[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Notices]
[Pages 37803-37837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17909]



[[Page 37803]]

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Part III





Department of Education





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Race to the Top Fund; State Fiscal Stabilization Fund Program; 
Institute of Education Sciences; Overview Information; Grant Program 
for Statewide Longitudinal Data Systems; Notice Inviting Applications 
for New Awards Under the American Recovery and Reinvestment Act of 
2009; Notices

Federal Register / Vol. 74 , No. 144 / Wednesday, July 29, 2009 / 
Notices

[[Page 37804]]


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DEPARTMENT OF EDUCATION

[Docket ID ED-2009-OESE-0006]
RIN 1810-AB07


Race to the Top Fund

AGENCY: Department of Education.

ACTION: Notice of proposed priorities, requirements, definitions, and 
selection criteria.

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Catalog of Federal Domestic Assistance (CFDA) Number: 84.395A.
SUMMARY: The Secretary of Education (Secretary) proposes priorities, 
requirements, definitions, and selection criteria for the Race to the 
Top Fund. The Secretary may use these priorities, requirements, 
definitions, and selection criteria in any year in which this program 
is in effect.

DATES: We must receive your comments on or before August 28, 2009. We 
encourage you to submit comments well in advance of this date.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time in order to ensure that we do not receive duplicate copies. In 
addition, please include the Docket ID and the term ``Race to the Top'' 
at the top of your comments.
     Federal eRulemaking Portal: Go to http://www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket, is available on 
the site under ``How To Use This Site.'' A direct link to the docket 
page is also available at http://www.ed.gov/programs/racetothetop.
     Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about these proposed priorities, 
requirements, definitions, and selection criteria, address them to 
Office of Elementary and Secondary Education (Attention: Race to the 
Top Fund Comments), U.S. Department of Education, 400 Maryland Avenue, 
SW., Room 3W329, Washington, DC 20202.
     Privacy Note: The Department's policy for comments 
received from members of the public (including those comments submitted 
by mail, commercial delivery, or hand delivery) is to make these 
submissions available for public viewing in their entirety on the 
Federal eRulemaking Portal at http://www.regulations.gov. Therefore, 
commenters should be careful to include in their comments only 
information that they wish to make publicly available on the Internet.

FOR FURTHER INFORMATION CONTACT: Beth Yeh, U.S. Department of 
Education, 400 Maryland Avenue, SW., Room 6W219, Washington, DC 20202. 
Telephone: 202-205-3775 or by e-mail: [email protected]. Note that we 
will not accept comments by e-mail.
    If you use a telecommunications device for the deaf (TDD), call the 
Federal Relay Service (FRS), toll free, at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: 
    Invitation to Comment: We invite you to submit comments regarding 
this notice. To ensure that your comments have maximum effect in 
developing the notice of final priorities, requirements, definitions, 
and selection criteria, we urge you to identify clearly the specific 
proposed priority, requirement, definition, or selection criterion that 
each comment addresses. We encourage you to submit comments in advance 
of the date by which they must be received.
    We 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 
priorities, requirements, definitions, and selection criteria. Please 
let us know of any further ways we could reduce potential costs or 
increase potential benefits while preserving the effective and 
efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about this notice by accessing Regulations.gov. You may also 
inspect the comments in person, in Room 3W329, 400 Maryland Avenue, 
SW., Washington, DC, between the hours of 8:30 a.m. and 4:00 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 provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for this notice. If you want to schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Purpose of Program: The Race to the Top Fund, authorized under the 
American Recovery and Reinvestment Act of 2009 (ARRA), provides 
approximately $4.3 billion for competitive grants to States to 
encourage and reward States that are creating the conditions for 
education innovation and reform; implementing ambitious plans in the 
four education reform areas described in the ARRA; and achieving 
significant improvement in student outcomes, including making 
substantial gains in student achievement, closing achievement gaps, 
improving high school graduation rates, and ensuring student 
preparation for success in college and careers.

    Program Authority: American Recovery and Reinvestment Act of 
2009, Division A, Section 14006, Public Law 111-5.

Background for Proposed Priorities, Requirements, Definitions, and 
Selection Criteria

The Statutory Context

    On February 17, 2009, President Obama signed into law the ARRA, 
historic legislation designed to stimulate the economy, support job 
creation, and invest in critical sectors, including education. The ARRA 
lays the foundation for education reform by supporting investments in 
innovative strategies that are most likely to lead to improved results 
for students, long-term gains in school and school system capacity, and 
increased productivity and effectiveness.
    The ARRA provides $4.3 billion for the Race to the Top Fund 
(referred to in the statute as the State Incentive Grant Fund). This is 
a competitive grant program designed to encourage and reward States 
that are implementing significant education reforms across four 
``assurance'' areas. Specifically, section 14006(a)(2) of the ARRA 
requires States to have made significant progress in the following four 
education reform areas in order to receive a grant: implementing 
standards and assessments, improving teacher effectiveness and 
achieving equity in teacher distribution, improving collection and use 
of data, and supporting struggling schools. In addition, as required by 
section 14006(c) of the ARRA, States that receive a Race to the Top 
grant must use at least 50 percent of the award to provide subgrants to 
local educational agencies (LEAs), including public charter schools 
identified as LEAs under State law, based upon LEAs' relative shares of 
funding under Part A of Title I of the Elementary and Secondary 
Education Act of 1965, as amended (ESEA). LEAs that choose to 
participate in their State's Race to the Top proposal must agree to 
fully implement the State's proposed plan and to use their funding 
under this grant in support of that plan.

[[Page 37805]]

    The ARRA also requires that the Governor apply on behalf of a State 
seeking a Race to the Top grant, and section 14005(c) of the ARRA 
specifically requires that a Race to the Top application:
     Describe the status of the State's progress in each of the 
four education reform areas, and the strategies the State is employing 
to help ensure that students in the subgroups described in section 
1111(b)(2)(C)(v)(II) of the ESEA (i.e., economically disadvantaged 
students, students from major racial and ethnic groups, students with 
disabilities, and students with limited English proficiency) who have 
not met the State's proficiency targets continue making progress toward 
meeting the State's student academic achievement standards;
     Describe the achievement and graduation rates (as 
described in section 1111(b)(2)(C)(vi) of the ESEA and as clarified in 
34 CFR 200.19(b)(1)) of public elementary and secondary school students 
in the State, and the strategies the State is employing to help ensure 
that all subgroups of students identified in section 
1111(b)(2)(C)(v)(II) of the ESEA continue making progress toward 
meeting the State's student academic achievement standards;
     Describe how the State would use its grant funding to 
improve student academic achievement in the State, including how it 
will allocate the funds to give priority to high-need LEAs (as defined 
in this notice); and
     Include a plan for evaluating the State's progress in 
closing achievement gaps.
    In this notice, we propose additional specific priorities, 
requirements, definitions, and selection criteria regarding the 
applications that individual States submit for approximately $4 billion 
of Race to the Top funds. At a later date, we may announce a separate 
Race to the Top Standards and Assessment competition, for approximately 
$350 million, to support the development of assessments by consortia of 
States.

Structure of Race to the Top

    Race to the Top will reward States for having created the 
conditions for reform (as measured through the State Reform Conditions 
Criteria proposed in this notice) and for increasing student 
achievement. Race to the Top will also provide incentives for States to 
develop and implement comprehensive reform strategies that are 
integrated across the four ARRA education reform areas and lead to 
improved student outcomes (as measured through the Reform Plan Criteria 
proposed herein). The Department expects successful applicants to clear 
a high bar on both State Reform Conditions and Reform Plan Criteria. 
Proposed State Reform Conditions and Reform Plan Criteria are described 
in detail in the Proposed Selection Criteria section of this notice.
    To ensure that the State's Race to the Top plans (which the State 
will describe in its application in response to the Reform Plan 
Criteria) are comprehensive, coherent, and measurable, we propose that 
States describe their approaches and, where appropriate, set annual 
targets for each of the Reform Plan Criteria.

    Note:  The proposed annual targets are set forth in the Appendix 
to this notice. These targets are specific to Race to the Top, and 
they are in addition to, not a replacement for, the existing annual 
requirements under the ESEA.) The annual targets should be 
achievable but sufficiently ambitious to support a successful Race 
to the Top grant application.

    Under the statute, at least 50 percent of the funds under a State's 
Race to the Top grant must be provided to LEAs based on LEAs' relative 
shares of funding under part A of Title I of the ESEA. The remaining 
funds are available to the State for State-level activities and for 
disbursements to LEAs and other eligible entities under such formulas, 
competitive processes, or other mechanisms as the State may propose in 
its plan. We propose that a State incorporate into its plan the 
activities that LEAs will undertake to advance the four education 
reform areas.

Timing of Applications and Awards

    The Department plans to make Race to the Top grants in two phases. 
States that are ready to apply may do so in Phase 1, which will open in 
late calendar year 2009. States that need more time--for example, to 
engage in planning with and secure commitments from superintendents, 
school boards, principals, teachers, union leaders, and community 
supporters, or others--may apply in Phase 2, which will open in late 
Spring of calendar year 2010. States that apply in Phase 1 but are not 
awarded grants may reapply for funding in Phase 2, together with States 
that are applying for the first time in Phase 2. Phase 1 grantees may 
not apply for additional funding in Phase 2. We will announce specific 
deadlines for both Phase 1 and Phase 2 in subsequent notice(s) inviting 
applications for funds under this program.

I. Proposed Priorities

    Background: The Secretary proposes five priorities for the Race to 
the Top competition. We are proposing to designate Proposed Priority 1 
as an absolute priority, Proposed Priority 2 as a competitive 
preference priority, and Proposed Priorities 3 through 5 as 
invitational priorities. We may choose, in the notice of final 
priorities, requirements, definitions, and selection criteria, to 
change the designation of any of these priorities to absolute, 
competitive preference, or invitational priorities, or to include the 
substance of these priorities in the selection criteria.
    Under an absolute priority, as specified by 34 CFR 75.105(c)(3), we 
would consider only applications that meet the priority. Under a 
competitive preference priority, we would give competitive preference 
to an application by (1) awarding additional points, depending on the 
extent to which the application meets the priority (34 CFR 
75.105(c)(2)(i)); or (2) selecting an application that meets the 
priority over an application of comparable merit that does not meet the 
priority (34 CFR 75.105(c)(2)(ii)). With an invitational priority, we 
would signal our interest in receiving applications that meet the 
priority; however, consistent with 34 CFR 75.105(c)(1), we would not 
give an application that meets an invitational priority preference over 
other applications.

Proposed Priority 1: Absolute Priority--Comprehensive Approach to the 
Four Education Reform Areas

    To meet this priority, the State's application must comprehensively 
address each of the four education reform areas specified in the ARRA 
to demonstrate that the State and its participating LEAs are taking a 
systemic approach to education reform. The State's application must 
describe how the State and participating LEAs intend to use Race to the 
Top and other funds to implement comprehensive and coherent policies 
and practices in the four education reform areas, and how these are 
designed to increase student achievement, reduce the achievement gap 
across student subgroups (as described in section 303(b)(2)(G) of the 
National Assessment of Educational Progress Authorization Act (NAEP) 
\1\), and increase the rates at which students

[[Page 37806]]

graduate from high school prepared for college and careers.
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    \1\ This statute, rather than relevant sections of the ESEA, is 
referenced because it provides the most recent listing of NAEP 
subgroups. We propose using the NAEP to monitor overall increases in 
student achievement and decreases in the achievement gap over the 
course of this grant because the NAEP provides a way to report 
consistently across Race to the Top grantees as well as within a 
State over time as the State transitions from its current 
assessments to the high-quality assessments (as defined in this 
notice).
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Proposed Priority 2: Competitive Preference Priority--Emphasis on 
Science, Technology, Engineering, and Mathematics (STEM)

    To meet this priority, the State's application must describe plans 
to address the need to (i) offer a rigorous course of study in 
mathematics, sciences, technology, and engineering; (ii) cooperate with 
industry experts, museums, universities, research centers, or other 
STEM-capable community partners to prepare and assist teachers in 
integrating STEM content across grades and disciplines, in promoting 
effective and relevant instruction, and in offering applied learning 
opportunities for students; and (iii) prepare more students for 
advanced study and careers in the sciences, technology, engineering, 
and mathematics, including addressing the needs of underrepresented 
groups and of women and girls in the areas of science, technology, 
engineering and mathematics.

Proposed Priorities 3 Through 5: Proposed Priority 3--Invitational 
Priority-- Expansion and Adaptation of Statewide Longitudinal Data 
Systems

    The Secretary is particularly interested in applications in which 
the State plans to expand statewide longitudinal data systems to 
include or integrate data from special education programs, limited 
English proficiency programs, early childhood programs, human 
resources, finance, health, postsecondary, and other relevant areas, 
with the purpose of allowing important questions related to policy or 
practice to be asked and answered.
    The Secretary is also particularly interested in applications in 
which States propose working together to adapt one State's statewide 
longitudinal data system so that it may be used, in whole or in part, 
by other State(s), rather than having each State build or continue 
building such system(s) independently.

Proposed Priority 4--Invitational Priority--P-20 Coordination and 
Vertical Alignment

    The Secretary is particularly interested in applications in which 
the State plans to address how early childhood programs, K-12 schools, 
postsecondary institutions, and workforce organizations will coordinate 
to improve all parts of the education system and create a more seamless 
P-20 route for students. Vertical alignment across P-20 is particularly 
critical at each point where a transition occurs (e.g., between early 
childhood and K-12, or between K-12 and post secondary) to ensure that 
students exiting one level are prepared for success, without 
remediation, in the next.

Proposed Priority 5--Invitational Priority--School-Level Conditions for 
Reform and Innovation

    The Secretary is particularly interested in applications in which 
the State's participating LEAs provide schools, where appropriate, with 
flexibilities and autonomies conducive to reform and innovation, such 
as--
    (i) Selecting staff;
    (ii) Implementing new structures and formats for the school day or 
year that expand learning time;
    (iii) Placing budgets under the schools' control;
    (iv) Awarding credit to students based on student performance 
instead of instructional time; and
    (v) Providing comprehensive services to high-need students (e.g., 
through local partnerships, internal staffing, and contracts with 
outside providers).

II. Requirements

    The Secretary proposes the following requirements for this program. 
We may apply these requirements in any year in which this program is in 
effect.

A. Eligibility Requirements

    Background: We are proposing two eligibility requirements for Race 
to the Top applicants. First, we propose that a State must have an 
approved application under both Phase 1 and Phase 2 of the State Fiscal 
Stabilization Fund (Stabilization) program of the ARRA in order to be 
eligible to receive an award from the Race to the Top competition. 
Section 14005(d) of the ARRA requires a State that receives funds under 
the Stabilization program to provide assurances in the same four 
education reform areas that will be advanced by the Race to the Top 
grant. We therefore believe that it would be inconsistent to award a 
Race to the Top grant, which requires a determination that a State has 
made significant progress in the four education reform areas, to a 
State that has not met requirements for receiving funds under the 
Stabilization program.
    Second, we propose that to be eligible under this program, a State 
must not have any legal, statutory, or regulatory barriers to linking 
student achievement or student growth data to teachers for the purpose 
of teacher and principal evaluation. Research indicates that teacher 
quality is a critical contributor to student learning and that there is 
dramatic variation in teacher quality.\2\ Yet it is difficult to 
predict teacher quality based on the qualifications that teachers bring 
to the job. Indeed, measures such as certification, master's degrees, 
and years of teaching experience have limited predictive power on this 
point.\3\ Therefore, one of the most effective ways to accurately 
assess teacher quality is to measure the growth in achievement of a 
teacher's students;\4\ \5\ and by aggregating the performance of 
students across teachers within a school, to assess principal quality. 
Current law in a number of States presents an obstacle to efforts to 
improve teacher quality by prohibiting data regarding student 
achievement from being tied to teachers for the purposes of evaluation. 
This capability is fundamental to Race to the Top reforms and to the 
requirement in section 14005(d)(2) of the ARRA that States take actions 
to improve teacher effectiveness. Without this legal authority, States 
would not be able to execute reform plans relating to several selection 
criteria in this notice (see Selection Criteria (C)(2) through (C)(5)), 
because these plans must require LEAs and schools to determine which

[[Page 37807]]

teachers and principals are effective using student achievement data.
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    \2\ See, e.g. Kane, Thomas J., Jonah E. Rockoff, and Douglas O. 
Staiger (2006), ``What Does Certification Tell Us About Teacher 
Effectiveness? Evidence from New York City,'' NBER Working Paper No. 
12155; Rivkin, Steven G., Eric A. Hanushek, and John F. Kain (2005), 
``Teachers, Schools, and Academic Achievement,'' Econometrica, 
73(2), 417-458; Rockoff, Jonah. E. (2004), ``The Impact of 
Individual Teachers on Students' Achievement: Evidence from Panel 
Data,'' American Economic Review 94(2), 247-52; Organisation for 
Economic Co-operation and Development (2004), ``Teachers Matter: 
Attracting, Developing and Retaining Effective Teachers'', p. 3; 
Leithwood, Kenneth, Karen Seashore Louis, Stephen Anderson, and Kyla 
Wahlstrom (2004), ``How Leadership Influences Student Learning,'' 
Wallace Foundation Learning from Leadership Project; Aaronson, 
Daniel, Lisa Barrow, and William Sander (2003), ``Teacher and 
Student Achievement in the Chicago Public High Schools,'' Federal 
Reserve Bank of Chicago Working Paper 2002-28.
    \3\ Rivkin, Hanushek, and Kain (2005). Kane, Rockoff, and 
Staiger (2006). Aaronson, Barrow, and Sander (2003).
    \4\ For example, Rockoff et al. find that even using a detailed 
data set on incoming teacher characteristics allows them to predict 
only about 12 percent of the variance of the expected distribution 
of teacher effectiveness. Jonah E. Rockoff, Brian A. Jacob, Thomas 
J. Kane, and Douglas O. Staiger (2008), ``Can You Recognize an 
Effective Teacher When You Recruit One?'' NBER Working Paper No. 
14485. Similarly, Goldhaber et al. show that the variance in student 
achievement due to unobservable teacher variables is 40 times 
greater than the variance due to observable teacher variables. Dan 
Goldhaber, Dominic Brewer, and Deborah J. Anderson (1999), ``A 
three-way error components analysis of educational productivity,'' 
Education Economics 7 (3): 199-208.
    \5\ Kane, Rockoff, and Staiger (2006). Aaronson, Barrow, and 
Sander (2003).
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    Proposed Eligibility Requirements: We propose the following 
requirements that a State must meet in order to be eligible to receive 
funds under this program.
    (a) In order for the State to be eligible for the Race to the Top 
Phase 1 competition, the State's applications for funding under Phase 1 
and Phase 2 of the Stabilization program must be approved by the 
Department by December 31, 2009. In order for the State to be eligible 
for the Race to the Top Phase 2 competition, the State's application 
for funding under Phase 1 and Phase 2 of the Stabilization program must 
be approved by the Department prior to the State submitting its Race to 
the Top Phase 2 application.
    (b) The State does not have any legal, statutory, or regulatory 
barriers to linking data on student achievement (as defined in this 
notice) or student growth (as defined in this notice) to teachers and 
principals for the purpose of teacher and principal evaluation.

B. Application Requirements

    Background: Section 14005(c) of the ARRA requires that certain 
information (as discussed earlier in this notice) be included in 
States' Race to the Top applications. Consistent with those 
requirements and the need for additional information that will ensure a 
fair and accurate peer review of the grant applications, we propose the 
following requirements for the application a State would submit to the 
Department for funding under this program.
    The Department recognizes that requests for data and information 
should reflect an integrated and coordinated approach among the various 
ARRA programs, particularly the State Fiscal Stabilization, Race to the 
Top, School Improvement Grants, and Statewide Longitudinal Data Systems 
grant programs. Accordingly, the Department will continue to evaluate 
our requests for data and information under this program in context 
with the other ARRA programs.
Proposed Application Requirements
    (a) The State's application must be signed by the Governor, the 
State's chief school officer, and the president of the State board of 
education.
    (b) The State must describe the progress it has made to date in 
each of the four education reform areas, including how the State has 
used ARRA and other Federal and State funding over the last several 
years to pursue reforms in these areas (as described in Overall 
Selection Criterion (E)(1)).
    (c) The State must provide financial data to show whether and to 
what extent the percentage of the total revenues available to the State 
(as defined in this notice) that were used to support elementary, 
secondary, and public higher education for FY 2009 increased, 
decreased, or remained the same compared to FY 2008 (as described in 
Overall Selection Criterion (E)(2)).
    (d) The State must describe its statewide support from stakeholders 
and LEAs, including public charter schools identified as LEAs under 
State law (as described in Overall Selection Criterion (E)(3)).
    (e) The State must include a budget that details how it will use 
grant funds and other resources to meet targets and perform related 
functions, including how it will use funds awarded under this program 
to--
    (1) Achieve its targets for improving student achievement and 
graduation rates and for closing achievement gaps (as described in 
Overall Selection Criterion (E)(4)); and
    (2) Give priority to high-need LEAs (as defined in this notice), in 
addition to providing 50 percent of the grant to participating LEAs 
based on their relative shares of funding under part A of Title I of 
the ESEA as required under section 14006(c) of the ARRA.
    (f) The State must provide, for each State Reform Conditions 
Criterion (listed later in this notice), a description of the State's 
current status in meeting that Criterion, and at a minimum, the 
information requested as supporting evidence for the Criterion. The 
Appendix to this notice contains a table listing the proposed evidence.
    (g) The State must provide, for each Reform Plan Criterion (listed 
later in this notice) a detailed plan for use of grant funds that 
includes, but need not be limited to--
    (1) The key activities to be undertaken;
    (2) The goals and rationale for the activities, which may include 
but need not be limited to evidence of the past effectiveness of those 
activities, as documented in research or through the effective 
implementation of an activity in one or more States, LEAs, or schools 
(which may include charter schools);
    (3) The timeline for implementing the activities;
    (4) The party or parties responsible for implementing the 
activities;
    (5) The resources the State will use to support the activities 
(e.g., funding, personnel, systems);
    (6) The State's annual targets, where applicable, with respect to 
the performance measures aligned to the Criterion for the four school 
years beginning with the 2010-2011 school year. The Appendix to this 
notice contains a table listing the proposed performance measures. 
Where plans are proposed for reform efforts not covered by a 
performance measure specified by the Department, States are encouraged 
to propose performance measures and annual targets for those efforts; 
and
    (7) The information requested as supporting evidence, if any (as 
described in the Appendix), for the Criterion, together with any 
additional information the State believes will be helpful to peer 
reviewers.
    (h) The State must submit a certification from the State Attorney 
General, or other chief State legal officer, that the State's 
description of, and statements and conclusions concerning, State law 
(for example, with respect to the Eligibility Requirement regarding 
teacher effectiveness or any of the applicable Selection Criteria) in 
its application are complete, accurate, and constitute a reasonable 
interpretation of State law.

C. Annual Report and Performance Measures

    The Secretary proposes core performance measures for evaluating the 
performance of States receiving funds under this program. See the 
Appendix to this notice for the proposed performance measures.
    In addition, a State receiving funds under this program must submit 
to the Department an annual report which may include, in addition to 
the standard elements, a description of the State's and its LEAs' 
progress to date on their goals, timelines, and budgets, as well as 
actual performance compared to the annual targets the State established 
in its application with respect to each performance measure.
    Further, a State receiving funds under this program and its 
participating LEA are accountable for meeting the goals, timelines, 
budget, and annual targets established in the application; adhering to 
an annual fund drawdown schedule that is tied to meeting these goals, 
timelines, budget, and annual targets; and fulfilling and maintaining 
all other conditions for the conduct of the project.
    The Department will monitor a State's and its participating LEAs' 
progress in meeting its goals, timelines, budget, and annual targets 
and in fulfilling other applicable requirements. To support a 
collaborative process between the State and the Department, the 
Department may require that applicants who are selected to receive an 
award enter into a written performance or cooperative

[[Page 37808]]

agreement with the Department. If the Department determines that a 
State is not meeting its goals, timelines, budget, or annual targets or 
is not fulfilling other applicable requirements, the Department will 
take appropriate action, which could include a collaborative process 
between the Department and the State, or enforcement measures with 
respect to this grant such as placing the State in high-risk status, 
putting the State on reimbursement payment status, or delaying or 
withholding funds.

D. Other Program Requirements

    We propose the following additional requirements for States 
receiving funds under this program:
    (a) The State and its participating LEAs must use funds under this 
program to participate in a national evaluation of the program, if the 
Department chooses to conduct one. In addition, the Department is 
seeking comment on whether a State should, instead of or in addition to 
a national evaluation, be required to conduct its own evaluation of its 
program activities using funds under this program. The Department will 
announce in the notice inviting applications the evaluation 
approach(es) that will be required.
    (b) The State must participate in all applicable technical 
assistance activities that may be conducted by the Department or its 
designees.
    (c) The State must make freely available all of the outputs (e.g., 
materials, tools, processes, systems) that it or its designated 
partners produce related to its grant, including by posting the outputs 
on any Web site identified or sponsored by the Department.

III. Selection Criteria

    The Secretary proposes the following criteria for reviewing 
applications submitted under this program. We may apply one or more of 
these criteria in any year in which this program is in effect. In the 
notice inviting applications, the application package, or both, we will 
announce the maximum number of points assigned to each criterion.
    As discussed elsewhere in this notice, we propose using two types 
of selection criteria--State Reform Conditions Criteria and Reform Plan 
Criteria--to rate a State's application for Race to the Top funds. 
State Reform Conditions Criteria will be used to assess a State's past 
progress and its success in creating conditions for reform in specific 
areas related to the four ARRA education reform areas. The Reform Plan 
Criteria will be used to assess States' plans for future efforts in the 
four ARRA education reform areas.
    In the Appendix, we list both the minimum evidence, if any, that 
the State must provide to assist the Department and peer reviewers in 
determining whether a State's application meets each Criterion, and the 
performance measures, if any, for each Reform Plan Criterion. States 
may submit additional information if they deem it to be relevant and 
useful. In addition, States that have submitted the requested 
information to the Department for other programs are welcome to 
indicate that they would like a specific previous submission to be used 
as evidence, or they may provide an updated submission.
    For each Reform Plan Criterion, peer reviewers will also consider 
the extent to which States, where applicable, set ambitious yet 
achievable annual targets against the performance measure, to support 
the State's plan. Grantees will report their progress with respect to 
these performance measures and annual targets as part of their annual 
reports.
Proposed Selection Criteria

A. Standards and Assessments

    Note: Under this reform area, we are proposing several Criteria 
that will be different for applications submitted under Phase 1 and 
Phase 2. Where the Criteria are different, we have so indicated.

State Reform Conditions Criteria
    (A)(1) Developing and adopting common standards: \6\
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    \6\ A State's responses to proposed Indicator (c)(2) and 
Descriptor (c)(1) in its Stabilization program Phase 2 application 
may contain information responsive, in part, to this State Reform 
Conditions Criterion, to which the State may refer and incorporate 
in its Race to the Top application.
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    (i) For Phase 1 applications: The extent to which the State has 
demonstrated commitment to improving the quality of its standards by 
participating in a consortium of States that is working toward jointly 
developing and adopting, by June 2010, a common set of K-12 standards 
(as defined in this notice) that are internationally benchmarked and 
that build toward college and career readiness by the time of high 
school graduation, and the extent to which this consortium includes a 
significant number of States.
    (ii) For Phase 2 applications: Whether the State has demonstrated 
commitment to improving the quality of its standards by adopting, as 
part of a multi-State consortium, a common set of K-12 standards (as 
defined in this notice) that are internationally benchmarked and that 
build toward college and career readiness by the time of high school 
graduation, and the extent to which this consortium includes a 
significant number of States.
    (A)(2) Developing and implementing common, high-quality 
assessments: \7\ Whether the State has demonstrated a commitment to 
improving the quality of its assessments by participating in a 
consortium of States that is working toward jointly developing and 
implementing common, high-quality assessments (as defined in this 
notice) aligned with the consortium's common set of K-12 standards (as 
defined in this notice) that are internationally benchmarked and that 
build toward college and career readiness by the time of high school 
graduation, and the extent to which this consortium includes a 
significant number of States.
---------------------------------------------------------------------------

    \7\ A State's responses to proposed Indicator (c)(2) and 
Descriptor (c)(1) in its Stabilization program Phase 2 application 
may contain information responsive, in part, to this State Reform 
Conditions Criterion, to which the State may refer and incorporate 
in its Race to the Top application.
---------------------------------------------------------------------------

Reform Plan Criteria
    (A)(3) Supporting transition to enhanced standards and high-quality 
assessments: \8\ The extent to which the State, in collaboration with 
its participating LEAs, has a high-quality plan for supporting a 
statewide transition to and implementation of (a) internationally 
benchmarked K-12 standards that build toward college and career 
readiness by the time of high school graduation, and (b) high-quality 
assessments (as defined in this notice) tied to these standards. State 
or LEA activities might include: Aligning high school exit criteria and 
college entrance requirements with the new assessments; developing, 
disseminating, and implementing curricular frameworks and materials, 
formative and interim assessments (as defined in this notice), and 
professional development materials; and engaging in other strategies 
that translate the standards and information from assessments into 
classroom practice.
---------------------------------------------------------------------------

    \8\ A State's responses to proposed Indicators (c)(1)-(c)(13) 
and Descriptor (c)(1) in its Stabilization program Phase 2 
application may contain information related to this Reform Plan 
Criterion, to which the State can refer and build upon in its Race 
to the Top application.
---------------------------------------------------------------------------

B. Data Systems to Support Instruction

State Reform Conditions Criteria
    (B)(1) Fully implementing a statewide longitudinal data system: \9\ 
The extent to

[[Page 37809]]

which the State has a statewide longitudinal data system that includes 
all of the elements specified in section 6401(e)(2)(D) of the America 
COMPETES Act (as defined in this notice).
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    \9\ The State's responses to proposed Indicator (b)(1) and 
requirements II.c.1.A and II.c.1.B.(i-iii) in its Stabilization 
program Phase 2 application may contain information responsive, in 
part, to this State Reform Conditions Criterion, to which the State 
can refer and build upon in its Race to the Top application.
---------------------------------------------------------------------------

Reform Plan Criteria
    (B)(2) Accessing and using State data: \10\ The extent to which the 
State has a high-quality plan to ensure that data from the State's 
statewide longitudinal data system are accessible to, and used to 
inform and engage, as appropriate, key stakeholders (e.g., parents, 
students, teachers, principals, LEA leaders, community members, unions, 
researchers, and policymakers); that the data support decision-makers 
in the continuous improvement of instruction, operations, management, 
and resource allocation; and that they comply with the applicable 
requirements of the Family Educational Rights and Privacy Act (FERPA).
---------------------------------------------------------------------------

    \10\ A State's responses to proposed Indicator (b)(2) and 
requirements II.c.2.A and II.c.2.B(i-iii) in its Stabilization 
program Phase 2 application may contain information related to this 
Reform Plan Criterion, to which the State can refer and build upon 
in its Race to the Top application.
---------------------------------------------------------------------------

    (B)(3) Using data to improve instruction: \11\ The extent to which 
the State, in collaboration with its participating LEAs, has a high-
quality plan to--
---------------------------------------------------------------------------

    \11\ A State's responses to proposed Indicator (b)(2) and 
requirements II.c.2.A and II.c.2.B(i-iii) in its Stabilization 
program Phase 2 application may contain information related to this 
Reform Plan Criteria, to which the State can refer and build upon in 
its Race to the Top application.
---------------------------------------------------------------------------

    (i) Increase the use of instructional improvement systems (as 
defined in this notice) that provide teachers, principals, and 
administrators with the information they need to inform and improve 
their instructional practices, decision-making, and overall 
effectiveness; and
    (ii) Make these data, together with statewide longitudinal data 
system data, available and accessible to researchers so that they have 
detailed information with which to evaluate the effectiveness of 
instructional materials, strategies, and approaches for educating 
different types of students (e.g., students with disabilities, limited 
English proficient students, students whose achievement is well below 
or above grade level), in a manner that complies with the applicable 
requirements of FERPA.

C. Great Teachers and Leaders

State Reform Conditions Criteria
    (C)(1) Providing alternative pathways for aspiring teachers and 
principals: The extent to which the State has in place legal, 
statutory, or regulatory provisions that allow alternative routes to 
certification (as defined in this notice) for teachers and principals, 
particularly routes that allow for providers in addition to 
institutions of higher education; and the extent to which these routes 
are in use.
Reform Plan Criteria
    (C)(2) Differentiating teacher and principal effectiveness based on 
performance: \12\ The extent to which the State, in collaboration with 
its participating LEAs, has a high-quality plan and ambitious yet 
achievable annual targets to (a) Determine an approach to measuring 
student growth (as defined in this notice); (b) employ rigorous, 
transparent, and equitable processes for differentiating the 
effectiveness of teachers and principals using multiple rating 
categories that take into account data on student growth (as defined in 
this notice) as a significant factor; (c) provide to each teacher and 
principal his or her own data and rating; and (d) use this information 
when making decisions regarding--
---------------------------------------------------------------------------

    \12\ A State's responses to proposed Indicators (a)(2) and 
(a)(5) and Descriptors (a)(1) and (a)(2) in its Stabilization 
program Phase 2 application may contain information related to this 
Reform Plan Criterion, to which the State can refer and build upon 
in its Race to the Top application.
---------------------------------------------------------------------------

    (i) Evaluating annually and developing teachers and principals, 
including by providing timely and constructive feedback and targeted 
professional development;
    (ii) Compensating and promoting teachers and principals, including 
by providing opportunities for teachers and principals who are highly 
effective (as defined in this notice) to obtain additional compensation 
and responsibilities; and
    (iii) Granting tenure to and dismissing teachers and principals 
based on rigorous and transparent procedures for awarding tenure (where 
applicable) and for removing tenured and untenured teachers and 
principals after they have had ample opportunities to improve but have 
not done so.
    (C)(3) Ensuring equitable distribution of effective teachers and 
principals: \13\ The extent to which the State has a high-quality plan 
and ambitious yet achievable annual targets to increase the number and 
percentage of highly effective teachers and principals (as defined in 
this notice) in high-poverty schools (as defined in this notice), and 
to increase the number and percentage of effective teachers (as defined 
in this notice) teaching hard-to-staff subjects including mathematics, 
science, special education, English language proficiency, and other 
hard-to-staff subjects identified by the State or LEA. Plans may 
include, but are not limited to, the implementation of incentives and 
strategies in areas such as recruitment, compensation, career 
development, and human resources practices and processes.
---------------------------------------------------------------------------

    \13\ A State's response to proposed Indicator (a)(1) in its 
Stabilization program Phase 2 application may contain information 
related to this Reform Plan Criterion, to which the State can refer 
and build upon in its Race to the Top application.
---------------------------------------------------------------------------

    (C)(4) Reporting the effectiveness of teacher and principal 
preparation programs: The extent to which the State has a high-quality 
plan and ambitious yet achievable annual targets to link a student's 
achievement data to the student's teachers and principals, to link this 
information to the programs where each of those teachers and principals 
was prepared for credentialing, and to publicly report the findings for 
each credentialing program that has twenty or more graduates annually.
    (C)(5) Providing effective support to teachers and principals: The 
extent to which the State, in collaboration with its participating 
LEAs, has a high-quality plan to use rapid-time (as defined in this 
notice) student data to inform and guide the support provided to 
teachers and principals (e.g., professional development, time for 
common planning and collaboration) in order to improve the overall 
effectiveness of instruction; and to continuously measure and improve 
both the effectiveness and efficiency of those supports.

D. Turning Around Struggling Schools

State Reform Conditions Criteria
    (D)(1) Intervening in the lowest-performing schools and LEAs: The 
extent to which the State has the legal, statutory, or regulatory 
authority to intervene directly in the State's persistently lowest-
performing schools (as defined in this notice) and in LEAs that are in 
improvement and corrective action status.
    (D)(2) Increasing the supply of high-quality charter schools: \14\
---------------------------------------------------------------------------

    \14\ A State's responses to proposed Indicator (d)(6) in its 
Stabilization program Phase 2 application may contain information 
related to this Reform Plan Criterion, to which the State can refer 
and build upon in its Race to the Top application.
---------------------------------------------------------------------------

    (i) The extent to which the State has a charter school law that 
does not prohibit or effectively inhibit increasing the number of 
charter schools in the State (as measured by the percentage of total 
schools in the State that are allowed to be charter schools) or 
otherwise restrict student enrollment in charter schools.

[[Page 37810]]

    (ii) The extent to which the State has statutes and guidelines 
regarding how charter school authorizers approve, monitor, hold 
accountable, reauthorize, and close charter schools, including the 
extent to which such statutes or guidelines require that student 
academic achievement be a factor in such activities and decisions, and 
the extent to which charter school authorizers in the State have closed 
or not renewed ineffective charter schools.
    (iii) The extent to which the State's charter schools receive 
equitable funding, compared to traditional public schools, and a 
commensurate share of local, State, and Federal program and revenue 
sources.
    (iv) The extent to which the State provides charter schools with 
facilities funding (for leasing facilities, purchasing facilities, or 
making tenant improvements), assistance with facilities acquisition, 
access to public facilities, the ability to share in bonds and mill 
levies, or other supports; and the extent to which the State does not 
impose any facility-related requirements on charter schools that are 
stricter than those applied to traditional public schools.
Reform Plan Criteria
    (D)(3) Turning around struggling schools: \15\ The extent to which 
the State has a high-quality plan and ambitious yet achievable annual 
targets to (i) identify at least the lowest-achieving five percent of 
the persistently lowest-performing schools (as defined in this notice) 
or the lowest-achieving five schools, whichever is larger; and (ii) 
support its LEAs in turning around these schools by--
---------------------------------------------------------------------------

    \15\ A State's responses to proposed Indicators (d)(3)-(d)(5) in 
its Stabilization program Phase 2 application may contain 
information related to this Reform Plan Criterion, to which the 
State can refer and build upon in its Race to the Top application.
---------------------------------------------------------------------------

     Putting in place new leadership and a majority of new 
staff, new governance, and improved instructional programs, and 
providing the school with flexibilities such as the ability to select 
staff, control its budget, and expand student learning time; or
     Converting them to charter schools or contracting with an 
education management organization (EMO); or
     Closing the school and placing the school's students in 
high-performing schools; or
     To the extent that these strategies are not possible, 
implementing a school transformation model that includes: Hiring a new 
principal, measuring teacher and principal effectiveness (as defined in 
this notice), rewarding effective teachers and principals (as defined 
in this notice), and improving strategies for recruitment, retention, 
and professional development; implementing comprehensive instructional 
reform, including an improved instructional program and differentiated 
instruction; and extending learning time and community-oriented 
supports, including more time for students to learn and for teachers to 
collaborate, more time for enrichment activities, and on-going 
mechanisms for family and community engagement.

E. Overall Selection Criteria

State Reform Conditions Criteria
    (E)(1) Demonstrating significant progress: The extent to which the 
State has, over the past several years--
    (i) Made progress to date in each of the four education reform 
areas;
    (ii) Used ARRA and other Federal and State funding to pursue 
reforms in these areas;
    (iii) Created, through law or policy, conditions favorable to 
education reform and innovation;
    (iv) Increased student achievement and decreased the achievement 
gap, as reported on the NAEP since 2003; and increased graduation 
rates.
    (E)(2) Making education funding a priority: The extent to which the 
percentage of the total revenues available to the State (as defined in 
this notice) that were used to support elementary, secondary, and 
public higher education for FY 2009 was greater than or equal to the 
percentage of the total revenues available to the State (as defined in 
this notice) that were used to support elementary, secondary, and 
public higher education for FY 2008.
    (E)(3) Enlisting statewide support and commitment: The extent to 
which the State has demonstrated commitment, support, and/or funding 
from the following key stakeholders:
    (i) The State's teachers' union(s) and charter school authorizers;
    (ii) Other State and local leaders (e.g., business, community, 
civil rights, and education association leaders);
    (iii) Grant-making foundations and other funding sources; and
    (iv) LEAs, including public charter schools identified as LEAs 
under State law, with special emphasis on the following: High-need LEAs 
(as defined in this notice); participation by LEAs, schools, students, 
and students in poverty; and the strength of the Memoranda of 
Understanding between LEAs and the State, which must at a minimum be 
signed by the LEA superintendent (or equivalent), the president of the 
local school board (if relevant), and the local teachers' union leader 
(if relevant).
Reform Plan Criteria
    (E)(4) Raising achievement and closing gaps:
    (i) Achievement gains: The extent to which the State has set 
ambitious yet achievable targets for increasing its students' 
achievement results overall and by student subgroup (as described in 
section 303(b)(2)(G) of the National Assessment of Educational Progress 
Authorization Act) in reading and mathematics, as reported by the NAEP; 
annual targets using other assessments may be submitted as well.
    (ii) Gap closing: The extent to which the State has set ambitious 
yet achievable targets for decreasing the reading and mathematics 
achievement gaps between subgroups (as described in section 
303(b)(2)(G) of the National Assessment of Educational Progress 
Authorization Act), as reported, at a minimum, by the NAEP; annual 
targets using other assessments may be submitted as well.
    (iii) Graduation rate: \16\ The extent to which the State has 
ambitious yet achievable annual targets for increasing graduation rates 
(as defined in this notice) overall and by student subgroup (consistent 
with section 1111(b)(2)(C)(v)(II) of the ESEA).
---------------------------------------------------------------------------

    \16\ A State's responses to proposed Indicator (c)(11) in its 
Stabilization program Phase 2 application may contain information 
related to this Reform Plan Criterion, to which the State can refer 
and build upon in its Race to the Top application.
---------------------------------------------------------------------------

    (E)(5) Building strong statewide capacity to implement, scale, and 
sustain proposed plans: The extent to which the State has a high-
quality overall plan that demonstrates how it has, and will continue to 
build, the capacity to--
    (i) Effectively and efficiently oversee the grant, including 
administering and disbursing funds, and, if necessary, taking 
appropriate enforcement actions to ensure that participating LEAs 
comply with the State's plan and program requirements;
    (ii) Support the success of participating LEAs, ensure the 
dissemination of effective practices, and hold participating LEAs 
accountable for progress;
    (iii) Use the economic, political, and human capital resources of 
the State to continue the reforms funded under the grant after the 
period of funding has ended;
    (iv) Collaborate with other States on key elements of or activities 
in the State's application; and
    (v) Coordinate, reallocate, or repurpose education funds from other

[[Page 37811]]

sources to align with the State's Race to the Top goals, as outlined in 
its plans.

IV. Definitions

    The Secretary proposes the following definitions for terms not 
defined in the ARRA (or, by reference, in the ESEA). We may apply these 
definitions in any year in which this program is in effect.

Proposed Definitions

    Alternative certification routes means pathways to certification 
that are authorized under the State's laws or regulations that allow 
the establishment and operation of teacher and administrator 
preparation programs in the State that have the following 
characteristics: (a) Can be provided by various types of qualified 
providers, including both institutions of higher education and other 
providers; (b) provide a clinical/student teaching experience; (c) 
significantly limit the amount of coursework required or have options 
to test-out of courses; and (d) award the level of certification that 
permits a candidate who successfully completes the program to teach or 
lead in public schools within the State.
    Common set of K-12 standards means a set of content standards that 
define what students must know and be able to do, and that are 
identical across all States in a consortium. Notwithstanding this, a 
State may supplement the common standards with additional standards, 
provided that the additional standards do not exceed 15 percent of the 
State's total standards for that content area.
    Effective principal means a principal whose students, overall and 
for each subgroup (described in section 1111(b)(2)(C)(v)(II) of the 
ESEA), demonstrate acceptable rates (e.g., at least one grade level in 
an academic year) of student growth (as defined in this notice). States 
may supplement this definition as they see fit so long as principal 
effectiveness is judged, in significant measure, by student growth (as 
defined in this notice).
    Effective teacher means a teacher whose students achieve acceptable 
rates (e.g., at least one grade level in an academic year) of student 
growth (as defined in this notice). States may supplement this 
definition as they see fit so long as teacher effectiveness is judged, 
in significant measure, by student growth (as defined in this notice).
    Formative assessment means an assessment process that is embedded 
in instruction and is used by teachers and students to provide instant 
feedback on student understanding and to adjust ongoing teaching and 
learning accordingly.
    Graduation rate means the four-year adjusted cohort graduation rate 
as defined by 34 CFR 200.19(b)(1)(i). A State may also use, as a 
supplement to this rate, extended adjusted cohort graduation rates 
(consistent with 34 CFR 200.19(b)(1)(v)) that are approved by the 
Secretary.
    Highly effective principal means a principal whose students, 
overall and for each subgroup (described in section 
1111(b)(2)(C)(v)(II) of the ESEA), demonstrate high rates (e.g., more 
than one grade level in an academic year) of student growth (as defined 
in this notice). States may supplement this definition as they see fit 
so long as principal effectiveness is judged, in significant measure, 
by student growth (as defined in this notice).
    Highly effective teacher means a teacher whose students achieve 
high rates (e.g., more than one grade level in an academic year) of 
student growth (as defined in this notice). States may supplement this 
definition as they see fit so long as teacher effectiveness is judged, 
in significant measure, by student growth (as defined in this notice).
    High-need LEA means an LEA with one or more high-poverty schools 
(as defined in this notice).
    High-poverty school means, consistent with section 
1111(h)(1)(C)(viii) of the ESEA, a school in the highest quartile of 
schools in the State with respect to poverty level, using a measure of 
poverty determined by the State.
    High-quality assessment means an assessment designed to measure a 
student's understanding of, and ability to apply, critical concepts 
through the use of a variety of item types, formats, and administration 
conditions (e.g., open-ended responses, performance-based tasks, use of 
technology). Such assessments are structured to enable measurement of 
student achievement (as defined in this notice) and student growth (as 
defined in this notice); are of high technical quality (e.g., are 
valid, reliable, and aligned to standards); and include the assessment 
of students with disabilities and limited English proficient students.
    Instructional improvement systems means tools that provide 
teachers, principals, and administrators with meaningful support for a 
cycle of continuous instructional improvement, including activities 
such as: instructional planning; gathering information (e.g., through 
formative assessments (as defined in this notice), interim assessments 
(as defined in this notice), and looking at student work); analyzing 
information with the support of rapid-time (as defined in this notice) 
reporting; using this information to inform decisions on appropriate 
next steps; and evaluating the effectiveness of the actions taken.
    Interim assessment means an assessment given at regular and 
specified intervals throughout the school year, and designed to 
evaluate students' knowledge and skills relative to a specific set of 
academic standards, and the results of which can be aggregated (e.g., 
by course, grade level, school, or LEA) in order to inform teachers and 
administrators at the student, classroom, school, and LEA levels.
    Persistently lowest-performing schools means Title I schools in 
improvement, corrective action, or restructuring in the State and the 
secondary schools (both middle and high schools) in the State that are 
equally as low-achieving as these Title I schools and are eligible for, 
but do not receive, Title I funds. When considering which schools are 
the lowest-achieving, the State must consider both the absolute 
performance of schools on the State assessments in reading/language 
arts and mathematics and whether schools have made progress on those 
assessments.
    Rapid-time, in reference to reporting and availability of school- 
and LEA-level data, means that data is available quickly enough to 
inform current lessons, instruction, and related supports; in most 
cases, this will be within 72 hours of an assessment or data gathering 
in classrooms, schools, and LEAs.
    Student achievement means, at a minimum--
    (a) For tested grades and subjects: A student's score on the 
State's assessment under section 1111(b)(3) of the ESEA; and
    (b) For non-tested grades and subjects: An alternative measure of 
student performance (e.g., student performance on interim assessments 
(as defined in this notice), rates at which students are on track to 
graduate from high school, percentage of students enrolled in Advanced 
Placement courses who take Advanced Placement exams, rates at which 
students meet goals in individualized education programs, student 
scores on end-of-course exams).
    Student growth means the change in achievement data for an 
individual student between two points in time. Growth may be measured 
by a variety of approaches, but any approach used must be statistically 
rigorous and based on student achievement (as defined in this notice) 
data, and may also include other measures of student learning in

[[Page 37812]]

order to increase the construct validity and generalizability of the 
information.
    Total revenues available to the State means either (a) projected or 
actual total State revenues for education and other purposes for the 
relevant year; or (b) projected or actual total State appropriations 
for education and other purposes for the relevant year.
    America COMPETES Act elements (as specified in section 
6401(e)(2)(D)) means: (1) A unique statewide student identifier that 
does not permit a student to be individually identified by users of the 
system; (2) student-level enrollment, demographic, and program 
participation information; (3) student-level information about the 
points at which students exit, transfer in, transfer out, drop out, or 
complete P-16 education programs; (4) the capacity to communicate with 
higher education data systems; (5) a State data audit system assessing 
data quality, validity, and reliability; (6) yearly test records of 
individual students with respect to assessments under section 1111(b) 
of the ESEA (20 U.S.C. 6311(b)); (7) information on students not tested 
by grade and subject; (8) a teacher identifier system with the ability 
to match teachers to students; (9) student-level transcript 
information, including information on courses completed and grades 
earned; (10) student-level college readiness test scores; (11) 
information regarding the extent to which students transition 
successfully from secondary school to postsecondary education, 
including whether students enroll in remedial coursework; and (12) 
other information determined necessary to address alignment and 
adequate preparation for success in postsecondary education.

Final Priorities, Requirements, Definitions, and Selection Criteria

    We will announce the final priorities, requirements definitions, 
and selection criteria, in a notice in the Federal Register. We will 
determine the final priorities, requirements, definitions, and 
selection criteria after considering responses to this notice and other 
information available to the Department. This notice does not preclude 
us from proposing additional priorities, requirements, definitions, or 
selection criteria, subject to meeting applicable rulemaking 
requirements.

    Note: This notice does not solicit applications. In any year in 
which we choose to use one or more of these priorities, 
requirements, definitions, and selection criteria, we invite 
applications through a notice in the Federal Register.

Executive Order 12866

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive Order and subject to review by OMB. 
Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action likely to result in a rule that may 
(1) have an annual effect on the economy of $100 million or more, or 
adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
Tribal governments, or communities in a material way (also referred to 
as an ``economically significant'' rule); (2) create serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) materially alter the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive order. Pursuant to the 
Executive order, it has been determined that this regulatory action 
will have an annual effect on the economy of more than $100 million 
because the amount of government transfers provided through the Race to 
the Top Fund will exceed that amount. Therefore, this action is 
``economically significant'' and subject to OMB review under section 
3(f)(1) of the Executive order.
    The potential costs associated with this proposed regulatory action 
are those resulting from statutory requirements and those we have 
determined as necessary for administering this program effectively and 
efficiently.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of this proposed regulatory action, we have determined 
that the benefits of the proposed priorities, requirements, 
definitions, and selection criteria justify the costs.
    We have determined, also, that this proposed regulatory action does 
not unduly interfere with State, local, and Tribal governments in the 
exercise of their governmental functions.

Need for Federal Regulatory Action

    These proposed priorities, requirements, definitions, and selection 
criteria are needed to implement the Race to the Top program. The 
Secretary does not believe that the statute, by itself, provides a 
sufficient level of detail to ensure that Race to the Top truly serves 
as a mechanism for driving significant education reform in the States. 
The authorizing language is very brief, and we believe the Congress 
likely expected the Secretary to augment this language, through 
rulemaking, in order to give greater meaning to the statutory 
provisions. Additionally, the statute expressly provides the Secretary 
the authority to require States to include in their application such 
information as the Secretary may reasonably require and to determine 
which States receive grants on the basis of other criteria as the 
Secretary determines appropriate.
    In the absence of specific selection criteria for Race to the Top 
grants, the Department would use the general selection criteria in 34 
CFR 75.210 of the Education Department General Administrative 
Regulations in selecting States to receive grants. The Secretary does 
not believe the use of those general criteria would be appropriate for 
the Race to the Top competitions, because they do not focus on the 
educational reforms that States must be implementing in order to 
receive a Race to the Top grant, on the specific uses of funds under 
Race to the Top, or on the plans that the Secretary believes States 
should develop for their Race to the Top grants.

Regulatory Alternatives Considered

    The Department considered a variety of possible priorities, 
requirements, definitions, and selection criteria before deciding to 
propose those included in this notice. The proposed priorities, 
requirements, definitions, and selection criteria are those that best 
embody the Secretary's concept of how the Race to the Top program 
should operate. The proposals would provide States (and their LEAs) 
receiving Race to the Top grants with broad flexibility in the 
expenditure of those grants, while creating clear criteria for the 
selection of applications and providing greater clarity (than is 
provided in the legislation itself) on what must be included in a State 
application and what progress States would have to make in the four 
education reform areas in order to receive a grant. The Secretary 
believes that the proposals, thus, appropriately balance a limited 
degree of Federal prescription with broad flexibility in State and 
local implementation. We seek public comment on whether we have 
achieved the optimal balance.

Summary of Costs and Benefits

    The Department believes that the proposed priorities, requirements, 
definitions, and selection criteria will not impose significant costs 
on States,

[[Page 37813]]

or on the LEAs and other entities that will receive assistance through 
the Race to the Top Fund. As discussed elsewhere, the proposals are 
intended to create a framework for the award of approximately $4 
billion in support of State and local efforts to implement critical 
educational reforms and to making substantial gains in student 
achievement, closing achievement gaps, improving high school graduation 
rates, and ensuring student preparation for success in college and 
careers. Without promulgation of priorities, requirements, definitions, 
and selection criteria for the Race to the Top competitions, the 
Department would not have clear and defensible criteria for making very 
large grants to States.
    The Department believes that the costs imposed on States by the 
proposed priorities, requirements, definitions, and selection criteria 
will be limited to the paperwork burden discussed elsewhere in this 
notice. The benefits conveyed on a State through its receipt of a grant 
will greatly exceed those costs. In addition, even States that apply 
but are unsuccessful in the competitions may derive benefits, as the 
process of working with LEAs and other stakeholders on the State 
application may help accelerate the pace of education reforms in the 
State.
Accounting Statement
    As required by OMB Circular A-4 (available at http://www.Whitehouse.gov/omb/Circulars/a004/a-4.pdf), in the following table, 
we have prepared an accounting statement showing the classification of 
the expenditures associated with the provisions of this proposed 
regulatory action. This table provides our best estimate of the Federal 
payments to be made to States under this program as a result of this 
proposed regulatory action. Expenditures are classified as transfers to 
States.

  Table--Accounting Statement Classification of Estimated Expenditures
------------------------------------------------------------------------
                 Category                     Transfers  (in millions)
------------------------------------------------------------------------
Annual Monetized Transfers................  $3,956.
From Whom to Whom.........................  Federal Government to
                                             States.
------------------------------------------------------------------------

    As previously explained, ARRA provides approximately $4.3 billion 
for the Race to the Top Fund (referred to in the statute as State 
Incentive Grants). In this notice, we propose additional specific 
priorities, requirements, definitions, and criteria regarding the 
applications that individual States submit for approximately $4 billion 
of Race to the Top funds. At a later date, we may announce a separate 
Race to the Top Standards and Assessment competition, for approximately 
$350 million, to support the development of assessments by consortia of 
States.

Paperwork Reduction Act of 1995

    The application requirements and selection criteria proposed in 
this notice will require the collection of information that is subject 
to review by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). It is our plan 
to offer a comment period for the information collection at the time of 
the notice of final priorities, requirements, definitions, and 
selection criteria. At that time, the Department will submit the 
information collection to OMB for its review and provide the specific 
burden hours associated with each of the requirements and selection 
criteria for comment. However, because it is likely that the 
information collection will be reviewed under emergency OMB processing, 
the Department encourages the public to comment on the estimates we are 
providing for the burden hours associated with the requirements and 
selection criteria proposed in this notice.

Proposed Application Requirements

    There are eight application requirements that the Department 
proposes States must meet when submitting their applications. These 
are:
    (a) The State's application must be signed by the Governor, the 
State's chief school officer, and the president of the State board of 
education.
    (b) The State must describe the progress it has made to date in 
each of the four education reform areas, including how the State has 
used ARRA and other Federal and State funding over the last several 
years to pursue reforms in these areas (as described in Overall 
Selection Criterion (E)(1)).
    (c) The State must provide financial data to show whether and to 
what extent the percentage of the total revenues available to the State 
(as defined in this notice) that were used to support elementary, 
secondary, and public higher education for FY 2009 increased, 
decreased, or remained the same compared to FY 2008 (as described in 
Overall Selection Criterion (E)(2)).
    (d) The State must describe its statewide support from stakeholders 
and LEAs, including public charter schools identified as LEAs under 
State law (as described in Overall Selection Criterion (E)(3)).
    (e) The State must include a budget that details how it will use 
grant funds and other resources to meet targets and perform related 
functions, including how it will use funds awarded under this program 
to--
    (1) Achieve its targets for improving student achievement and 
graduation rates and for closing achievement gaps (as described in 
Overall Selection Criterion (E)(4)); and
    (2) Give priority to high-need LEAs (as defined in this notice), in 
addition to providing 50 percent of the grant to participating LEAs 
based on their relative shares of funding under part A of Title I of 
the ESEA as required under section 14006(c) of the ARRA.
    (f) The State must provide, for each State Reform Conditions 
Criterion (listed earlier in this notice), a description of the State's 
current status in meeting that Criterion, and at a minimum, the 
information requested as supporting evidence for the Criterion. The 
Appendix to this notice contains a table listing the proposed evidence.
    (g) The State must provide, for each Reform Plan Criterion (listed 
earlier in this notice) a detailed plan for use of grant funds that 
includes, but need not be limited to the activities to be undertaken, 
the goals and rationale for the activities, the timeline for 
implementation, the party responsible for implementing the activities, 
the resources the State will use to support the activities, the State's 
annual targets, if applicable, for the performance measures aligned to 
the Criterion, and the evidence requested in support of that Criterion 
(if any). (See the ``Proposed Application Requirements'' section for a 
detailed description of these proposed requirements.)
    (h) The State must submit a certification from the State Attorney 
General, or other chief State legal officer, that the State's 
description of, and statements and conclusions concerning, State law 
(for example, with respect to the Eligibility Requirement regarding 
teacher effectiveness or any of the applicable Selection Criteria) in 
its application are complete, accurate, and constitute a reasonable 
interpretation of State law.

Proposed Selection Criteria

    There are 19 selection criteria that the Department proposes States 
may address when submitting their applications. These are--

    (A)(1) Developing and adopting common standards;

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    (A)(2) Developing and implementing common, high-quality 
assessments;
    (A)(3) Supporting transition to enhanced standards and high-
quality assessments;
    (B)(1) Fully implementing a statewide longitudinal data system;
    (B)(2) Accessing and using State data;
    (B)(3) Using data to improve instruction;
    (C)(1) Providing alternative pathways for aspiring teachers and 
principals;
    (C)(2) Differentiating teacher and principal effectiveness based 
on performance;
    (C)(3) Ensuring equitable distribution of effective teachers and 
principals;
    (C)(4) Reporting the effectiveness of teacher and principal 
preparation programs;
    (C)(5) Providing effective support to teachers and principals;
    (D)(1) Intervening in the lowest-performing schools and LEAs;
    (D)(2) Increasing the supply of high-quality charter schools;
    (D)(3) Turning around struggling schools;
    (E)(1) Demonstrating significant progress;
    (E)(2) Making education funding a priority;
    (E)(3) Enlisting statewide support and commitment;
    (E)(4) Raising achievement and closing gaps; and
    (E)(5) Building strong statewide capacity to implement, scale, 
and sustain proposed plans.

    (Please see the ``Proposed Selection Criteria'' section for 
detailed descriptions.)
    We estimate that each SEA would spend approximately 642 hours of 
staff time to address the application requirements and criteria, 
prepare the application, and obtain necessary clearances. The total 
number of hours for all 52 SEAs is an estimated 33,384 hours (52 SEAs 
(the 50 States plus the District of Columbia and Puerto Rico) times 642 
hours equals 33,384 hours.) We estimate the average total cost per hour 
of the State-level staff who carry out this work to be $30.00 an hour. 
The total estimated cost for all States would be $1,001,520 ($30.00 x 
33,384 hours = $1,001,520).

Regulatory Flexibility Act Certification

    The Secretary certifies that this proposed regulatory action will 
not have a significant economic impact on a substantial number of small 
entities. The Secretary makes this certification because the only 
entities eligible to apply for grants are States, and States are not 
small entities.
    Intergovernmental Review: This program is 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 a strengthened 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 our specific plans and 
actions for this program.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or computer diskette) on request to the program contact 
person listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: You can view this document, as 
well as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF) on the 
Internet at the following site: http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. 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.


    Dated: July 22, 2009.
Arne Duncan,
Secretary of Education.
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[FR Doc. E9-17909 Filed 7-24-09; 11:15 am]
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