[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Rules and Regulations]
[Pages 23487-23489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10224]


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DEPARTMENT OF EDUCATION

34 CFR Subtitle B, Chapter II

[Docket ID ED-2010-OESE-0005]
RIN 1810-AB10


Race to the Top Fund

ACTION: Final requirements.

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SUMMARY: The U.S. Secretary of Education (Secretary) adopts as final, 
without changes, the interim final requirements for the Race to the Top 
Fund to incorporate and make binding for Phase 2 of the competition 
State budget guidance.

DATES: These requirements are effective May 27, 2011.

FOR FURTHER INFORMATION CONTACT: James Butler, Telephone: 202-205-3775 
or by e-mail: [email protected].
    If you use a telecommunications device for the deaf (TDD), call the 
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or computer 
diskette) on request to the contact person listed under FOR FURTHER 
INFORMATION CONTACT.

SUPPLEMENTARY INFORMATION: 
    On April 2, 2010, the Secretary published interim final 
requirements for the Race to the Top Fund in the Federal Register (75 
FR 16668). The interim final requirements became effective April 2, 
2010. At the time the interim final requirements were published, the 
Secretary requested public comment on the interim final requirements.
    In the interim final requirements, the Secretary made budget ranges 
for the Race to the Top Fund, which were originally included in the 
Race to the Top Fund NIA for fiscal year (FY) 2010, published in the 
Federal Register on November 18, 2009 (74 FR 59836), binding on 
applicants. In developing the budget ranges, the Department grouped the 
States into five categories by ranking every State according to its 
share of the national population of children ages 5 through 17 and 
identifying natural breaks in the population numbers. The Department 
then developed overlapping budget ranges for each category based on the 
student population data.
    As explained in the preamble to the interim final requirements (75 
FR 16668, 16669), the Secretary made the budget ranges a requirement in 
response to the unexpected budget requests received in Phase 1 of the 
Race to the Top competition, which varied widely and proposed, for the 
most part, budgets that were well above the suggested funding ranges. 
Additionally, the Department performed an analysis and did not find a 
relationship between States' scoring ranks in Phase 1 and the extent to 
which States exceeded the Department's suggested budget ranges. In 
balancing the need to fund high-quality reform plans and to ensure that 
a sufficient number of States received grants to serve as models of 
change for the Nation with the discrete amount of funding available, 
the Secretary determined that it was essential to make the budget 
ranges binding on applicants.
    There are no differences between the interim final requirements and 
these final requirements.

Analysis of Comments and Changes

    In response to our invitation in the interim final requirements, 
one commenter submitted comments.
    Generally we do not address technical and other minor changes, or 
suggested changes the law does not authorize us to make under the 
applicable statutory authority. In addition we do not address general 
comments that raised concerns not directly related to the interim final 
requirements.
    Comment: The commenter raised concerns about the impact of making 
the budget ranges mandatory on States for Phase 2 of the Race to the 
Top competition without first considering public comments. The 
commenter stated that the budget caps would force States to propose 
less ambitious activities than those proposed in their Phase 1 
applications, and that this in turn would harm their ability to 
undertake the meaningful reform efforts sought under the Race to the 
Top program. The commenter also noted that limiting States' budgets 
would in turn limit the amount of funds that local educational agencies 
(LEAs), particularly small LEAs, would receive, thereby undercutting 
the capacity of those LEAs to implement bold reform plans. 
Additionally, the commenter expressed concern with the timing of the 
release of the interim final requirements, April 2, 2010, contending 
that States would have far too little time to effectively alter their 
Phase 1

[[Page 23488]]

applications to stay within the budget ranges before the Phase 2 
application deadline of June 1, 2010. Finally, the commenter expressed 
concern with the fairness of creating such a requirement in light of 
the two Race to the Top Phase 1 winners that received awards in excess 
of their suggested budget caps. The commenter suggested that this lack 
of equitability in award amounts between Phase 1 and Phase 2 grantees 
would hinder the Department's ability to evaluate the effectiveness of 
the program.
    Discussion: As explained in detail in the preamble to the interim 
final requirements, the Department did not have sufficient time to 
complete notice-and-comment rulemaking on the interim final 
requirements given that all funds under the Race to the Top program 
were required to be obligated by September 30, 2010. Completing notice-
and-comment rulemaking would have taken four to six months, and, in 
consideration of the time needed to conduct Phase 2 of the competition, 
the time States needed to draft applications, and the impending 
September 30th American Recovery and Reinvestment Act of 2009 (ARRA) 
obligation deadline, we concluded that it would be impracticable and 
contrary to the public interest for the Department to complete notice-
and-comment rulemaking.
    In deciding whether to make the budget ranges binding on 
applicants, we considered whether States would be able to propose 
comprehensive and successful reform plans within the proposed budget 
ranges. Because we did not find a relationship between States' scoring 
ranks in Phase 1 and the extent to which States exceeded the 
Department's suggested budget ranges, we concluded that States could, 
in fact, develop comprehensive reform plans that met the Race to the 
Top selection criteria. We disagree with the commenter that States that 
submitted applications in Phase 1 were automatically forced to propose 
less ambitious activities in their Phase 2 applications. Requiring 
States to limit their budget requests only required State staff to make 
strategic decisions about where Race to the Top funds were most needed 
and where they could coordinate, reallocate, or repurpose other 
Federal, State, and local sources of funding to support Race to the Top 
goals, as evaluated under selection criterion (A)(2)(i)(d). While 
capping the amount of funds that a State could request necessarily 
limited the 50 percent of Race to the Top funds required to flow to 
participating LEAs under section 14007 of the ARRA, States could 
augment the amount of funds available for participating LEAs from the 
State portion of the award.
    The Race to the Top competition, even with the budget caps, made 
available the largest amounts of funding ever offered to States through 
a Department of Education discretionary grant program. We believe these 
amounts were sufficient to ensure a robust competition and to stimulate 
comprehensive education reform throughout the country.
    Applicants had approximately two months from the announcement of 
the requirement that States conform to the previously suggested budget 
ranges until the application submission deadline for Phase 2. While we 
recognize that it would have been helpful to give applicants more time 
between the announcement of the requirement and the Phase 2 application 
deadline, we could not make the final decision about whether to make 
the budget caps binding until after the Phase 1 competition was 
complete, and we had the opportunity to analyze applicants' budget 
requests and scores. Specifically, we needed the results from the Phase 
1 competition to investigate whether there was a relationship between 
the amount of funds requested and a State's rank in Phase 1 to ensure 
that making the budget ranges binding would not limit a State's ability 
to propose a successful reform plan in Phase 2. Additionally, 
applicants in Phase 1 of the competition had two months from the date 
of publication of the NIA to prepare their applications, just as 
applicants in Phase 2 had after publication of the budget requirements.
    Finally, we do not believe that there will be difficulty comparing 
results across Phase 1 and Phase 2 grantees. The program is not focused 
on dollar-for-dollar spending, but rather on improved educational 
outcomes in winning States.
    Changes: None.

Final Requirements

    For the reasons discussed previously, the Secretary amends the Race 
to the Top Fund final requirements published in the Federal Register on 
November 18, 2009 (74 FR 59688, 59799) to include a new section under 
the heading Program Requirements, as follows:
    Budget Requirements: For Phase 2 of the fiscal year 2010 
competition, and for any subsequent competitions, the State's budget 
must conform to the following budget ranges: \1\
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    \1\ The Department developed budget ranges for each State by 
ranking every State according to its share of the national 
population of children ages 5 through 17 based on data from 
``Estimates of the Resident Population by Selected Age Groups for 
the United States, States, and Puerto Rico: July 1, 2008'' released 
by the Population Division of the U.S. Census Bureau. The Department 
identified the natural breaks in the population data and then 
developed overlapping budget ranges for each category taking into 
consideration the total amount of funds available for awards.
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    Category 1--$350-700 million: California, Texas, New York, Florida.
    Category 2--$200-400 million: Illinois, Pennsylvania, Ohio, 
Georgia, Michigan, North Carolina, New Jersey.
    Category 3--$150-250 million: Virginia, Arizona, Indiana, 
Washington, Tennessee, Massachusetts, Missouri, Maryland, Wisconsin.
    Category 4--$60-175 million: Minnesota, Colorado, Alabama, 
Louisiana, South Carolina, Puerto Rico, Kentucky, Oklahoma, Oregon, 
Connecticut, Utah, Mississippi, Iowa, Arkansas, Kansas, Nevada.
    Category 5--$20-75 million: New Mexico, Nebraska, Idaho, West 
Virginia, New Hampshire, Maine, Hawaii, Rhode Island, Montana, 
Delaware, South Dakota, Alaska, North Dakota, Vermont, Wyoming, 
District of Columbia.
    The State should develop a budget that is appropriate for the plan 
it outlines in its application; however we will not consider a State's 
application if its request exceeds the maximum in its budget range.
    Program Authority: American Recovery and Reinvestment Act of 2009, 
Division A, Section 14006, Public Law 111-5.

Executive Order 12866

    Under Executive Order 12866, the Secretary must determine whether a 
regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive order and subject to review by the Office 
of Management and Budget (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 local 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

[[Page 23489]]

order. The Secretary has determined that this regulatory action is not 
significant under section 3(f) of the Executive order.
    We summarized the potential costs and benefits of these final 
requirements in the interim final requirements published in the Federal 
Register on April 2, 2010 at 75 FR 16668, 16670.

Paperwork Reduction Act of 1995

    The final requirements do not contain new information collection 
requirements subject to review by OMB under the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501-3520).

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 notification of our specific plans regarding 
budget requirements for this program. Electronic Access to This 
Document: 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 via the Federal Digital System at: http://www.gpo.gov/fdsys. 
At this site 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). To use PDF you must have Adobe Acrobat 
Reader, which is available free at the site.

    Dated: April 21, 2011.
Arne Duncan,
Secretary of Education.
[FR Doc. 2011-10224 Filed 4-26-11; 8:45 am]
BILLING CODE 4000-01-P