[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Rules and Regulations]
[Pages 92376-92464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30190]



[[Page 92375]]

Vol. 81

Monday,

No. 243

December 19, 2016

Part VIII





 Department of Education





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





34 CFR Part 300





Assistance to States for the Education of Children With Disabilities; 
Preschool Grants for Children With Disabilities; Final Rule

  Federal Register / Vol. 81 , No. 243 / Monday, December 19, 2016 / 
Rules and Regulations  

[[Page 92376]]


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

DEPARTMENT OF EDUCATION

34 CFR Part 300

[Docket ID ED-2015-OSERS-0132]
RIN 1820-AB73


Assistance to States for the Education of Children With 
Disabilities; Preschool Grants for Children With Disabilities

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Final regulations.

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

SUMMARY: The Secretary amends the regulations under Part B of the 
Individuals with Disabilities Education Act (IDEA) governing the 
Assistance to States for the Education of Children with Disabilities 
program and the Preschool Grants for Children with Disabilities 
program. With the goal of promoting equity under IDEA, the regulations 
will establish a standard methodology States must use to determine 
whether significant disproportionality based on race and ethnicity is 
occurring in the State and in its local educational agencies (LEAs); 
clarify that States must address significant disproportionality in the 
incidence, duration, and type of disciplinary actions, including 
suspensions and expulsions, using the same statutory remedies required 
to address significant disproportionality in the identification and 
placement of children with disabilities; clarify requirements for the 
review and revision of policies, practices, and procedures when 
significant disproportionality is found; and require that LEAs identify 
and address the factors contributing to significant disproportionality 
as part of comprehensive coordinated early intervening services 
(comprehensive CEIS) and allow these services for children from age 3 
through grade 12, with and without disabilities.

DATES: 
    Effective Date: These regulations are effective January 18, 2017.
    Compliance Date: Recipients of Federal financial assistance to 
which these regulations apply must comply with these final regulations 
by July 1, 2018, except that States are not required to include 
children ages three through five in the calculations under Sec.  
300.647(b)(3)(i) and (ii) until July 1, 2020.

FOR FURTHER INFORMATION CONTACT: Mary Louise Dirrigl, U.S. Department 
of Education, 400 Maryland Avenue SW., Room 5156, Potomac Center Plaza, 
Washington, DC 20202-2600. Telephone: (202) 245-7324.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

Executive Summary

    Purpose of This Regulatory Action: The purpose of these final 
regulations is to promote equity in IDEA. Specifically, the final 
regulations will help to ensure that States meaningfully identify LEAs 
with significant disproportionality and that States assist LEAs in 
ensuring that children with disabilities are properly identified for 
services, receive necessary services in the least restrictive 
environment, and are not disproportionately removed from their 
educational placements by disciplinary removals. These final 
regulations also address the well-documented and detrimental over-
identification of certain students for special education services, with 
particular concern that over-identification results in children being 
placed in more restrictive environments and not taught to challenging 
academic standards.
    While these regulations only establish a system for identifying 
significant disproportionality based on overrepresentation, the 
regulations acknowledge that overrepresentation may be caused by under-
identification of one or more racial or ethnic groups and the 
regulations allow funds reserved for comprehensive CEIS to be used to 
address these issues if they are identified as a factor contributing to 
the significant disproportionality. LEAs are legally obligated to 
identify students with disabilities and provide the resources and 
supports they need to have equal access to education. Thus we, 
encourage States to ensure that the State's and LEAs' child find 
policies, practices, and procedures are working effectively to identify 
all children with disabilities, regardless of race or ethnicity.
    IDEA requires States and local educational agencies (LEAs) to take 
steps to determine the existence of and address significant 
disproportionality in special education. The statute and regulations 
for IDEA, Part B, include important provisions for how States and LEAs 
must address significant disproportionality, including an examination 
of significant disproportionality and remedies where findings of 
significant disproportionality occur.
    Under IDEA section 618(d) (20 U.S.C. 1418(d)) and Sec.  300.646, 
States are required to collect and examine data to determine whether 
significant disproportionality based on race or ethnicity is occurring 
in the State and the LEAs of the State with respect to the 
identification of children as children with disabilities, including 
identification as children with particular impairments; the placement 
of children in particular educational settings; and the incidence, 
duration, and type of disciplinary actions, including suspensions and 
expulsions. States must make this determination annually.
    When a State educational agency (SEA) identifies LEAs with 
significant disproportionality in one or more of these areas based on 
the collection and examination of their data, States must: (1) Provide 
for the review (and if appropriate) revision of the LEA's policies, 
procedures, and practices for compliance with IDEA; (2) require the LEA 
to reserve the maximum amount (15 percent) of its Part B funds to be 
used for comprehensive coordinated early intervening services 
(comprehensive CEIS) to serve children in the LEA, particularly, but 
not exclusively, children in those groups that were significantly over-
identified; and (3) require the LEA to publicly report on the revision 
of its policies, procedures, and practices. Under the statute and 
regulations, each State has considerable discretion in how it defines 
significant disproportionality.
    To address and reduce significant disproportionality, the final 
regulations establish a standard methodology that each State must use 
in its annual determination under IDEA section 618(d) (20 U.S.C. 
1418(d)) of whether significant disproportionality based on race and 
ethnicity is occurring in the State and the LEAs of the State.
    Further, the final regulations clarify ambiguities in the existing 
regulations concerning significant disproportionality in the 
disciplining of children with disabilities. Specifically, these 
regulations adopt the Department's long-standing interpretation that 
the required remedies in IDEA section 618(d)(2) apply when there is 
significant disproportionality in identification, placement, or any 
type of disciplinary removal from placement. In addition, funds 
reserved for comprehensive CEIS now must be used to identify and 
address the factors contributing to significant disproportionality and 
may be used to serve children from age 3 through grade 12, with and 
without disabilities.

[[Page 92377]]

Summary of Major Provisions of This Regulatory Action
    Significant provisions of these final regulations include:
     Sec. Sec.  300.646(b) and 300.647(a) and (b) provide the 
standard methodology that States must use to determine whether there is 
significant disproportionality based on race or ethnicity in the State 
and its LEAs;
     As part of the standard methodology, Sec.  300.647(b)(1) 
requires States to set reasonable risk ratio thresholds, reasonable 
minimum n-sizes, reasonable minimum cell sizes, and if a State uses the 
flexibility described in Sec.  300.647(d)(2), standards for measuring 
reasonable progress, all with input from stakeholders (including their 
State Advisory Panels), subject to the Department's oversight;
     Sec.  300.647(b)(1)(iv) sets a rebuttable presumption that 
a minimum cell size of no greater than 10 and a minimum n-size of no 
greater than 30 are reasonable.
     Sec.  300.647(d) provides flexibilities that States, at 
their discretion, may consider when determining whether significant 
disproportionality exists. States may choose to identify an LEA as 
having significant disproportionality after an LEA exceeds a risk ratio 
threshold for up to three prior consecutive years. States may also 
choose not to identify an LEA with significant disproportionality if 
the LEA is making reasonable progress, as defined by the State, in 
lowering risk ratios in each of the two consecutive prior years, even 
if the risk ratios exceed the State's risk ratio thresholds;
     Sec.  300.646(c) clarifies that the remedies in IDEA 
section 618(d)(2) are triggered if a State makes a determination of 
significant disproportionality with respect to disciplinary removals 
from placement;
     Sec.  300.646(c)(1) and (2) clarify that the review of 
policies, practices, and procedures must occur in every year in which 
an LEA is identified with significant disproportionality and that LEA 
reporting of any revisions to policies, practices, and procedures must 
be in compliance with the confidentiality provisions of the Family 
Educational Rights and Privacy Act (FERPA), (20 U.S.C. 1232), its 
implementing regulations in 34 CFR part 99, and IDEA section 618(b)(1); 
and
     Sec.  300.646(d) describes which populations of children 
may receive comprehensive CEIS when an LEA has been identified with 
significant disproportionality. Comprehensive CEIS may be provided to 
children from age 3 through grade 12, regardless of whether they are 
children with disabilities, and, as part of implementing comprehensive 
CEIS, an LEA must identify and address the factors contributing to the 
significant disproportionality.
    Costs and Benefits: Due to the considerable discretion allowed 
States (e.g. flexibility to determine their own reasonable risk ratio 
thresholds, reasonable minimum n-sizes and cell size, and the extent to 
which LEAs have made reasonable progress under Sec.  300.647(d)(2) in 
lowering their risk ratios or alternate risk ratios, we cannot evaluate 
the costs of implementing the final regulations with absolute 
precision. However, we estimate the total cost of these regulations 
over ten years would be between $50.1 and $91.4 million, plus transfers 
between $298.4 and $552.9 million. These estimates assume discount 
rates of three to seven percent.
    There are several benefits of the regulations that include: 
Increased transparency regarding each State's definition of significant 
disproportionality; an increased role for State Advisory Panels in 
determining States' risk ratio thresholds, minimum n-sizes, and minimum 
cell sizes; and State review and, if appropriate, revision of the 
policies, procedures, and practices used in the identification, 
placement, or discipline of children with disabilities, to ensure that 
the policies, procedures, and practices comply with the requirements of 
IDEA; and, ultimately, better identification, placement, and discipline 
of children with disabilities.
    Additionally, the Department believes that expanding the 
eligibility of children ages three through five to receive 
comprehensive CEIS would give LEAs new flexibility to use additional 
funds received under Part B of IDEA to provide appropriate services and 
supports at earlier ages to children who might otherwise later be 
identified as having a disability, which could reduce the need for more 
extensive special education and related services for such children in 
the future. The Department believes this regulatory action to 
standardize the methodology States use to identify significant 
disproportionality will provide clarity to the public, increase 
comparability of data across States, and improve upon current policy, 
which has resulted in State definitions which vary widely and may 
prevent States from identifying the magnitude of racial and ethnic 
overrepresentation in special education. We provide further detail 
regarding costs and benefits in the Regulatory Impact Analysis section.

General

    On March 2, 2016, the Secretary published a notice of proposed 
rulemaking (NPRM) in the Federal Register (81 FR 10967) to amend the 
regulations in 34 CFR part 300 governing the Assistance to States for 
the Education of Children with Disabilities program and the Preschool 
Grants for Children with Disabilities program. Specifically, in the 
NPRM, we proposed changes to the regulation regarding significant 
disproportionality based on race and ethnicity in the identification, 
placement, and discipline of children with disabilities.
    In the preamble of the NPRM, we discussed on pages 10980 and 10981 
the major changes proposed in that document. These included the 
following:
     Adding Sec. Sec.  300.646(b) and 300.647(a) and (b) to 
provide the standard methodology that States must use to determine 
whether there is significant disproportionality based on race or 
ethnicity in the State and its LEAs;
     Adding Sec.  300.647(c) to provide the flexibilities that 
States, at their discretion, may consider when determining whether 
significant disproportionality exists. States may choose to identify an 
LEA as having significant disproportionality after an LEA exceeds a 
risk ratio threshold for up to three prior consecutive years. A State 
also has the flexibility not to identify an LEA with significant 
disproportionality if the LEA is making reasonable progress under Sec.  
300.647(d)(2) in lowering the risk ratios, even if they exceed the 
State's risk ratio thresholds, where reasonable progress is defined by 
the State;
     Amending current Sec.  300.646(b) (proposed Sec.  
300.646(c)) to clarify that the remedies in IDEA section 618(d)(2) are 
triggered if a State makes a determination of significant 
disproportionality with respect to disciplinary removals from 
placement;
     Amending current Sec.  300.646(b)(1) and (3) (proposed 
Sec.  300.646(c)(1) and (2)) to clarify that the review of policies, 
practices, and procedures must occur in every year in which an LEA is 
identified with significant disproportionality, and that LEA reporting 
of any revisions to policies, practices, and procedures must be in 
compliance with the confidentiality provisions of the Family 
Educational Rights and Privacy Act (FERPA), (20 U.S.C. 1232), its 
implementing regulations in 34 CFR part 99, and IDEA section 618(b)(1); 
and
     Amending current Sec.  300.646(b)(2) (proposed Sec.  
300.646(d)) to define which

[[Page 92378]]

populations of children may receive comprehensive CEIS when an LEA has 
been identified with significant disproportionality. Comprehensive CEIS 
may be provided to children from age 3 through grade 12, regardless of 
whether they are children with disabilities, and, as part of 
implementing comprehensive CEIS, an LEA must identify and address the 
factors contributing to the significant disproportionality.
    These final regulations contain several significant changes from 
the NPRM, including:
     A revised Sec.  300.646(d)(1)(ii) to include additional 
factors that may contribute to significant disproportionality;
     A new Sec.  300.646(d)(1)(iii) to clarify that in 
implementing comprehensive CEIS an LEA must address a policy, practice, 
or procedure it identifies as contributing to significant 
disproportionality;
     A new Sec.  300.646(e) to clarify that LEAs that serve 
only children with disabilities are not required to reserve IDEA Part B 
funds for comprehensive CEIS;
     A new Sec.  300.646(f) to make clear that these 
regulations do not authorize a State or an LEA to develop or implement 
policies, practices, or procedures that result in actions that violate 
any IDEA requirements, including requirements related to child find and 
ensuring that a free appropriate public education is available to all 
eligible children with disabilities.
     A revised Sec.  300.647(a) to include a definition of 
comparison group, minimum n-size, and minimum cell size;
     A revised Sec.  300.647(b)(1) to require States to set 
reasonable risk ratio thresholds, reasonable minimum cell sizes, 
reasonable minimum n-sizes, and, if a State is using the flexibility in 
Sec.  300.647(d)(2), standards for measuring reasonable progress, all 
with input from stakeholders (including their State Advisory Panels) 
and subject to the Department's oversight. As revised, Sec.  
300.647(b)(1) also clarifies that a State may, but is not required to, 
set these standards at different levels for each of the categories 
described in paragraphs (b)(3) and (4);
     States may delay the inclusion of children ages three 
through five in the review of significant disproportionality with 
respect to the identification of children as children with 
disabilities, and with respect to the identification of children as 
children with a particular impairment, until July 1, 2020;
     A revision of Sec.  300.647(b)(4) to no longer require 
States to calculate the risk ratio for children with disabilities ages 
6 through 21, inside a regular class more than 40 percent of the day 
and less than 79 percent of the day;
     An amendment to Sec.  300.647(b)(5) to require States to 
use the alternate risk ratio when the number of children in the 
comparison group fails to meet either the State's reasonable minimum n-
sizes or the State's reasonable minimum cell sizes;
     A new Sec.  300.647(b)(7) requiring States to report all 
risk ratio thresholds, minimum cell sizes, minimum n-sizes, standards 
for measuring reasonable progress, and the rationales for each, to the 
Department at a time and in a manner determined by the Secretary. 
Rationales for minimum cell sizes and minimum n-sizes must include a 
detailed explanation of why the numbers are reasonable and how they 
ensure appropriate analysis for significant disproportionality.
     A new Sec.  300.647(c) to clarify that States are not 
required to calculate a risk ratio or alternate risk ratio if the 
particular racial or ethnic group being analyzed does not meet the 
minimum n-size or minimum cell size, or in calculating the alternate 
risk ratio under Sec.  300.647(b)(5), the comparison group in the State 
does not meet the minimum cell size or minimum n-size; and
     A revision to proposed Sec.  300.647(c)(2)--now Sec.  
300.647(d)(2)--to allow States the flexibility to not identify an LEA 
that exceeds a risk ratio threshold if it makes reasonable progress 
under Sec.  300.647(d)(2) in lowering the applicable risk ratio or 
alternate risk ratio in each of two consecutive prior years.
    We fully explain these changes in the Analysis of Comments and 
Changes elsewhere in this preamble.
Effective Date of These Regulations
    As noted in the Dates section, these regulations become part of the 
Code of Federal Regulations on January 18, 2017. However, States and 
LEAs are not required to comply with these regulations until July 1, 
2018, or to include children ages three through five in the review of 
significant disproportionality with respect both to the identification 
of children as children with disabilities and to the identification of 
children as children with a particular impairment, until July 1, 2020.
    The Department recognizes the practical necessity of allowing 
States time to plan for implementing these final regulations, including 
to the extent necessary, time to amend the policies and procedures 
necessary to comply. States will need time to develop the policies and 
procedures necessary to implement the standard methodology in Sec.  
300.647 and the revised remedies in Sec.  300.646(c) and (d). In 
particular, States must consult with their stakeholders and State 
Advisory Panels under Sec.  300.647(b)(1) to develop reasonable risk 
ratio thresholds, reasonable minimum n-sizes, reasonable minimum cell 
sizes, and if a State uses the flexibility in Sec.  300.647(d)(2), 
standards for measuring reasonable progress. States must also determine 
which, if any, of the available flexibilities they will adopt. To the 
extent States need to amend their policies and procedures to comply 
with these regulations, States will also need time to conduct public 
hearings, ensure adequate notice of those hearings and provide an 
opportunity for public comment, as required by Sec.  300.165.
    Accordingly, States must implement the standard methodology under 
Sec.  300.647 in school year (SY) 2018-19. In doing so, States must 
identify LEAs with significant disproportionality under Sec.  
300.647(d)(1) in SY 2018-2019 using, at most, data from the three most 
recent school years for which data are available. We note that, in the 
case of discipline, States may be using data from four school years 
prior to the current year, as data from the immediate preceding school 
year may not yet be available at the time the State is making its 
determinations (i.e., final discipline data from SY 2017-2018 may not 
yet be available at the time during SY 2018-2019 the State is 
calculating risk ratios).
    In SY 2018-2019, States must implement the standard methodology 
contained in these regulations by ensuring that the identification of 
any LEAs with significant disproportionality based on race and 
ethnicity in the identification, placement, or disciplinary removal of 
children with disabilities, is based on the standard methodology in 
Sec.  300.647, and implements the revised remedies in accordance with 
Sec.  300.646(c) and (d). In the spring of 2020, therefore, States will 
report (via IDEA Part B LEA Maintenance of Effort (MOE) Reduction and 
CEIS data collection, OMB Control No. 1820-0689) whether each LEA was 
required to reserve 15 percent of its IDEA Part B funds for 
comprehensive CEIS in SY 2018-19.
    States may, at their option, accelerate this timetable by one full 
year. In other words, States may implement the standard methodology in 
SY 2017-18 and assess LEAs for significant disproportionality using 
data from up to the most recent three consecutive school years for 
which data are available.
    States that choose to implement the standard methodology in Sec.  
300.647 to

[[Page 92379]]

identify LEAs with significant disproportionality in SY 2017-2018 may 
also require those LEAs to implement the revised remedies in accordance 
with Sec.  300.646(c) and (d). Similarly, in SY 2017-18, States may 
choose to implement the revised remedies without implementing the 
standard methodology.
    Whether a State begins compliance in SY 2017-2018 or 2018-2019, it 
need not include children ages three through five in the review of 
significant disproportionality, with respect to both the identification 
of children as children with disabilities and to the identification of 
children as children with a particular impairment, until July 1, 2020.
    Finally, the delayed compliance date does not mean that States are 
excused from making annual determinations of significant 
disproportionality in the intervening years. States must still make 
these determinations in accordance with the current text of Sec.  
300.646.
    Public Comment: In response to our invitation in the NPRM, 316 
parties submitted comments on the proposed regulations. We group major 
issues according to subject under these headings:

I. General Comments
    Introduction
    Glossary of Terms
    Terminology
    The Department Should Await Congressional Action
    Under-Identification of Children With Disabilities by Race and 
Ethnicity
    Recommendations Regarding Technical Assistance and Guidance
    Causes of Racial and Ethnic Disparity That Originate Outside of 
School
    Causes of Racial and Ethnic Disparities That Originate in School
    Proposed Regulations Would Create Racial Quotas
    The Purpose of the Proposed Regulations
    The Cost and Burden of the Regulations
    Evaluating the Impact of the Regulation
    Reporting Requirements
    Additional State and Local Standards
    Noncompliance With IDEA
    General Opposition to the Regulation
    Comments on the Racial and Ethnic Disparities Report
    Timeline and Effective Date of the Regulation
    Appropriate Placement of Children With Disabilities
    Special Education, Generally
    Results-Driven Accountability
II. A Standard Methodology for Determining Significant 
Disproportionality (Sec.  300.647)
    General
    Risk Ratios (Sec.  300.646(b); Sec.  300.647(a)(2); Sec.  
300.647(a)(3); Sec.  300.647(b))
    Categories of Analysis (Sec.  300.647(b)(3) and (4))
    Risk Ratio Thresholds (Sec.  300.647(a)(7); Sec.  300.647(b)(1) 
and(2); Sec.  300.647(b)(6)
    Minimum Cell Sizes and Minimum N-Sizes (Sec.  300.647(a)(3) and 
(4); Sec.  300.647(b)(1)(i)(B) and (C); Sec.  300.647(b)(3) and (4); 
Sec.  300.647(c)(1))
    Alternate Risk Ratios (Sec.  300.647(a)(1); Sec.  300.647(b)(5); 
Sec.  300.647(c)(2))
    Flexibilities--Three Consecutive Years of Data, Sec.  
300.647(d)(1)
    Flexibilities--Reasonable Progress, Sec.  300.647(d)(2)
III. Clarification that Statutory Remedies Apply to Disciplinary 
Actions (Sec.  300.646(a)(3) and (c))
IV. Clarification of the Review and Revision of Policies, Practices, 
and Procedures (Sec.  300.646(c))
    Review of Policies, Practices, and Procedures--Requirements
    Guidance
    Clarifications
V. Expanding the Scope of Comprehensive Coordinated Early 
Intervening Services (Sec.  300.646(d))
    Use of Comprehensive CEIS for Specific Populations
    Funding Comprehensive CEIS
    Implications for IEPs
    Implications for LEA Maintenance of Effort (MOE)
    General Uses of Comprehensive CEIS Funds
    Implications for Voluntary Implementation of CEIS
    Miscellany

    Analysis of Comments and Changes: An analysis of the comments and 
of any changes in the regulations since publication of the NPRM 
follows. Generally, we do not address: (a) Minor changes, including 
technical changes made to the language published in the NPRM; or (b) 
comments that express concerns of a general nature about the U.S. 
Department of Education (Department) or other matters that are not 
germane.

I. General Comments

Introduction

    We provide a glossary as an aid to reading and understanding the 
technical discussions surrounding a standard methodology for 
determining significant disproportionality. Some terms in this glossary 
are defined in these final regulations.
Glossary of Terms
    Alternate Risk Ratio means a calculation performed by dividing the 
risk of a particular outcome for children in one racial or ethnic group 
within an LEA by the risk of that outcome for children in all other 
racial or ethnic groups in the State. (Sec.  300.647(a)).
    Cell Size means the number of children experiencing of a particular 
outcome, to be used as the numerator when calculating either the risk 
for a particular racial or ethnic group or the risk for children in all 
other racial or ethnic groups.
    Comparison Group consists of the children in all other racial or 
ethnic groups within an LEA or within the State, when reviewing a 
particular racial or ethnic group within an LEA for significant 
disproportionality.
    N-Size means the number of children enrolled in an LEA with respect 
to identification, and the number of children with disabilities 
enrolled in an LEA with respect to placement and discipline, to be used 
as the denominator when calculating either the risk for a particular 
racial or ethnic group or the risk for children in all other racial or 
ethnic groups.
    Population Requirement means the minimum number of children 
required before a racial or ethnic group within an LEA will be reviewed 
for significant disproportionality, such as a minimum cell size or 
minimum n-size.
    Risk means the likelihood of a particular outcome (identification, 
placement, or disciplinary removal) for a specified racial or ethnic 
group (or groups), calculated by dividing the number of children from a 
specified racial or ethnic group (or groups) experiencing that outcome 
by the total number of children from that racial or ethnic group (or 
groups) enrolled in the LEA. (Sec.  300.647(a)).
    Risk Ratio means a calculation performed by dividing the risk of a 
particular outcome for children in one racial or ethnic group within an 
LEA by the risk for children in all other racial and ethnic groups 
within the LEA. (Sec.  300.647(a)).
    Risk Ratio Threshold means a threshold, determined by the State, 
over which disproportionality based on race or ethnicity is significant 
under Sec.  300.646(a) and (b). (Sec.  300.647(a)).
    Weighted Risk Ratio means a variation on the risk ratio in which 
the risk to each racial and ethnic group within the comparison group is 
multiplied by a weight that reflects that group's proportionate 
representation within the State.
Terminology
    Comment: None.
    Discussion: In the NPRM, the Department noted that many States have 
minimum cell size requirements to restrict their assessment of 
significant disproportionality to include only those LEAs that have 
sufficient numbers of children to generate stable calculations. The 
Department further noted that, while different States use different 
definitions of ``minimum cell size,'' the most common definition placed 
a requirement on the number of children with disabilities in the racial 
or ethnic subgroup being analyzed. This common

[[Page 92380]]

definition describes the population used in the denominator when 
calculating the risk of placement or disciplinary removal for a racial 
or ethnic group.
    Based on this information, the Department used the term ``minimum 
cell size'' in its description of proposed Sec.  300.647(b)(3) and (4), 
in which we intended to allow States not to apply the standard 
methodology when analyzing for significant disproportionality with 
respect to identification when a racial or ethnic group in an LEA had 
fewer than 10 children (or, when analyzing for placement or discipline, 
when a racial or ethnic group in an LEA had fewer than 10 children with 
disabilities). Put another way, it was the Department's intent to allow 
States not to apply the standard methodology when, in calculating the 
risk of identification, placement, or discipline for a racial or ethnic 
group, the denominator of the risk calculation included fewer than 10 
children.
    In response to the NPRM, many commenters raised concerns about the 
effects of particularly small groups of children on the calculation of 
risk for particular racial or ethnic groups and the benefits and 
drawbacks of setting a minimum number of children for either the 
numerator or denominator in the risk calculation. Upon review of these 
comments, the Department determined that using a single term (i.e., 
``minimum cell size'') to refer to both of these requirements would be 
potentially confusing. Therefore, in this NFR, the Department uses the 
term ``n-size'' to refer to the denominator of a risk calculation and 
``cell size'' to refer to the numerator of the risk calculation. We 
note that this use of terms is different than what was used in the 
NPRM, but we believe this differentiation will provide the greatest 
clarity in our discussion of the requirements of the final rule.
    Consistent with this approach, we have interpreted comments 
regarding the proposed Sec.  300.647(b)(3) and (4), and comments 
regarding risk denominators, to be referring to n-size, and refer to 
those comments using that terminology. Further, we have interpreted 
comments regarding risk numerators to be referring to cell size, and 
refer to those comments using that terminology.
    Change: We have revised proposed Sec.  300.647 to include 
definitions for the terms ``minimum cell size'' and ``minimum n-size'' 
and have utilized those terms through the regulation to increase 
specificity and clarity.
The Department Should Await Congressional Action
    Comments: Some commenters argued that the Department should 
withdraw the proposed rule and first allow Congress to address 
significant disproportionality in the next reauthorization of IDEA.
    Discussion: The Department has an obligation to implement and 
enforce the requirements of IDEA as they exist today. While we will 
work with Congress to reauthorize IDEA, including any potential changes 
to section 618(d), we must continue to ensure that States and LEAs are 
appropriately implementing the current requirements to ensure that 
every child has access to a free appropriate public education in the 
least restrictive environment. As we have stated in the NPRM, following 
the Government Accountability Office (GAO) report, the Department 
conducted its own review of State approaches, as well as a review of 
the extent to which States identified significant disproportionality. 
Additionally, we examined research related to significant 
disproportionality and analyzed data collected under section 618 of 
IDEA.
    The Department's analysis found several nationwide examples of 
disparity across racial and ethnic groups. For example in 2012: 
American Indian and Alaska Native students were 60 percent more likely 
to be identified for an intellectual disability, while Black children 
were more than twice as likely as other groups to be so identified. 
Similarly, American Indian or Alaska Native students were 90 percent 
more likely, Black students were 50 percent more likely, and Hispanic 
students were 40 percent more likely to be identified as a student with 
a learning disability. In addition, Black children were more than twice 
as likely to be identified with an emotional disturbance. These 
national-level data are troubling, given the number of States that have 
not identified any LEAs with significant disproportionality.
    As published in the NPRM, in SY 2012-13, only 28 States and the 
District of Columbia identified any LEA with significant 
disproportionality, and of the 491 LEAs identified, 75 percent were 
located in only seven States. Of the States that identified LEAs with 
significant disproportionality, only the District of Columbia and four 
States identified significant disproportionality in all three 
categories of analysis--identification, placement, and in discipline. 
In short, these data suggest that there are likely LEAs that are not, 
but should be, identified with significant disproportionality, and thus 
that many children in these districts are not receiving proper 
services.
    The Department's decision now to require States to follow a 
standard methodology is intended to promote consistency between States 
and to help ensure compliance with IDEA section 618(d). We are adopting 
the standard methodology to ensure proper implementation of the statute 
and so that LEAs with significant disparities, based on race and 
ethnicity, in identification, placement and discipline are 
appropriately identified; that significant disproportionality is 
appropriately addressed; and that children with and without 
disabilities receive the services they need.
    Changes: None.
Under-Identification of Children With Disabilities by Race and 
Ethnicity
    Comments: Several commenters responded to Directed Question #11 and 
expressed various concerns about under-identification. Other commenters 
did the same independently of the question. Several commenters 
expressed support for the Department's efforts to remediate the 
problems of overrepresentation and over-identification of children with 
disabilities based on race and ethnicity.\1\ However, other commenters, 
some citing research, asserted that the under-identification of 
children of color for special education and related services is a 
greater and more serious problem than their overrepresentation in 
special education, and that, by not addressing the proper problem, the 
proposed regulations would allow harm to children of color to continue. 
One commenter stated that lawyers around the country have noted a 
systemic neglect of children of color with disabilities in education 
systems, and another stated that many families have reported delays in 
the identification of disabilities and, in some cases, the 
misidentification of disabilities. Still other commenters shared 
personal experiences of under-identification. Two commenters stated 
that the proposed regulations should be withdrawn and revised to 
address this more pressing problem, and one suggested that the 
Department withdraw the regulation in favor of other efforts to promote 
the proper implementation of

[[Page 92381]]

child find procedures and the early and appropriate identification of 
children with disabilities.
---------------------------------------------------------------------------

    \1\ We distinguish ``overrepresentation'' and 
``underrepresentation,'' which describe disparities in the relative 
proportion of a racial or ethnic subgroup in special education and 
their relative proportion in the population, from ``over-
identification'' and ``under-identification,'' which describe the 
appropriateness of a child's identification as a child with a 
disability.
---------------------------------------------------------------------------

    Discussion: The Department agrees that when under-identification of 
children of color occurs it is problematic. These children, like all 
children with disabilities, are entitled to a free appropriate public 
education. States should ensure that their child find procedures are 
robust enough to appropriately identify all children with disabilities 
in a timely manner.
    The Department's long-standing interpretation of IDEA section 
618(d) (20 U.S.C. 1418(d)), has been that it requires States to address 
overrepresentation, not under-identification or underrepresentation, 
consistent with the intent of Congress when it authorized that 
provision. (See, Office of Special Education Programs (OSEP) Memorandum 
08-09 (July 28, 2008)).
    The basis for congressional action was largely due to a concern 
that students of color were being identified too often for special 
education services, and placed too frequently in segregated settings, 
in ways that were detrimental to their education. There is also an 
increased understanding that appropriate identification and delivery of 
special education services would ensure that students with disabilities 
have access to, and an opportunity to fully participate in, the general 
education curriculum.
    We understand that overrepresentation of one racial or ethnic group 
that rises to the level of significant disproportionality may occur for 
a variety of reasons, including over-identification of that racial or 
ethnic group, under-identification of another racial or ethnic group or 
groups, or appropriate identification with higher prevalence of a 
disability in a particular racial or ethnic group.
    For example, consider an LEA in which the risk ratio for African 
American students with an emotional disturbance exceeds the State 
determined risk ratio threshold and is identified as having significant 
disproportionality. The overrepresentation of African American students 
could be due to: (1) The LEA inappropriately identifying African 
American students as having an emotional disturbance and needing 
special education and related services even though they do not (over-
identification); (2) the LEA failing to appropriately identify students 
in other racial or ethnic groups as having an emotional disturbance and 
needing special education and related even though they do (under-
identification); or (3) the LEA appropriately identifying all students 
in the LEA who have an emotional disturbance but underlying variations 
in the prevalence of those disabilities across racial and ethnic groups 
results in an overrepresentation of African American students.
    We encourage States and LEAs to consider multiple sources of data 
when attempting to determine the factors contributing to significant 
disproportionality, including school level data, academic achievement 
data, relevant environmental data that may be correlated with the 
prevalence of a disability, or other data relevant to the educational 
needs and circumstances of the specific group of students identified.
    Changes: We have added a new Sec.  300.646(d)(1)(iii), requiring an 
LEA, in implementing comprehensive CEIS, to address any policy, 
practice, or procedure it identifies as contributing to significant 
disproportionality, including any policy, practice or procedure that 
results in a failure to identify, or the inappropriate identification 
of, a racial or ethnic group (or groups).
    Comments: Several commenters requested that the Department address 
both over-identification and under-identification based on race and 
ethnicity in special education. These commenters recommended that the 
Department require States to report racial and ethnic disparities in 
the identification of children with disabilities, and children with 
particular impairments, due to under-identification. These commenters 
also requested that the Department require States to provide technical 
assistance to LEAs with under-identification, by race or ethnicity, but 
not require those LEAs to implement the statutory remedies under IDEA 
section 618(d).
    Similarly, one commenter asked the Department to amend proposed 
Sec.  300.646(c)(1) to clarify that, in cases of significant 
disproportionality in the over-identification or the under-
identification of children as children with disabilities, an LEA must 
undergo a review and, if necessary, revision of its policies, 
practices, and procedures.
    One commenter suggested that addressing both over-identification 
and under-identification was particularly important in the context of 
autism and emotional disturbance identification. The commenter further 
observed that these are both areas where recent research has suggested 
that girls in particular are under-identified.
    A few commenters, however, opposed any expansion of the proposed 
regulations to address under-identification due to concerns that this 
will weaken their ability to address overrepresentation. One of these 
commenters stated that, when the Department previously required States 
to address under-identification by race and ethnicity as part of the 
State Performance Plan/Annual Performance Report (SPP/APR), the result 
was confusion among States.
    Discussion: As we stated earlier, while this regulation only 
establishes a system for identifying significant disproportionality 
based on overrepresentation, nothing in these regulations prevents 
States from working with their LEAs to ensure appropriate 
identification of children with disabilities and address any potential 
under-identification that may exist. In cases where LEAs find that a 
factor contributing to the overrepresentation of one racial or ethnic 
group is the under-identification of a different racial or ethnic 
group, the LEA may use funds reserved for comprehensive CEIS to address 
that under-identification. In particular, we remind States that, 
consistent with IDEA child find requirements, each State must have 
policies and procedures to ensure that all children residing in the 
State who are in need of special education and related services are 
identified, located, and evaluated, regardless of race or ethnicity.
    We also note that nothing in these regulations establishes or 
authorizes the use of racial or ethnic quotas limiting a child's access 
to special education and related services, nor do they restrict the 
ability of Individualized Education Program (IEP) Teams or others to 
appropriately identify and place children with disabilities. In fact, 
an LEA's use of quotas to artificially reduce the number of children 
who are identified as having a disability, in an effort to avoid a 
finding of significant disproportionality, would almost certainly 
conflict with their obligations to comply with other Federal statutes, 
including civil rights laws governing equal access to education. States 
have an obligation under IDEA both to identify significant 
disproportionality, based on race and ethnicity, in the identification 
of children with disabilities and to ensure that LEAs implement child 
find procedures appropriately and make a free appropriate public 
education available to all eligible children with disabilities. (20 
U.S.C. 1412(a)(1), (3) and (11); 34 CFR 300.101, 300.111, and 300.149). 
To clarify that these regulations must be implemented in a manner that 
is consistent with all other requirements of this part, we have added 
Sec.  300.646(f) to make clear that these regulations do not authorize 
a State or an LEA to develop or implement policies, practices, or

[[Page 92382]]

procedures that result in actions that violate any IDEA requirements, 
including requirements related to child find and ensuring that a free 
appropriate public education is available to all eligible children with 
disabilities.
    Changes: As described above, we have added a new Sec.  300.646(f).
    Comment: One commenter recommended that the Department address the 
under-identification of children with disabilities by supporting States 
and LEAs in collecting child-level data on developmental screenings and 
referrals for services to better understand where child find efforts 
are effective.
    Discussion: We appreciate the commenter's proposal to expand 
awareness and understanding of child find implementation, and of the 
potential under-identification of children with disabilities, through 
better data collection. The Department is committed to ensuring that 
all children with disabilities are appropriately identified, evaluated, 
and provided with special education services. However, we believe that 
any requirement to collect data regarding developmental screenings and 
referrals would be beyond the scope of IDEA section 618(d), which 
directs States to collect and examine data for the purpose of 
identifying significant disproportionality by race and ethnicity. We 
believe it is more appropriate to consider the merits of the 
commenter's proposal separately from regulation.
    Changes: None.
    Comments: Several commenters requested that the proposed 
regulations be withdrawn until there is more research available 
regarding under-identification and over-identification in special 
education, including better information as to whether over-
identification or under-identification is the more pressing problem. 
Similarly, one commenter stated that the regulations were based on a 
flawed understanding of research on racial and ethnic disparities in 
special education.
    One other commenter asserted that the research that the Department 
is using to justify its current regulations to address significant 
disproportionality has been repeatedly identified as having serious 
methodological limitations, including a lack of statistical controls 
for known confounds.
    Discussion: The Department agrees that there is a continued need 
for research to support Federal, State, and local efforts to address 
racial and ethnic disparities in special education, though we do not 
agree that the research we relied upon is flawed. We also agree that 
additional research is necessary to continue to examine both over- and 
under-representation in special education, and the Department plans to 
direct additional resources to research these issues. However, we do 
not agree that these regulations should be delayed until further 
research is conducted because there is sufficient evidence of 
significant disproportionalities going uninvestigated or unaddressed.
    We also agree that some research suggests that there are children 
with disabilities who are not, but should be, receiving special 
education services under IDEA. However, there is a corresponding body 
of research that children of certain races or ethnicities are 
disproportionately identified with disabilities, educated in more 
restrictive placements, and disciplined at greater rates than their 
peers. We do not believe that over- and under-representation in special 
education based on race or ethnicity are mutually exclusive. In fact, 
it is possible, if not probable, that both over- and under-
representation are occurring, which is why the Department's effort to 
standardize the way in which States examine LEAs for significant 
disproportionality is necessary.
    The Department believes that Sec.  300.646(b), which requires 
States to apply a standard methodology to identify significant 
disproportionality due to overrepresentation, will help to build 
greater knowledge about existing State practice and the extent of these 
disparities and encourage additional research to investigate their 
causes and potential solutions for them. That said, States are required 
to ensure that they are appropriately implementing these new 
regulations in conjunction with appropriate child find procedures. 
These regulations should not be used to exclude children with 
disabilities from receiving services under IDEA.
    Changes: None.
Recommendations Regarding Technical Assistance and Guidance
    Comment: A number of commenters called upon the Department to 
provide to States and LEAs technical assistance and guidance for 
implementing the proposed regulations. Some commenters asserted that 
the Department should provide technical assistance to States in order 
to ensure that LEAs appropriately identify children of color, rather 
than under-identifying them, to avoid a designation of significant 
disproportionality. In the absence of sufficient supports for LEAs, the 
commenters stated, LEAs may implement shortcuts so that they appear to 
be reducing disparities. These shortcuts could include under-reporting 
of disciplinary removals, under-identifying children of color as 
children with disabilities, or referring fewer children from 
overrepresented racial or ethnic groups for special education services. 
Similarly, another commenter stated that the Department could ensure 
that LEAs do not under-identify children with disabilities by 
supporting States' efforts to utilize appropriate cell sizes, risk 
ratio thresholds, and significance testing.
    Other commenters recommended that the Department provide 
suggestions to States about evidence-based practices that may reduce 
disproportionality and that the Department tailor technical assistance 
to the needs of the agencies served.
    One commenter suggested that the Department provide specific 
information on evaluation and identification of children who may need 
special education, the use of schoolwide approaches such as positive 
behavioral interventions and supports, developing multi-tiered systems 
of support to provide intensive services before referral to special 
education, and the use of multi-disciplinary teams of specialized 
instructional support personnel to support children with and without 
disabilities. Another commenter also requested that the Department 
provide research-based root cause analysis tools, targeted to each of 
the areas of significant disproportionality, as well as assistance with 
cultural responsive evaluation, appropriate academic and behavioral 
interventions prior to referral for special education services, and the 
monitoring of highly mobile children within a multi-tiered system of 
support.
    One commenter recommended that the Department provide guidance that 
indicates how LEAs can compare the number of children identified, 
placed, or disciplined to the number of children who should have been 
identified, placed, or disciplined and how best to use risk ratio 
methods with small populations.
    One commenter requested that the Department provide guidance on, 
monitor, and enforce IDEA provisions governing evaluation procedures 
and encourage States to implement school-age hearing screening programs 
as part of their implementation of child find.
    One commenter recommended that the Department provide more 
technical assistance and guidance on the importance of health care 
providers in helping identify all children with disabilities.
    Other commenters suggested that the Department enhance State 
capacity to train and counsel parents about IDEA,

[[Page 92383]]

disability, and the implications when a child is found eligible for 
special education and related services.
    Discussion: We agree that supporting States and LEAs in 
implementing these regulations is important. The Department provides 
technical assistance through numerous investments funded under part D 
of IDEA, and it provides easy access to information from its research 
to practice efforts at www.osepideasthatwork.org. In general, the 
Department funds technical assistance centers to work with States and 
LEAs to provide a variety of products and services to support children 
with disabilities, teachers, special education service providers, 
policy makers, and parents of children with disabilities with the 
implementation of IDEA requirements, including those provisions and 
activities required to address significant disproportionality based on 
race or ethnicity. We agree with commenters that there are many 
distinct but overlapping provisions under IDEA that will need to be 
addressed to help States and their stakeholders comply with the 
requirements of these regulations. The Department will continue to 
provide technical assistance to help States and stakeholders address 
significant disproportionality based on race or ethnicity. In addition, 
the Department plans to identify new Federal resources to support 
States' work to implement these regulations through the Technical 
Assistance and Dissemination network and Department staff. When these 
resources are available, the Department will work to ensure that States 
are aware of Federal technical assistance resources that can be used to 
support their implementation of these regulations.
    Changes: None.
    Comment: One commenter requested that the Department issue guidance 
to States on monitoring and analyzing LEA placement data with regard to 
disability category, gender, ethnicity, and socioeconomic status to 
help create transparency in decision-making that results in LEA-level 
disparities.
    Discussion: We appreciate the suggestion and will take it into 
consideration as we develop guidance and technical assistance for these 
regulations after they are published. Changes: None.
Causes of Racial and Ethnic Disparity That Originate Outside of School
    Comments: Several commenters stated that the proposed regulations 
are based on a flawed assumption, that the percentage of children of 
color with disabilities who receive special education and related 
services should reflect the percentage of children of color in the 
general population. Other commenters asserted that one should expect 
certain subgroups of children to be identified with disabilities (or 
particular impairments) at higher rates than others due to the effects 
of poverty, concentrated poverty, poor education, lack of adequate 
health care parental incarceration, limited language proficiency, drug 
abuse, environmental toxins, the lack of specialized instructional 
support or parent training, and other factors that (according to the 
commenters) increase the risk of disabilities and the need for special 
education services. Others asserted that achieving proportionality 
among all races and ethnicities in special education is not an 
appropriate goal, and that the statistical assumption of equal rates of 
identification across all groups is erroneous.
    Discussion: The Department recognizes that there will be variations 
in the proportion of individuals across racial and ethnic groups who 
are identified as children with disabilities. The purpose of these 
regulations is not to artificially force the identification rate to be 
equal across all subgroups or to fit any preconceived proportion. The 
regulation does, however, seek to promote more accurate identification 
of LEAs in which disproportionality between racial and ethnic groups 
has become significant and, therefore, possibly indicative of an 
underlying problem in the identification, placement, or disciplinary 
removal of children with disabilities.
    While various risk factors associated with poverty may be 
associated with greater risk of disability among children, those 
factors are by no means determinative of whether a child should be 
identified as a child with a disability under IDEA. Ideally, children 
exposed to these risk factors are screened for developmental delays, 
and other academic and behavioral challenges, so that their needs may 
be addressed early and appropriately. Further, IDEA requires that the 
individual needs of children with disabilities--as opposed to their 
exposure to risk--be central to determining the need for special 
education and related services.
    Changes: None.
    Comment: Many commenters stated that risk factors--such as poverty, 
concentrated poverty, poor education, and lack of access to health 
care--contribute to the incidence of disability and may confound 
attempts to effectively examine racial and ethnic disparity in special 
education. Similarly, one commenter suggested that recent increases in 
K-12 enrollment, the number of English Learners, and the prevalence of 
poverty may account for increases in the number of children of color in 
special education.
    In this same context, a few other commenters warned that a simple 
comparison of percentages of populations must not be taken as evidence 
of bias, misidentification, or racial discrimination by school 
officials. Rather, these commenters argued that approaches such as the 
risk ratio are oversimplifications that may lead to the withdrawal or 
denial of special education services to children who need them. 
Similarly, another commenter stated that there are situations where a 
risk ratio alone will not provide enough information to determine 
whether an LEA has or does not have significant disproportionality.
    Discussion: The Department understands that there are many complex 
factors that may influence the need for special education services, 
placement decisions, and disciplinary removals, and that schools alone 
cannot address all of these factors, particularly those associated with 
poverty. The Department also understands that risk ratios do not 
identify the causes of significant disproportionality.
    However, risk ratios do identify those LEAs where there are large 
racial and ethnic disparities and, where these are considered 
significant, States and LEAs must review the policies, procedures, and 
practices related to identification, placement, or discipline and, 
through the implementation of comprehensive coordinated early 
intervening services, identify and address the causes of these 
disparities, as appropriate. Even in situations where differential 
exposure to risk factors contributes to racial disparities in special 
education, we believe that schools may help to mitigate the effects of 
these risk factors by screening children early and by providing early 
and appropriate interventions and supports. Donovan and Cross, 2002. 
This is a major purpose of comprehensive CEIS, and one reason, as we 
discuss in the section Expanding the Scope of Comprehensive Coordinated 
Early Intervening Services, that the Department has expanded the scope 
of comprehensive CEIS to include children ages three through five.
    Changes: None.
    Comments: Many commenters expressed concern that the Department's 
overall approach to addressing significant disproportionality, as well 
as the standard methodology in Sec.  300.647(b), fails to address the 
underlying causes of racial and ethnic disparities. A large number of 
commenters noted that there are many

[[Page 92384]]

societal and systemic factors that lead to disproportionality. These 
commenters argued that final regulations should be postponed until 
these other societal and systemic factors, such as access to mental 
health care and access to quality early-childhood education, are 
addressed. Another commenter argued that the issue of significant 
disproportionality is beyond the responsibility of educators and beyond 
the scope of their role, and efforts to identify and address it must 
take into account factors such as poverty, urbanicity, medical care 
accessibility, and the presence of schools specifically for children 
with disabilities.
    One commenter requested that--once these broad societal and 
educational problems are addressed--States only report on special 
education indicators (which we understand the commenter to mean data 
showing racial and ethnic disparities, similar to what was proposed 
under Sec.  300.646(b)(3) and (4)) until systems are in place to hold 
general education accountable as well. Similarly, other commenters 
asserted that as special education programs typically have little 
influence over general education programs, it will be difficult to 
improve services using a mandate on special education.
    Discussion: The Department recognizes that racial and ethnic 
disparities in the identification, placement, and discipline of 
children with disabilities can have a wide range of causes, including 
systemic issues well beyond the typical purview of most LEAs. Again, 
however, this does not mean that LEAs, schools, and educators are 
wholly incapable of addressing, or mitigating, any of the causes of 
significant disproportionality. In fact, the Department believes that 
effective elementary and secondary education, with appropriate supports 
for children with and without disabilities is essential to addressing 
the very issues the commenters raise. Delaying the examination of data 
to make determinations of significant disproportionality (and the 
review and revision of problematic policies, practices, and procedures) 
until these broader issues are resolved would overlook both the 
statutory requirement that States annually collect and examine data and 
strategies currently available to address these inequities.
    The commenters' concerns about holding general education 
accountable suggest a false dichotomy between special and general 
education. That is, LEAs are responsible for providing a high quality 
education to every child, both in general education and special 
education. When children are inappropriately identified, placed, or 
disciplined on the basis of race or ethnicity, all parties are, and 
should be, held accountable. In fact, this realization of the benefits 
of a holistic approach to addressing the causes of significant 
disproportionality led to the Department's expansion of comprehensive 
CEIS to serve both children with and without disabilities.
    Changes: None.
    Comment: One commenter suggested that the Department develop 
funding priorities to examine the connections between race, culture, 
socio-economic status, and disability. Many commenters noted that 
additional Federal funds should be made available to address 
disproportionality in special education and general education programs.
    Discussion: Although we view this as beyond the scope of these 
regulations, we appreciate the suggestion. The Department will take 
this recommendation under consideration as we develop funding 
priorities for fiscal years 2017 and 2018.
    Changes: None.
Causes of Racial and Ethnic Disparities That Originate in School
    Comments: Several commenters asserted that disproportionality in 
special education occurs due to children not receiving the necessary 
interventions early in their academic career. Disproportionality, 
according to the commenters, must be addressed in the regular 
educational environment and earlier in the school process, with 
administrators responsible for title I programs as partners, and cannot 
be addressed once children have been referred for evaluation for 
special education.
    Discussion: The Department believes that these regulations address 
the commenters' concerns. Under Sec.  300.646(d)(3), LEAs identified 
with significant disproportionality may use funds reserved for 
comprehensive CEIS to support the needs of both children with and 
without disabilities. Section 300.646(d) requires the State to identify 
and address the factors contributing to the significant 
disproportionality which may include a wide range of factors, some of 
which were mentioned by commenters. Moreover, under Sec.  300.646(d) 
the LEA may not limit comprehensive coordinated early intervening 
services to children with disabilities. To the extent, then, that an 
LEA identifies the lack of early interventions in the general education 
program as a factor contributing to the significant disproportionality, 
it may use funds reserved for comprehensive CEIS to provide access to 
early interventions.
    As to partnering with administrators of title I programs, we 
understand the commenters to suggest that title I funds should be used 
in conjunction with CEIS funds when providing early intervening 
services. Title I funds may be used this way, provided that all of the 
requirements attached to the funds are met. Further, CEIS funds may be 
used to carry out services aligned with activities funded by and 
carried out under ESEA, if IDEA funds are used to supplement, and not 
supplant, funds made available under the ESEA for those activities.
    Changes: None.
    Comments: One commenter noted that, while research suggests that 
there is disproportionate representation of children of color in 
special education, in restrictive special education settings, and in 
exclusionary disciplinary actions, the commenter does not believe this 
is the result of discriminatory practices. The commenter suggested that 
the Department should, therefore, concentrate its efforts on guidance, 
for example, on the appropriate identification of students with 
disabilities from diverse backgrounds. Similarly, another commenter 
suggested that instead of focusing on significant disproportionality, 
the Department should reevaluate the causes of ineffective practices in 
special education and focus directly upon appropriate services for 
students with disabilities in special education. Another commenter made 
this point more generally and suggested that the proposed regulations 
attempt to solve a problem that may not exist.
    Discussion: IDEA section 618(d)(1) (20 U.S.C. 1418(d)(1)) requires 
States to provide for the collection and examination of data to 
determine if significant disproportionality based on race and ethnicity 
is occurring in the State and LEAs of the State. IDEA section 618(d)(2) 
(20 U.S.C. 1418(d)(2)) specifies that the review of--and if 
appropriate, revision of--policies, practices, and procedures is a 
consequence of, rather than a part of, a determination of significant 
disproportionality. Therefore, the Department does not have the 
authority to relieve States of their responsibility to determine 
whether significant disproportionality is occurring in an LEA, or 
require the review of polices, practices, and procedures, even in the 
absence of evidence showing discriminatory practices. Moreover, once 
identified with significant disproportionality, the LEA's review of 
policies, procedures, and practices and

[[Page 92385]]

implementation of comprehensive CEIS under Sec.  300.646(d) could 
reasonably encompass determinations of whether proper identification 
practices are in place or determinations of the effectiveness of 
specific services.
    Congress intended for States and LEAs to address significant 
disproportionality, by race and ethnicity, in special education. We 
noted in the NPRM various data points from our IDEA section 618 data, 
and using the standard methodology, indicating that children from 
certain racial or ethnic groups are overrepresented in special 
education, particularly in the categories of emotional disturbance, 
specific learning disabilities, and intellectual disabilities. 81 FR 
10967. Further, we noted that some children are overrepresented, by 
race and ethnicity, with respect to their placement in restrictive 
settings and with respect to their exposure to disciplinary removals 
from placement. Therefore, we believe that the Department has both a 
congressional mandate and factual support for proceeding with this 
rule.
    Changes: None.
    Comment: One commenter asserted that the proposed regulations did 
not address the underlying issues that result in racial and ethnic 
disparities in the identification of children with disabilities, among 
them the failure to strictly follow procedures for child find, referral 
for evaluation, the evaluation itself, and subsequent identification of 
children as children with disabilities.
    Discussion: We disagree and believe that these regulations are 
designed to directly address any underlying factors and IDEA 
noncompliance that result in or contribute to significant 
disproportionality.
    Under Sec.  300.646(c), States must provide for a review, and, if 
necessary, revision of policies, practices, and procedures to ensure 
compliance with IDEA's requirements if an LEA is identified as having 
significant disproportionality.
    Under Sec.  300.646(d)(1)(ii), an LEA identified as having 
significant disproportionality must reserve 15 percent of its IDEA part 
B funds for comprehensive CEIS, to identify and address the factors 
contributing to the significant disproportionality. If the underlying 
cause of significant disproportionality is found to be rooted in 
inappropriate practices, such as a failure to appropriately implement 
evaluation procedures, this provision would help to identify that issue 
and require that the problematic practices be changed. In addition, 
addressing the factors contributing to the significant 
disproportionality could include training school personnel on the 
appropriate implementation of evaluation procedures.
    Changes: None.
Proposed Regulations Would Create Racial Quotas
    Comment: Many commenters asserted that proposed Sec. Sec.  
300.646(b) and 300.647 would put into place racial quotas that would 
interfere with the appropriate identification of children with 
disabilities based purely on the children's needs. Commenters raised 
concerns that the regulations might generally discourage appropriate 
identification of children of color, and, in so doing, harm children of 
color and children from low-income backgrounds. One commenter argued 
that the regulations will exacerbate inequality for children of color 
with disabilities and lead to a surge in class action lawsuits by 
families arbitrarily denied services based on their children's race or 
ethnicity. Other commenters stated that, if the determination of 
significant disproportionality is based strictly on numerical data, 
then the remedy for significant disproportionality, for some LEAs, will 
be denying access to special education services to children of color. 
One commenter suggested that to bias LEAs against serving eligible 
children with special education services is worse than providing these 
services to children who are only marginally eligible.
    Discussion: The Department recognizes the possibility that, in 
cases where States select particularly low risk ratio thresholds, LEAs 
may have an incentive to avoid identifying children from particular 
racial or ethnic groups in order to avoid a determination of 
significant disproportionality. For this reason, Sec.  300.647(b)(1) 
provides States the flexibility to set their own reasonable risk ratio 
thresholds, with input from stakeholders and State Advisory Panels. As 
part of the process of setting risk ratio thresholds, States must work 
with stakeholders to identify particular risk ratio thresholds that 
help States and LEAs to address large racial and ethnic disparities 
without undermining the appropriate implementation of child find 
procedures.
    Further, nothing in these regulations establishes or authorizes the 
use of racial or ethnic quotas limiting a child's access to special 
education and related services, nor do they restrict the ability of IEP 
Teams to appropriately identify and place children with disabilities. 
In fact, an LEA's use of racial or ethnic quotas to artificially reduce 
the number of children who are identified as having a disability, or 
inappropriately segregating children in LEAs that serve only children 
with disabilities, in an effort to avoid a finding of significant 
disproportionality, would almost certainly conflict with the LEA's 
obligations to comply with other Federal statutes, including civil 
rights laws governing equal access to education. States have an 
obligation under IDEA both to identify significant disproportionality, 
based on race and ethnicity, in the identification of children with 
disabilities and to ensure that LEAs implement child find procedures 
appropriately. (20 U.S.C. 1412(a)(3); 34 CFR 300.111). We agree that 
the establishment of any such quotas would almost certainly result in 
legal liability under Federal civil rights laws, including title VI of 
the Civil Rights Act of 1964 and the Constitution.
    We generally believe that the appropriate and timely identification 
of children with disabilities and the prevention of significant 
disproportionality on the basis of race and ethnicity are goals that 
work in concert with one another. In fact, a finding of significant 
disproportionality could be a signal that an LEA's child find 
procedures are not working appropriately. One of the goals of Sec.  
300.646(b) and (c) is to help LEAs identified with significant 
disproportionality to review and if appropriate, revise policies, 
practices, and procedures--including child find procedures--to ensure 
compliance with IDEA.
    At the same time, we are interested in the impact that these 
regulations may have on the appropriate identification of children with 
disabilities. As a result, the Department intends to conduct an 
evaluation of the implementation of this regulation to assess its 
impact, if any, on how LEAs identify children with disabilities. This 
evaluation will include an examination of the extent to which school 
and LEA personnel incorrectly interpret the risk ratio thresholds and 
implement racial quotas in an attempt to avoid findings of significant 
disproportionality by States, contrary to IDEA.
    Changes: As described above, we have added a new Sec.  300.646(f) 
to make clear that these regulations do not authorize a State or an LEA 
to develop or implement policies, practices, or procedures that result 
in actions that violate any IDEA requirements, including requirements 
related to child find and ensuring that a free appropriate public 
education is available to all eligible children with disabilities.

[[Page 92386]]

The Purpose of the Proposed Regulations
    Comments: One commenter expressed concern that the Department's 
discussion of the ability to grant waivers to States and the content of 
the NPRM's directed questions indicate that the Department understands 
that the proposed regulations do not provide a solution to 
disproportionality.
    Discussion: The NPRM did not include any discussion regarding 
waivers of IDEA section 618(d). 81 FR 10967. As the commenter points 
out, IDEA does not include a provision that would allow either the 
Department, or States, to waive the statutory remedies--including the 
review and revision of policies, practices, and procedures and 
reservation of funds for comprehensive CEIS--for LEAs identified with 
significant disproportionality.
    The Department disagrees that the directed questions in the NPRM 
were an indication that the standard methodology and the flexibilities 
included in the NPRM will not appropriately identify LEAs with 
significant disproportionality. Rather, these questions were a means to 
gather informed input from the public about, among other things, how a 
standard methodology (and the accompanying flexibilities) should be 
structured to ensure proper implementation of the requirements of IDEA 
section 618(d). We appreciate the many informed and thoughtful 
responses that we received in public comment and have made several 
changes to the final regulations based on input from the public to 
improve comparability and transparency while providing States and LEAs 
sufficient flexibility to appropriately identify and address 
significant disproportionality.
    Changes: None.
    Comments: A commenter generally expressed confidence in their LEAs' 
ability to properly determine eligibility and placement for children 
with disabilities and to follow board policy with regard to the 
discipline of all children with disabilities. The Department 
interpreted this comment to suggest that these regulations are not 
necessary.
    Discussion: The Department agrees with commenters that, in many 
LEAs, school personnel and LEA officials appropriately implement IDEA's 
requirements. However, we interpret IDEA section 618(d) to require 
States to examine data and make determination whether LEAs have 
significant disproportionality, based on race and ethnicity, 
irrespective of whether the practices, procedures, and policies of the 
LEA are appropriate and comply with IDEA. Given the remedies that 
States and LEAs must implement following a determination of significant 
disproportionality, we believe the statute anticipates that the 
significant disproportionality within the LEA may be addressed by 
reviewing, and if appropriate, modifying policies, practices, and 
procedures not in compliance with IDEA, by providing children and staff 
with additional supports through the implementation of comprehensive 
CEIS, or by doing both. IDEA section 618(d)(2)(A) and (B), 20 U.S.C. 
1418(d)(2)(A) and (B).
    Changes: None.
    Comment: A few commenters requested assurance that the purpose of 
the proposed regulations was more substantive than a means of 
identifying a larger number of LEAs with significant 
disproportionality.
    Discussion: While it is possible that more LEAs may be identified 
with significant disproportionality as a result of these regulations, 
this outcome is a consequence of, rather than the purpose of, these 
regulations. The purpose of these regulations is to increase 
comparability and transparency in the examination of data and 
identification of LEAs with significant disproportionality across 
States to ensure that States are more uniform in implementing IDEA 
section 618(d). As the GAO noted in its 2013 report, the flexibility 
States were given to define significant disproportionality, in the 
absence of this regulation, provided ``no assurance that the problem 
[was] being appropriately identified across the nation.'' The 
Department believes that these revised regulations will improve 
implementation of IDEA section 618(d), build greater knowledge about 
the extent of these disparities, and provide additional opportunities 
for stakeholders to understand and shape how LEAs are identified with 
significant disproportionality.
    Ultimately, the purpose of the regulations is to help ensure that 
LEAs are appropriately identified with significant disproportionality, 
however many LEAs that may be, so that the children with disabilities 
in those LEAs receive the services that are appropriate to each of 
them. Even under a possible scenario where the first years of 
implementing these regulations increases the number of LEAs with 
significant disproportionality, using comprehensive CEIS to properly 
address the contributing factors should also reduce the number of LEAs 
with significant disproportionality in subsequent years.
    Changes: None.
    Comment: A number of commenters noted that ensuring proper 
implementation of IDEA section 618(d) would reinforce existing legal 
protections under the Civil Rights Act of 1964, the Americans with 
Disabilities Act, title IX of the Education Amendments Act of 1972, and 
Section 504 of the Rehabilitation Act.
    Discussion: The Department generally agrees with the commenters 
that the proper implementation of IDEA section 618(d) may serve to 
reinforce and advance civil rights for all children.
    Changes: None.
    Comments: None.
    Discussion: The Department believes it would be helpful to States 
and LEAs to clearly state that nothing in this rule supersedes or 
replaces other applicable constitutional, statutory, or regulatory 
requirements including those related to ensuring proper implementation 
of IDEA requirements for child find, free appropriate public education 
(FAPE), or placement in the least restrictive environment (LRE). 
Similarly, this rule does not abrogate, conflict with, or identify a 
specific violation of, any Federal civil rights protection from 
discrimination, including discrimination based on race, color, national 
origin, sex, or disability. Further, in establishing the methodology 
required under this rule (specifically the use of risk ratios and risk 
ratio thresholds to determine significant disproportionality), the 
Department does not intend that this methodology be presumed to apply 
or otherwise occupy the field in other legal contexts where examination 
of numerical data for racial and ethnic disparities may be relevant, 
such as enforcement of Federal civil rights laws.
    Changes: We have added a new Sec.  300.646(f) to make clear that 
these regulations do not authorize a State or an LEA to develop or 
implement policies, practices, or procedures that result in actions 
that violate any IDEA requirements, including requirements related to 
child find and ensuring that a free appropriate public education is 
available to all eligible children with disabilities.
The Cost and Burden of the Regulations
    Comment: One commenter anticipated that the implementation of the 
regulations would be more costly and time intensive than the estimates 
in the NPRM due to the costs associated with changes to data analysis 
protocols, documentation and technical assistance to data personnel to 
assure accurate implementation, and communication with schools and 
communities.

[[Page 92387]]

    Discussion: The Department appreciates the commenter's concern and 
agrees that the initial time estimates to implement the regulation were 
too conservative. We agree that accurate and high-quality data are 
necessary to ensure appropriate implementation of the regulation.
    Changes: We have increased the time estimates for modified data 
collection protocols, technical assistance activities, and 
communication required for implementation and increased the cost 
estimates for these regulations. In addition, the Department increased 
the estimated costs associated with consulting with State Advisory 
Panels to account for the additional time that will now be required for 
States to identify reasonable minimum n-sizes, reasonable minimum cell 
sizes, and standards for reasonable progress.
    Comment: A few commenters expressed concerns about the amount of 
staff time that will be needed to implement the regulations. These 
commenters argued that some States simply do not have the staff the 
Department suggests are needed, and that there are no additional funds 
being made available to States for the increase in workload, including 
workload required to collect and analyze data. One of these commenters 
therefore recommended that the regulations be withdrawn until adequate 
funding is provided to support the additional State personnel needed to 
implement the regulations. Another commenter recommended that the 
Department work with those States or entities with limited staff 
support to help them implement the requirements of the proposed 
regulations. The commenter further argued that, in the past, States and 
entities could rely on the Regional Resource Centers (RRCs) to assist 
them in meeting their responsibilities under IDEA. With the elimination 
of the RRCs, the commenter suggested that some of the currently funded 
data technical assistance centers be tasked with making staff members 
available to support the States and other entities to undertake this 
work. One commenter asserted that if the State's offices responsible 
for special education oversight are required to monitor action plans to 
address significant disproportionality, then these new responsibilities 
will dilute the State's other monitoring responsibilities.
    Discussion: While we recognize that States vary widely both in 
their staffing and financial resources, all States that receive funds 
under Part B of IDEA must meet the requirements of that Act, including 
those outlined in IDEA section 618(d), regardless of the funding 
provided under the Act. Therefore, the Department disagrees with 
commenters who requested that the Department delay the implementation 
of the regulations until adequate funding is provided to support 
additional State personnel for both this and other requirements of the 
Act.
    However, the Department recognizes that there is burden associated 
with implementing these final regulations, and States will need varying 
levels of support to appropriately implement these regulations. 
Therefore, the Department plans to identify Federal resources to 
support States' work through the Technical Assistance and Dissemination 
network and Department staff. When these resources are available, the 
Department will work to ensure that States are aware of Federal 
technical assistance resources that can be used to support their 
implementation of these new regulations.
    Changes: None.
    Comments: Some commenters requested that the Department clarify 
whether the examples contained in the report in the NPRM, Racial and 
Ethnic Disparities in Special Education, were intended to be 
illustrative or were intended to be duplicated by States or LEAs in 
setting risk ratios. Other commenters stated that the regulations would 
cost large amounts of money, both up front and over time, based on the 
Department's report published with the NPRM, Racial and Ethnic 
Disparities in Special Education. One commenter stated that the actual 
cost of the regulation would be $12 billion, as, according to the 
commenter, the Department estimated that 8,148 LEAs could be found with 
significant disproportionality. The commenter stated that, as the 
Department recommended no increase in the Federal budget for special 
education, the overall result of the regulation would be a reduction in 
Federal funding for special education. Another commenter stated that 
the methodology used in the Department's report would mean a five-fold 
increase in the number of LEAs identified in one State, which exceeds 
the State's capacity to address through a review of policies, 
practices, and procedures and through technical assistance.
    Several commenters offered other projections of the number of LEAs 
that would be identified with significant disproportionality due to 
these regulations. In general, commenters provided projections based on 
either the Department's report--Racial and Ethnic Disparities in 
Special Education--or a projected number of false-positive 
identifications of LEAs due to small numbers. According to many of 
these commenters, over 80 percent of LEAs in one State would be 
identified with significant disproportionality and would have to 
transfer tens of millions of dollars away from supporting children with 
disabilities. We understand this concern to reference the mandatory 
reservation of funds for comprehensive CEIS by LEAs that are identified 
with significant disproportionality. Similarly, another commenter 
stated that Department projects that 23 States will require 50-80 
percent of all LEAs to set aside 15 percent of their Federal share for 
comprehensive CEIS, a redirection of some $550 million away from direct 
services for special education.
    Discussion: The Department's purpose in creating the Racial and 
Ethnic Disparities in Special Education report was to provide the 
public the number and percentage of LEAs that would be identified with 
significant disproportionality if the Department's example risk ratio 
thresholds were adopted by all 50 States and the District of Columbia. 
We did not intend the tables to be indicative of the actual numbers of 
LEAs that would be identified with significant disproportionality under 
the proposed regulations, although we can understand how the commenters 
read the report this way. The tables do not represent an estimated 
number of LEAs that would be identified under the final regulations, 
and the risk ratio thresholds included in those tables do not represent 
the risk ratios thresholds that States must adopt or the standard that 
the Department will use to determine whether or not specific risk ratio 
thresholds are reasonable. Under final Sec.  300.647, States retain the 
flexibility to set reasonable risk ratio thresholds in excess of those 
identified in the table without necessarily being subject to 
enforcement actions. Further, as described in greater detail elsewhere, 
these final regulations provide States with additional flexibilities 
that were not included in the proposed regulations to set reasonable 
minimum n-sizes and minimum cell sizes, both of which we expect would 
reduce the number of LEAs included in the analyses and the number of 
so-called ``false positives'' (e.g., LEAs identified due to small 
changes in the student population that result in large changes in the 
risk ratio that do not represent any systemic problems giving rise to 
significant disproportionality). As such, we do not believe that the 
tables in the Department's report reflect the actual number of LEAs 
that will be identified

[[Page 92388]]

as having significant disproportionality under these final regulations.
    The Department therefore does not agree with the cost estimates 
produced by commenters who used the report as a basis for estimating 
costs or the number of LEAs that will be identified with significant 
disproportionality.
    Changes: None.
    Comment: A few commenters challenged the Department's estimate in 
the Regulatory Impact Analysis of the NPRM of how many LEAs would be 
identified with significant disproportionality, stating that the 
regulation would significantly increase the number of LEAs identified 
with significant disproportionality. One commenter noted that the 
Department provided little explanation for its estimates that 400 to 
1,200 LEAs could be affected by the regulations.
    Discussion: As stated in the NPRM, the Department does not know 
with a high degree of certainty how many LEAs would be newly identified 
in future years, particularly given the wide flexibilities provided to 
States in the final regulations. To address this uncertainty, the 
Department used SY 2012-13 IDEA section 618 data, in which States 
identified 449 out of approximately 16,000 LEAs as having significant 
disproportionality. Using that year's data as a baseline, the 
Department's estimates were based on the overall number of LEAs 
identified with significant disproportionality roughly doubling under 
the proposed regulations. However, to fully examine the sensitivity of 
our analysis to this estimate, we also included estimates for the 
number of identified LEAs tripling and quadrupling over the baseline. 
As discussed in the NPRM, we believe it would be highly unlikely that 
such an increase would be realized.
    Changes: None.
    Comment: One commenter expressed that, if only 400 LEAs would be 
impacted, there is little need for the regulation.
    Discussion: We disagree with the commenter's assertion that the 
likelihood that a small number of LEAs will be affected should 
determine the appropriateness of regulatory action. Under IDEA, each 
and every child with a disability is entitled to a free appropriate 
public education in the least restrictive environment. If the 
regulations can help to identify and address racial disparities in 
special education--which may result from inappropriate identification, 
placement, and discipline of children with disabilities--regulatory 
action is fully warranted.
    Changes: None.
Evaluating the Impact of the Regulation
    Comment: One commenter requested that the Department withdraw the 
proposed regulations due to concerns that they do not include 
sufficient detail to allow the public to provide informed comments. In 
particular, the commenter expressed concern that the proposed 
regulations do not include any national standard, criteria, benchmarks, 
or goals upon which to gauge State compliance with them. The Department 
interprets these comments to refer to the impact of the proposed 
standard methodology.
    Discussion: In its 2013 audit, the GAO noted that the wide 
variability in States' approaches to identifying significant 
disproportionality made it difficult to determine the extent of 
significant disproportionality across the Nation, or the extent to 
which it is being addressed. The Department agrees with the GAO's 
assessment, and believes States' current implementation of IDEA section 
618(d)--with only 28 States and the District of Columbia identifying 
any significant disproportionality--would not provide an appropriate 
baseline from which to establish benchmarks or goals for the reduction 
of significant disproportionality.
    The Department's goal in issuing these regulations, as discussed in 
the NPRM, is to ensure the appropriate review of data and examination 
for significant disproportionality, and to help States and LEAs address 
and reduce significant disproportionality. To accomplish this goal, as 
well as facilitate a better understanding of the extent of significant 
disproportionality across the Nation, the Department did not propose to 
decide for States the point at which specific racial or ethnic 
overrepresentation becomes significant disproportionality; rather, the 
Department proposed to require States to follow a standard methodology, 
with flexibility to account for State differences, consistent with the 
GAO's 2013 recommendation. Further, a key area of flexibility, under 
Sec.  300.647(b)(1)(i), allows States to set reasonable risk ratio 
thresholds, with input from stakeholders and State Advisory Panels, 
under Sec.  300.647(b)(1)(i), subject to the Department's review and 
enforcement for reasonableness. As the risk ratio threshold is the 
point at which an LEA is determined to have significant 
disproportionality, this aspect of the standard methodology has a 
strong impact on the total cost. Accordingly, the Department's proposal 
to allow States to select reasonable risk ratio thresholds means that, 
to a great extent, the final impact of these regulations will be 
determined by the States themselves. This relationship between the 
flexibility afforded to States, and the Department's estimates of the 
costs of the regulation, were explained in the NPRM. The Department 
continues to believe that allowing States the flexibility to set 
reasonable risk ratio thresholds is necessary to account for 
differences between States, despite the fact that Department-
established risk ratio thresholds would allow for a more precise 
assessment of the costs of the regulation.
    Changes: None.
    Comment: Several commenters responded to Directed Question #13 in 
the NPRM, which requested suggestions for the metrics the Department 
should establish to assess the regulations once they are final. We 
received a variety of responses.
    One commenter suggested that the regulations be measured by whether 
they reduce or eliminate the number of States and LEAs with significant 
disproportionality. A different commenter, by contrast, suggested that 
measures focus on children, not LEAs and suggested that the Department 
give consideration to the number of children attending LEAs identified 
with significant disproportionality and the proportion of all children 
that represents. Another made a similar suggestion, that the Department 
should compare proportions of children with disabilities identified, 
placed, and disciplined over three years--within an LEA and across LEAs 
with comparable demographics--to determine, first, whether there is a 
decrease in significant disproportionality over the years within LEAs 
and, second, if trends in significant disproportionality are similar 
across LEAs with comparable demographics. Still another suggested that 
the Department monitor metrics that focus on the placement of children 
with particular impairments--specifically, children with autism, 
emotional disturbance, or intellectual disability--outside of the 
regular classroom. The commenter argued that a child's disability 
should not be the determining factor for where the child spends the 
school day. Last, a few commenters recommended that the Department 
assess the regulation's impact on the appropriate identification, 
placement, and discipline of children with disabilities; increases in 
placement in the regular classroom for children of color with 
disabilities; increases in access to the general curriculum for 
children of color with disabilities; and movement of children of color 
from restrictive settings to placement in the regular

[[Page 92389]]

classroom 80 percent or more of the school day.
    A few commenters suggested that the Department use monitoring 
metrics that include State baseline and progress data but insisted that 
these data not be used in any ranking or accountability ratings. 
Another commenter suggested that the Department monitor baseline and 
progress data that integrate IDEA results-driven accountability 
measures with measures from Federal elementary and secondary, as well 
as career and technical, education programs. Another commenter 
recommended that metrics used to assess the regulation include 
academic, social, and emotional outcomes.
    Finally, a few other commenters interpreted the question broadly, 
perhaps more broadly than intended. One commenter suggested that the 
Department develop self-assessments for States, similar to what the 
Department previously provided for dispute resolution and correctional 
education. Another commenter suggested the Department measure impact by 
monitoring and enforcing the requirement in proposed Sec.  
300.647(b)(1)(i), which requires States to use advice from 
stakeholders.
    Discussion: The Department appreciates the comments we received 
addressing what metrics should be established to assess these 
regulations once they become final, and will take them all into 
consideration. Further, as States take the steps necessary to implement 
the regulations, we will be in a better position to determine what 
evaluation metrics, monitoring, and technical assistance, will be most 
meaningful and appropriate.
    Changes: None.
Reporting Requirements
    Comment: A few commenters generally opposed any attempt by the 
Department to require States to take on additional reporting burden.
    Discussion: We recognize the commenters' concern about reporting 
burden. Under IDEA section 618(d) (20 U.S.C. 1418(d)), States are 
required to collect and examine data to determine whether significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State. Prior to these regulations, the 
Department clarified in guidance the specific data that States must 
collect and review with respect to the identification of children as 
children with disabilities, including the identification of children 
with particular impairments, placement and disciplinary removals. OSEP 
Memorandum 08-09 (July 28, 2008). The Department made a concerted 
effort, both in our prior guidance and in these final regulations, to 
ensure that States were only required to collect and examine data that 
they, and their LEAs, are otherwise obligated to collect and report to 
the Department and the public under IDEA section 618(a) (20 U.S.C. 
1418(a)). We have added a new Sec.  300.647(b)(7) requiring States to 
report all risk ratio thresholds, minimum cell sizes, minimum n-sizes, 
standards for measuring reasonable progress and the rationales for each 
to the Department. Prior to the development of a new data collection to 
be submitted to the Department at a time and in a manner determined by 
the Secretary, the EMAPS User Guide: State Supplemental Survey--IDEA 
will be revised to clarify what specific information States should 
include within their definition of significant disproportionality. The 
updated survey instructions will be released in February of 2017. The 
Department is sensitive to the reporting burdens upon States, but 
believes that the additional reporting requirements created by this 
regulation will be minimal as States are required to select risk ratio 
thresholds, minimum cell sizes, and minimum n-sizes, and States will 
have sufficient time to prepare before that information is required. We 
also believe that this information will help the Department analyze the 
impact of this regulation. As noted in the regulation, this information 
will be collected in a time and manner determined by the Secretary and 
will not be collected until an information collection request has been 
completed.
    Changes: We have added a new Sec.  300.647(b)(7) requiring States 
to report all risk ratio thresholds, minimum cell sizes, minimum n-
sizes, standards for measuring reasonable progress, and the rationales 
for each to the Department at a time and in a manner determined by the 
Secretary. We are currently revising the EMAPS User Guide: State 
Supplemental Survey--IDEA to clarify what specific information States 
should include within their definition of significant 
disproportionality. These include requests of States to include 
information on risk ratio thresholds and minimum cell and n-sizes. The 
revised survey instructions will publish in February 2017. States will 
then submit SY 15-16 data.
    Comments: Commenters requested that States each be required to 
submit a long-term plan to the Department for addressing significant 
disproportionality that includes how they will implement the new 
regulations and provide support to LEAs.
    Discussion: The Department recognizes the value of States having 
long-term plans to reduce significant disproportionality. Indeed, we 
believe such an approach, including the setting of appropriate risk 
ratio thresholds, minimum n-sizes, and minimum cell sizes, can serve to 
help States identify the most pressing issues facing their students and 
provide adequate support to LEAs as they work to reduce significant 
disproportionalities.
    In addition, we note that to the extent that implementation of 
these regulations, including establishing reasonable risk ratio 
thresholds, cell sizes, n-sizes and a measure for reasonable progress, 
would require changes to a State's policies and procedures, under Sec.  
300.165, States must conduct public hearings, ensure adequate notice of 
those hearings, and provide an opportunity for public comment. We would 
expect that States, in consulting with stakeholders, including their 
State Advisory Panels, would engage in planning to ensure the best 
results for their students. However, we believe that requiring States 
to report these plans to the Department would place an unnecessary 
burden upon them. As such, we decline to require this reporting.
    Changes: None.
    Comments: A few commenters suggested that the Department add a 
requirement for States to publicly report risk ratios, including LEA-
level risk ratios, regarding placement, noting that they are rarely 
reported and that LEAs are rarely aware of their own performance. One 
commenter requested that the Department require States to publish LEA-
wide data on suspensions of children of color with disabilities.
    Discussion: Under IDEA section 618(a)(3) (20 U.S.C. 1418(a)(3)), 
the Department has broad authority to require States to collect, and 
report to the Department and the public, data and information related 
to Part B of IDEA. In general, the Department does not exercise this 
authority by including specific reporting requirements in regulations. 
Rather, the Department issues an information collection request, which 
is subject to public comment, to specify the data States must collect 
and report. Under the Department's current information collection (OMB 
Control No. 1875-0240), States are required to submit counts of 
children with disabilities, by race, who are (1) identified with a 
particular impairment, (2) placed in particular educational settings, 
and (3) subjected to disciplinary removals. We agree with the 
commenters' suggestion that all of the risk ratios and alternate risk 
ratios

[[Page 92390]]

the States calculate for their LEAs should be made public. This 
increased transparency allows States, LEAs, and stakeholders alike to 
monitor significant disproportionality and reinforces the review and 
revision of risk ratio thresholds, cell sizes, and n-sizes as an 
iterative public process within each State. The Department therefore 
anticipates that all risk ratios and alternative risk ratios will be 
made public but has not yet determined the precise time and manner for 
this to occur. We anticipate doing so through an information collection 
request, through the Department's own publication of these data, or 
some combination of the two.
    Changes: None.
    Comments: A few commenters suggested that the Department add a 
requirement for States to publicly report risk ratios calculated to 
determine disproportionate representation, under IDEA section 
612(a)(24).
    Discussion: These regulations pertain only to IDEA section 618(d) 
(20 U.S.C. 1418(d)), which outlines the obligation of each State to 
collect and examine data to determine if significant 
disproportionality, based on race or ethnicity, is occurring in the 
State and LEAs of the State with respect to the identification, 
placement, or discipline of children with disabilities. A different 
provision of IDEA--section 612(a)(24) (20 U.S.C. 1412(a)(24)--requires 
States, consistent with the purposes of IDEA and IDEA section 618(d), 
to develop policies and procedures designed to prevent the 
inappropriate over-identification or disproportionate representation by 
race and ethnicity of children as children with disabilities, including 
children with disabilities with a particular impairment. Under 
Indicators 9 and 10 of the Part B State Performance Plan/Annual 
Performance Report (SPP/APR), consistent with section 616(a)(3)(C) (20 
U.S.C. 1416(a)(3)(C)), States are required to report the percent of 
districts with disproportionate representation of racial and ethnic 
groups in special education and in specific disability categories that 
is the result of inappropriate identification. It would be outside the 
scope of these regulations to prescribe how States collect, calculate, 
or report data regarding the identification of LEAs with 
disproportionate representation due to inappropriate identification.
    Changes: None.
    Comments: One commenter requested that the Department require 
States to report data on all children who are deaf and hard of hearing, 
regardless of whether another disability is considered the child's 
primary disability, in its IDEA section 618 data collection. The 
commenter stated that up to 55 percent of deaf and hard of hearing 
children are reported to have an additional disability. The commenter 
believed that, if they are counted in the category of their additional 
disability, but not in the category of hearing impairment, data on the 
number of deaf and hard of hearing children is incomplete or 
inaccurate.
    Discussion: The Department appreciates the commenter's concern that 
if children who are deaf or hard of hearing are not counted in the 
categories of deafness or hearing impairment, but are counted in the 
another category that is considered the child's ``primary disability,'' 
the State's section 618 data on the number of deaf and hard of hearing 
children is incomplete or inaccurate. The commenter's suggestion that 
the Department change the section 618 data collection for children who 
are deaf or hard of hearing is outside the scope of this regulation. We 
also note that children who are deaf or hard of hearing are not 
included as a category of analysis under Sec.  300.647(b)(3). 
Therefore, States are not required to determine if significant 
disproportionality is occurring with respect to the identification of 
children who are deaf or hard of hearing.
    Changes: None.
    Comments: A few commenters requested that the Department require 
States to annually report additional discipline data--suspensions of 
one day or more disaggregated by impairment, race and ethnicity, 
gender, and English language proficiency--to the public. These 
commenters suggested that this data would help address the problem that 
children identified with deafness, blindness, or traumatic brain injury 
are often disciplined due to improper school discipline policies or 
inadequate staff training.
    One commenter stated that, under IDEA section 618(a)(1), while 
States are already required to do this reporting, as of 2013, only 16 
States had reported any discipline data for children with disabilities, 
and only 1 State provided the disaggregated data as required by 
Statute. The commenter requested that the Department reinforce for the 
States that compliance with the public reporting requirements of IDEA 
will be reviewed by the Secretary and could influence the Department's 
determination of whether risk ratio thresholds are reasonable.
    Discussion: The Department declines to require States to annually 
report additional discipline data under IDEA section 618(a) through 
these regulations. Further, in the exercise of our responsibilities to 
ensure compliance with IDEA, the Department annually reviews each 
State's SPP/APR, in which each State reports to the Secretary on the 
performance of the State and makes an annual determination of the 
State's performance under section 616(d) of IDEA (20 U.S.C. 1416(d)). 
The Department considers the timeliness and accuracy of data reported 
by the State under section 618 of IDEA, when making annual 
determinations for each State under IDEA section 616(d) (20 U.S.C. 
1416(d)). The Department would typically address noncompliance with 
section 618(a) reporting requirements through this process and, as 
such, we decline to address them as part of this regulation.
    Further, States' compliance with the requirement to report to the 
Department under IDEA section 618(a) is a separate issue from the 
State's compliance with the requirement to establish reasonable risk 
ratio thresholds under Sec.  300.647 of the final regulation, which 
implements IDEA section 618(d). For this reason, we decline the 
commenters' request to consider States' reporting under section 618(a) 
in the Department's review of the reasonableness of States' risk ratio 
thresholds.
    Changes: None.
    Comments: One commenter requested that the Department eliminate 
SPP/APR Indicators 4 (rates of suspension and expulsion), 9 
(disproportionate representation in special education resulting from 
inappropriate identification), and 10 (disproportionate representation 
in specific disability categories resulting from inappropriate 
identification). The commenter asserted that the standard methodology 
will require States to duplicate analyses of the same data, albeit with 
varying definitions, and to report it twice.
    Discussion: We are sensitive to concerns about duplicative 
reporting requirements and seek to reduce them wherever possible. 
However, multiple distinct provisions of IDEA require States to analyze 
similar data sets to identify LEAs where racial or ethnic disparities 
exist. These provisions include IDEA sections 612(a)(24) and 
616(a)(3)(C) (20 U.S.C. 1412(a)(24) and 1416(a)(3)(C)), under which 
States must identify LEAs with disproportionate representation that is 
the result of inappropriate identification; IDEA section 612(a)(22) (20 
U.S.C. 1412(a)(22)), under which States must identify LEAs that have a 
significant discrepancy in the rate of long-term suspensions and 
expulsions; and IDEA section 618(d), which is the focus of these 
regulations. While the Department acknowledges that these provisions 
may require States to use similar data (i.e.,

[[Page 92391]]

identification and discipline data disaggregated by race and 
ethnicity), the data analysis required to identify LEAs with 
disproportionate representation, a significant discrepancy, and 
significant disproportionality is different. As States have an 
obligation under IDEA to comply with each of these provisions, we 
believe it is appropriate for the Department to monitor their 
implementation separately.
    Further, the Department does not have flexibility to eliminate 
Indicators 9 and 10 of the SPP/APR--under which States report their 
implementation of IDEA section 612(a)(24)--as States are explicitly 
required to submit this information under IDEA section 616(a)(3)(C) (20 
U.S.C. 1416(a)(3)(C)).
    Changes: None.
Additional State and Local Standards
    Comments: One commenter requested that the Department set State and 
local standards, as well as national standards, for identifying and 
addressing significant disproportionality.
    Discussion: To the extent that the commenter means that the 
Department should, in addition to the standard methodology, require 
States and LEAs to adopt additional standards for identifying 
significant disproportionality, we believe this is unnecessary. The 
standard methodology in Sec.  300.647 implements the requirement in 
IDEA section 618(d) (20 U.S.C. 1416(d)) that each State annually 
collect and examine data to determine if significant disproportionality 
based on race and ethnicity is occurring in the State and the LEAs of 
the State with respect to the identification, placement, and discipline 
of children with disabilities. Section 300.647 sets common parameters 
for analysis, which each State must use to determine whether 
significant disproportionality is occurring at the State and local 
level. As such, there is no need for the Department to set any separate 
State or local standards.
    To the extent that the commenter means that the Department should 
set State and local standards for addressing significant 
disproportionality once it is identified in LEAs, we believe that this 
is not the best approach given the potential variability in the needs 
of students with and without disabilities in the various States and 
LEAs and that further prescribing the ways that States and LEAs must 
respond to significant disproportionality is unnecessary at this time 
and in these regulations.
    IDEA section 618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B), requires LEAs 
identified with significant disproportionality to reserve 15 percent of 
their IDEA Part B funds for comprehensive CEIS. The Department believes 
that the specifics of how those funds are to be used to address the 
underlying factors is best left to State and local officials. The 
Department notes that IDEA section 613(f) (20 U.S.C. 1413(f)) already 
sets out examples of the kinds of activities that may be funded. 
Section 300.646(d) of these regulations does the same and adds, in 
Sec.  300.646(d)(1)(ii), that comprehensive CEIS must be directed to 
identifying and addressing the factors contributing to the significant 
disproportionality in the LEA. Regulations specifically prescribing how 
this is to be done cannot possibly address the myriad circumstances and 
needs that local officials will encounter when determining how best to 
provide comprehensive CEIS.
    Changes: None.
Noncompliance With IDEA
    Comments: One commenter requested that the Department not consider 
a finding of significant disproportionality as a finding of 
noncompliance with IDEA which, as explained in OSEP Memorandum 09-02 
(October 17, 2008), would require correction at the individual and 
systems levels within one year of the finding. IDEA sections 616 and 
642 (20 U.S.C. 1416 and 20 U.S.C. 1442). The commenter stated that a 
finding of significant disproportionality is merely an indication that 
policies, practices, and procedures warrant further attention due to 
the number of children of a race or ethnicity that have been 
identified, placed, or disciplined, as opposed to an indication that 
the LEA has taken inappropriate action. Further, the commenter, along 
with one other, argued that a State would not be able to enforce the 
correction of non-compliance for individual children affected by 
disproportionality with respect to identification or placement, as 
these are IEP Team decisions.
    Discussion: The Department generally agrees with the commenters' 
description of a finding of significant disproportionality. An LEA 
found to have significant disproportionality is not necessarily out of 
compliance with IDEA; rather, as the commenter indicated, the 
significant disproportionality is, among other things, an indication 
that the policies, practices, and procedures in the LEA may warrant 
further attention.
    If an LEA is identified with significant disproportionality, the 
State must provide for review and, if appropriate, revision of 
policies, practices, and procedures used in identification or placement 
in particular education settings, including disciplinary removals, to 
ensure they comply with the requirements of IDEA.
    If the State identifies noncompliance with a requirement of IDEA 
through this review, then under Sec.  300.600(e), the State must ensure 
that the noncompliance is corrected as soon as possible, and in no case 
later than one year after the State's identification of the 
noncompliance. When verifying the correction of identified 
noncompliance, the State must ensure that the LEA has corrected each 
individual case of noncompliance, unless the child is no longer within 
the jurisdiction of the LEA and the State determines that the LEA is 
correctly implementing the specific regulatory requirement(s) based on 
a review of updated data such as data subsequently collected through 
on-site monitoring or a State data system, as explained in OSEP 
Memorandum 09-02, dated October 17, 2008.
    Changes: None.
General Opposition to the Regulation
    Commenters: A number of commenters expressed general opposition to 
the proposed regulations, which they understood to cut special 
education funding. A few commenters expressed general opposition to the 
Department's proposed regulations as a whole, without further 
clarification.
    Discussion: Final Sec. Sec.  300.646 and 300.647 do not change the 
level of funding under IDEA provided to States or their LEAs. To the 
extent that these commenters are referring to the required reservation 
of funds to provide comprehensive CEIS, we note that IDEA section 
618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B)) makes the reservation mandatory 
upon a finding of significant disproportionality in an LEA. The 
Department does not have the authority to alter this statutory 
requirement. As to the commenters who express general opposition, we 
set out throughout this document our reasons for proceeding with these 
regulations.
    Changes: None.
Comments on the Racial and Ethnic Disparities Report
    Changes: None.
    Comments: A few commenters expressed concern that they were unable 
to reproduce the example risk ratio thresholds or verify the 
calculations published in the Department's report, Racial and Ethnic 
Disparities in Special Education. Other commenters requested that we 
publish the business rules associated with the report.
    Discussion: We apologize for any concern or confusion the report 
may

[[Page 92392]]

have caused. We attempted to include the necessary details and 
explanations with the report, which we believe are responsive to the 
request for business rules. It was, however, not necessary, nor was it 
our intent, for States to reproduce the risk ratio thresholds or 
minimum n-size used in the report. The Department did not intend for 
States to adopt the risk ratios or minimum n-size in the report 
(referred to as ``cell size'' in the NPRM and the report), and the 
report did not account for the flexibilities provided in the 
regulations. Rather, the purpose of including the report was to provide 
the public with a set of tables showing the number and percentage of 
LEAs that would be identified with significant disproportionality if 
the Department's example risk ratio thresholds and minimum n-size were 
adopted by all 50 States and the District of Columbia.
    Changes: None.
Timeline and Effective Date of the Regulation
    Comment: A number of commenters expressed concerns about the 
timeline for the implementation of the new regulations. One commenter 
stated that, if the regulations go into effect immediately, it would be 
costly to require States to retroactively implement the standard 
methodology, determine significant disproportionality, and notify LEAs. 
The commenter added that this timeline would present a challenge for 
States that have already made their significant disproportionality 
determinations for the next year. The commenter concluded by 
recommending a phase-in period for the implementation of the new 
standard methodology and the consequences for LEAs.
    Similarly, another commenter stated that the Department should 
first run a pilot year in selected States. This, the commenter said, 
would allow States to prepare new personnel to implement the 
regulations (as, according to the commenter, there has been personnel 
turnover since the last regulation of IDEA section 618(d)); provide the 
Department with additional time to prepare comprehensive guidance and 
technical assistance; provide the Department an opportunity to 
determine whether these regulations are likely to address racial and 
ethnic disparities; and support more accurate and complete national 
data, due to the availability of stronger guidance. Finally, other 
commenters requested that the Department give States and LEAs 
additional time to understand the new standard methodology and 
proactively make efforts to address racial and ethnic disparities.
    Discussion: The Department agrees that additional time is needed to 
implement these regulations. With time for compliance delayed, we 
believe there is no need for a phase-in year or a pilot year in 
selected States.
    These regulations become part of the Code of Federal Regulations on 
January 18, 2017. However, States and LEAs will not be required to 
comply with these regulations until July 1, 2018, and, in the case of 
Sec.  300.647(b)(3)(iii), States may delay including children ages 
three through five in the review of significant disproportionality with 
respect both to the identification of children as children with 
disabilities and to the identification of children as children with a 
particular impairment, until July 1, 2020.
    The Department recognizes the practical necessity of allowing 
States time to plan for implementation of these final regulations, 
including time to amend the policies and procedures necessary for 
compliance. States will need time to develop the policies and 
procedures necessary to implement the standard methodology in Sec.  
300.647 and the revised remedies in Sec.  300.646(c) and (d). In 
particular, States must consult with their stakeholders and State 
Advisory Panels under Sec.  300.647(b)(1) to develop reasonable risk 
ratio thresholds, a reasonable minimum n-size, a reasonable minimum 
cell size, and, if a State uses the flexibility described in Sec.  
300.647(d)(2), standards for determining whether an LEA has achieved 
reasonable progress under Sec.  300.647(d)(2) in lowering a risk ratio. 
States must also determine which, if any, of the available 
flexibilities under Sec.  300.647(d) they will adopt. To the extent 
States need to amend their policies and procedures to comply with these 
regulations, States will also need time to conduct public hearings, 
ensure adequate notice of those hearings, and provide an opportunity 
for public comment, as required by Sec.  300.165.
    Accordingly, States must implement the standard methodology under 
Sec.  300.647 in SY 2018-19. In doing so, States must identify LEAs 
with significant disproportionality under Sec.  300.647(c)(1) in SY 
2018-2019 using, at most, data from the three most recent school years 
for which data are available. We note that, in the case of discipline, 
States may be using data from four school years prior to the current 
year, as data from the immediate preceding school year may not yet be 
available at the time the State is making its determinations (i.e., 
final discipline data from SY 2017-2018 may not yet be available at the 
time during SY 2018-2019 the State is calculating risk ratios).
    States must ensure that the identification of LEAs with significant 
disproportionality based on race and ethnicity in the identification, 
placement, or disciplinary removal of children with disabilities in SY 
2018-2019, is based on the standard methodology in Sec.  300.647, and 
then implement the revised remedies in accordance with Sec.  300.646(c) 
and (d). In the spring of 2020, therefore, States will report (via IDEA 
Part B Maintenance of Effort (MOE) Reduction and Coordinated Early 
Intervening Services (CEIS) data collection, OMB Control No. 1820-0689) 
whether each LEA was required to reserve 15 percent of their IDEA Part 
B funds for comprehensive CEIS in SY 2018-19.
    States may, at their option, accelerate this timetable by one full 
year. States may implement the standard methodology in SY 2017-18 and 
assess LEAs for significant disproportionality using data from up to 
the most recent three school years for which data are available. States 
that choose to implement the standard methodology in Sec.  300.647 to 
identify LEAs with significant disproportionality in SY 2017-2018 may 
also require those LEAs to implement the revised remedies in in 
accordance with Sec.  300.646(c) and (d).
    Whether a State begins compliance in SY 2017-2018 or 2018-2019, it 
need not include children ages three through five in the review of 
significant disproportionality with respect both to the identification 
of children as children with disabilities and to the identification of 
children as children with a particular impairment, until July 1, 2020.
    Finally, the delayed compliance date does not mean that States are 
excused from making annual determinations of significant 
disproportionality in the intervening years. States must still make 
these determinations in accordance with the current text of Sec.  
300.646.
    Changes: None.
Appropriate Placement of Children With Disabilities
    Comments: Commenters expressed concerns that the Department is 
encouraging the placement of children with disabilities in the regular 
classroom, irrespective of their needs or IEP Team decisions. One 
commenter expressed concern at the Department's perceived suggestion 
that children placed in restrictive environments receive substandard 
education and do not receive appropriate services. The commenter noted 
that, while the Department stated its intention not to

[[Page 92393]]

limit services for children with disabilities who need them, its 
suggestion that over-identification results in restrictive placements 
and less challenging academic standards suggests otherwise. The 
commenter noted that private, specialized education programs that serve 
children with disabilities publicly placed by LEAs are required to meet 
the same academic standards as public schools and that each public 
agency is required to ensure that a continuum of alternative placements 
and services is available to children with disabilities.
    Discussion: The Department agrees with commenters that it would be 
inappropriate to place all children with disabilities in the general 
education classroom 100 percent of the time without regard to their 
individual needs or IEP Team decisions, including decisions about 
supplementary aids and services that will enable the child to be 
involved in, and make progress in, the general education curriculum. 
Section 300.115 explicitly requires that each public agency ensure that 
a continuum of alternative placements is available to meet the needs of 
children with disabilities for special education and related services. 
Further, Sec.  300.116 requires that each child's placement decision 
must be made in conformity with the least restrictive environment (LRE) 
provisions in Sec. Sec.  300.114 through 300.118. The LRE provision in 
IDEA section 612(a)(5), (20 U.S.C. 1412(a)(5)) and its implementing 
regulation in Sec.  300.114 require, to the maximum extent appropriate, 
that children with disabilities, including children in public or 
private institutions or other care facilities, be educated with 
children who are not disabled. Special classes, separate schooling, or 
other removal of children with disabilities from the regular 
educational environment should occur only when the nature or severity 
of the disability of a child is such that education in regular classes 
with the use of supplementary aids and services cannot be achieved 
satisfactorily. Unnecessarily removing children with disabilities from 
an integrated setting and concentrating them in separate schools runs 
contrary to the integration goal that lies at the heart of the 
Americans with Disabilities Act (ADA). (See, e.g., 28 CFR 
35.130(b)(1)(ii), (b)(1)(iv), (b)(2); see also, Olmstead v. L.C., 527 
U.S. 581, 597 (1999) (``Unjustified isolation, we hold, is properly 
regarded as discrimination based on disability'' under title II of the 
ADA).) Additionally, under Sec.  300.116, a child's placement must be 
determined at least annually, be based on the child's individualized 
education program (IEP), and be as close as possible to the child's 
home. The overriding rule is that placement decisions must be 
determined on an individual, case-by-case basis, depending on each 
child's unique needs and circumstances and, in most cases, based on the 
child's IEP. Further, eligibility determinations and placement 
decisions must be made at the local level with parental input and in 
accordance with the requirements of IDEA and its implementing 
regulations.
    These regulations do not override either the requirement under 
Sec.  300.306(a) that eligibility determinations must be made by a 
group of qualified professionals and the parent of the child or the 
requirement under Sec.  300.116(a)(1) that placement decisions must be 
made by a group of persons, including the parents, and other persons 
knowledgeable about the child, the meaning of the evaluation data, and 
placement options.
    However, to the extent that a State identifies significant 
disproportionality based on race or ethnicity with respect to 
identification and placement in an LEA, we believe it is fully 
appropriate, as IDEA section 618(d)(2)(A) (20 U.S.C. 1418(d)(2)(B) 
requires, for there to be a review, and, if necessary, revision, of the 
policies, practices, and procedures of the LEA to ensure that 
eligibility and placement decisions are consistent with IDEA's focus on 
providing children with disabilities a free appropriate public 
education in the least restrictive environment based on their 
individual needs.
    Changes: None.
    Comments: Many commenters raised concerns that a standard 
methodology would be inconsistent with the individualized nature of 
IDEA. Some were concerned that proposed Sec.  300.647(b) would lead 
LEAs to establish strict, albeit unofficial, quotas on the numbers of 
children with disabilities who could be identified, placed in 
particular settings, or disciplined in order for the LEA to avoid being 
identified with significant disproportionality. These commenters stated 
that this practice, or any uniform mathematical calculation, would fail 
to consider each child's individual needs. Other commenters had similar 
concerns, noting that identification and placement decisions are 
appropriately made by IEP teams on an individual basis--based on a 
full, fair, and complete evaluation, consistent with IDEA's 
requirements--and argued that it would be inappropriate for the 
Department to promulgate a regulation that could exert undue pressure 
on those decisions. These commenters said that discipline decisions 
alone should be subject to analysis for significant disproportionality, 
as it was the only category that was an administrative decision and not 
the purview of IEP teams.
    Discussion: Under IDEA section 601(d)(1)(A) (20 U.S.C. 
1400(d)(1)(A)), one of the purposes of IDEA is to ensure that all 
children with disabilities have available to them a free appropriate 
public education that emphasizes special education and related services 
designed to meet their unique needs. The Department disagrees with the 
assertion that any uniform methodology for determining significant 
disproportionality in LEAs would be inconsistent with IDEA's emphasis 
on addressing the unique needs of individual children. In fact, one of 
the main goals of these regulations is to help ensure, through improved 
implementation of section 618(d) of IDEA, that identification and 
placement decisions are, in fact, based on the unique needs of 
individual children, rather than the result of problematic policies, 
practices, and procedures that may differentially and inappropriately 
affect children in various racial and ethnic groups.
    Once an LEA is identified as having significant disproportionality, 
it would not be appropriate for the LEA to overturn prior decisions 
regarding the identification of children as children with disabilities 
or the placement of children with disabilities in particular 
educational environments simply to prevent future findings of 
significant disproportionality.
    Moreover, it is a violation of IDEA for LEAs to attempt to avoid 
determinations of significant disproportionality by failing to identify 
otherwise eligible children as children with disabilities. IDEA 
sections 612(a)(3)(A) and 613(a)(1), 20 U.S.C. 1412(a)(3)(A) and 20 
U.S.C. 1413(a)(1). Imposing artificial numerical targets on the groups 
responsible for making eligibility determinations under Sec.  
300.306(a)(1) or placement decisions under Sec.  300.116(a)(1), or 
restricting their ability to make eligibility determinations or 
placement decisions based on the unique needs of the child are also 
inconsistent with IDEA. IDEA requires that the individual needs of 
children with disabilities, as described in their IEPs, be central to 
determining eligibility for IDEA services and appropriate placement.
    Furthermore, IDEA and its implementing regulations currently 
include provisions to safeguard individualized decision-making. States 
must ensure that all LEAs, including

[[Page 92394]]

those determined to have significant disproportionality with respect to 
identification, implement the States' child find procedures. (20 U.S.C. 
1412(a)(3) and (a)(11) and 20 U.S.C. 1416 (a)(1)(C)) (34 CFR 300.111, 
300.149 and 300.600). States must also ensure that LEAs comply with 
specific evaluation procedures under IDEA section 614(b) (20 U.S.C. 
1414(b)) to determine a child's eligibility for special education 
services and ensure that a child's placement in a particular education 
setting is based on his or her IEP (Sec.  300.116(b)) and is in the 
least restrictive environment (IDEA section 612(a)(5)) (20 U.S.C. 
1412(a)(5)). Under IDEA section 618(d)(2)(A) (20 U.S.C. 1418(d)(2)(A)), 
States must provide for an annual review, and, if appropriate, revision 
of policies, practices, and procedures to ensure that LEAs identified 
with significant disproportionality are in compliance with IDEA's 
requirements. Through this review process and their monitoring 
procedures, States have an opportunity to ensure that LEAs identified 
with significant disproportionality appropriately implement child find, 
evaluation, and placement procedures.
    Last, while the Department will require all States to use a 
standard methodology to implement IDEA section 618(d), we believe that 
Sec.  300.647(b) provides States with sufficient flexibility to prevent 
unintended consequences associated with the use of a numerical formula 
to identify significant disproportionality. When risk ratio thresholds 
are set too low, we believe there is some risk that LEAs may face 
pressure to inappropriately limit or reduce the identification of 
children with disabilities to avoid a determination of significant 
disproportionality. For this reason, we believe it is important for 
States to take time to consult with their stakeholders and State 
Advisory Panels to ensure that, when setting risk ratio thresholds, 
they balance the need to identify significant disproportionality in 
LEAs with the need to avoid perverse incentives that would inhibit a 
child with a disability from being identified or placed in the most 
appropriate setting based on the determination of the IEP Team.
    Changes: None.
Special Education--Generally
    Comments: A few commenters asserted that special education must be 
seen as a support for children, not as bad for children or as a 
punishment, and that it was inappropriate for the Department to suggest 
that special education services are generally of low quality.
    Discussion: We agree that special education and related services 
provided in conformity with a child's IEP are essential for children 
with disabilities to receive a free appropriate public education. We do 
not agree that we in any way suggested that special education services 
are of low quality or that they are a punishment of any kind. To the 
extent that children in particular racial or ethnic groups are 
disproportionately identified as children with disabilities, placed in 
particular educational environments, and disciplined, it is possible 
that the special education and related services that those children are 
receiving are inappropriate for their specific needs. This says nothing 
about the quality of the services that LEAs provide to children with 
disabilities generally.
    Changes: None.
Results-Driven Accountability
    Comments: Some commenters expressed concerns that the proposed 
regulations divert OSEP away from results-driven accountability--which 
includes consideration of both compliance and results data in measuring 
States' performance under IDEA annual determinations process--and back 
towards IDEA compliance alone.
    Discussion: We disagree. The Department's re-conceptualized IDEA 
accountability system--results-driven accountability--is designed to 
support States in improving results for children with disabilities, 
while continuing to assist States in ensuring compliance with IDEA's 
requirements. We believe that an effective accountability system is 
attentive to both goals. High quality results do not mitigate a State's 
responsibility to comply with the statute, just as compliance with the 
statute does not reduce the imperative for States to achieve improved 
results for children with disabilities. While significant 
disproportionality has not been included as a compliance indicator in 
the SPP/APR, States are still responsible for complying with IDEA 
section 618(d) (20 U.S.C. 1418(d)), and for ensuring that LEAs 
identified with significant disproportionality carry out the statutory 
remedies. Nothing in the regulations changes these obligations, and the 
Department maintains its responsibility to monitor and enforce the 
implementation of this requirement.
    Changes: None.

II. A Standard Methodology for Determining Significant 
Disproportionality (Sec.  300.647)

General

    Comments: The Department received several comments in support of 
proposed Sec.  300.647(b), which would require States to follow a 
standard methodology to identify significant disproportionality in the 
State and the LEAs of the State. Many supported particular features of 
the proposed methodology, including the use of a standard method to 
compare racial and ethnic groups and minimum n-size requirements, and 
others expressed support for having a general or common methodology.
    One commenter also noted that proposed Sec.  300.647(b) addressed 
the GAO's recommendation to develop a standard approach for defining 
significant disproportionality. One commenter described observing 
racial and ethnic disparities within LEAs that went unaddressed by 
States and that State definitions of significant disproportionality 
were so complex that they were difficult to comprehend. Other 
commenters stated that the standard methodology in proposed Sec.  
300.647(b) would provide much needed clarity and draw attention to 
potentially inappropriate policies, practices, and procedures for the 
identification, placement, and discipline of children with 
disabilities. Some of these commenters stated that common standards are 
the only way for the public and the Department to judge the efforts of 
the States and to ensure transparency in this area.
    Discussion: The Department appreciates the comments in support of 
the creation of a standard methodology to identify significant 
disproportionality in the identification, placement, and discipline of 
children with disabilities. We agree that these regulations will help 
to improve comparability of significant disproportionality 
determinations across States, increase transparency in how States make 
determinations of LEAs with significant disproportionality, improve 
public comprehension of a finding of significant disproportionality (or 
lack thereof), and address concerns raised by the GAO.
    Changes: None.
    Comments: Many commenters expressed concern that the standard 
methodology is unnecessary, has not been sufficiently reviewed, or 
should be further researched before its adoption is required to prevent 
potential harm to States that already address significant 
disproportionality well. Another

[[Page 92395]]

commenter argued that, without substantive analysis of the intended and 
unintended results, it was premature to implement the standard 
methodology at a national level. Further, the commenter recommended 
that the standard methodology be subject to a pilot test to explore 
fiscal, data analysis, and systems change issues after a full review of 
public comment. Another commenter recommended that the Department 
postpone issuing these regulations until it had better knowledge of 
appropriate methods for measuring racial differences. One commenter 
acknowledged the complexity involved in measuring racial and ethnic 
disparities but stated that there is no reason why a measurement 
strategy cannot be selected, implemented, and studied after the 
regulations are in place. The Department interpreted this comment to 
suggest that is not necessary to study, or pilot, a particular method 
of measuring racial and ethnic disparities before State use of the 
method is required by regulation.
    Discussion: The Department appreciates all of the comments about 
Sec.  300.647(b). However, for the reasons that follow, we do not 
believe it is necessary to remove the requirement that States use the 
standard methodology in Sec.  300.647 to determine if significant 
disproportionality based on race and ethnicity is occurring in the 
State and LEAs of the State. Further, we disagree with commenters' 
concerns that the standard methodology requires further research before 
being implemented or could cause substantial harm to States that are 
doing well in addressing significant disproportionality.
    In developing the standard methodology, the Department drew heavily 
from current State practices. As we noted in the NPRM, most States, as 
part of their methodology for comparing racial and ethnic groups for 
the purpose of identifying significant disproportionality, already use 
a version of the risk ratio, a minimum n-size or cell size, a threshold 
over which LEAs are identified with significant disproportionality, and 
up to three years of data when making an annual determination.
    States also have flexibility to tailor the standard methodology to 
the needs of their populations. This flexibility includes the ability 
to set reasonable risk ratio thresholds and reasonable minimum cell 
sizes and n-sizes (all with input from stakeholders, including the 
State Advisory Panel), the choice to use up to three years of data 
before making a determination of significant disproportionality, and 
the option to not identify LEAs that exceed the risk ratio threshold 
but are making reasonable progress under Sec.  300.647(d)(2) in 
lowering their risk ratios in each of the two prior consecutive years. 
We provided this flexibility because we believe it is appropriate for 
States to tailor their implementation of these regulations to their 
unique circumstances--and, as they feel necessary, make adjustments--
rather than delay the implementation of the regulations. Nothing in the 
regulations prohibits States from changing their risk ratio thresholds, 
population requirements, or flexibilities in accordance with Sec.  
300.647 if, after implementation of the regulations, they determine 
that reasonable adjustments are needed.
    The Department appreciates the suggestion that States pilot the 
standard methodology and analyze its effects prior to adopting the 
regulations nationwide; however, we decline to accept the suggestion. 
Given that the standard methodology is largely based on approaches 
currently in use among States, we agree with the commenter who asserted 
that additional study of the standard methodology after the regulations 
are in place, rather than before, is appropriate. Accordingly, we plan 
to evaluate the impact of these regulations, including the implications 
of using risk ratios to compare racial and ethnic groups. We also 
believe that the considerable flexibility provided to States will allow 
researchers to collect and study valuable data regarding different 
applications of the standard methodology across States.
    Changes: None.
    Comments: One commenter suggested that the States' loss of 
flexibility to define significant disproportionality may create other, 
more significant forms of inequity and inappropriate identification. 
The commenter did not further detail the types of inequity that might 
arise.
    Discussion: While Sec.  300.647(b) requires that all States follow 
a standard methodology to identify significant disproportionality, we 
believe that these regulations provide States with sufficient 
flexibility to tailor their implementation to their unique 
circumstances. This flexibility includes the ability to set reasonable 
risk ratio thresholds, reasonable minimum cells sizes and n-sizes (with 
input from stakeholders, including the State Advisory Panel), the 
choice to use up to three years of data before making a determination 
of significant disproportionality, and the option to not identify LEAs 
that exceed the risk ratio threshold but are making reasonable progress 
under Sec.  300.647(d)(2) in lowering their risk ratios in each of the 
two prior consecutive years.
    Changes: None.
    Comments: Numerous commenters noted that each State's 
disproportionality processes have been approved by the Department and 
recommended that, in lieu of these regulations, the Department address 
any concerns regarding disproportionality, or definitions of 
significant disproportionality, State by State.
    Discussion: The Department does not believe that approach would 
achieve the goals of improved transparency and consistency among 
States. We believe that the standard methodology adopted in these final 
regulations is a necessary step to achieve those goals.
    Changes: None.
    Comments: One commenter was concerned about the Department's 
contention that States' current methodologies of identifying 
significant disproportionality were inappropriate, given that the 
Department's contention is based on a data analysis that uses a 
methodology different from the States' methodologies.
    Discussion: The Department disagrees that the basis for these 
regulations is a single analysis conducted by the Department. The 
standard methodology provides basic guidelines to facilitate greater 
consistency among States, consistent with the GAO's recommendations, 
and to promote greater transparency in State efforts to address 
significant disproportionality. The recommendations of the GAO, public 
comments the Department received in a response to a 2014 request for 
information (79 FR 35154), and the Department's review of State 
definitions of significant disproportionality all informed the 
Department's decision to require that all States follow a standard 
methodology.
    Comments: One commenter stated that, because there is no 
flexibility once an LEA is identified with significant 
disproportionality, States make decisions about their methodologies to 
ensure LEAs are not inappropriately identified for arbitrary factors 
unrelated to policies, practices, and procedures.
    Discussion: While it is important for States to appropriately 
identify LEAs for significant disproportionality, we disagree with the 
commenter that identification of significant disproportionality is 
arbitrary if it is based on factors unrelated to an LEA's policies, 
practices, or procedures. IDEA section 618(d) (20 U.S.C. 1418(d)) is 
not intended solely to address significant disproportionality that 
results from inappropriate policies, practices, or

[[Page 92396]]

procedures. Under IDEA section 618(d)(2) (20 U.S.C. 1418(d)(2)), a 
review of policies, practices, and procedures is a consequence of, not 
a part of, a determination of significant disproportionality. Under 
this provision, once LEAs are identified with significant 
disproportionality, States are required to ensure the review and, if 
appropriate, revision of the LEAs' policies, practices, and procedures 
to ensure they comply with IDEA.
    Changes: None.
    Comments: One commenter argued that the ability to make comparisons 
among States, if that is the Department's goal with these regulations, 
does not result in meaningful discussion or problem-solving as each 
State is unique.
    Discussion: By requiring that all States follow a standard 
methodology, it is the Department's intent to foster greater 
comparability in the approaches States use to identify significant 
disproportionality. While States will have flexibility to determine 
their own reasonable risk ratio thresholds, to determine reasonable 
population requirements, such as a minimum n-size or cell size, and to 
use up to three consecutive years of data, we believe the standard 
methodology provides comparability that is key to promoting 
transparency in the States' implementation of IDEA section 618(d), and, 
in turn, meaningful discussion with stakeholders and State Advisory 
Panels regarding the State's progress in addressing significant 
disproportionality. These comparisons among States are currently not 
possible, given, for example, the vastly different methods States 
currently use to compare racial and ethnic groups, as was described in 
the NPRM.
    Changes: None.
    Comments: One commenter expressed concern that the Department's 
standard methodology is inconsistent with IDEA. The commenter stated 
that, when reauthorizing IDEA in 2004, Congress expanded the law's 
focus on issues related to disproportionality by including 
consideration of racial disparities and by adding certain enforcement 
provisions out of a ``desire to see the problems of over-identification 
of minority children strongly addressed.'' The commenter noted that 
Congress did not define the term ``significant disproportionality'' or 
impose a methodology to determine whether significant 
disproportionality based on race or ethnicity in the State and its LEAs 
is occurring. According to the commenter, each State was left to choose 
its own methodology for determining whether there is significant 
disproportionality in the State and its LEAs with respect to 
identification, placement, and discipline of racial and ethnic minority 
children with disabilities. The commenter argued that this intent was 
reflected in final IDEA Part B regulations, promulgated by the 
Department in August 2006, which stated that ``[w]ith respect to the 
definition of significant disproportionality, each State has the 
discretion to define the term for the LEAs and for the State in 
genera1.'' The commenter stated that, in 2006, the question of whether 
to impose a methodology for determining significant disproportionality 
was rejected by the Department as inconsistent with the law. The 
commenter also argued that an expansion of the Department's authority 
to determine whether States' risk ratio thresholds are reasonable 
conflicts with congressional intent, as the law does not support a 
national standard for determining significant disproportionality. Other 
commenters expressed similar concerns, stating that proposed Sec.  
300.647(b) was an example of Federal overreach--an improper attempt to 
control local education.
    Discussion: We agree with the commenter that, at the time of the 
2006 regulations, the Department declined to include a definition of 
significant disproportionality in the regulations. At the time, the 
Department stated that there are multiple factors to consider in making 
a determination of significant disproportionality--such as population 
size, the size of individual LEAs, and composition of State 
population--and determined that States were in the best position to 
evaluate those factors. 71 FR 46738. However, the Department did not 
state that a definition of significant disproportionality would be 
inconsistent with the law.\2\
---------------------------------------------------------------------------

    \2\ In the 2006 IDEA regulation, just prior to the Department's 
discussion regarding a definition of significant disproportionality, 
the Department did note that another commenter's suggestion was 
inconsistent with IDEA. This commenter had proposed that the 
Department amend the regulation to clarify that the determination of 
significant disproportionality should be based on a review of LEA 
policies and procedures, and not just a numerical determination. 71 
FR 46738.
---------------------------------------------------------------------------

    The fact that the Department chose not to regulate on these issues 
in 2006, based on information and experience available at the time, 
does not preclude the Department from doing so now under our authority 
to issue regulations under IDEA section 607(a) (20 U.S.C. 1406(a)). 
Under IDEA section 618(d)(1) (20 U.S.C. 1418(d)(1)), States must 
collect and examine data to determine each year whether significant 
disproportionality based on race and ethnicity is occurring in the 
State and its LEAs with respect to the identification, placement, and 
discipline of children with disabilities. The Department has the 
authority to issue regulations to the extent regulations are necessary 
to ensure compliance with the requirements of Part B of IDEA (IDEA 
section 607(a) (20 U.S.C. 1406(a)). As we noted in the NPRM, the 
Department concurs with findings by the GAO that the variability in 
State definitions of significant disproportionality has made it 
difficult to assess the extent to which States are appropriately 
identifying LEAs with significant disproportionality. Based on the 
GAO's findings, comments received in response to a June 2014 request 
for information on addressing significant disproportionality under IDEA 
section 618(d), and the field's experience with IDEA section 618(d) 
over the last 12 years, the Department now believes that these proposed 
changes are necessary to ensure that States meaningfully identify LEAs 
with significant disproportionality and that the statutory remedies are 
implemented in a manner that addresses any significant 
disproportionality identified.
    We do not believe that standardization of an analysis required 
under a Federal statute, consistent with the authority provided to us 
in that same statute, while providing a great deal of flexibility to 
States, constitutes Federal overreach. Nothing in these regulations 
requires the adoption of particular educational practices at the local 
level or seeks to exert control of local education decision-making.
    Changes: None.
    Comments: One commenter noted that Directed Questions #5, #9, #10, 
and #12 all inquire whether the Department should place future 
mandates, requirements, or restrictions upon the States relating to 
creation of risk ratio thresholds or State flexibility to define 
``reasonable progress.'' The commenter stated that additional Federal 
oversight in the form of mandates, requirements, or restrictions is 
unwarranted and inappropriate. The commenter claimed the States and 
their respective State boards or departments of education are most 
knowledgeable about the issues affecting them. As such, the commenter 
argued that those issues are best left to the discretion of individual 
States.
    Discussion: As the Department has explained in detail, both in the 
NPRM and in this document, we believe these regulations are necessary 
to ensure consistent State action in examining LEAs for significant 
disproportionality based on race and ethnicity in the identification, 
placement, and discipline of children with disabilities. Again, as the 
GAO found in its 2013

[[Page 92397]]

study, only two percent of more than 15,000 LEAs nationwide were 
required in SY 2010-11 to provide comprehensive CEIS, and the 
Department found, in SY 2012-13 that 22 States did not identify any 
LEAs as having significant disproportionality.
    That said, we agree that flexibility is necessary for States, and 
these final regulations give States the flexibility to determine 
reasonable risk ratio thresholds, reasonable minimum cell sizes and n-
sizes, and standards for reasonable progress after consultation with 
stakeholders and State Advisory Panels. Section 300.647(d) of the final 
regulations provides additional flexibilities to States.
    Under Sec.  300.647(d)(1) a State is not required to identify an 
LEA with significant disproportionality until it has exceeded the risk 
ratio threshold set by the State for up to three years. Under Sec.  
300.647(d)(2), a State is not required to identify an LEA that has 
exceeded the risk ratio threshold with significant disproportionality 
until the LEA ceases to make reasonable progress in lowering its risk 
ratio in each of two prior consecutive years.
    Changes: None.
    Comments: One commenter stated that it is discriminatory to create 
a formula for how many children of color can be identified as having 
disabilities. Another commenter stated that the Department's proposal 
would force LEAs to serve children based on the Department's 
understanding of how many children should be served, rather than on the 
individual needs of each child. A number of commenters argued that 
individual children need to be assessed without consideration of their 
race, ethnicity, socioeconomic status, sexual orientation, or gender.
    Discussion: The Department agrees with commenters that the 
determination of whether a child is eligible for special education 
services must not include consideration of his or her race, ethnicity, 
socioeconomic status, sexual orientation, or gender, or any numerical 
formula associated with these characteristics. LEAs must also follow 
specific evaluation procedures under IDEA section 614(b) (20 U.S.C. 
1414(b)) to determine a child's eligibility for special education 
services.
    However, we disagree that the standard methodology under Sec.  
300.647(b) represents a formula indicating how many children of color, 
or children in general, may be identified as children with 
disabilities. As we note elsewhere in this section, we believe that 
restricting the ability to make eligibility determinations by imposing 
artificial numerical targets on the groups responsible for making 
eligibility determinations under Sec.  300.306(a)(1) is inconsistent 
with IDEA. The standard methodology is not intended to guide 
determinations of eligibility for special education; rather, it is 
designed to help States to appropriately determine whether significant 
disproportionality, based on race and ethnicity, is occurring within an 
LEA with respect to the identification, placement, and discipline of 
children as children with disabilities. For LEAs determined to have 
significant disproportionality, the statute requires that the State 
provide for a review, and, if necessary, revision of policies, 
practices, and procedures to ensure compliance with IDEA and require 
each LEA to implement comprehensive CEIS to address the factors 
contributing to the significant disproportionality.
    Changes: None.
    Comments: One commenter stated that the proposed regulations do 
little to address significant disproportionality and that the only way 
to address disparities in identification is to provide guidance to 
States and LEAs on the appropriate identification of children with 
disabilities from diverse backgrounds.
    Discussion: While we generally agree that guidance about the 
appropriate identification of children with disabilities would be 
helpful to States and LEAs, we do not believe it is the only way to 
address disparities in identification. By requiring States to use a 
standard methodology, it is our intent to help States to make more 
appropriate determinations of significant disproportionality, and, 
consistent with IDEA section 618(d)(2)(A) (20 U.S.C. 1418(d)(2)(A)), 
help ensure that LEAs identified with significant disproportionality 
undergo a review, and, if necessary, revision, of policies, practices, 
and procedures to ensure compliance with IDEA. We believe that guidance 
regarding the appropriate identification of children as children with 
disabilities will be more valuable when paired with strategies that 
require LEAs determined to have with significant disproportionality to 
take steps to review their policies, practices, and procedures.
    Consistent with the commenters' suggestion, it is the Department's 
intent to publish guidance to help schools to prevent racial 
discrimination in the identification of children as children with 
disabilities, including over-identification, under-identification, and 
delayed identification of disabilities by race.
    Changes: None.
    Comments: A large number of commenters opposed the standard 
methodology based on their view that any standard method for 
calculating disproportionality is inherently flawed because numbers and 
data cannot reveal the cause of the disproportionality.
    Discussion: While we agree with commenters that data analysis does 
not identify or address the causes of numerical disparities, the 
identification of LEAs as having significant disproportionality 
nevertheless is a first step that will require LEAs to identify and 
address the causes of the significant disproportionality. Under Sec.  
300.646(d)(1)(ii), in implementing comprehensive CEIS, LEAs identified 
with significant disproportionality are required to identify and 
address the factors contributing to the significant disproportionality.
    Changes: None.
    Comments: Many commenters stated that any rules to address 
disproportionality in special education must be based on solid 
theoretical foundations and research-based, reliable mechanisms for the 
identification of disproportionality that are not skewed by extraneous 
factors and not based on single, arbitrary calculations.
    Discussion: While we generally agree that efforts to address racial 
and ethnic disparities in special education should be informed by 
research, theory, and reliable data, we also interpret IDEA section 
618(d) to require States to make a determination of significant 
disproportionality based on a numerical calculation and to take 
specific steps to address any significant disproportionality 
identified. This has been our long-standing position and we believe 
that it is the best interpretation based on the language in section 
618(d) that requires States to collect and examine ``data'' to 
determine if significant disproportionality is occurring. Congress 
placed the significant disproportionality provision in section 618(d) 
and under section 618(a), States are required to provide ``data'' on 
the number and percentage of children with disabilities by race and 
ethnicity who are: Receiving FAPE; participating in regular education; 
in separate classes, separate schools or residential facilities; 
removed to interim alternative education setting; and subject to long-
term suspensions and expulsions and other disciplinary actions. To 
develop a standard methodology consistent with the requirements of IDEA 
section 618(d), the Department drew heavily from current State 
practices implemented and adjusted over the course of the 12 years 
since the last reauthorization of IDEA.

[[Page 92398]]

As we noted in the NPRM, most States, as part of their methodology for 
comparing racial and ethnic groups for the purpose of identifying 
significant disproportionality, already use a version of the risk ratio 
and a threshold over which LEAs are identified with significant 
disproportionality. Further, States use population requirements--such 
as a minimum n-size or cell size--and up to three years of data when 
making an annual determination to offset the volatility of risk ratios.
    The standard methodology under Sec.  300.647 includes these 
features, but also provides States with flexibility to tailor them to 
the needs of their populations. This flexibility includes the ability 
to set reasonable risk ratio thresholds, reasonable minimum cell sizes 
and n-sizes (with input from stakeholders, including the State Advisory 
Panel), the choice to use up to three years of data before making a 
determination of significant disproportionality, and the option to not 
identify LEAs that exceed the risk ratio threshold but are making 
reasonable progress, under Sec.  300.647(d)(2), in lowering their risk 
ratios in each of the two prior consecutive years.
    Given that the standard methodology is largely based on approaches 
currently in use among States and includes a large degree of 
flexibility, it will help States to make appropriate, and not 
arbitrary, determinations of significant disproportionality.
    Changes: None.
    Comments: Several other commenters requested that the analysis for 
significant disproportionality include not only a risk ratio or other 
mathematical calculation but also a review of factors such as 
inappropriate identification, discriminatory practices, State 
performance indicators, graduation rates, and academic performance. One 
commenter suggested that the Department use a two-step approach to 
ensure that States are focusing on LEAs where compliance indicators may 
have impacted the performance of children with disabilities. The 
Department would first examine performance indicators and identify 
agencies significantly discrepant from the median. This information 
would then be combined with data from compliance indicators, including 
information on disproportionality, to determine how to provide States 
and LEAs with technical assistance and support. A few commenters 
suggested that LEAs first undergo a review for discriminatory 
practices, and, if none exist, no further action should be taken.
    Discussion: Based on the plain language of IDEA section 618(d) (20 
U.S.C. 1418(d)), States are required to make a determination of whether 
significant disproportionality, based on race and ethnicity, is 
occurring by collecting and examining data. We interpret this language 
to limit States' determinations of significant disproportionality to a 
review of the numerical disparities between racial and ethnic groups 
with respect to identification, placement, and discipline. Given this 
language, we do not believe it would be consistent with IDEA to allow 
the multi-factor standard methodology for determining significant 
disproportionality that the commenters suggested.
    Changes: None.
    Comments: Several commenters argued that, if States must adopt a 
standard methodology for determining significant disproportionality, 
then States need greater flexibility to exempt LEAs from reserving Part 
B funds for comprehensive CEIS.
    Discussion: Once an LEA has been determined to have significant 
disproportionality in identification, placement or discipline, the LEA 
is required under IDEA section 618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B)) 
to reserve the maximum amount of funds under section 613(f) to provide 
comprehensive CEIS. IDEA does not include any provision that would 
allow the Department or States to waive the statutory remedies for LEAs 
identified with significant disproportionality.
    Changes: None.
    Comments: Some commenters likened the standard methodology to a 
one-size metric that would fail to account for factors that might 
influence measurements of significant disproportionality. These 
include, according to one commenter, the size of the LEA, its location, 
and the popularity of an LEA's programs. Similarly, one commenter noted 
that data may be misinterpreted in a one-size-fits-all model, 
especially where there are outliers that do not fit the model.
    Discussion: The Department disagrees with the assertion that the 
proposed standard methodology is a one-size-fits-all approach to 
identifying significant disproportionality. The final regulations 
provide States with a great deal of flexibility within the standard 
methodology to identify significant disproportionality only in those 
LEAs with the greatest racial and ethnic disparities.
    Section 300.647(b)(1) of the final regulations requires States to 
set reasonable risk ratio thresholds to determine the threshold above 
which an LEA may be identified with significant disproportionality and 
to determine reasonable minimum cell sizes and n-sizes to exclude from 
their review for significant disproportionality those racial and ethnic 
groups within LEAs with too few children to calculate stable risk 
ratios. These standards must be based on advice from stakeholders, 
including State Advisory Panels. Section 300.647(d)(1) of the final 
regulation allows States flexibility not to identify an LEA until it 
has exceeded the risk ratio threshold for up to three consecutive 
years. Lastly, Sec.  300.647(d)(2) allows States not to identify LEAs 
that exceed the risk ratio thresholds if LEAs are making reasonable 
progress in lowering their risk ratios in each of the two prior 
consecutive years.
    Changes: None.
    Comments: Many commenters requested that the standard methodology 
be flexible enough to allow LEAs to appeal any findings of significant 
disproportionality that are outside the control of school personnel. 
One commenter requested that the Department establish a waiver system, 
whereby LEAs could exceed risk ratio thresholds for the identification 
of children with disabilities without a finding of significant 
disproportionality, so long as the LEAs provide adequate justification.
    Another commenter suggested that LEAs with specialized programs, 
when identified with significant disproportionality, have the option to 
submit an explanation to the State as to why their numerical 
disparities are not indicative of any inappropriate identification, 
placement, or discipline of children. The commenter suggested that the 
State then consider this explanation, along with compliance data, to 
determine whether a finding of significant disproportionality is 
appropriate.
    Two commenters requested that States have flexibility to consider 
mitigating circumstances; the commenters shared that, as a result of 
one LEA's location near a children's hospital, the LEA has an 
identification rate for autism much higher than the State rate.
    Discussion: The Department appreciates the request to create a 
waiver and appeals system for certain LEAs with risk ratios above the 
State-selected risk ratio threshold. However, IDEA does not allow for 
such a system, and we believe there are sufficient flexibilities in the 
final regulations to address the commenters' underlying concerns. 
Further, the Department believes that, even if it had the authority

[[Page 92399]]

to allow this system, it would be inconsistent with the goal of 
maximizing consistent enforcement of the statute and comparability of 
data across States, which were issues raised by the GAO.
    Changes: None.
    Comments: Several commenters included a request that States be 
allowed to waive the requirements of IDEA section 618(d) for very small 
LEAs.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and analyze data to determine whether significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State. There is no provision in the statute 
that allows a State to exempt an LEA from this analysis solely because 
of the size of its overall enrollment.
    However, with these regulations, it is our goal to help ensure that 
LEAs with significant disproportionality based on race and ethnicity in 
identification, placement, or discipline are appropriately identified 
and that the significant disproportionality is appropriately addressed. 
For certain racial and ethnic groups within small LEAs, specifically 
those groups with very small populations, the risk ratio method of 
measuring significant disproportionality is susceptible to volatility--
the possibility that small changes in population will result in large 
changes in the risk ratio that do not represent any systemic problems 
giving rise to significant disproportionality. Therefore, in order to 
ensure that LEAs are not inappropriately identified because their data 
would not produce valid results, Sec.  300.647(c) of the final 
regulation allows States to exclude from their review any racial and 
ethnic groups within LEAs that do not meet the State-set population 
requirements. This is consistent with various IDEA provisions that 
require States and LEAs to use valid and reliable data when meeting 
IDEA requirements. (See, IDEA section 614(b)(3)(A)(iii), requiring 
public agencies to use assessments that are valid and reliable; IDEA 
section 616(b)(2)(B)(i), requiring States to report valid and reliable 
data in their State Performance Plans/Annual Performance Reports (SPPs/
APRs); and IDEA section 616(i)(1), requiring the Secretary to review 
the data collection and analysis capacity of States to ensure that data 
and information determined necessary for implementation of section 616 
is collected, analyzed, and accurately reported to the Secretary).
    Changes: None.
    Comment: Several commenters requested that States be allowed to 
waive the standard methodology in proposed Sec.  300.647(b) in 
extraordinary circumstances, including environmental disasters that may 
impact children's health, such as the recent water contamination in 
Flint, Michigan. Other commenters urged the Department to allow States 
discretion to determine the appropriate set-aside amount if an LEA is 
suffering both a fiscal and environmental crisis, or if there should 
even be a set-aside for LEAs that are recovering from a substantial 
health or environmental crisis, as the demand for basic special 
education programs and services for eligible children may be extremely 
high. One commenter urged the Department to consider the needs of 
children in these circumstances, rather than simple measures of 
disparity, to determine whether the identification of significant 
disproportionality is appropriate.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and examine data to determine if significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State. A specific exemption for LEAs that 
have experienced an environmental disaster, or other extraordinary 
circumstances, is not contemplated under IDEA. We think it would be 
inappropriate to assume that all such crises would create, or worsen, 
prolonged and significant racial and ethnic disparities in special 
education. Therefore, we do not think it would be appropriate to exempt 
LEAs that have experienced an environmental disaster or other 
extraordinary circumstances from the analysis for significant 
disproportionality.
    If an LEA is identified with significant disproportionality, IDEA 
section 618(d)(2) (20 U.S.C. 1418(d)(2)) requires the State to provide 
for the review and, if necessary, revision, of the LEA's policies, 
practices, and procedures to ensure they comply with IDEA. The section 
also requires the LEA to publicly report on any revisions and reserve 
15 percent of its IDEA Part B funds to provide comprehensive CEIS. 
Specifically, IDEA section 618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B)) 
requires an LEA identified with significant disproportionality to 
reserve the maximum amount of funds under IDEA section 613(f), which is 
15 percent of its IDEA Part B funds, to provide comprehensive CEIS. 
Therefore, the Department does not have the authority to allow LEAs to 
adjust the amount that they are required to reserve for comprehensive 
CEIS.
    Changes: None.
    Comments: Some commenters shared their concerns that LEAs with a 
high population turnover due to highly mobile families or school choice 
might be inappropriately identified with significant disproportionality 
under the standard methodology in Sec.  300.647(b). One commenter 
suggested that, if a school's mobility rate is significantly higher 
than the State average, the standard methodology should not be applied. 
One commenter argued that there is nothing that an LEA can do to 
address significant disproportionality when it is the result of 
children simply enrolling or moving into the LEA. Another commenter 
requested that the Department address the issue of transfers, both 
interstate and intrastate, and their potential impact on findings of 
significant disproportionality. One commenter stated that, in one LEA, 
families are transient due to military connections, making it highly 
likely that the children transferring into the LEA were identified with 
a disability outside of the LEA. One commenter supported the exclusion 
of transfer children from the LEA counts of children with disabilities 
used to determine significant disproportionality. Last, one commenter 
opposed the omission of highly mobile children from the State's review 
for significant disproportionality because children transfer in and out 
of LEAs, and, in general, this movement does not result in a 
significant net gain in children. Further, the commenter argued that 
omitting those children from the analysis would be burdensome for 
States.
    Discussion: The Department recognizes that particular LEAs are more 
likely to serve high numbers of highly mobile children, including 
children of military families. In such LEAs, it is particularly likely 
that eligibility determinations were initially made by LEAs other than 
the one currently providing special education and related services to 
the student. Highly mobile children include children experiencing 
frequent family moves into new school districts, such as military-
connected children, migrant children, children in the foster care 
system, and children who are homeless. There is no reason States cannot 
determine, in accordance with Sec.  300.647, whether significant 
disproportionality is occurring in LEAs with highly mobile children. To 
the extent that highly mobile children make an LEA vulnerable to large 
swings in the risk ratio from year to year, the standard methodology 
will help to prevent inappropriate identification due to rapid changes 
in enrollment by allowing States to take into consideration up to

[[Page 92400]]

three years of data prior to making a determination of significant 
disproportionality.
    However, under IDEA section 614(a)(1) (20 U.S.C. 1414(a)(1)), all 
children who are suspected of having a disability and who are in need 
of special education and related services, including highly mobile 
children, must be evaluated in a timely manner and without undue delay 
so that eligible children can receive a free appropriate public 
education (FAPE). (34 CFR 300.101, 300.111, and 300.201.) When a child 
transfers to a new school district in the same school year, whether in 
the same State or in a different State, after the previous school 
district has begun but has not completed the evaluation, both school 
districts must coordinate to ensure completion of the evaluation. This 
must occur as expeditiously as possible, consistent with applicable 
Federal regulations. Under IDEA section 614(a)(2)(B) (20 U.S.C. 
1414(a)(2)(B)), all LEAs are required to reevaluate each child with a 
disability not more frequently than once a year, and at least once 
every three years, unless the child's parent and the LEA agree 
otherwise. As such, each LEA must ensure, through proper implementation 
of its child find procedures, appropriate identification and placement 
of all children with disabilities for whom it is responsible for making 
FAPE available, regardless of how long that child has resided in the 
LEA.
    For this reason, and because providing that exception would be 
particularly complex and burdensome to implement, the Department 
declines the recommendation to exempt highly mobile children, or to 
exempt LEAs with large numbers of mobile children, from the State's 
analysis for significant disproportionality.
    Changes: None.
    Comments: A few commenters urged the Department to allow States, in 
implementing Sec.  300.647(b)(3), to count only those children with 
disabilities identified by the LEA. Of these, one commenter noted that 
it would not be fair for LEAs to be held accountable for children who 
are not identified by the LEA's own school personnel. Another commenter 
stated that there are some LEAs, such as vocational LEAs and charters 
schools, that educate children with disabilities identified by other 
LEAs. According to the commenter, these LEAs are often identified with 
disproportionate representation and would likely be inappropriately 
identified with significant disproportionality under the Department's 
proposed standard methodology. Similarly, another commenter recommended 
that States have flexibility to determine if the disproportionality 
based on race or ethnicity is due not to the actions of the LEA but to 
disparities in the enrollment of children previously identified with 
disabilities.
    Discussion: Children with disabilities, like all children, may 
transfer from school to school for a variety of reasons, ranging from a 
family relocation--including relocations related to the military--to 
homelessness, foster care, or because they are members of migrant 
families, to name a few. The Department has provided guidance to States 
regarding how they should collect and report IDEA section 618 data, 
including child count data. As explained in the guidance, children who 
reside in one LEA but received services in another LEA should be 
reported by the LEA that has responsibility for providing a free 
appropriate public education to the children. OSEP Memorandum 08-09, 
Response to Question 18 and FILE C002, 2013. In general, the Department 
expects that States will use the same data annually submitted to the 
Department under IDEA section 618 to make determinations of significant 
disproportionality.
    Further, as we discussed elsewhere in this section, the Department 
believes that the standard methodology contains sufficient flexibility 
to prevent the inappropriate identification of LEAs with specialized 
programs as having significant disproportionality.
    Changes: None.
    Comments: Many commenters requested that States have the 
flexibility to exempt an LEA from examination for significant 
disproportionality under IDEA section 618(d) if the LEA houses any 
residential facilities, foster homes (or high numbers of children in 
foster care), or group homes. One commenter stated that the standard 
methodology does not properly account for residential placements and 
the locations of facilities, including incarcerated children.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and examine data to determine if significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State. However, a specific exemption for LEAs 
that house residential facilities, foster homes, or group homes is not 
contemplated under IDEA. We also do not believe that exemption would be 
appropriate. There could be significant racial and ethnic disparities 
in LEAs that house residential facilities, foster homes, or group 
homes, and nothing prevents the State from doing a reliable data 
analysis in those LEAs. For these reasons, the Department declines to 
exempt an LEA from examination for significant disproportionality under 
IDEA section 618(d) if it houses any residential facilities, foster 
homes (or high numbers of children in foster care), or group homes.
    The Department has previously provided guidance on how children 
with disabilities placed in a residential facility or group home by an 
educational or noneducational agency should be counted for the purpose 
of calculating significant disproportionality. All children with 
disabilities placed in a residential facility or group home in the same 
State by an educational agency must be included in the calculation of 
significant disproportionality. However, a State should assign 
responsibility for counting children with disabilities placed in out-
of-district placements to the LEA that is responsible for providing 
FAPE for those children, rather than the LEA in which the child has 
been placed.
    Children with disabilities placed in a residential facility or 
group home in a different State by an educational agency should be 
included in a State's calculation of significant disproportionality in 
the LEA responsible for providing FAPE for that child (the placing 
LEA).
    Children with disabilities placed in residential facilities or 
group homes in the same State by a noneducational agency (e.g., court 
systems; departments of corrections; departments of children, youth and 
families; departments of social services; etc.) may be excluded from a 
State's calculation of significant disproportionality if the State has 
valid and reliable procedures for determining which children should be 
excluded.
    Children with disabilities placed in a residential facility or 
group home in a different State by a noneducational agency (e.g., court 
systems; departments of corrections; departments of children, youth and 
families; departments of social services; etc.) may be excluded from 
the calculation of significant disproportionality by both the State in 
which the child resides and the State where the residential facility or 
group home is located, if the State has valid and reliable procedures 
for determining which children should be excluded. (See, IDEA section 
618(d); Questions and Answers on Disproportionality, June 2009, 
Response to Question B-1.)
    Changes: None.
    Comments: One commenter shared that, in one State, only LEAs--and 
not State-run facilities or group homes housed within LEAs--are 
accountable for significant disproportionality.

[[Page 92401]]

    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and examine data to determine whether the LEAs within the 
State have significant disproportionality. In general, the term ``local 
educational agency'' means a public board of education or other public 
authority legally constituted within a State for administrative control 
or direction of, or to perform a service function for, public 
elementary schools or secondary schools in a city, county, township, 
school district, or other political subdivision of a State, or for such 
combination of school districts or counties as are recognized in a 
State as an administrative agency for its public elementary schools or 
secondary schools. (See, IDEA section 602(19) (20 U.S.C. 1401(19) and 
34 CFR 300.28).) For this reason, we do not expect States to determine 
whether State-run facilities or group homes housed within LEAs have 
significant disproportionality, unless those facilities or group homes 
are LEAs under Sec.  300.28.
    Changes: None.
    Comments: A number of commenters responded to Directed Question #1 
in the NPRM, which requested public input about the appropriate 
application of the standard methodology to LEAs serving only children 
with disabilities and LEAs with special schools and programs. We 
received comments with varying suggestions.
    Several commenters stated that special schools and programs should 
be excluded from a State's review of an LEA for standard methodology, 
whereas others stated that these special schools must be included. 
Numerous commenters opposed to including special schools or programs in 
the identification of significant disproportionality stated that States 
should have discretion to include children in specialized schools in 
their review for significant disproportionality. One commenter stated 
that, in one State, only LEAs are held accountable for significant 
disproportionality--not schools serving only children with disabilities 
or offering specialized programs. Another commenter inquired whether 
programs serving children with disabilities from multiple LEAs should 
be excluded from the State's determination of significant 
disproportionality.
    One commenter noted that, while LEAs specially constituted as 
special education LEAs may have the appearance of disproportionality, 
these LEAs have legitimate reasons for overrepresentation of certain 
racial and ethnic populations. One commenter stated that the standard 
methodology cannot be used, as the risk ratio cannot be calculated, for 
an LEA that enrolls only children with disabilities. This commenter 
suggested that States monitor disproportionality in those LEAs through 
performance reports.
    Discussion: The Department disagrees with the commenters that 
requested that LEAs with specialized schools or programs, and the 
children within those schools or programs, should be excluded from a 
review of significant disproportionality. IDEA section 618(d)(1) (20 
U.S.C. 1418(d)(1)) requires States to collect and examine data to 
determine whether significant disproportionality based on race and 
ethnicity is occurring in the State and the LEAs of the State. As a 
general matter, therefore, if a special school or program is an LEA, 
consistent with the definition of LEA in Sec.  300.28, and serves 
children with and without disabilities, the State must apply the 
standard methodology in Sec.  300.647 to determine if significant 
disproportionality is occurring in that LEA, and all of the remedies in 
Sec.  300.647(c) and (d) apply.
    However, the Department has carefully considered the commenters' 
concerns about LEAs serving only children with disabilities. In 
accordance with IDEA section 618(d)(1) (20 U.S.C. 1418(d)(1)), a State 
must annually collect and examine data to determine, using the standard 
methodology under Sec.  300.647, if significant disproportionality is 
occurring in LEAs that serve only children with disabilities. 
Consistent with IDEA section 618(d)(2)(A) and (C), and Sec.  
300.346(c), if such an LEA is identified with significant 
disproportionality, the State must provide for the review and, if 
appropriate, revision of the policies, practices, and procedures used 
in identification or placement in particular education settings, 
including disciplinary removals, to ensure they comply with the IDEA. 
The State must also require the LEA to publicly report on any 
revisions.
    However, we note that it would be impossible for LEAs that serve 
only children with disabilities to comply with the requirement in IDEA 
section 618(d)(2)(B) following a determination of significant 
disproportionality. Under our interpretation of that section, LEAs must 
use at least some of the IDEA Part B funds reserved for comprehensive 
CEIS to serve children without disabilities, and we have adopted this 
interpretation in Sec.  300.646(d)(3). This would require an LEA that 
serves only children with disabilities to reserve IDEA Part B funds to 
provide comprehensive CEIS, which under Sec.  300.646(d)(3) must 
include services to children without disabilities, a population that 
the LEA does not serve. Therefore, an LEA that serves only children 
with disabilities is not required to reserve 15 percent of its IDEA 
Part B funds to provide comprehensive CEIS.
    That said, suggestions that specialized schools or programs that 
are housed in an LEA that serves children with disabilities and 
children without disabilities or only children with disabilities should 
be exempt from the standard methodology are inconsistent with the goal 
of addressing significant disproportionality, by race or ethnicity, in 
the most restrictive placements. By allowing States to ignore children 
in those placements when reviewing LEAs, the Department could 
inadvertently create an incentive to place children with disabilities 
in special schools--instead of separate classrooms. Further, as noted 
earlier, a State should assign responsibility for counting a child who 
is placed in a specialized school or program housed in an LEA to the 
``placing LEA,'' if that LEA remains responsible for providing FAPE to 
that child, rather than to the LEA in which the specialized school or 
program is housed.
    Changes: The Department has added Sec.  300.646(e) to clarify that 
LEAs that serve only children with disabilities are not required to 
reserve IDEA Part B funds for comprehensive CEIS.
    Comments: A few commenters suggested that States have flexibility 
to exclude from their review children with disabilities who are placed 
in special schools by non-education agencies, such as courts or mental 
health agencies.
    Discussion: Children with disabilities placed in special schools in 
the same State by a noneducational agency (e.g., court systems; 
departments of corrections; departments of children, youth and 
families; departments of social services; etc.) may be excluded from a 
State's calculation of significant disproportionality, if the State has 
valid and reliable procedures for determining which children should be 
excluded. Children with disabilities placed in a special school in a 
different State by a noneducational agency (e.g., court systems; 
departments of corrections; departments of children, youth and 
families; departments of social services; etc.) may be excluded from 
the calculation of significant disproportionality by both the State in 
which the child resides and the State where the residential facility or 
group home is located, if each State has valid and reliable procedures 
for determining which children should be excluded. (See, IDEA section 
618(d); and Questions and Answers on

[[Page 92402]]

Disproportionality, June 2009, Response to Question B-1.)
    Changes: None.
    Comments: One commenter stated that, while LEAs specially 
constituted as special education LEAs may have the appearance of 
disproportionality, these LEAs have legitimate reasons for 
overrepresentation of certain racial and ethnic populations. Another 
commenter suggested that States, when calculating risk ratios for LEAs 
with specialized schools, use an alternate method of calculating risk 
for the racial or ethnic group of interest. The Department understood 
this commenter to suggest that States adjust the denominator used to 
calculate risk to include children from the racial or ethnic group from 
that LEA and children from the same racial or ethnic group from a 
similarly sized LEA without children with disabilities. A few 
commenters suggested that States should have discretion to include 
additional calculations of disproportionality of the LEAs with special 
schools. Commenters in favor of including special schools indicated 
that the LEAs are responsible for the children within their LEAs and, 
therefore, should be held accountable for those children. One commenter 
stated that, because children in one State remain assigned to the LEA 
responsible for accountability and reporting purposes, specialized 
populations have not had an effect on the State's ability to capture 
significant disproportionality data.
    One commenter stated that, in its State, the data from the children 
placed in the specialized school are included in the receiving LEA's 
counts of children. A number of commenters expressed a belief that when 
a child is placed in a specialized school, the referring LEA should 
retain the child's data for this count. One commenter requested that 
the Department clarify the impact of the standard methodology on 
programs serving children with disabilities across multiple LEAs, and 
clarify the implications of the standard methodology for the LEA in 
which the program operates and LEA in which attending children are 
residents. The commenter asked about the possibility of sharing 
accountability for these children between the resident and operating 
(or ``sending'' and ``receiving'') LEAs.
    Discussion: The Department considered the different approaches 
commenters recommended. As noted earlier, using the standard 
methodology under Sec.  300.647, a State must annually collect and 
examine data to determine if significant disproportionality is 
occurring in LEAs that serve only children with disabilities. However, 
we have clarified in Sec.  300.646(e) that LEAs that serve only 
children with disabilities are not required to reserve IDEA Part B 
funds for comprehensive CEIS.
    That said, there is no specific exemption in IDEA section 618(d)(1) 
(20 U.S.C. 1418(d)(1)) for LEAs that house special schools and serve 
children with and without disabilities or only children with 
disabilities. We do not believe an exemption for those LEAs is 
appropriate because by allowing States to ignore children in special 
schools when reviewing LEAs, the Department could inadvertently create 
an incentive to place children with disabilities in special schools 
instead of separate classrooms, for example. For these reasons, the 
Department declines to exempt LEAs that house special schools and serve 
children with and without disabilities or only children with 
disabilities from a determination of significant disproportionality 
under IDEA section 618(d).
    Further, current IDEA section 618 data collection procedures are 
consistent with the commenters' recommendation that children with 
disabilities placed in a special school should be counted by the LEA 
that placed the children in the special school (what one commenter 
refers to as the ``sending LEA'') and is responsible for providing FAPE 
to the child. (See, FILE C002, 2013 and OMB Control No. 1875-0240.) The 
Department expects that States will use the same data annually 
submitted under IDEA section 618(a) (20 U.S.C. 1418(a)) to make 
determinations of significant disproportionality. Consistent with the 
guidelines that govern that reporting, children publicly placed in 
special schools should be included in the enrollment counts for the LEA 
that is responsible for providing FAPE to the child. FILE C002, 2013. 
This means that many children in special schools or programs in LEAs, 
to the extent they are publicly placed by another LEA, will not affect 
LEAs count of children, for purposes of significant disproportionality, 
because these children are already attributed to the LEA responsible 
for providing FAPE to the child.
    Changes: None.
    Comment: Many commenters were concerned that highly regarded 
schools for children with disabilities with open enrollment policies 
often draw their children from across the State or region. In fact, one 
commenter expressed that families might relocate within the borders of 
some LEAs with reputations for higher quality services, resources, and 
outcomes for a particular disability. This commenter stated that LEAs 
are not able to address significant disproportionality by race or 
ethnicity that is due to self-selection.
    Discussion: The Department appreciates these concerns. However, 
data do not exist that could distinguish these LEAs from other LEAs or 
determine the intent of families that move into these LEAs. Further, 
there is no reason to exclude LEAs from the analysis for significant 
disproportionality because parents elect to enroll their children in 
LEAs with a reputation for high quality services. Therefore, the 
Department declines to create an exception for LEAs that include highly 
regarded schools with open enrollment policies that often draw their 
children from across the State or region.
    Change: None.
    Comments: In response to Directed Question #8, which inquired how 
best to address significant disproportionality in LEAs with homogenous 
populations, we received a few comments that LEAs with homogenous 
populations should not be examined for disproportionality, positing 
that ``if there is no comparison group, there can be no 
disproportionality.'' However, we received more comments that indicated 
LEAs with homogenous populations should be included in significant 
disproportionality calculations. A few commenters offered that these 
LEAs should use an unspecified alternate method in place of, or in 
addition to, the standard methodology in proposed Sec.  300.647(b). A 
few more commenters offered that these LEAs should use an unspecified 
calculation in addition to the standard risk ratio method.
    Another commenter suggested that, for LEAs with homogenous 
populations, the Department closely analyze the performance data that 
States submit and use compliance monitoring to identify problems and 
provide technical assistance. Some commenters suggested that the data 
from the LEAs with homogenous populations should be compared to 
similarly sized LEAs, to a statewide risk ratio, or to national data.
    One commenter suggested that the Department allow the use of 
alternate calculations to identify instances of significant 
disproportionality because, where no comparison group exists, it is not 
possible to obtain valid and reliable data by using a risk ratio or 
alternate risk ratio calculation. Another commenter suggested that a 
different risk ratio method should be used to identify significant 
disproportionality in homogenous populations (e.g., urban special 
education schools comprised primarily of children from one racial or

[[Page 92403]]

ethnic background), using data from LEAs or other States with more 
racially and ethnically diverse populations, yet similar in other 
demographic factors.
    One commenter suggested that States undertake a longitudinal 
examination of homogenous LEAs over a period of five years and only 
take action if nearly all individuals from a race or ethnic subgroup 
have been identified or disciplined. This commenter disagreed with 
suggestions that these LEAs be compared with national or State data and 
suggested that comparisons to LEAs of similar size and demographics 
would be most appropriate. Two commenters expressed concern that 
homogenous LEAs would not fare well under the proposed regulations.
    Discussion: The Department appreciates all of these suggestions. We 
believe it is important that States review LEAs, whenever possible, for 
significant disproportionality, even when LEAs may have homogenous 
populations. We do not agree with the suggestion that there cannot be 
disparity where there is no comparison group within the LEA. To the 
contrary, it is quite possible for children with disabilities from a 
particular racial or ethnic subgroup to be identified, disciplined, or 
placed in restrictive settings at rates markedly higher than their 
peers in other LEAs within the State. The fact that there is no 
comparison group within the LEA does not mean that the LEA should not 
be reviewed for significant disproportionality, particularly since IDEA 
section 618(d)(1) (20 U.S.C. 1418(d)(1)) requires States to determine 
whether significant disproportionality is occurring within the State 
and the LEAs of the State. For this reason, under Sec.  300.647(a) and 
(b)(5), States are required to calculate the alternate risk ratio--
using a State-level comparison group--whenever the comparison group 
within the LEA does not meet the States' population requirements. While 
we considered commenters' suggestions to allow States to use an 
approach other than the alternate risk ratio to examine homogenous 
LEAs, we continue to believe that the alternate risk ratio is the 
strongest option, given its close similarity to the risk ratio in ease 
of calculation and interpretation. As with the risk ratio, we 
anticipate that the stability of the alternate risk ratio will be 
improved by the flexibility States have to set reasonable population 
requirements and use up to three consecutive years of data to identify 
significant disproportionality.
    However, in reviewing the commenters' feedback, we recognize that 
there may be certain situations when using an alternate risk ratio may 
not be adequate for evaluating a homogenous LEA. These instances 
include homogenous LEAs within homogenous States or unitary systems 
where an LEA and its State cover the same geographic area. In a 
homogenous unitary system, the risk ratio, which uses an LEA-level 
comparison group, and the alternate risk ratio, which uses a State-
level comparison group, would be the same; therefore, if a unitary 
system has too small a comparison group to calculate a risk ratio, it 
would also have too small a comparison group to calculate the alternate 
risk ratio and therefore would produce an unreliable, or meaningless 
result. In this situation, we believe that IDEA does not require a 
review for significant disproportionality.
    Changes: We have added Sec.  300.647(c)(2), which excludes States 
from calculating the risk ratio or alternate risk ratio for a racial or 
ethnic group when, for both the risk ratio and the alternate risk 
ratio, there is an insufficient number of children in all other racial 
or ethnic groups to serve as a comparison group.
    Comment: One commenter requested that the Department consider a 
unique methodology for determining significant disproportionality in 
LEAs with clusters of recent immigrants. This methodology should 
accommodate the special influences in language and culture, differences 
in access to education in immigrants' country of origin, or post-
traumatic stress. A few commenters also noted that, as their LEA is now 
home to an office that provides adjustment services to refugees and 
immigrants, it may have the appearance of disproportionality even 
though it has legitimate reasons for overrepresentation of certain 
populations.
    Discussion: The Department appreciates these concerns. However, 
there is no specific exemption in IDEA section 618(d) (20 U.S.C. 
1418(d)(1)) for LEAs with clusters of immigrants. Such an exemption 
would not be appropriate because we believe that it is particularly 
important to review LEAs with clusters of recent immigrants for 
significant disproportionality. Therefore, the Department declines to 
create an exception for these LEAs.
    Changes: None.
    Comment: Several commenters requested that because certain LEAs 
have atypical demographic distributions that could create data 
anomalies, the Department should exempt certain types of LEAs from 
providing comprehensive CEIS and from reviewing, revising, and 
publishing, as appropriate, policies, procedures, and practices if 
identified with significant disproportionality. Many commenters 
asserted that States should have authority to exempt LEAs from these 
statutory remedies if there is a small population of children, where 
the addition or subtraction of a few children alters a finding of 
significant disproportionality. Other commenters requested that LEAs 
with very low rates of special education identification, restrictive 
placements, or exclusionary discipline for all children should not be 
automatically required to set aside funding to provide comprehensive 
CEIS. The Department interprets the comment to suggest that LEAs with 
very low rates of identification, restrictive placement, and discipline 
will likely be identified with significant disproportionality due to 
high risk ratios. A few commenters requested further consideration of 
how significant disproportionality is applied to States and rural LEAs. 
One commenter expressed strong concerns that the regulation would, 
without just cause, negatively affect its small, rural LEA, where 
children of color make up less than five percent of the school 
population.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and analyze data to determine whether significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State.
    However, the Department agrees with commenters that LEAs with small 
populations or small populations of specific racial or ethnic subgroups 
with disabilities, such as those in small rural or charter schools, 
could potentially produce risk ratios that are misleading due to 
volatility associated with calculating risk ratios for small numbers of 
children. The Department appreciates the feedback of commenters and 
agrees that a minimum n-size of 10, as proposed in the NPRM, is 
insufficient to account for issues related to LEAs with small 
populations.
    We describe in the section Minimum Cell Sizes and Minimum N-Sizes 
(Sec.  300.647(b)(3) and (4); Sec.  300.647(b)(6)), the changes to 
these regulations to give States added flexibility to exempt LEAs from 
a review for significant disproportionality when a racial or ethnic 
group does not meet a reasonable minimum cell size or reasonable 
minimum n-size set by the State with input from the stakeholders, 
including the State Advisory Panel.
    This change will give the States increased flexibility to use a 
minimum cell size--a minimum number of children in the risk numerator 
when calculating a risk ratio--to avoid identifying LEAs with 
significant disproportionality due to the

[[Page 92404]]

identification, placement, or disciplinary removal of a small number of 
children. The minimum cell size should also help to prevent 
identification of LEAs with low prevalence of identification, 
placement, discipline--which may be subject to more volatile risk 
ratios--to the extent that these LEAs also have a small population of 
children.
    Again, however, IDEA does not contain any provisions allowing 
either States, or the Department, to waive the statutory remedies once 
an LEA is identified with significant disproportionality. When an LEA 
is identified with significant disproportionality, the statute 
specifies that the State must require the LEA to reserve the maximum 
amount of funds under section 613(f)--15 percent of its IDEA, Part B 
funds--to provide comprehensive CEIS.
    Changes: Please see the discussion on changes to minimum cell and 
n-sizes in the section Minimum Cell Sizes and Minimum N-Sizes (Sec.  
300.647(b)(3) and (4); Sec.  300.647(b)(6).
    Comment: One commenter requested clarification about the 
responsibilities of virtual schools and the LEAs within which children 
attending the virtual schools live. The commenter stated that there has 
been a significant increase in the number of children with disabilities 
who receive part or all of their education through virtual schools, 
raising the need for guidance on this issue.
    Discussion: IDEA requires that each State make FAPE available to 
all eligible children with disabilities aged 3 through 21 within the 
State's mandated age range and residing in the State. (20 U.S.C. 1412). 
This includes the identification and evaluation of children with 
disabilities, the development of an IEP, the provision of special 
education and related services in the least restrictive environment, 
and the provision of procedural safeguards to children with 
disabilities and their families. The requirements of IDEA apply to 
States and LEAs, regardless of whether a child is enrolled in a virtual 
school that is a public school of the LEA or a virtual school that is 
constituted as an LEA by the State.\3\ IDEA and its implementing 
regulations do not make any exceptions to these requirements to allow 
States to waive or relax requirements for virtual schools, including 
those virtual schools constituted as LEAs. Therefore, the requirements 
that States must use to determine whether significant 
disproportionality based on race or ethnicity is occurring in LEAs 
applies to LEAs with virtual schools and to virtual schools that are 
constituted as LEAs, consistent with Sec.  300.28. Letter to Texas 
Education Agency Associate Commissioner Susan Barnes, 2003.
---------------------------------------------------------------------------

    \3\ See, OSEP Dear Colleague Letter, August 5, 2016, citing 
Letter to Texas Education Agency Associate Commissioner Susan 
Barnes, December 18, 2003. As stated in the Barnes letter, ``. . . 
IDEA requires that each State make available a free appropriate 
public education to all children with disabilities (as defined by 
the IDEA) aged 3 through 21 residing in the State (20 U.S.C. 
1412(a)(1)). This includes the identification and evaluation of 
children with disabilities (20 U.S.C. 1412(a)(3)), the development 
of an individualized educational program (20 U.S.C. 1412(a)(4)), the 
provision of special education and related services in the least 
restrictive environment (20 U.S.C. 1412(a)(5)), and the provision of 
procedural safeguards to children with disabilities and their 
families (20 U.S.C. 1412(a)(6)). The IDEA statute and its 
corresponding regulations do not make any exceptions to these 
requirements or allow States to waive or relax these requirements 
for virtual schools.''
---------------------------------------------------------------------------

    Changes: None.
    Comment: Another commenter observed that in its State, a high 
school LEA has been identified as having significant disproportionality 
based on the identification of children with disabilities, simply 
because of the combining of elementary school LEAs into one population. 
The commenter stated that there was no significant disproportionality 
at the elementary level.
    Discussion: With regard to States that include elementary school 
LEAs and high school LEAs, the Department's standard methodology offers 
States sufficient flexibility to ensure that the identification of 
those LEAs is appropriate. When calculating risk ratios under Sec.  
300.647(b)(1), States are required to select reasonable minimum cell 
sizes (to be applied to the risk numerator) and minimum n-sizes (to be 
applied to the risk denominator). This will allow States to focus their 
attention on the most systemic disparities and avoid the identification 
of LEAs based on volatile risk ratios.
    Changes: None.
    Comments: One commenter recommended that the Department require 
States use to use a tiered standard methodology that takes into 
consideration the type, size, and poverty within an LEA
    Discussion: As we noted in the NPRM, part of the purpose of the 
standard methodology is to foster greater transparency in how States 
identify significant disproportionality. Given this, it is critical 
that the standard methodology consist of simple and easily interpreted 
analyses. The Department believes that a tiered methodology would be 
inconsistent with this goal because it would require States to adjust 
the methodology for different types of LEAs, adding greater complexity 
and, possibly, ambiguity.
    Instead of a tiered methodology, the Department has proposed a 
standard methodology that provides States with adequate flexibility to 
consider the needs of different types of LEAs. This flexibility 
includes the ability to set reasonable risk ratio thresholds, 
reasonable minimum cells sizes and n-sizes (with input from State 
Advisory Panels), the ability consider up to three years of data before 
making a determination of significant disproportionality, and the 
option to not identify LEAs that exceed the risk ratio threshold and 
are making reasonable progress in lowering their risk ratios.
    Changes: None.
    Comments: Many commenters requested greater clarity as to the count 
of children that should be used for the denominator when calculating 
risk ratios for a particular racial or ethnic group. One commenter 
noted that, for discipline risk ratios, one State uses a cumulative 
count of children rather than a snapshot, point-in-time count. These 
commenters note that States should be allowed to use the denominators 
that most closely align with the numerators of the risk calculations, 
where alignment refers both to the timing of the counts and to the 
inclusion or exclusion of certain groups of children (e.g., parentally 
placed private school children, children ages three through five, 
children receiving transition services, etc.)
    Discussion: In the NPRM, we noted that, with respect to the 
specific categories of analysis--identification, placement, and 
discipline--the Department's intended to incorporate in the regulations 
the required categories of analysis, which are consistent with the 
States' current IDEA section 618 data submissions.
    In reviewing LEAs for significant disproportionality with respect 
to identification, we generally expect that States will use the same 
IDEA section 618 data that is reported to the Department (for data 
regarding children with disabilities) and data submitted to the 
Institute for Education Sciences for the Common Core of Data (for 
enrollment data). OMB Control No. 1875-0240. In reviewing LEAs for 
significant disproportionality with respect to placement, we generally 
expect that States will use the same IDEA section 618 data that is 
reported to the Department. OMB Control No. 1875-0240.
    In reviewing LEAs for significant disproportionality with respect 
to discipline, we generally expect that

[[Page 92405]]

States will use the same section 618 data reported to the Department. 
For IDEA section 618 data, discipline data is a cumulative count from 
July 1st through June 30th, while IDEA section 618 child count and 
placement data is a point-in-time count that occurs in the fall. OMB 
Control No. 1875-0240. After the final regulations are published, the 
Department plans to provide States with additional guidance about the 
counts of children that States should use when analyzing LEA data for 
significant disproportionality with respect to identification, 
placement, and discipline.
    Changes: None.
    Comments: A few commenters recommended that the Department convene 
workgroups and invest in research to explore issues related to 
significant disproportionality. A few commenters recommended that the 
Department establish a workgroup to make recommendations for 
researching how to address common issues and identify the root causes 
of disproportionality. One commenter recommended that Department build 
a workgroup to identify evidence-based practices in the implementation 
of IDEA's child find provisions so that these practices can be 
distributed widely to the field. This commenter also recommended that 
the Department convene an expert group to identify the issues and 
possible solutions to under-identification, including the under-
identification of children who are twice exceptional. Another commenter 
recommended that the Department more carefully examine the impacts of 
poverty on significant disproportionality, including the linkages 
between poverty and the identification, placement, and discipline of 
children with disabilities.
    Discussion: The Department appreciates the suggestions to develop 
workgroups and expand research into the causes of significant 
disproportionality, under-identification, and evidence based practices 
States and LEAs can use to address significant disproportionality. The 
Department agrees that it will be valuable to undertake more research 
on the impact of these regulations and on significant 
disproportionality in general. We also agree that it will be beneficial 
to help develop communities of practice for addressing significant 
disproportionality and expand technical assistance to support the work 
of States and LEAs. After the publication of these regulations, the 
Department plans to identify additional resources to support expanded 
research and technical assistance to improve the identification, 
placement, and discipline of children with disabilities.
    Changes: None.
Risk Ratios (Sec.  300.646(b); Sec.  300.647(a)(2); Sec.  
300.647(a)(3); Sec.  300.647(b))
    Comment: Several commenters responded to Directed Question #2, 
which requested additional strategies to address the shortcomings of 
the risk ratio method and inquired whether the Department should allow 
or require States to use another method in combination with the risk 
ratio method. A few commenters stated that the risk ratio has a 
definite advantage over other methods because it is easy to explain and 
duplicate. Other commenters agreed, stating that the risk ratio is 
relatively simple and straightforward, which is especially important 
for a standard methodology. Two commenters appreciated that the NPRM 
included a review of several possible methods for defining significant 
disproportionality and had no concerns with the selection of the risk 
ratio as the approach that is currently most widely used and best 
understood among States. One commenter stated that its State has 
primarily used the risk ratio method and found success in identifying 
LEAs as having significant disproportionality each year. A few 
commenters stated that the use of the risk ratio will provide an 
opportunity to make comparisons between LEAs and States to ensure 
children are appropriately served through IDEA.
    Discussion: The Department appreciates the comments in support of 
the use of the risk ratio as part of the standard methodology. We agree 
that States' use of this method will help to improve comparability of 
significant disproportionality determinations across States, increase 
transparency in how States make determinations of LEAs with significant 
disproportionality, improve public comprehension of a finding of 
significant disproportionality (or lack thereof), and address concerns 
raised by the GAO.
    Changes: None.
    Comments: Several commenters expressed concerns about the risk 
ratio. A few of these commenters expressed that sole reliance on the 
risk ratio may result in a failure to fully address the problem of 
racial or ethnic disproportionality. A number of commenters expressed 
concern that, in general, the risk ratio will not provide enough 
information to determine whether an LEA has significant 
disproportionality. A few commenters were concerned that the Department 
proposed the risk ratio as the standard methodology due to its ease of 
implementation by States and comprehension by the public rather than 
the robustness of the method itself in determining disproportionality 
in identification, placement, and discipline.
    Discussion: In developing the standard methodology, the Department 
drew heavily from current State practices. As we noted in the NPRM, 
most States, as part of their methodology for comparing racial and 
ethnic groups for the purpose of identifying significant 
disproportionality, already use a version of the risk ratio, along with 
a threshold over which LEAs are identified with significant 
disproportionality. Further, States using a risk ratio pair this method 
with a minimum n-size or cell size and use up to three years of data 
when making an annual determination to prevent inappropriate 
determinations of significant disproportionality due to risk ratio 
volatility. While the risk ratio method will allow States to conduct 
simple analyses that are easy to interpret, we also believe this 
approach is sufficiently robust to help States to appropriately 
identify significant disproportionality.
    While we agree with commenters that while the use of risk ratios--
or any data analysis alone--does not identify or address the causes of 
numerical disparities, risk ratios are sufficient to determine whether 
an LEA has sufficiently large disparities to determine whether 
significant disproportionality is occurring. This determination is an 
important first step that will require the LEA to identify and address 
the causes of the significant disproportionality. Further, as we note 
in A Standard Methodology for Determining Significant 
Disproportionality--General, we interpret IDEA section 618(d) (20 
U.S.C. 1418(d)) to require efforts to address the causes of significant 
disproportionality as a consequence of, rather than a part of, the 
determination of significant disproportionality.
    Changes: None.
    Comments: Several commenters requested that the Department allow 
the use of additional criteria to address limitations in the risk ratio 
method. One commenter suggested that methods in addition to, or instead 
of, risk and alternate risk ratio should be allowed. One commenter 
recommended that States adopt other risk ratio methods, provide the 
Department with a rationale for doing so, and that the Federal 
government evaluate each State's approach. Two commenters

[[Page 92406]]

recommended that States be allowed to demonstrate to the Department why 
the use of a risk ratio or alternate risk ratio may not provide the 
best analysis of disproportionality in their State, and then 
demonstrate the effectiveness of an alternate calculation. These 
commenters stated that the primary purpose of the regulation should be 
to identify significant disproportionality and that methods other than 
the risk ratio can be effective in doing so. A few commenters requested 
that the Department allow States to use multiple measures to identify 
LEAs with significant disproportionality. One commenter stated that 
States' use of multiple risk ratio methods emerged based on careful 
analysis of false positive identifications that occurred when applying 
a single risk ratio, possibly complemented by the alternate risk ratio. 
This commenter stated that States would not have moved to more complex 
measures if it were not considered important for the analysis to have 
integrity.
    A second commenter stated that one State currently uses two 
measurements for disproportionality--the alternate risk ratio and the 
e-formula. This commenter stated that using both methods--with an 
appropriate minimum cell size and minimum n-size--identifies both large 
and small LEAs that have real racial and ethnic disparities. Another 
commenter encouraged the use of multiple methods of identifying LEAs, 
as the sole reliance on the relative risk ratio can lead to unintended 
results (e.g., an inability to calculate the risk ratio when a 
comparison group has 0 percent risk).
    Discussion: In reviewing these comments, the Department carefully 
considered the need to provide States adequate flexibility to adjust 
the standard methodology to their needs, while ensuring that the 
Department's goal of promoting uniformity and transparency is 
addressed. As mentioned in the NPRM, a 2013 GAO study found that ``the 
discretion that States have in defining significant disproportionality 
has resulted in a wide range of definitions that provides no assurance 
that the problem is being appropriately identified across the nation.'' 
Further, the GAO found that ``the way some states defined 
overrepresentation made it unlikely that any districts would be 
identified and thus required to provide early intervening services.'' 
(GAO, 2013). To better understand the extent of racial and ethnic 
overrepresentation in special education and to promote consistency in 
how States determine which LEAs are required to provide comprehensive 
CEIS, the GAO recommended that the Department ``develop a standard 
approach for defining significant disproportionality to be used by all 
States'' and added that ``this approach should allow flexibility to 
account for state differences and specify when exceptions can be 
made.'' (GAO, 2013.)
    In keeping with these recommendations, the Department believes that 
restricting States to the risk ratio will foster greater transparency, 
as well as comparability between States, and thereby strengthen the 
Department's ability to review and report on States' implementation of 
IDEA section 618(d). To allow States to generate and adopt additional 
criteria--even if only a second criterion--would interfere with the 
goal of greater comparability while adding to the complexity of the 
standard methodology as a whole.
    However, the Department is sensitive to the commenters' concerns 
and has included some limited flexibilities that States may consider 
when making determinations of significant disproportionality. Under 
Sec.  300.647, States have the flexibility to set their own reasonable 
risk ratio thresholds and to identify only those LEAs that exceed the 
risk ratio threshold for a number of consecutive years, but no more 
than three. Section 300.647(d)(2) also allows States to not identify 
LEAs that exceed the risk ratio threshold if they demonstrate 
reasonable progress, as determined by the State, in lowering the risk 
ratio for the group and category in each of two consecutive prior 
years. This latter flexibility enables States to identify significant 
disproportionality only in those LEAs where the level of 
disproportionality is the same or not decreasing at a reasonable rate 
and does not require those LEAs that are reasonably reducing 
disparities to implement the remedies required under IDEA section 
618(d)(2), even if those LEAs have risk ratios that exceed the State's 
risk ratio threshold.
    Last, while in the NPRM the Department proposed to allow States to 
set a minimum n-size of up to 10 children (or children with 
disabilities), the Department has amended the regulation to allow 
States to set reasonable minimum n-sizes, as well as reasonable minimum 
cell sizes, that apply to the risk numerator when calculating risk 
ratios. The Department's intent with this change was to allow States to 
account for the volatility of risk ratio calculations, deem as 
significant only the most systemic cases of significant 
disproportionality, and prevent the identification of significant 
disproportionality based on the enrollment of, or the LEA's responses 
to the needs of, one or two children. It is our belief that, by 
allowing States the flexibility to determine both minimum n-sizes and 
minimum cell sizes, the Department has dramatically reduced the 
likelihood of inappropriate identifications of significant 
disproportionality (false positives) that could occur when broadly 
applying the risk ratio methodology. Further, allowing States to use 
minimum cell and n-sizes to determine when to use an alternate risk 
ratio would allow States to examine racial and ethnic groups for 
significant disproportionality in the absence of an LEA-level 
comparison group or when the comparison group has a risk of 0 percent.
    With these provisions, the Department believes these regulations 
achieve an appropriate balance between the need for flexibilities to 
ensure valid data analysis when evaluating significance and the need 
for greater consistency among the States' systematic reviews.
    Changes: See, discussion on changes to minimum cell and n-sizes in 
the section Minimum Cell Sizes and Minimum N-Sizes (Sec.  300.647(a)(3) 
and (4); Sec.  300.647(b)(1)(i)(B) and (C); Sec.  300.647(b)(3) and 
(4); Sec.  300.647(c)(1)). See also, discussion on the reasonable 
progress flexibility in the section, Reasonable Progress, Sec.  
300.647(c)(2).
    Comments: A large number of commenters noted that the risk ratio 
method does not work well with small populations. Although most of 
these comments cited issues with the Department's proposed cap on 
minimum n-sizes, which we address in the section Minimum Cell Sizes and 
Minimum N-Sizes (Sec.  300.647(a)(3) and (4); Sec.  300.647(b)(1)(i)(B) 
and (C); Sec.  300.647(b)(3) and (4); Sec.  300.647(c)(1)), some 
commenters were concerned that the standard risk ratio method would be 
inappropriately sensitive to racial and ethnic disparities in smaller 
LEAs that have fewer children with disabilities.
    Many commenters also recommended that States have flexibility to 
add criteria beyond risk ratio and minimum n-size to avoid 
inappropriately identifying significant disproportionality due to small 
numbers. Several of these commenters reported that a large number of 
LEAs in their States and regions are small and use varying benchmarks 
for identification. One commenter noted that this flexibility would be 
necessary for small LEAs, whether using a risk ratio or weighted risk 
ratio calculation.
    A few commenters recommended that, in States with small 
populations, the Department permit the use of a second method of 
calculating risk ratio, such as the e-formula, statistical significance 
testing, or n-size criteria,

[[Page 92407]]

since small populations are vulnerable to year-to-year fluctuations and 
a second method helps to ensure risk is not due to chance alone. A few 
commenters noted that the use of the risk ratio alone, without adequate 
minimum n-sizes or additional significance testing, will result in many 
LEAs being identified as having significant disproportionality when the 
disproportionality is due to small numbers of children identified with 
disabilities, placed in restrictive settings, and disciplined, and not 
to any underlying cause.
    Discussion: The Department appreciates all of these comments and 
has considered the suggestion to permit States to use additional 
methods, beyond the use of the risk ratio alone, to address the 
potential for false positive identification of significant 
disproportionality when risk ratios are applied to small populations. 
As discussed earlier, in the interest of increasing both comparability 
and transparency across States, with respect to their implementation of 
IDEA section 618(d), we believe it is necessary to require States to 
use a common analytical method for determining significant 
disproportionality and to allow limited flexibilities within that 
methodology rather than allowing or requiring additional methodologies.
    For example, as discussed elsewhere in this section, the Department 
received various comments that the minimum n-size initially proposed in 
the NPRM did not adequately protect small communities. The Department 
agrees that additional criteria--beyond the risk ratio and minimum n-
size--would help to ensure appropriate identification of LEAs with 
significant disproportionality. In addition to minimum n-sizes, which 
States may use to ensure risk denominators are sufficiently large to 
calculate a stable risk ratio, States may also use minimum cell sizes 
to ensure that risk numerators are sufficiently large to reduce the 
potential for false positive identification due to small numbers.
    Likewise, the ability to use up to three years of data when 
determining significant disproportionality could be used to address the 
year-to-year fluctuations that may occur in a State with many small 
LEAs. Finally, because States, in consultation with the State Advisory 
Panel, must set a reasonable risk ratio threshold and a measure of 
reasonable progress, the Department believes that the regulations 
provide sufficient flexibilities for ensuring that IDEA section 618(d) 
can be properly implemented using this methodology.
    Changes: See, discussion on changes to minimum cell and n-sizes in 
the section Minimum Cell Sizes and Minimum N-Sizes (Sec.  300.647(a)(3) 
and (4); Sec.  300.647(b)(1)(i)(B) and (C); Sec.  300.647(b)(3) and 
(4); Sec.  300.647(c)(1)). See also, discussion on the reasonable 
progress flexibility in the section, Reasonable Progress, Sec.  
300.647(c)(2).
    Comment: Several commenters expressed concern about efforts to 
identify significant disproportionality in LEAs with low incidence in 
any of the categories of analysis. A few commenters argued that there 
are situations in which a risk ratio alone will not provide enough 
information to determine whether an LEA has or does not have 
significant disproportionality. For example, comparing two very low 
risks for discipline of children with disabilities can result in a high 
risk ratio, even though both the racial or ethnic group being examined 
and the comparison group's discipline rates are low. Similarly, a few 
commenters noted that sole reliance on the risk ratio can produce 
similar results when examining disability identification and 
restrictive placement.
    A few commenters argued that the risk ratio is dependent on scale 
and may unduly penalize LEAs with a low overall prevalence in the 
disability or discipline categories. For example, an LEA with an 
overall rate of suspension for all children of less than one percent 
would be regarded by most as exemplary. According to the commenter, the 
same LEA--if it were suspending 1.5 percent of children with 
disabilities in one racial or ethnic group, and 0.5 percent from a 
comparison group--would be treated the same as an LEA that was 
suspending 30 percent of children with disabilities in one group, and 
10 percent from a comparison group.
    One commenter suggested that States have flexibility to consider a 
low incidence of disciplinary removals as reasonable progress, or to 
exempt LEAs with low incidence from any review of significant 
disproportionality with respect to discipline.
    Discussion: The Department appreciates the suggestions to expand 
the flexibilities included in the NPRM. Under Sec.  300.647(d)(1), 
States may choose not to identify any LEAs as having significant 
disproportionality until a risk ratio for a particular racial or ethnic 
group for a particular category of analysis has exceeded a risk ratio 
threshold for up to three consecutive years. The Department believes 
that, in cases where an LEA that exceeds the minimum cell and n-sizes 
achieves persistently low rates of disciplinary action, such as a 
suspension, but a particular racial or ethnic group faces consistently 
disproportionate treatment over the course of multiple years, it would 
be appropriate for the LEA to be identified with significant 
disproportionality.
    Further, the Department believes that allowing the use of up to 
three years of data provides LEAs the time and opportunity to encourage 
schools to use, and train personnel to use, alternatives to 
disciplinary removals prior to a State determination of significant 
disproportionality. The Department also believes that allowing States 
to use up to three years of data to identify significant 
disproportionality will promote the appropriate identification of LEAs, 
including LEAs with low incidence rates.
    Changes: None.
    Comments: Several commenters argued that the risk ratio will fail 
to detect significant disproportionality in areas where the risk levels 
in an LEA for identification, placement, or discipline are 
extraordinarily high for children in all racial and ethnic groups. That 
LEA could nevertheless have a small risk ratio. Similarly, one 
commenter argued that the risk ratio is an illogical measure of the 
association between two groups; for example, a risk ratio of 1.85 for 
outcome rates of 37 percent and 20 percent means the same thing as a 
risk ratio of 2.60 for rates of 13 percent and 5 percent
    Discussion: While that there may be LEAs where children with 
disabilities are inappropriately identified, placed in overly 
restrictive settings, or disciplined at higher rates than national 
averages, IDEA section 618 and its requirement for an annual review for 
significant disproportionality does not operate in isolation. There are 
other provisions of IDEA beyond section 618(d) that promote appropriate 
practices in these areas. For example, States and LEAs share 
responsibility for ensuring appropriate implementation of State child 
find procedures (IDEA section 612(a)(3)) and evaluation and 
reevaluation procedures (IDEA section 614(a)-(c)); children with 
disabilities must receive FAPE in the least restrictive environment 
(IDEA section 612(A)(5)); and finally, specific discipline procedures 
and protections must be followed (IDEA section 615(k)).
    In addition, Congress included specific language that allows States 
to address higher incidences of discipline for children with 
disabilities under IDEA section 612(a)(22)(A). This provision requires 
that States examine data to determine if LEAs have significant 
discrepancies, by disability status or by race and ethnicity, in rates 
of long-term suspensions and

[[Page 92408]]

expulsions, either among the LEAs in the State or when comparing rates 
for disabled and nondisabled children within each LEA.
    There are still other sections of IDEA that support the provision 
of services for children in need of behavioral supports and that could 
be used to address any high incidence of disciplinary removals among 
children with disabilities. Section 614(d)(3)(B)(i) (20 U.S.C. 
1414(d)(3)(B)(i)), for example, requires IEP teams to, in the case of a 
child whose behavior impedes the child's learning or that of others, 
consider the use of positive behavioral interventions and supports, and 
other strategies, to address that behavior.
    In 2016, the Department released guidance to clarify that, while 
IDEA section 615(k)(1)(B) (20 U.S.C. 1415(k)(1)(B)) authorizes school 
personnel to remove from their current placement children who violate a 
code of student conduct, that authority in no way negates the 
obligation of schools to provide behavioral supports to children with 
disabilities as needed to ensure FAPE. OSEP Dear Colleague Letter, 
August 1, 2016.
    As noted earlier, significant discrepancies in the rates of long-
term suspension and expulsions among LEAs in a State or when comparing 
rates for children with and without disabilities are addressed by IDEA 
section 612(A)(22), but section 618(d) does not contain comparable 
language mandating those examinations.
    Finally, consistent with earlier discussions, the Department 
declines to require or allow additional criteria that would reduce the 
proposed levels of comparability and transparency.
    Changes: None.
    Comments: Many commenters suggested that the Department allow 
States to compare LEA risk to a risk index. Some argued that if the 
Department allowed States to include comparisons to risk indices in the 
standard methodology, States could reduce the number of LEAs identified 
with significant disproportionality where risk levels are very low for 
all groups (but where the risk ratios are high). Similarly, others 
recommended that while any LEA with a racial or ethnic group risk ratio 
above the specified risk ratio threshold would be considered for a 
finding of significant disproportionality, any LEA with a racial or 
ethnic group risk that was to some degree below the State mean risk 
index would not be determined to have significant disproportionality. 
Still other commenters suggested many variations on ways that a 
comparison to a risk index could be used, such as comparing the risk of 
a particular outcome for a racial or ethnic group in an LEA to a 
statewide risk or a national risk for that same group. These 
recommendations addressed the use of risk indices for different areas 
of analysis, different racial or ethnic groups, and different 
disabilities. In short, the commenters suggested ways to use risk 
indices in conjunction with the risk ratio for all of the analysis 
required under Sec.  300.647(b).
    Discussion: To begin with, the Department understands risk index to 
mean the likelihood of a particular outcome (identification, placement 
or disciplinary removal) for an aggregate population of children--such 
as all children within a State, or all children nationally--to which 
risk may be compared. The Department is not aware of, and no commenters 
provided, a research basis for selecting a particular magnitude of 
difference--such as one or two percentage points--between racial or 
ethnic subgroup risk and a risk index that would allow the risk index 
to be used as a measure of significant disproportionality in a way that 
is not arbitrary.
    That aside, LEAs must use extreme caution to avoid actions based on 
race or ethnicity that could violate Federal civil rights laws and the 
Constitution. Moreover, LEAs must ensure that the requirements for 
individualized decisions about evaluations, placement, and disciplinary 
removals are properly and fully implemented.
    Under IDEA, a child's identification, placement, and discipline are 
determined through specific individualized means. The Department has 
determined that allowing or requiring States to compare and control for 
racial or ethnic group risk and an overall risk index--that is, 
including in the standard methodology measures that would require 
States to adjust for, and thereby artificially mandate, the overall 
incidence of identification, placement, or discipline--would create 
strong incentives for impermissible quotas in overall identification, 
placements, and disciplinary removals. The Department believes that 
restrictions that would inhibit the ability of an evaluation team to 
make eligibility determinations, a placement team to make placement 
decisions based on the child's unique needs, or an IEP Team to 
determine if conduct subject to discipline was a manifestation of the 
child's disability, would result in violations of IDEA section 
612(a)(3) (child find), section 614(a)-(c) (evaluation and 
reevaluation) section 612(a)(5) (placement in the least restrictive 
environment), or section 615(k) (disciplinary removals).
    As such, the Department believes that creating an exception to a 
determination of significant disproportionality based on a comparison 
between racial or ethnic group risk and a risk index, or modifying the 
standard methodology to include this use of the risk index, would 
undermine the determinations required under 618(d) and create strong 
incentives to violate IDEA's requirements for identification, 
placement, and disciplinary removals.
    The Department appreciates the various suggestions for addressing 
certain potential issues when using risk ratios to identify LEAs with 
significant disproportionality. In line with the GAO's recommendations, 
the Department also believes that restricting States to the risk ratio 
will foster greater transparency, as well as comparability between 
States, and thereby strengthen the Department's ability to evaluate 
States' implementation of IDEA section 618(d). To allow States to add 
additional criteria--even if only a second criterion--would reduce 
comparability between States' approaches while adding to the complexity 
of the standard methodology as a whole and creating additional burdens.
    Changes: None.
    Comments: Several commenters requested that States be permitted to 
use risk difference along with, or instead of, risk ratios because it 
has a number of advantages over the risk ratio for measuring racial and 
ethnic disparities.
    First, commenters stated that risk differences can be calculated 
even when the comparison group has a risk level of zero, and therefore 
the risk ratio cannot be calculated. According to commenters, the most 
serious racial disparities are those in which only one racial or ethnic 
group is subjected to the harshest disciplinary actions; for this 
reason, commenters supported the use of risk difference to properly 
analyze significant disproportionality in suspensions and expulsions 
exceeding 10 days.
    Second, commenters argued that risk differences could capture 
disparities in LEAs that have very high rates of restrictive settings 
and disciplinary exclusion for all groups. Commenters expressed their 
concerns that those LEAs would be overlooked if risk ratios alone are 
used.
    Third, as discussed elsewhere in this section, commenters stated 
that risk difference can ensure that significant disproportionality 
would not be triggered when incidence levels are very low for all 
groups.
    Finally, commenters stated that risk differences are easy to 
calculate,

[[Page 92409]]

interpret, and use to compare LEAs. These commenters suggested that the 
Department define a range of acceptable risk difference thresholds and 
review each State's thresholds for reasonableness. The commenters also 
expressed that, because risk differences are simple to calculate and 
easy to understand, the Department should not find it difficult to 
review States' risk difference thresholds for reasonableness. Further, 
commenters suggested that, as most of the States finding zero LEAs with 
significant disproportionality use a risk ratio, the preferences of 
States for risk ratios should not prejudice the Department against the 
use of risk difference in addition to, or instead of, a risk ratio.
    Discussion: The Department carefully considered the optional use of 
a second measure of significant disproportionality, either instead of 
or in addition to, the risk ratio. The Department agrees that risk 
difference has certain advantages that the risk ratio does not. 
However, the Department also believes that, at the present time, the 
risk ratio also has advantages not shared by the risk difference.
    First, as risk ratio method is widely used by States, its strengths 
and weaknesses are well known, as are the approaches needed to address 
its shortfalls (e.g., multiple years of data and minimum n-sizes and 
minimum cell sizes). While we agree that the risk difference can be 
calculated when risk in the comparison group is zero, and may help 
States to avoid inappropriate identification of LEAS with low incidence 
rates, we believe that the standard methodology, as a whole, allows 
States to appropriately measure racial and ethnic disparities in LEAs 
experiencing these issues. Further, while risk differences may identify 
racial and ethnic disparities when LEAs have high incidence rates, we 
believe there are other provisions of IDEA beyond section 618(d) that 
promote appropriate practices to address those high incidence rates, 
which we list earlier in this section.
    Second, due to the widespread use of risk ratio thresholds, the 
Department anticipates that Sec.  300.646(b), which would require 
States to follow a standard methodology, will create less burden for 
States if the methodology includes a more common measure of racial and 
ethnic group disparity. Based on the Department's review of State 
definitions of significant disproportionality, as noted in the NPRM, 
fewer than five States used risk difference, while nearly 45 States 
used some form of the risk ratio (e.g., risk ratio, alternate risk 
ratio, weighted risk ratio), and 21 used the risk ratio proposed in the 
Department's standard methodology.
    Third, the States' experience with risk ratios provides the 
Department with some historical knowledge of what risk ratio thresholds 
have previously been considered as indicative of significant 
disproportionality. In the NPRM, we noted that, of States utilizing a 
risk ratio, 16 States used a risk ratio threshold of 4.0, while seven 
States each used thresholds of 3.0 and 5.0. This history will help 
inform the Department's review of reasonableness. With so few States 
utilizing risk difference, this same history is not available to the 
Department. For these reasons, the Department considers the risk ratio 
to be superior to risk difference as the primary measure of racial and 
ethnic disparities for the standard methodology.
    Further, the Department does not believe the benefits of the risk 
difference outweigh the consequences. While the risk difference method 
may serve to clarify the significance of racial disproportionality 
between LEAs with identical risk ratios, its application would still 
require the development of a threshold of risk difference for 
determination of significant disproportionality. The use of two 
different thresholds for significant disproportionality is contrary to 
the objective of promoting consistency and transparency in how States 
determine disproportionality, as recommended by the GAO report. In 
addition, we believe that the measures implemented in these final 
regulations to promote consistency and transparency also will lead to 
more appropriate identification of significant disproportionality and 
do not believe that the low incidence of identification in the past is 
a result of the risk ratio method itself.
    Changes: None.
    Comments: Two commenters asserted that the weighted risk ratio is 
the most accurate and effective measurement because it allows the State 
to standardize across LEAs that are very different. These commenters 
argued that, while the risk ratio is simple and straightforward, the 
weighting of findings using State data provides standardization that 
makes comparability across LEAs possible. These commenters also argued 
that the weighted risk ratio formula is not too difficult for States to 
utilize Further, commenters argued that the States currently using a 
weighted risk ratio--nearly half of all States--would be prohibited 
from doing so under proposed Sec.  300.647(b), apparently because of 
its complexity and lack of public understanding--rather than specified 
weaknesses in the methodology itself. Some commenters suggested 
allowing States to calculate significant disproportionality using 
either the risk ratio method or the weighted risk ratio method. One 
commenter stated that the weighted risk ratio ensures that two LEAs are 
treated similarly if the risk for the racial or ethnic group of 
interest is the same in both LEAs, even if the racial demographics in 
each LEA are different.
    Other commenters, meanwhile, supported regulations that would 
disallow States' use of the weighted risk ratio. These commenters 
agreed that weighted risk ratios add a high level of complexity that 
makes the decision to identify an LEA difficult for the layperson to 
follow. These commenters stated as well that weighted risk ratios are 
not necessary if the alternative risk ratio is available. One of these 
commenters stated that it was important for special education 
administrators to be able to calculate current racial and ethnic 
disparities independent from a State report, which is based on prior 
year data. A few commenters stated that the use of the weighted risk 
ratio alone, without adequate minimum n-sizes or additional 
significance testing, would result in many LEAs being identified as 
having significant disproportionality when the disproportionality is 
due only to small numbers of children identified with disabilities, 
placed in restrictive settings, and disciplined. Some commenters 
observed that the Department's proposal did not include permission to 
use weighted risk ratio but requested that the Department explicitly 
prohibit its use.
    Discussion: As we noted in the NPRM, with a weighted risk ratio, 
the comparison group is adjusted by adding different weights to each 
racial and ethnic group, typically based on State-level representation. 
The weighted risk ratio method has the drawback of volatility across 
years, similar to the risk ratio, but does not support straightforward 
interpretation as well as the risk ratio does.
    Given that we proposed three mechanisms to help States account for 
risk ratio volatility--(1) the alternate risk ratio, (2) the allowance 
for using up to three consecutive years of data before making a 
significant disproportionality determination, and (3) the minimum n-
size and cell size requirements--the Department previously determined 
that the potential benefits of the weighted risk ratio method were 
exceeded by the costs associated with complexity and decreased 
transparency. Although the final regulations adopt additional

[[Page 92410]]

flexibility, and potential variability, through the requirement for a 
minimum cell size, the Department continues to believe that use of the 
weighted risk ratio is not justified for the same reasons.
    While a number of States currently use the weighted risk ratio 
method, the Department believes that method fails to provide LEAs and 
the public with a transparent comparison between risk to a given racial 
or ethnic group and risk to peers in other racial or ethnic groups, as 
the risk ratio and alternate risk ratio methodologies are designed to 
do. We believe that the final regulations, as drafted, clearly disallow 
use of the weighted risk ratio as part of the standard methodology and 
that additional clarification on this point is not necessary.
    Changes: None.
    Comment: A few commenters stated that States should be encouraged 
to add a test of statistical significance to the standard methodology. 
Two commenters requested that the Department allow States to use 
appropriate tests of statistical significance to assess the statistical 
significance of any preliminary result produced through risk ratio 
analysis.
    Another commenter suggested that, if the Department only allows 
States to set a minimum n-size, it should allow States to conduct a 
test of statistical significance to determine if the risk ratio is 
truly significant.
    Discussion: Statistical significance testing is applicable only to 
samples rather than population data, and therefore is not an 
appropriate method of determining significant disproportionality in an 
LEA. As we noted in the NPRM, States have access to population data, 
including actual counts of children identified with a disability, 
placed into particular settings, or subjected to a disciplinary removal 
from placement. With this information, States can simply calculate 
whether an LEA's risk ratio for a given subgroup is different from the 
risk ratio for a comparison group.
    Changes: None.
    Comment: A commenter argued that, when calculating a risk ratio, 
White children would be a more appropriate comparison group than ``all 
other racial and ethnic groups'' as specified in the definition of 
``risk ratio'' in the proposed Sec.  300.647(a)(3) (now Sec.  
300.647(a)(6)). To help States make use of this comparison, while 
ensuring that White children are not precluded from the States' review 
for significant disproportionality, the commenter recommended that 
States be required to calculate both the Department's proposed risk 
ratio and a second risk ratio where White children replace all other 
racial and ethnic groups. The commenter noted that the additional data 
analysis and reporting burden associated with the addition of this risk 
ratio would be negligible. Another commenter recommended that, in 
addition to the risk ratio, the Department allow States to compare all 
racial or ethnic groups to the State risk index for White children 
only, in order to prevent States from identifying significant 
disproportionality in LEAs where risk for a given racial or ethnic 
group is low.
    Discussion: The Department acknowledges that, in general, it may be 
a common practice to utilize White children as a comparison group when 
examining data for racial and ethnic disparities. However, for purposes 
of IDEA section 618(d), it would be inappropriate to use one method for 
children of color with disabilities--a comparison to White children--
and a separate method for White children in which they are compared to 
all other racial and ethnic groups. We do not find it appropriate for 
one racial or ethnic group to be treated differently from the others in 
these regulations.
    Changes: None.
Categories of Analysis (Sec.  300.647(b)(3) and (4))
    Comment: One commenter stated that, in one State, children with 
disabilities are not categorized by impairment, noting that IDEA does 
not require that children be classified by their disability. The 
commenter requested that, to preserve this State's current policy, the 
Department revise proposed Sec.  300.647(b)(3) to clarify that States 
need only calculate risk ratios for particular impairments if those 
States or their LEAs identify children with particular impairments.
    Discussion: The Department does not believe that a revision to 
Sec.  300.647(b)(3) is necessary to allow a State that currently does 
not classify children by disability to continue in its current 
practice. The standard methodology in Sec.  300.647 does not require 
States to classify children by impairment in order to comply with the 
requirement to identify and address significant disproportionality. 
Rather, under Sec.  300.647(b)(3), the State is required to review 
those racial or ethnic groups within LEAs that meet the State's 
population requirements, including a minimum cell size. Because a State 
that does not classify children by disability would, in assessing LEAs 
for significant disproportionality, have a cell size of zero for each 
of the impairments enumerated under Sec.  300.647(b)(3)(ii) for all 
racial and ethnic groups and for all LEAs, that State would not be 
required to calculate risk ratios for any of the impairments. Under 
Sec.  300.647(b)(3)(i), however, the State must calculate risk ratios 
for the category of all children with disabilities, by racial and 
ethnic group.
    Changes: None.
    Comments: Several commenters responded to Directed Question #3 in 
the NPRM, which inquired whether the Department should remove any of 
the six impairments from, or add additional impairments to, proposed 
Sec.  300.647(b)(3)(ii). That section listed the impairments that 
States must examine in determining whether an LEA has significant 
disproportionality with respect to the identification of particular 
impairments.
    One commenter responded that the Department need not expand the 
list of impairments because the remaining impairments under IDEA 
section 602(3) that could be added to those listed in Sec.  
300.647(b)(3)(ii) are low incidence, and the qualifying factors for 
these are so specific, that there is limited room for varying 
interpretations that might lead to significant disproportionality. Two 
commenters recommended that all six impairments included in proposed 
Sec.  300.647(b)(3)(ii) remain if the Department allows States to limit 
their review of significant disproportionality only to those racial and 
ethnic groups where at least 10 children (or, as an alternative, at 
least 15 children) have been identified with that particular 
impairment. One commenter asserted that all impairments listed in 
proposed Sec.  300.647(b)(3)(ii) should remain and that the Department 
should further include all of the impairments in IDEA section 602(3), 
including those impairments enumerated under IDEA section 603(3)(B) 
that are applicable to children, aged 3 through 9, who experience 
developmental delays in physical development, cognitive development, 
communication development, social or emotional development, or adaptive 
development. Another commenter also supported the inclusion of 
developmental delay in States' review for significant 
disproportionality.
    Two commenters recommended that blindness, orthopedic impairment, 
and hearing impairments be added to the list of impairments in proposed 
Sec.  300.647(b)(3)(ii).
    Discussion: The Department agrees that it is unnecessary to require 
States to examine the seven low-incidence impairments listed in IDEA 
section 602(3) and in Sec.  300.8 that were not

[[Page 92411]]

included in proposed Sec.  300.647(b)(3)(ii) for significant 
disproportionality. Given the low incidence of these impairments, the 
Department continues to believe that disproportionality based on race 
or ethnicity will not be reliably identified as systemic or otherwise 
indicative of persistent underlying problems. Further, given that the 
Department has not previously required States to examine these 
impairments, doing so now would impose a new data analysis burden that 
the Department does not believe is necessary. For this same reason, the 
Department declines to add to Sec.  300.647(b)(3)(ii) blindness, 
orthopedic impairment, hearing impairments, or the developmental 
impairments applicable to children aged three through nine defined 
under IDEA section 602(3)(B).
    Changes: None.
    Commenter: One commenter recommended the use of an alternative risk 
ratio method to capture the disability categories in IDEA section 
602(3). The commenter suggested that the alternative risk ratio method 
be used when a racial or ethnic group does not meet a minimum 
population requirement for any of the disability categories. The 
commenter suggested this approach to help address the possible under-
identification of hearing loss.
    Discussion: Again, the Department believes that it is unnecessary 
to require States to examine the seven low-incidence impairments listed 
in IDEA section 602(3) that were not included in proposed Sec.  
300.647(b)(3)(ii) for significant disproportionality. Given the low 
incidence of these impairments, disproportionality based on race or 
ethnicity may not be reliably identified as systemic or otherwise 
indicative of persistent underlying problems, and the Department has 
not previously required States to examine these impairments. Nothing, 
however, would prevent a State from examining low-incidence 
disabilities for racial and ethnic disparities--or for disproportionate 
overrepresentation--if it chose to do so. Moreover, while a State may 
choose to review an LEA's policies, procedures, and practices for 
compliance with IDEA requirements related to identification and 
evaluation under its separate general supervisory authority in IDEA 
section 612(a)(22) or monitoring authority in section 616, the 
consequences set out in IDEA section 618(d)(2) and these regulations, 
including mandating the use of comprehensive CEIS, do not apply.
    Change: None.
    Comments: One commenter recommended that the Department exclude any 
of the six impairments from a review for significant disproportionality 
that were not part of the research base informing the 2004 IDEA 
regulations related to significant disproportionality in special 
education.
    According to the commenter, concerns regarding overrepresentation 
in special education were limited to the identification of intellectual 
disabilities, specific learning disabilities, and emotional 
disturbance.
    Discussion: We decline to make the commenter's requested change to 
Sec.  300.647(b)(3). IDEA section 618(d) (20 U.S.C. 1418(d)) requires 
that States examine LEAs for significant disproportionality based on 
race and ethnicity in the identification of particular impairments. We 
believe there is a sufficient statutory basis to extend the requirement 
for States to examine LEAs for significant disproportionality to all of 
the impairments included in IDEA section 602(3); however, the 
Department has determined that, given the low incidence of several of 
the listed impairments, it may be difficult to reliably identify 
significant disproportionality with respect to these impairments that 
is systemic or otherwise indicative of persistent underlying problems.
    Change: None.
    Comments: One commenter recommended that under proposed Sec.  
300.647(b)(3)(ii), States should not be required to examine LEAs for 
significant disproportionality in the identification of children with 
specific learning disabilities. This commenter noted that some States 
have put in place a process whereby children must receive certain 
services--specifically, response to intervention--prior to being 
identified with specific learning disabilities. This commenter 
suggested that the use of evidence-based interventions has reduced the 
number of children requiring special education services.
    Discussion: The Department appreciates the comment and agrees that 
the provision of multi-tiered systems of support, such as response to 
intervention, can be useful and important in serving children with 
disabilities. At the same time, we note that States and LEAs have an 
obligation under Sec. Sec.  300.304 to 300.311 to ensure that the 
evaluation of children suspected of having a disability is not delayed 
or denied because of the implementation of specific strategies or 
interventions. Under Sec.  300.307, States must adopt criteria for 
determining whether a child has a specific learning disability. The 
criteria adopted by the State: (1) Must not require the use of a severe 
discrepancy between intellectual ability and achievement for 
determining whether a child has an specific learning disability; (2) 
must permit the use of a process based on the child's response to 
scientific, research-based interventions; and (3) may permit the use of 
other alternative research-based procedures for determining whether a 
child has a specific learning disability. (34 CFR 300.307, OSEP 
Memorandum 11-07, January 21, 2011).
    We decline to revise Sec.  300.647(b)(3)(ii) as suggested by the 
commenter. In its 37th Annual Report to Congress on the Implementation 
of the Individuals with Disabilities Education Act (2015) (37th IDEA 
Annual Report), the Department noted that the percentage of the 
resident population ages 6 through 21 served under IDEA, Part B, 
identified with specific learning disabilities was 39.5 percent of 
children, the highest of all impairments.
    The fact that specific learning disabilities, as a category, has 
the highest incidence of all the impairments recognized by IDEA 
suggests that it may be one of the most important disability categories 
to review for significant disproportionality. Moreover, given that it 
is a high-incidence category, removing specific learning disabilities 
from the analysis may have the unintended effect of increasing 
identification of this impairment to minimize any appearance of racial 
and ethnic disparities in the identification of children with 
impairments that are subject to examination for significant 
disproportionality. To prevent this possibility and encourage the 
appropriate identification of children with disabilities, the 
Department believes it best to continue to require States to review 
LEAs for significant disproportionality with respect to specific 
learning disabilities.
    Changes: None.
    Comments: Several commenters recommended that the Department remove 
autism from the list of impairments under proposed Sec.  
300.647(b)(3)(ii) that States must examine in LEAs for significant 
disproportionality. Of these commenters, one noted that autism 
identification generally follows a medical diagnosis. Several explained 
that some States require that a medical evaluation be conducted or a 
medical diagnosis be considered before a child can be identified with 
autism. Several others generally noted that it is rare that an LEA 
diagnoses a child as having autism. As a result, one commenter 
concluded, any over-identification of autism may be attributable to a 
medical professional in the LEA and not

[[Page 92412]]

necessarily indicative of an issue in the LEA itself. Another commenter 
noted that, since a diagnosis of autism is not under the control of the 
LEA, the LEA would have no means or capacity to remedy and correct a 
finding of significant disproportionality.
    Several other commenters stated that a failure to provide children 
with special education services after a medical diagnosis of autism 
could result in noncompliance with IDEA. Finally, several commenters 
examined the Department's report--Racial and Ethnic Disparities in 
Special Education: A Multi-Year Disproportionality Analysis by State, 
Analysis Category, and Race/Ethnicity (2015)--and found that the most 
egregious disparities with respect to autism applied to White children. 
These commenters believed that requiring LEAs to address significant 
disproportionality with respect to White children was not the intention 
of IDEA.
    With respect to special education eligibility determinations, a 
last commenter stated that LEAs generally do not make clinical 
diagnoses. Rather, LEAs and schools are charged with determining 
whether children meet State and Federal criteria to be eligible for 
special education and require specialized instruction.
    Discussion: In its 37th Annual Report, the Department noted that 
the percentage of the resident population of children with autism ages 
6 through 21 served under IDEA, Part B, increased markedly between 2004 
and 2013. Specifically, the percentages of three age groups--ages 6 
through 11, 12 through 17, and 18 through 21--that were reported under 
the category of autism were 145 percent, 242 percent, and 258 percent 
larger in 2013 than in 2004, respectively.
    Given those increases, and to encourage the appropriate 
identification of children with disabilities, the Department believes 
it best to continue to require States to review LEAs for significant 
disproportionality with respect to autism.
    We further note that, even if disparities in an LEA's 
identification of autism tend to result from disparities in the medical 
diagnosis of autism, it may be the case that the latter disparities are 
due to factors such as unequal access to medical care, which may result 
in children not being referred for an evaluation. In this instance, the 
broader use of developmental screening for young children--which may be 
supported using comprehensive CEIS--may help to identify children in 
other racial or ethnic groups that may currently be underrepresented 
among children with impairments such as autism that may follow a 
medical diagnosis.
    Last, we disagree with the commenters' suggestion that IDEA section 
618(d) was not intended to address significant disproportionality that 
impacts White children. The plain language of IDEA section 618(d) (20 
U.S.C. 1418(d)) requires States to identify significant 
disproportionality, based on race or ethnicity, without any further 
priority placed on specific racial or ethnic groups. For that reason, 
the Department believes that the statute directs States to address 
significant disproportionality impacting all children.
    Changes: None.
    Comments: A number of commenters recommended that the Department 
remove other health impairments (OHI) from the list of impairments 
under proposed Sec.  300.647(b)(3)(ii) that States must examine for 
significant disproportionality. Of these, some commenters noted that 
some States require that a medical evaluation be conducted, or a 
medical diagnosis be considered, before a child is determined to have 
OHI. Still others noted that it is rare for an LEA to diagnose a child 
with OHI and that failure to provide children with special education 
services when an evaluation indicates OHI could result in non-
compliance with IDEA. One commenter stated that, since a diagnosis of 
OHI is not under the control of the LEA, the LEA would have no means or 
capacity to remedy and correct a finding of significant 
disproportionality. Finally, some commenters stated that the 
Department's data show that the most egregious disproportionality with 
respect to OHI applies to White children, but requiring LEAs to address 
significant disproportionality with respect to White children was not 
the intention of IDEA.
    With respect to special education eligibility determinations, a 
last commenter stated that LEAs generally do not make clinical 
diagnoses. Rather, LEAs and schools are charged with determining 
whether children meet State and Federal criteria to be eligible for 
special education and require specialized instruction.
    Discussion: In its 37th Annual Report, the Department noted that 
the percentage of the resident population with OHI ages 6 through 21 
and served under IDEA, part B, increased markedly between 2004 and 
2013. Specifically, the percentages of three age groups reported--ages 
6 through 11, 12 through 17, and 18 through 21--were 45 percent, 624 
percent, and 104 percent larger in 2013 than in 2004, respectively.
    Given recent increases in the percentage of children identified 
with OHI, and to encourage the appropriate identification of children 
with disabilities, the Department believes it best to continue to 
require States to review LEAs for significant disproportionality in 
OHI. Also, we note that, even if disparities in the identification of 
OHI tend to result from disparities in the medical or clinical 
diagnosis of OHI, it may be the case that the latter disparities are 
due to factors such as unequal access to medical care, which may result 
in children not being referred for an evaluation. In this instance, the 
broader use of developmental screening for young children--which may be 
supported using comprehensive CEIS--may help to identify children in 
other racial or ethnic groups that may currently be underrepresented in 
disability categories, like OHI, that may follow a medical diagnosis.
    Last, we disagree with commenters' suggestion that IDEA section 
618(d) was not intended to address significant disproportionality that 
impacts White children. The plain language of IDEA section 618(d) 
requires States to identify significant disproportionality, based on 
race or ethnicity, without any further priority placed on specific 
racial or ethnic groups. For that reason, the Department believes that 
the statute directs States to address significant disproportionality 
impacting all children.
    Changes: None.
    Comment: Several commenters responded to Directed Question #4 of 
the NPRM, which inquired whether the Department should continue to 
require States to review LEAs for significant disproportionality based 
on race or ethnicity in the placement of children with disabilities 
inside the regular classroom between 40 percent and 79 percent of the 
day.
    Multiple commenters suggested that the Department continue the 
requirement. Of these commenters, a few noted that this type of 
placement data is already collected by States and might be helpful in 
addressing other issues of disproportionality. One commenter advocated 
for leaving this placement in the regulations and noted that 50 percent 
of the day is the equivalent of lunch, recess, gym, morning meeting, 
and art class. In the commenter's opinion, placement in the classroom 
only 50 percent of the day is a significant amount of isolation, and 
may mean a potential lack of access to the general education 
curriculum.
    One commenter stated that research shows that almost every child of 
color

[[Page 92413]]

with disabilities who takes an alternate assessment based on alternate 
academic achievement standards is segregated from their peers for all 
or most of the day, and that the lack of integration in the regular 
classroom is associated with lower performance on State general 
assessments. The commenter suggested that this information supports the 
continued inclusion of placement inside the regular classroom between 
40 percent and 79 percent of the day in States' review for significant 
disproportionality.
    Conversely, a few commenters expressed their preference that the 
Department not require States to review for significant 
disproportionality placement in the regular classroom between 40 and 79 
percent of the school day. These commenters noted that data regarding 
this placement provides little information about the severity of a 
child's disability, the classroom supports the child receives, or the 
quality of the services in that setting. Many commenters noted that 40 
percent to 79 percent of the school day covers a wide range that 
encompasses anywhere from 2.4 to 4.7 hours. These commenters stated 
that while only 2.4 hours in the regular classroom may be more 
restrictive, 4.7 hours may not be; therefore, this placement is 
difficult to categorize.
    Several commenters noted that it is generally meaningless to draw 
conclusions about the percentage of time a child is in a regular class 
and whether it means the LEA has provided services in the least 
restrictive environment.
    One commenter asserted that one State may have difficulty 
collecting data regarding this placement, as the State reports 
placement using different percentages of time spent in the regular 
classroom (i.e., 20 percent or less, less than 60 percent and greater 
than 20 percent, 60 percent or more). The commenter expressed concern 
that requiring States to change their placement categories would 
require changes to State special education regulations, resulting in 
significant increases in paperwork and resource expenditures.
    Additionally, several commenters stated that reporting additional 
placement data will be a burden for LEAs and will not provide useful 
information.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to examine data to determine if significant disproportionality based on 
race and ethnicity is occurring in the State and LEAs of the State with 
respect to the placement of children with disabilities. To meet their 
general data reporting obligations under IDEA section 618(a) (20 U.S.C. 
1418(a)), States currently submit to the Department a count of children 
with disabilities, disaggregated by race and ethnicity, who are placed 
inside the regular classroom between 40 percent and 79 percent of the 
day, inside the regular classroom less than 40 percent of the day 
(i.e., inside self-contained classrooms) and inside separate settings 
(i.e., separate schools and residential facilities). OSEP Memorandum 
08-09 and FILE C002, OMB Control Nos. 1875-0240 and 1820-0517. 
Consistent with this reporting requirement, the Department initially 
proposed requiring States to review each of these three placements for 
significant disproportionality, as racial and ethnic disparities in 
these placements may suggest that some children with disabilities have 
less access to the least restrictive environment to which they are 
entitled under IDEA section 612(a)(5) (20 U.S.C. 1412(a)(5)). The 
Department did not include in the NPRM any requirements that States 
expand the scope of their data collection with respect to placement.
    However, the Department asked Directed Question #4 to ascertain 
whether States and LEAs should be required to determine whether there 
is significant disproportionality in LEAs with respect to placement in 
the regular classroom between 40 percent and 79 percent of day. After 
reviewing the perspectives shared by commenters, the Department agrees 
to no longer require that States determine whether significant 
disproportionality, by race or ethnicity, is occurring within an LEA 
with respect to placement in the regular classroom between 40 percent 
and 79 percent of the day. The Department acknowledges that there could 
be significant qualitative differences in the opportunities for 
interaction with nondisabled peers for students at the lower end of 
this range and students at the upper end. While the Department 
emphasizes that placement decisions must be individualized, we also 
recognize that, given these differences, for students on the lower end 
of this range, there could be unintended incentives to improperly place 
them in settings where they spend less classroom time with nondisabled 
students rather than more. Given the qualitative differences and the 
broad range of class time addressed in this category, we no longer 
believe that addressing significant disproportionality in LEAs with 
regard to this placement category is appropriate.
    The Department appreciates the comments supporting the proposed 
requirement and we recognize that an examination of the placement of 
children with disabilities outside of the regular classroom more than 
40 percent of the day and less than 79 percent of the day could, in 
some limited cases, help to highlight systemic issues. In the 
Department's view, on balance, the continued use of this category for 
determining significant disproportionality is not warranted.
    Changes: The Department has revised proposed Sec.  300.647(b)(4) to 
remove the requirement that States identify significant 
disproportionality with respect to the placement of children with 
disabilities ages 6 through 21, inside a regular class more than 40 
percent of the day and less than 79 percent of the day.
    Comment: One commenter expressed concern that the standard 
methodology requires States to examine risk ratios for each placement 
type separately, rather than recognizing their interconnectedness. The 
commenter suggested, for example, that an LEA could evade a finding of 
what the commenter calls ``significant discrepancy'' by moving children 
from partial inclusion to a substantially separate classroom. The 
commenter stated that this would cause the LEA to not be identified 
with ``significant discrepancy'' with respect to the number of children 
being educated in partially inclusive settings. The commenter concluded 
that this approach would not create the right incentives for LEAs.
    Discussion: We appreciate the commenter's concern. The Department 
has heard from several commenters regarding our initial proposal to 
require States to review for significant disproportionality the 
placement of children with disabilities in the regular classroom for no 
more than 79 percent of the day and no less than 40 percent of the day. 
After reviewing the comments, we agree that this placement covers too 
broad a range of hours within the school day to help States to identify 
significant disproportionality with respect to placement. In 
considering this commenter's perspective, we find it may also be the 
case that, to avoid a determination of significant disproportionality 
with respect to placement in the regular class for no more than 79 
percent of the day and no less than 40 percent of the day, LEAs may 
have an incentive to shift children with disabilities from this more 
inclusive placement to self-contained

[[Page 92414]]

classrooms or separate schools. With this in mind, the Department will 
remove the proposed language requiring States to review LEAs, or their 
racial or ethnic groups, for significant disproportionality with 
respect to placement in the regular classroom for no more than 79 
percent of the day and no less than 40 percent of the day from Sec.  
300.647(b)(4). With this change, the Department has narrowed States' 
review of significant disproportionality to the most restrictive 
placements, including self-contained classrooms, separate schools, and 
residential facilities. We believe that Sec.  300.647(b)(4), as 
revised, encourages LEAs to focus on placing children in the proper 
setting by requiring them to analyze only the most significant removals 
from the regular classroom.
    Changes: As discussed above, the Department has revised proposed 
Sec.  300.647(b)(4) to remove the requirement that States identify 
significant disproportionality with respect to the placement of 
children with disabilities ages 6 through 21, inside a regular class 
more than 40 percent of the day and less than 79 percent of the day.
    Comment: Several commenters noted that the Department should not 
expand data collection regarding disproportionality in placements as 
discretion regarding placement is not entirely within the hands of the 
LEA. Instead, these commenters asserted, placement involves difficult 
decisions by IEP Teams, including parents, that can change 
significantly from year to year (and sometimes throughout the year). 
The commenters added that the only way to address significant 
disproportionality would be to change a child's educational placement, 
which by law is the decision of an IEP Team that includes the parents. 
We interpreted these comments to refer to the requirements of Sec.  
300.116(a)(1), which specifies that placement is to be determined by a 
group of persons, including the parents, and other persons 
knowledgeable about the child. One commenter expressed concern that 
LEAs will stop thinking about the individual needs of the child and 
instead include them in regular classes to avoid a determination of 
significant disproportionality.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) explicitly 
requires States to review LEAs for significant disproportionality based 
on race and ethnicity with respect to placement, and, when significant 
disproportionality is identified, to (1) require LEAs to undergo a 
review and, if appropriate, revision of policies, practices, and 
procedures; (2) publicly report on any revisions; and (3) reserve 15 
percent of their IDEA Part B funds for comprehensive CEIS. This 
statutory language is consistent with the mandate that all children 
with disabilities receive special education and related services in the 
least restrictive environment. (IDEA section 612(a)(5) (20 U.S.C. 
1412(a)(5))).
    When LEAs have significant disproportionality with respect to 
placement, the LEA must review its policies, practices, and procedures 
to ensure that the policies and procedures conform with IDEA 
requirements and that the practice of placement teams in implementing 
these policies and procedures is also consistent with IDEA--such as 
involving parents in placement decisions, and ensuring placement 
decisions are made in conformity with least restrictive environment 
requirements. (34 CFR 300.114 and 116(a)(1)). In any case, these 
regulations do not include an expansion of data collections to support 
State review for significant disproportionality in placement. In 
Question 14 of OSEP Memorandum 08-09 (July 28, 2008), the Department 
clarified that States had an obligation to use the data collected for 
reporting under IDEA section 618 and must, at a minimum, examine data 
for three of IDEA section 618 reporting categories: Children who 
received educational and related services in the regular class no more 
than 79 percent of the day and no less than 40 percent of the day, 
children who received special education and related services in the 
regular class for less than 40 percent of the day, and children who 
received special education and related services in separate schools and 
residential facilities. However, as we note in this section of this 
document, the Department is revising proposed Sec.  300.647(b)(4) to no 
longer require States to review LEAs for significant disproportionality 
with respect to placement in the regular class no more than 79 percent 
of the day and no less than 40 percent of the day.
    Changes: None.
    Comment: Several commenters expressed that it is worth noting how 
much time a child spends in a self-contained classroom as it is a 
unique placement.
    Discussion: The Department agrees and has retained the requirement 
that States review LEAs for significant disproportionality with respect 
to placement in the regular classroom less than 40 percent of the day. 
In general, when children spend less than 40 percent of the day in the 
regular classroom, the Department considers most of these children to 
be placed in self-contained classrooms.
    Changes: None.
    Comment: One commenter noted that the populations reviewed under 
proposed Sec.  300.647(b)(3) do not align with the populations reviewed 
under proposed Sec.  300.647(b)(4). The commenters specifically noted 
that none of the subsections under Sec.  300.647(b)(4) reference the 
six specific impairments enumerated under Sec.  300.647(b)(3)(ii). The 
commenter also noted that the two provisions include differences in the 
ages of the children reviewed. The commenter requested that the 
Department revise both provisions so that the populations reviewed for 
significant disproportionality are consistent across the review of 
identification, placement, and discipline.
    Discussion: In OSEP Memorandum 08-09, the Department previously 
provided guidance on the data that IDEA section 618(d) requires States 
to examine to determine if significant disproportionality based on race 
and ethnicity was occurring with respect to the identification, 
placement, or discipline of children with disabilities. This data is 
consistent with that already required of States to meet their reporting 
obligations under IDEA section 618(a), and which were established, 
following notice and comment, in OMB-approved data collections 1875-
0240 and 1820-0517. FILE C002, 2013. As we noted in the NPRM, the 
Department intentionally designed Sec.  300.647(b)(3) and (4) to mirror 
the guidance previously provided in OSEP Memorandum 08-09, and current 
data collection requirements, so as not to introduce confusion or add 
unnecessary burden.
    Changes: None.
    Comments: Various commenters requested that the Department extend 
the list of placements that States must review to determine whether 
significant disproportionality based on race or ethnicity is occurring 
within their States.
    Several commenters requested that the Department require States to 
review LEAs for significant disproportionality in the placement of 
children in hospital, homebound and correctional settings, as well as 
private schools, if they include more than 10 children. Several 
commenters specifically argued that children with disabilities in 
correctional education programs should be included, generally, in the 
calculations for significant disproportionality.
    Commenters reported that, according to advocates and attorneys, the 
number of children with disabilities placed in homebound or tutoring 
programs--and,

[[Page 92415]]

as a consequence, provided with only one or two hours of instruction a 
day--is increasing due to unaddressed disability-related behaviors in 
school and efforts to reduce the use of suspension and expulsion. In 
many cases, according to the commenters, no attempt is made to provide 
these children with supplementary aids and services in less restrictive 
settings. The commenters stated that these practices likely have a 
greater impact on low-income families and children of color and 
concluded that the need to review this low-incidence placement for 
significant disproportionality is worth the risk of false positive 
identification of LEAs.
    Further, commenters stated that LEAs play a role in the placement 
of children with disabilities in correctional facilities through the 
use of school-based arrests and juvenile justice referrals. One 
commenter clarified that States need to answer the question of whether 
children with disabilities were receiving special education services 
and supports in correctional facilities and whether there is 
significant disproportionality in those placements.
    Discussion: The Department continues to believe that it is 
inappropriate to require States to examine placement in correctional 
facilities, or in homebound or hospital settings, given that LEAs 
generally have little, if any, control over a child's placement in 
those settings. Further, given that the Department has not previously 
required States to examine data to determine if significant 
disproportionality is occurring in these placements, a new requirement 
that States examine these placements in LEAs would represent a new data 
analysis burden that the Department does not believe is warranted.
    Change: None.
    Comments: A commenter requested that the Department require States 
to: (1) Report the number and proportion of inmates in correctional 
facilities within the State who have been identified as children with 
disabilities and are receiving special education services, and (2) make 
a determination of significant disproportionality, by disability 
status, with respect to placement in correctional facilities.
    Discussion: We decline to require States to take either action. 
First, States already report to the Department counts of children with 
disabilities in correctional facilities as part of IDEA Part B Child 
Count and Educational Environments Collection. OMB Control No. 1875-
0240 and File C002, 2013. Further, IDEA section 618(d) (20 U.S.C. 
1418(d)) explicitly requires States to collect and examine data to 
identify significant disproportionality by race and ethnicity in the 
LEAs of the State. Insofar as correctional facilities are not 
constituted as LEAs in the State, IDEA section 618(d) does not require 
States to conduct a significant disproportionality analysis there, and 
it would be an inappropriate expansion of the statutory requirement to 
mandate that analyses. However, to the extent that the educational 
programs in specific correctional facilities or systems are constituted 
as LEAs, States are required under IDEA to assess whether there is 
significant disproportionality by race and ethnicity whenever the 
populations are of sufficient size.
    Changes: None.
    Comment: One commenter requested that the Department require States 
to measure disparities in placement within separate schools for 
children who are blind and children who are deaf. (0221, 0227). The 
commenter stated that these schools often have separate sub-campuses or 
separate residential placements and academic tracks for children with 
multiple disabilities, and that is likely that children of color with 
disabilities are at greater risk of placement into these sub-campuses.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires SEAs 
to collect and examine data to determine if significant 
disproportionality based on race and ethnicity is occurring in the 
State or the LEAs of the State. Accordingly, unless a separate school 
is an LEA in its own right, it will not be reviewed for significant 
disproportionality.
    Further, as we have stated elsewhere in this document, a State must 
annually collect and examine data to determine, using the standard 
methodology in Sec.  300.647, if significant disproportionality is 
occurring in LEAs that serve only children with disabilities. However, 
we have clarified in Sec.  300.646(e) that LEAs that serve only 
children with disabilities are not required to reserve IDEA Part B 
funds for comprehensive CEIS.
    Changes: None.
    Comment: One commenter expressed concern that disciplinary removal 
data may not be collected consistently. The commenter stated that 
proposed Sec.  300.647(b)(4) allows States to either compare rates for 
children with disabilities to rates for nondisabled children within an 
LEA or compare among LEAs for children with disabilities in the State.
    A second commenter requested that the Department clarify whether a 
State might use the same calculation to determine significant 
disproportionality with respect to disciplinary removal that it 
currently uses to identify significant discrepancy for purposes of APR/
SPP Indicator 4. The commenter added that the State currently compares 
children with disabilities to children without disabilities within an 
LEA, and does not make comparisons between children with disabilities 
across LEAs.
    Discussion: We appreciate the comments seeking to interpret or 
recommend the comparisons required under Sec.  300.647(b)(4). This 
provision does not require, nor does it allow, States to compare 
children with disabilities to children without disabilities within an 
LEA or across LEAs for the purpose of identifying significant 
disproportionality. Rather, Sec.  300.647(b)(4) requires States to 
compare children with disabilities in one racial or ethnic group to 
children with disabilities in all other racial groups within an LEA. 
When reviewing a racial or ethnic group within an LEA with a comparison 
group that does not meet the State's population requirements, the State 
will compare children with disabilities in one racial or ethnic group 
to children with disabilities in all other racial or ethnic groups 
within the State.
    Moreover, we note that unlike the language in IDEA section 618(d), 
the language in section 612(a)(22) expressly provides for an 
examination of data for significant discrepancies (in the rates of 
long-term suspensions and expulsions of children with disabilities) 
among the LEAs in the State or compared to rates of nondisabled 
children in those LEAs. Thus, Congress knew how to require comparisons 
and expressly did so in IDEA section 612(a)(22), but not in sections 
618(d), which is the subject of these regulations.
    Change: None.
    Comments: One commenter suggested that the Department remove from 
proposed Sec.  300.647(b)(4)(vi), (vii) and (viii) all mention of in-
school suspensions, as the term is not defined and the implementation 
of in-school suspension varies greatly from LEA to LEA.
    Discussion: We generally expect that States will review LEAs for 
significant disproportionality using the same IDEA section 618 data 
reported to the Department. Under the IDEA Part B Discipline 
Collection, in-school suspension is defined as ``instances in which a 
child is temporarily removed from his/her regular classroom(s) for 
disciplinary purposes but remains under the direct supervision of 
school personnel, including but not limited to children who are 
receiving the services in their IEP, appropriately participate in

[[Page 92416]]

the general curriculum, and participate with children without 
disabilities to the extent they would have in their regular placement. 
Direct supervision means school personnel are physically in the same 
location as students under their supervision.'' OMB Control No. 1875-
0240; Data Accountability Center, 2013.
    Change: None.
    Comments: A few commenters requested that the Department modify the 
proposed regulations to require States to collect and analyze data to 
determine if significant disproportionality by English language 
proficiency or gender is occurring with respect to the identification, 
placement, or discipline of children with disabilities. These 
commenters argued that IDEA provides the Department with authority to 
require States to submit demographic data on children with disabilities 
beyond race and ethnicity. Some of these commenters stated that the 
ability to disaggregate and cross-tabulate data is essential to 
understanding disparities in treatment between subgroups of children. 
One commenter noted that, according to the NPRM, English Learners are 
at greater risk for being disproportionately identified as children 
with a disability. This commenter stated that there are other 
demographic factors--beyond race and ethnicity--that should be 
considered when evaluating significant disproportionality across 
identification, placement, and discipline, including socioeconomic and 
linguistic status.
    A few commenters cited research suggesting that school-age boys are 
over-identified as having disabilities, while school-age girls are 
under-identified. A last commenter stated that gender deserved 
heightened attention, especially as it relates to identification for 
autism and emotional disturbance.
    Discussion: IDEA section 618(d) (20 U.S.C. 1418(d)) requires States 
to collect and examine data to determine whether significant 
disproportionality based on race and ethnicity is occurring with 
respect to the identification, placement, and discipline of children 
with disabilities in the State or the LEAs of the State. The Department 
believes that requiring, or permitting, analysis for significant 
disproportionality based on sex, English language proficiency, or 
socioeconomic status is beyond the scope of IDEA section 618(d) and 
inappropriate for these regulations. Accordingly, the Department will 
only require States to identify significant disproportionality based on 
race and ethnicity and will not require States to expand their review 
to include significant disproportionality based on factors such as sex, 
English language proficiency, or socioeconomic status. As with other 
areas of review, there is nothing in IDEA that would prevent review of 
data for significant disproportionality based on factors such as sex or 
English language proficiency. In addition, States may choose to review 
policies, procedures, and practices of an LEA for compliance with IDEA 
requirements under its general supervisory authority in IDEA section 
612(a)(11) or monitoring authority in section 616; however, the 
consequences of a determination of significant disproportionality based 
on other factors not set out in these regulations--e.g., sex or English 
language proficiency--may not include mandating the use of 
comprehensive CEIS as set out in IDEA section 618(d)(2) and these 
regulations.
    Changes: None.
    Comments: A large number of commenters offered perspectives as to 
whether children ages three through five should be included in States' 
review for significant disproportionality in the identification of 
children as children with disabilities and in the identification of 
children as children with a particular impairment.
    Several commenters expressed that it is inappropriate to consider 
ages three through five in a determination of significant 
disproportionality, as some LEAs are not responsible for early 
intervention. One commenter stated that data used to identify 
significant disproportionality is also used in Indicators 9 and 10 of 
the SPP/APR, in which States have been instructed to use data only on 
children ages 6 through 21. The commenter requested that the age ranges 
used to identify disproportionate representation under IDEA section 
612(a)(24) (20 U.S.C. 1412(a)(24)) and those used to identify 
significant disproportionality under IDEA section 618(d) (20 U.S.C. 
1418(d)) remain consistent. Another commenter noted that the proposed 
regulations require States to report data on three through five year 
olds that is not currently reported. This commenter noted that States 
cannot calculate data regarding placement for children ages three 
through five because there are no peers in the regular classroom to 
compare the numbers. Two commenters noted that most States do not have 
a data collection mechanism to make determinations of whether 
significant disproportionality, based on either identification or 
discipline, for children ages three and four, is occurring. These 
commenters urged the Department to eliminate the requirement to 
determine significant disproportionality for three and four year olds. 
Another commenter built on this argument, stating that, in a State 
without universal preschool, a majority of the children enrolled in 
public preschool are children with disabilities ages three to five. The 
commenter stated that this disproportional loading of preschool 
children into the analysis will result in the identification of nearly 
all of one State's small regional elementary LEAs.
    One commenter suggested that the Department require States to 
review LEAs for significant disproportionality with respect to 
identification only among children age 6 through 21. Other commenters 
noted that the inclusion of preschool-aged children is problematic 
because, without universal preschool, there is no reliable method for 
determining the total population of children ages three through five 
and, therefore, no appropriate denominator for the risk calculation. 
One commenter noted that, because preschoolers without disabilities do 
not have the same guarantee of a free appropriate public education as 
their peers with disabilities, States would have to use general census 
data, rather than enrollment, to identify the population of three and 
four year olds for purposes of determining significant 
disproportionality. In one State, according to one commenter, the State 
is the LEA responsible for the education of children with disabilities 
ages three through five. Given this context, the commenter expressed 
concern that the requiring States to review ages three through five for 
significant disproportionality will create a disincentive to offer non-
mandated early intervention programs.
    Conversely, several commenters suggested that the Department 
require States to review the identification of three through five year 
old children with disabilities only when there is a valid comparison or 
reliable baseline group within the public school.
    A number of commenters generally supported the Department's 
proposal to lower the age range for the calculation of 
disproportionality for identification and discipline from ages 6 to 21 
to ages 3 to 21. Commenters noted that lowering the age limit of each 
State's review of significant disproportionality in both identification 
and discipline is an important step in addressing the importance of the 
preschool years, and focusing attention on early childhood discipline.
    Discussion: The Department has previously issued guidance 
explaining which specific disability categories, types of discipline 
removals, and placements that States must review for significant 
disproportionality based on

[[Page 92417]]

race and ethnicity under IDEA section 618(d). OSEP Memorandum 08-09, 
July 28, 2008. This guidance included only those identification 
categories, disciplinary removals, and placements--as well as the age 
ranges to be reviewed for each--that were consistent with the data 
collection that States submit to the Department each year to satisfy 
their reporting obligations under IDEA section 618(a) (20 U.S.C. 
1418(a)). OMB Control Nos. 1875-0240 and 1820-0517 and File C002, 2013. 
At present, States submit to the Department data on children identified 
with any disability, autism, intellectual disability, emotional 
disturbance, specific learning disabilities, other hearing impairments, 
speech and language impairment for ages 3 through 21, and data on 
discipline removals for children ages 3 through 21.
    It was the Department's intention to align the proposed 
regulations, to the extent possible, with IDEA section 618 data 
collection requirements so as to avoid any new data collection burden 
and any new data analysis burden on the States. At the same time, 
however, we must balance our desire to minimize burden with our 
interest in ensuring that children are not mislabeled. As this may be 
especially critical for young children, we agree with commenters that 
including children ages three through five is a meaningful step in 
recognizing the importance of preschool and early childhood education.
    To that end, the Department will maintain the requirement for 
States to examine populations age 3 through 21, for purposes of 
significant disproportionality due to identification. We also agree, 
however, that the inclusion of children ages three through five in the 
State's review for significant disproportionality--with respect to the 
identification of disabilities and impairments--may create some 
complications or additional burden related to data collection and 
comparison. We acknowledge, for example, that some LEAs do not yet 
provide universal preschool, making a determination about the total 
population of children ages three through five more difficult. We also 
recognize that this collection would not correspond with current 
Indicators 9 and 10 of the SPP/APR, which focus on children ages 6 
through 21.
    As it is our expectation that States will use the same IDEA section 
618 data reported to the Department to examine LEAs for significant 
disproportionality, we anticipate that States will use their IDEA, Part 
B child count data (rather than Federal census data) to examine 
significant disproportionality for children ages 3 through 21. 
Additionally, to provide States more time to modify State analyses and 
consider how to identify and address factors associated with 
significant disproportionality in children with disabilities ages three 
through five, the Department will delay the requirement for including 
children ages three through five in their examination of significant 
disproportionality--with respect to the identification of disabilities 
and impairments--until July 1, 2020, in anticipation of more widespread 
provision of preschool programs in the future.
    We disagree that States do not have data collection procedures to 
review LEAs for significant disproportionality due to discipline for 
populations ages 3 through 21, as States are currently required to 
collect data for purposes of IDEA section 618(a). For that reason, we 
will leave unchanged the requirement that States examine populations 
ages 3 through 21 for purposes of identifying significant 
disproportionality due to discipline.
    Finally, we disagree that requiring the review of children ages 
three through five for significant disproportionality will create a 
disincentive for States or LEAs to offer non-mandated early 
intervention programs. We believe that early education and early 
intervention can have a number of salutary effects--not least being the 
reduced need for later, more intensive services--that serve as ample 
incentive for States to invest in these programs. Moreover, even in 
those instances in which States, not LEAs, are responsible for the 
provision of early intervention, the benefits of ensuring that this 
population is not subject to significant disproportionality outweigh 
any potential disincentives. Therefore, we will delay the inclusion of 
children ages three through five in the review of significant 
disproportionality with respect to the identification of children as 
children with disabilities, and with respect to the identification of 
children as children with a particular impairment, until July 1, 2020.
    Changes: None.
    Comments: Several commenters suggested that the Department allow 
States to use a single factor analysis and consider the total 
disability population when calculating disproportionality with respect 
to placement. We understood these comments to suggest that the 
Department allow States to identify LEAs with significant 
disproportionality based on the extent to which race or ethnicity is 
predictive of a child's placement.
    Discussion: As we discussed in Under-Identification of Children 
with Disabilities by Race and Ethnicity, the Department interprets IDEA 
section 618(d) (20 U.S.C. 1418(d)) to require States to identify 
significant disproportionality based on race and ethnicity, 
irrespective of the causes of the disparity. The statute anticipates 
that the investigation of the causes of the disparity will take place 
after the significant disproportionality has been identified, as part 
of the implementation of the statutory remedies provided for under IDEA 
section 618(d)(2) (20 U.S.C. 1418(d)(2)). For this reason, we decline 
to allow States to identify LEAs with significant disproportionality 
based on the extent to which the State believes race or ethnicity may 
predict the placement of a child with a disability.
    Changes: None.
    Comments: Several commenters offered perspectives on the 
requirements for States to review LEAs for significant 
disproportionality with respect to disciplinary removals.
    A number of commenters recommended that the Department eliminate 
the requirement to calculate disciplinary removals of 10 days or fewer, 
both in-school and out-of-school, in proposed Sec.  300.647(b)(4)(iv)-
(vii). Of these, some commenters suggested that the requirement itself 
is excessive and punitive. Some commenters suggested that schools need 
some flexibility to manage behavior. These short-term removals, other 
commenters stated, respond to behaviors that are best managed through 
IEPs and are typically not as serious as the behaviors that give rise 
to removals of more than 10 days. Still other commenters stated that 
the requirement hampers school officials' ability to manage behavior, 
indicating that LEAs may feel constrained in their options for short-
term removals if removals of fewer than 10 days and removals of 10 days 
or more are treated in the same way in the significant 
disproportionality calculation. In addition, these commenters stated 
that, by not requiring the review of short-term removals, the 
Department would enable States to focus more on the disproportionate 
results for schools placing children in disciplinary settings more than 
10 days, which constitutes a change of placement.
    Some commenters recommended removing the requirement for 
calculating total disciplinary removals under proposed Sec.  
300.647(b)(4)(viii) so as not to double count removals. The commenter 
also stated that it is unfair to treat LEAs that have a few short-term 
suspensions where behaviors are resolved through changes in IEPs in the

[[Page 92418]]

same way as LEAs that have repeated removals of more than 10 days and 
make no changes in IEPs or services for the children involved.
    One commenter suggested that, to reduce confusion, the Department 
should rewrite proposed Sec.  300.647(b)(4) to separate disciplinary 
removals from educational placements and place them under a heading of 
discipline. The commenter stated that data must be collected on 
exclusionary removals of all students with disabilities, regardless of 
the restrictiveness of the setting in which they are served.
    One commenter expressed concern that, by including the entire range 
of disciplinary options in the required risk ratio calculations--from 
alternative education settings to removals by a hearing officer--the 
Department will force schools to constantly watch their data for quota 
targets for each type of discipline because there are no acceptable 
options not subject to the test for significant disproportionality.
    Finally, one commenter requested that only discretionary discipline 
actions be monitored for significant disproportionality.
    Discussion: The Department appreciates all of these comments. We 
disagree, however, with several and believe that many of these comments 
misstate either the discipline requirements or the requirements in 
these regulations. First, it is not clear to the Department that 
determining whether significant disproportionality exists for 
suspensions of any length in any way burdens the overall ability of 
LEAs or schools to manage behavior. Further, Sec.  300.646(c) is 
intended, in part, to identify systemic issues in discipline practices, 
whether discretionary or not, in order to correct them and improve the 
ability of schools to manage behavior overall. Examining LEAs for 
significant disproportionality in discipline gives State and local 
school officials the opportunity to see where policies, procedures and 
practices should be changed--to determine, for example, whether schools 
might do more to manage behavior through IEPs, services, and supports 
which could be used to address or reduce both short-term and long-term 
suspensions. We especially note that under IDEA section 615(k) and the 
current regulations at Sec. Sec.  300.530 and 300.531, there is 
significant involvement by the IEP Team members in making a range of 
decisions related to discipline including manifestation determinations 
and interim alternative settings for services. Likewise, in 2016, the 
Department released guidance to clarify that, while IDEA section 
615(k)(1)(B) (20 U.S.C. 1415(k)(1)(B)) authorizes school personnel to 
remove from their current placement children who violate a code of 
student conduct, that authority in no way negates the obligation of 
schools to provide behavioral supports to children with disabilities as 
needed to ensure FAPE. OSEP Dear Colleague Letter, August 1, 2016.
    We further disagree that collecting discipline data in any way 
leads to the punitive treatment of LEAs. When we published the NPRM, 
States already were required under Sec.  300.646(a) to determine 
whether there was significant disproportionality in disciplinary 
removals of fewer than 10 days, disciplinary removals of more than 10 
days, and total disciplinary removals, and States were already 
obligated to collect and report the data upon which these 
determinations were made. See, OMB Control No. 1875-0240; OSEP 
Memorandum 07-09, April 24, 2007. The requirements under Sec.  
300.647(b), therefore, cannot reasonably be considered excessive.
    Further, while calculating risk ratios for total disciplinary 
removals under Sec.  300.646(b)(4)(vii) does involve using the data 
already included in Sec.  300.646(b)(4)(iii) through (vi), is the 
Department does not view this as double counting but as an amalgamation 
of various types of removals. That is, Sec.  300.646(b)(4)(vii) is 
intended to allow for a separate review of disciplinary removals that 
could include lower-incidence disciplinary actions that may happen too 
rarely to allow for a stable risk ratio calculation. This is similar to 
the inclusion, in Sec.  300.646(b)(3)(i), of categories of disabilities 
set out in Sec.  300.646(b)(3)(ii) and all other categories, including 
low-incidence disabilities.
    With respect to the comment suggesting that the Department 
reorganize Sec.  300.647(b)(4), we believe that the current structure 
is sufficiently clear to avoid confusion. The Department further 
disagrees that the requirements under Sec.  300.647(b)(4) will force 
LEAs to develop quota targets for different types of discipline so as 
to avoid a finding of significant disproportionality. Nothing in these 
regulations is intended to require LEAs to overturn appropriate prior 
decisions or to otherwise affect individual decisions regarding the 
identification of children as children with disabilities, the placement 
of children with disabilities in particular educational environments, 
or the appropriate discipline of children with disabilities.
    Finally, nothing in Sec.  300.647 is intended to unfairly target 
those LEAs that have a few short-term suspensions where behaviors are 
resolved through changes in IEPs by grouping these districts with those 
that have repeated removals of more than 10 days, whether or not the 
IEP Teams make changes in IEPs or services for the children involved. 
It is true that all LEAs are subject to the same State methodology for 
determining significant disproportionality, and every LEA where the 
State determines there is significant disproportionality is subject to 
the same statutory remedies of reserving 15 percent of IDEA Part B 
funds for comprehensive CEIS and reviewing, and revising, if 
appropriate, policies, practices, and procedures related to 
disciplinary removals. One of the purposes of the analyses, however, is 
to identify and address significant disproportionality that is 
indicative of systemic or otherwise persistent underlying problems, 
which may not be revealed when there are too few short-term or long-
term suspensions, whether or not behaviors are proactively resolved 
through changes in IEPs.
    Changes: None.
    Comments: One commenter expressed a concern regarding the 
completeness of IDEA section 618 data with respect to the disciplinary 
removals of children ages three through five. The commenter stated that 
the field of early childhood often does not use the terms suspension or 
expulsion to describe a disciplinary removal.
    Discussion: As we have discussed previously, the Department 
designed Sec.  300.647(b)(4) to mirror IDEA section 618(a) (20 U.S.C. 
1418(a)) provisions with respect to the collection of discipline data 
and the use of these data to review disciplinary removals, as explained 
in our previous guidance. OSEP Memorandum 08-09 (July 28, 2008). This 
guidance clearly specified our interpretation that States' review for 
significant disproportionality with respect to disciplinary removal 
must include children with disabilities, ages three through five.
    That said, the Department generally agrees with the commenter that 
data completeness and quality is important and will consider ways to 
support the work of States to properly collect and report data to the 
Department, especially in situations where a State's terminology 
differs from the Department's data definitions.
    Changes: None.
    Comment: A commenter expressed concerns about the inclusion of 
residential facilities in proposed Sec.  300.647(b)(4), as LEAs are 
generally not the agency responsible for placing children in 
residential facilities. In the

[[Page 92419]]

commenter's State, children are counted in the LEA where the facility 
is located.
    Discussion: When States examine their data to determine whether an 
LEA has significant disproportionality, the Department expects that 
States will use education placement data that is consistent with those 
submitted to the Department for purposes of IDEA section 618(a) and OMB 
Control No. 1875-0240. Final Sec.  300.647(b)(4) is consistent with 
these data collection requirements and with the Department's previous 
guidance regarding States' review of significant disproportionality 
with respect to placement in residential facilities. (See, IDEA section 
618(d); and Questions and Answers on Disproportionality, June 2009, 
Response to Question B-1.) We repeat the Department's position here for 
convenience.
    We interpret IDEA section 618(d) to require States to include, or 
exclude, a child with a disability in its calculation of significant 
disproportionality depending on the agency that placed the child in a 
residential facility and the location of the residential facility. All 
children with disabilities placed in a residential facility in the same 
State by an educational agency must be included in the calculation of 
significant disproportionality. For purposes of calculating significant 
disproportionality, however, a State should assign responsibility for 
counting a child with a disability placed in an out-of-district 
placement to the LEA that is responsible for providing FAPE for the 
child (the ``sending'' LEA) rather than the LEA in which the child has 
been placed (the ``receiving'' LEA). Children with disabilities placed 
in residential facilities or group homes in the same State by a 
noneducational agency (e.g., court systems, Department of Corrections, 
Department of Children, Youth and Families, Social Services, etc.) may 
be excluded from a State's calculation of significant 
disproportionality. Children with disabilities placed in a residential 
facility in a different State by an educational agency should be 
included in a State's calculation of significant disproportionality in 
the LEA responsible for providing FAPE for that child (the sending 
LEA). Children with disabilities placed in a residential facility in a 
different State by a noneducational agency (e.g., court systems, 
Department of Corrections, Department of Children, Youth and Families, 
Social Services, etc.) may be excluded from the calculation of 
significant disproportionality by both the State in which the child 
resides and the State where the residential facility is located.
    Changes: None.
Risk Ratio Thresholds (Sec.  300.647(a)(7); Sec.  300.647(b)(1) and 
(2); Sec.  300.647(b)(6))
    Comments: One commenter questioned whether proposed Sec.  
300.647(b)(1) requires States to identify additional LEAs and noted 
that, expressing concern that the potential costs of the regulations 
outweigh the benefits. The commenter noted that, in the NPRM, the 
Department stated that it would examine each State's risk ratio 
threshold to determine its reasonableness.
    Discussion: The section in the NPRM containing the analysis of 
costs and benefits, and the same section in this document, states that 
the standard methodology, applied nationwide, will likely result in 
more LEAs identified with significant disproportionality. That is 
different, however, than requiring States to identify additional LEAs. 
Under Sec. Sec.  300.646 and 300.647, States are not required to 
identify additional LEAs.
    Similarly, while the Department stated that the risk ratio 
thresholds selected by the States would be subject to its review, the 
Department did not state that this review must strictly adhere to a 
particular outcome that may be overly burdensome to States. In general, 
the Department does not intend to require States to submit their risk 
ratio thresholds for approval prior to the implementation of the 
standard methodology. Rather, after these regulations take effect, the 
Department will monitor States for any use of risk ratio thresholds 
that may be unreasonable and take steps, as needed, to ensure the 
States' compliance with Sec.  300.647(b)(1).
    To ensure that the Department may accurately and uniformly monitor 
all risk ratio thresholds for reasonableness, we have added a 
requirement that each State report to the Department all of its risk 
ratio thresholds and the rationale for each. The Department has not yet 
determined the precise time and manner of these submissions, but it 
will do so through an information collection request. States are not 
obligated to comply with this reporting requirement until the Office of 
Management and Budget approves the Department's information collection 
request.
    Changes: The Department has added Sec.  300.647(b)(7), which 
requires States to report to the Department, at a time and in a manner 
specified by the Secretary, all risk ratio thresholds developed under 
Sec.  300.647(b)(1)(i)(A) and the rationale for each.
    Comments: A number of commenters raised issues with respect to the 
process by which States will develop reasonable risk ratio thresholds. 
Several of these commenters strongly supported the Department's 
proposal to require States to involve their State Advisory Panels in 
setting the thresholds. One of these commenters added that we should 
require States currently using a method similar to the standard 
methodology to review their thresholds with stakeholders prior to 
gaining Department approval. One commenter requested that the 
Department, prior to the issuance of the final regulations, clarify the 
process by which States would assess the reasonableness of their 
proposed risk ratio thresholds.
    Other commenters suggested that the Department require States to 
use a uniform standard-setting process to inform the State Advisory 
Panels in developing risk ratio thresholds. One commenter suggested 
that the Department require States to undertake a standard-setting 
process with stakeholders, including the State Advisory Panels, to 
revisit their existing risk ratio thresholds using the new 
calculations; generate impact data using these thresholds; and then 
apply different thresholds to examine the impact upon disability 
subgroups, placement categories, and impairments. The commenter also 
recommended that States' risk ratio thresholds, as well as their 
business rules for the application of the thresholds, be publicly 
posted. The commenter further suggested that States reexamine risk 
ratio thresholds every three years to study their impact, adjust for 
population changes or new research, and to revise the opportunities for 
stakeholder input. Finally, these commenters urged the Department to 
require States to include epidemiologists on State Advisory Panels.
    Discussion: We agree with commenters that State Advisory Panels 
should play a critical role in the development of States' reasonable 
risk ratio thresholds. Under IDEA section 612(a)(21)(D)(iii) (20 U.S.C. 
1412(a)(21)(D)(iii)), State Advisory Panels have among their duties a 
responsibility to ``advise the State educational agency in developing 
evaluations and reporting on data to the Secretary under section 618.'' 
As the selection of risk ratio thresholds will affect the data States 
will submit to the Department under the IDEA Part B Maintenance of 
Effort (MOE) Reduction and Coordinated Early Intervening Services 
(CEIS) data collection required under IDEA section 618--including the 
LEAs identified with significant

[[Page 92420]]

disproportionality and the category or categories under which the LEA 
was identified (i.e., identification, identification by impairment, 
placement, or discipline)--the State Advisory Panel should have a 
meaningful role in advising the State on methods to use in establishing 
reasonable risk ratio thresholds for determining significant 
disproportionality.
    However, while the Department does not preclude either a State or 
State Advisory Panel from undertaking a standard-setting process and 
evaluating impact data in developing a reasonable risk ratio threshold, 
we do not find it necessary to prescribe the exact steps States must 
take in order to gain input from State Advisory Panels in that process. 
Likewise, at this time, the Department does not intend to mandate a 
specific process by which a State and its State Advisory Panel should 
assess the reasonableness of its proposed threshold, nor do we 
currently find it necessary to require States to reestablish their risk 
ratio thresholds every three years. As a State has the flexibility to 
establish its own reasonable risk ratio threshold, and is required to 
do so with input from its State Advisory Panel, the Department expects 
that either or both entities may, at any time, seek to reexamine 
whether the State's risk ratio threshold continues to be reasonable. 
Absent any indication that this practice would not be effective, the 
Department currently prefers to allow States and State Advisory Panels 
the flexibility to review and revise risk ratio thresholds as necessary 
or appropriate, rather than increase their burden by requiring regular 
reviews or mandating a specific standard-setting process.
    Finally, while epidemiologists may be useful stakeholders for 
States as they create reasonable risk ratio thresholds, we believe that 
States have sufficient expertise to determine the appropriate 
composition of their State Advisory Panels.
    Changes: None.
    Commenter: A few commenters recommended that the Department ensure 
that the regulations outline specific ways that States and LEAs can 
meaningfully include all stakeholders in addressing significant 
disproportionality. The commenters recommended that States be required 
to demonstrate outreach and incorporation of diverse stakeholder input 
and advice in setting thresholds and addressing significant 
disproportionality through: Documentation of outreach to stakeholders 
(including efforts to recruit a diverse State Advisory Panel); posting 
of detailed minutes of State Advisory Panel meetings; transparent 
publication and communication about State efforts to set reasonable 
risk ratio thresholds; demonstration of how stakeholder feedback was 
incorporated in defining final thresholds above which 
disproportionality is significant; demonstration of stakeholder input 
in reviewing and revising State policies, practices, and procedures 
related to the identification or placement of children with 
disabilities in LEAs identified as having significant 
disproportionality; and transparency in noting State efforts and 
progress in remedying significant disproportionality.
    Discussion: We do not believe it necessary to outline in these 
regulations the specific ways that States must document their efforts 
to involve stakeholders in the development of risk ratio thresholds. 
Under IDEA section 612(a)(21)(D)(iii) (20 U.S.C. 1412(a)(21)(D)(iii)), 
State Advisory Panels already have among their duties a responsibility 
to ``advise the State educational agency in developing evaluations and 
reporting on data to the Secretary under section 618.'' Given these and 
other long-standing responsibilities, it is the Department's belief 
that States already have in place processes and procedures to secure 
input from their State Advisory Panels. Further specific requirements 
for stakeholder involvement could add a new data collection or 
reporting burden on States, which we do not believe is necessary. As 
most of the commenters' suggestions would dramatically increase 
paperwork burden for States, and because we believe there are already 
sufficient procedures in place for States to work with their State 
Advisory Panels, the Department declines to include those requirements 
in these regulations.
    As discussed elsewhere in this analysis of comments, we also note 
that public participation in the adoption and amendment of policies and 
procedures needed to comply with IDEA Part B is already addressed by 
IDEA section 612(a)(19) and Sec.  300.165. To the extent that 
commenters sought requirements for public participation requirements 
beyond the ones contained in those provisions, we decline to adopt them 
for the reasons discussed above.
    Changes: None.
    Comments: One commenter expressed concerns that these regulations 
will weaken the role of State Advisory Panels and other stakeholder 
groups in each LEA. Another commenter asked the Department to clarify 
the authority of State Advisory Panels under the proposed regulations.
    Discussion: We believe that these regulations help make more 
explicit and strengthen the role of State Advisory Panels and other 
stakeholders in how States identify significant disproportionality. 
Section 300.647(b)(1)(ii)(A) requires consultation with stakeholders, 
including the State Advisory Panels, in developing the State's risk 
ratio thresholds, minimum cell sizes, minimum n-sizes, and standards 
for determining reasonable progress under Sec.  300.647(d)(2). As 
discussed elsewhere in this analysis of comments, we also note that 
public participation in the adoption and amendment of policies and 
procedures needed to comply with IDEA Part B is addressed by IDEA 
section 612(a)(19) and Sec.  300.165 would apply, as appropriate. This 
helps to ensure greater public awareness, transparency, and input into 
how States establish these values and implement these regulations.
    Further, in the future, the Department anticipates that all risk 
ratios and alternative risk ratios will be made public but has not yet 
determined the precise time and manner for this to occur. We anticipate 
doing so through an information collection request, through the 
Department's own publication of these data, or some combination of the 
two. This will help reinforce the review and revision of risk ratio 
thresholds, cell sizes, and n-sizes as an iterative public process 
within each State.
    Changes: None.
    Comments: A few commenters asserted that, as State Advisory Panels 
have limited family participation, Parent Training and Information 
Centers and Community Parent Resource Centers should be required 
participants in States' implementation of the standard methodology.
    Discussion: The Department agrees with commenters about the 
importance of the meaningful involvement of families in the development 
of reasonable risk ratio thresholds. We note that State Advisory Panels 
are composed of individuals ``involved in, or concerned with, the 
education of children with disabilities,'' and must include ``parents 
of children with disabilities.'' 20 U.S.C. 1412(a)(21)(B). Section 
300.647(b)(1)(i) requires that States involve stakeholders, including 
State Advisory Panels, in the development of each State's risk ratio 
thresholds.
    This advisory role is within the scope of the statutory 
responsibility of State Advisory Panels to advise States in developing 
evaluations and reporting on data to the Department under IDEA

[[Page 92421]]

section 618. IDEA section 612(a)(21)(D)(iii); 20 U.S.C. 
1412(a)(21)(D)(iii). While IDEA does not include a similar statutory 
requirement for either Parent Training and Information Centers or 
Community Parent Resource Centers, nothing in these regulations that 
would prevent a State, or other members of the State Advisory Panel, 
from consulting with those entities in the development of risk ratio 
thresholds. To the extent that States believe that their input would be 
valuable, we encourage States to include Parent Training and 
Information Centers and Community Parent Resource Centers in their 
deliberations regarding the standard methodology.
    Changes: None.
    Comments: A number of commenters responded to Directed Question #9, 
which inquired, in part, whether there are any circumstances under 
which the use of different risk ratio thresholds for different 
categories of analysis could result in an unlawful disparate impact on 
racial and ethnic groups.
    A few commenters expressed their general support for allowing 
States to use different risk ratio thresholds for different categories 
of analysis. Of these, one commenter specifically supported allowing 
three different risk ratio thresholds--one for identification, one for 
placement, and one for disciplinary removals. Other commenters noted 
that, given the varying incidence rates and resulting cell sizes across 
disability categories, placements, and discipline rates, different risk 
ratio thresholds would be important in helping to ensure that any 
identified disproportionality is indeed significant. A last commenter 
noted that States should be allowed to consider setting different risk 
ratio thresholds for different categories of analysis (e.g., analysis 
of identification, placement, and discipline) if those thresholds are 
consistent with advice from stakeholders, including State Advisory 
Panels.
    Some commenters indicated only partial support for using different 
risk ratio thresholds for different categories of analysis. Of these, 
one commenter supported the use of different thresholds for the 
analyses regarding disciplinary removals, as well as different 
thresholds for placement categories, but suggested that all thresholds 
used to analyze impairments must be consistent. Other commenters agreed 
that thresholds used to determine significant disproportionality in 
identification should not change for each impairment.
    Several commenters expressed concerns about, or opposed the use of, 
different risk ratio thresholds for different categories of analysis. 
Of these, some suggested that different risk ratio thresholds would 
impede transparency for parents, educators, and the public at large; 
impede Federal efforts to monitor States; and make it difficult to 
understand why some LEAs would be identified as having significant 
disproportionality and not others. Two commenters suggested that the 
language allowing different thresholds for different categories of 
analysis appeared unconstitutional.
    Several commenters cautioned that States should not be permitted to 
set higher risk ratios for the categories where racial 
disproportionality is most likely to negatively impact historically 
disadvantaged groups of children. Some of these commenters suggested 
that this flexibility would allow States to avoid identifying LEAs 
where disparities have historically been most problematic. These 
commenters noted that racial disparities in special education--notably, 
identification of intellectual disability and emotional disturbance, 
and placement outside the regular classroom--were the result of local 
efforts to use disability identification and placement to resist 
desegregation requirements and deny children of color access to the 
regular classroom and curriculum.
    One commenter noted that the LEAs in one State have historically 
(1) only over-identified Black children in intellectual disability; (2) 
mostly over-identified Hispanic children in speech and language 
impairment; and (3) over-identified Black and Native American children 
in emotional disturbance and specific learning disabilities. This 
commenter and another commenter stated that when specific races are 
mostly or always over-identified in specific disability categories, 
then the use of different risk ratio thresholds for different 
categories of analysis may result in unlawful disparate impact on 
racial and ethnic groups.
    One commenter suggested that the use of different thresholds for 
different disability categories might allow States to conceal 
disproportionality in disability categories that are commonly known to 
be significantly disproportionate.
    Discussion: The Department agrees with commenters that States may 
need different risk ratio thresholds in order to reasonably identify 
significant disproportionality for categories with different degrees of 
incidence rates, and, therefore, different degrees of disparity. The 
Department sees no specific legal obstacle to setting different 
thresholds for different categories of analysis, though we recognize 
that it is possible that any race-neutral threshold, just like any 
race-neutral policy, could have a disparate impact. In addition, as we 
state later in this section, setting different risk ratio thresholds 
for different racial or ethnic groups within the same category of 
analysis is unlikely to withstand constitutional scrutiny.
    Further, under Sec.  300.647(b)(1), the Department intends for 
States to have the flexibility to set reasonable risk ratio thresholds 
for each impairment and for various placements and disciplinary 
removals. With this provision, States have the flexibility to set up to 
15 different risk ratio thresholds. While the Department understands 
commenters' concerns that States could set race-neutral risk ratio 
thresholds that may have a disparate impact on a particular race or 
ethnicity based on historical numbers, in the Department's view, a 
requirement to apply uniform race-neutral risk ratio thresholds across 
all impairments would be unlikely to address this concern. We believe 
that States will have greater flexibility to establish reasonable risk 
ratio thresholds that do not have a disparate impact based on race or 
ethnicity if allowed to set different thresholds for different 
disability categories. As it works with States as they determine their 
risk ratio thresholds, the Department will decide whether additional 
guidance in analyzing potential disparate impact in setting reasonable 
risk ratio thresholds is necessary. For general guidance about the 
application of the legal theory of disparate impact in other contexts, 
please see the joint Department of Education and Department of Justice 
Dear Colleague Letter on the Nondiscriminatory Administration of School 
Discipline at http://www2.ed.gov/about/offices/list/ocr/letters/colleague-201401-title-vi.pdf and the Department of Education Dear 
Colleague Letter on Resource Comparability at http://www2.ed.gov/about/offices/list/ocr/letters/colleague-resourcecomp-201410.pdf.
    While we acknowledge that allowing States to set multiple risk 
ratio thresholds may mean some increase in the complexity of the 
standard approach, we do not believe that permitting multiple risk 
ratio thresholds substantively impedes the goals of improved 
transparency or comparability in State implementation of the standard 
methodology. For any one category of analysis--emotional disturbance, 
for example--it will still be possible to compare the reasonable risk 
ratio thresholds each State uses to identify significant 
disproportionality. Meanwhile, we believe that allowing

[[Page 92422]]

States this flexibility actually increases the likelihood that they may 
take action to address racial and ethnic disparities in each of the 
categories of analysis, rather than limit their efforts to only those 
categories with the greatest disparities.
    The involvement and impact of State Advisory Panels in the State's 
setting of risk ratio thresholds is discussed elsewhere in this 
analysis of comments.
    Changes: None.
    Comment: Directed Question #9 also inquired whether there are any 
circumstances under which the use of different risk ratio thresholds 
for different racial and ethnic groups (within the same category of 
analysis) could be appropriate and meet constitutional scrutiny. A 
number of commenters opposed the use of different risk ratio thresholds 
for different racial or ethnic groups of children. One commenter stated 
that different thresholds for different racial or ethnic groups would 
not be useful or fair. Two commenters believed that allowing different 
thresholds for different racial or ethnic groups would make 
transparency difficult and make data analysis much more complex. 
Another commenter noted that, with different risk ratio thresholds, one 
could not make comparisons across racial or ethnic groups. One 
commenter noted that these thresholds would not likely meet 
constitutional scrutiny.
    Discussion: The Department agrees with the concerns raised by the 
commenters. We believe that the use of different risk ratio thresholds, 
by race or ethnicity within the same category of analysis, would be 
unlikely to meet constitutional scrutiny because it is difficult to 
articulate a compelling justification for analyzing certain groups 
differently based on their race or ethnicity. For this reason, the 
Department will not change Sec.  300.647(b)(2), which clarifies that 
the risk ratio thresholds developed for each category of analysis 
(under Sec.  300.647(b)(1)) must be the same for each racial and ethnic 
group.
    Changes: None.
    Commenters: Several commenters suggested that the Department 
establish a cap above which States may not establish a risk ratio 
threshold, or otherwise limit States to a range of risk ratio 
thresholds.
    A few commenters suggested 3.0 as a cap. One of the commenters 
noted that, in the years between 2006 and 2009, six States increased 
their risk ratio thresholds and asked that the Department establish an 
absolute maximum risk ratio threshold of 3.0 (based, according to the 
commenter, on two median absolute deviations above the national median 
of all LEA risk ratios). Another commenter suggested a risk ratio 
threshold cap of 2.0. Still another commenter noted that using risk 
ratio thresholds over 2.0 may well mask significant disproportionality 
in identification, especially for impairments where children of color 
with disabilities have historically been over-identified, such as 
intellectual disability and emotional disturbance.
    Several commenters suggested that the Department recommend a range 
within which States may choose to set their risk ratio threshold. These 
commenters recommended a range between 1.5 and 3.0, with some 
flexibility to allow States to use higher thresholds. The commenters 
suggested that, so long as the State has identified some LEAs in the 
prior two years and is able to provide evidence that it will identify 
some LEAs using a threshold that is higher than the recommended range, 
the State be allowed to set risk ratio thresholds that exceed the 
established range. Two commenters believed that no State with a risk 
ratio exceeding a level of two times discrepant or above the national 
average should be allowed to identify zero LEAs as having significant 
disproportionality.
    Discussion: The Department considered and rejected the possibility 
of establishing an absolute cap on the States' choice of risk ratio 
thresholds and limiting States' choice to a range of thresholds. At 
this time, the Department has not identified a sufficient, broadly 
applicable justification on which to establish these limitations at any 
specific threshold. In lieu of a mandate that all States use the same 
risk ratio thresholds, or set thresholds within limits established by 
the Department, Sec.  300.647(b)(1) requires States to develop risk 
ratio thresholds that are reasonable and to consider the advice of 
stakeholders in establishing these thresholds. Moving forward, we will 
review State policies and practices to determine whether there emerges 
a standard practice or set of practices that may provide sufficient 
rationale for those limitations.
    As mentioned earlier in this section, we have added a requirement 
that States submit to the Department the risk ratio thresholds they set 
and the rationales for setting them. Though the principal purpose of 
the requirement is to enable the Department's uniform monitoring of 
risk ratio thresholds, submitting risk ratio thresholds and their 
underlying rationales will inform the Department's review of the 
question of the need for a nationwide risk ratio threshold.
    Changes: As mentioned above, the Department has added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all risk ratio 
thresholds, the standard for measuring progress under Sec.  
300.647(b)(1)(i)(A)-(D) and the rationale for each.
    Comment: A number of commenters requested additional clarification 
regarding how the Department will determine whether States' risk ratio 
thresholds are reasonable. Of these, some commenters' requests were 
general in nature. One commenter noted that, theoretically, the 
provision could allow States to continue to set unreasonably high 
standards that will continue to result in the identification of few or 
no LEAs. Another commenter suggested that the Department presume risk 
ratio thresholds for certain categories of analysis to be 
unreasonable--if there has been consistent overrepresentation in a 
category--and require States to provide a reasonable justification. A 
few commenters noted that, if States are given too much flexibility to 
set their risk ratio thresholds, then the requirement that they collect 
and analyze data to identify significant disproportionality becomes 
less meaningful or results in little meaningful information. Another 
commenter expressed concern that a standard of reasonableness, without 
further qualification in the regulations, might be result in a 
different determination of reasonableness from State to State, and from 
year to year.
    Other commenters recommended that the Department use specific 
definitions of reasonableness. One commenter expressed concern that the 
Department's proposal offers no national standard, criteria, 
benchmarks, or goals and targets on which to gauge State compliance 
with the proposed regulations and requested that the Department 
withdraw the regulations until it can clearly specify its standard of 
``reasonableness.'' One commenter requested that the Department notify 
all States of any Federal enforcement action taken to ensure the 
reasonableness of a State's risk ratio threshold.
    Other commenters recommended that the Department make clear that 
States that did not identify a single LEA in any area in the past, or 
that identified very few LEAs because of an unreasonably high 
threshold, will be unlikely to have their threshold deemed 
``reasonable'' if it exceeds a set range, or remains unchanged (even if 
falling within a range recommended by the Department).

[[Page 92423]]

    Some commenters suggested that the Department include factors 
unique to each State when considering the reasonableness a risk ratio 
threshold. One commenter suggested that the Department consider both 
the racial and ethnic composition of States and LEAs and the presence 
of factors correlated with disability when evaluating risk ratio 
thresholds. Other commenters suggested that the Department provide 
States the flexibility to establish risk ratio thresholds that reflect 
the composition of States' and LEAs' unique demography.
    One commenter suggested that, so long as the State's proposed risk 
ratio threshold represents a decision that is unbiased, data-driven, 
and responsive to the particular needs of the State, it should be 
deemed reasonable when analyzed by the Department.
    Discussion: We appreciate all of the comments regarding the 
Department's review of a State's risk ratio thresholds. It is our 
intention to clarify in forthcoming guidance the specific processes the 
Department will use to review for reasonableness a State's risk ratio 
thresholds, including information on how, and under what circumstances, 
the Department will undertake this review. In the interim, however, 
States may choose to consider the four conditions that the Department 
included in the NPRM in their development of risk ratio thresholds.
    First, if the selected threshold leads to a reduction in 
disparities on the basis of race or ethnicity in the State or if it 
results in identification of LEAs in greatest need of intervention, 
then the Department may be more likely to determine that a State has 
selected a reasonable threshold. Second, the Department may be more 
likely to determine that a State has selected an unreasonable risk 
ratio threshold if the State avoids identifying any LEAs (or 
significantly limits the identification of LEAs) with significant 
disproportionality in order to, for example, preserve State or LEA 
capacity that would otherwise be used for a review of policies, 
practices, and procedures and reserving IDEA Part B funds for 
comprehensive CEIS, or to protect LEAs from needing to implement 
comprehensive CEIS. Third, the Department noted that establishing a 
risk ratio threshold solely on an objective calculation does not 
guarantee that the Department would consider the resulting threshold to 
be reasonable when examined in light of racial and ethnic disparities 
taking place at the LEA level. As States have access to population 
data, there is no need to use statistical methods to make inferences 
about the population data using sample data. Fourth, a State's 
selection of a risk ratio threshold that results in no determination of 
significant disproportionality may nonetheless be reasonable, 
particularly if that State has little or no overrepresentation on the 
basis of race or ethnicity.
    Given this, Sec.  300.647(b)(1)(ii), and Sec.  300.647(b)(7), under 
which any State's selection of risk ratio threshold is submitted to the 
Department and subject to its monitoring and enforcement for 
reasonableness, we disagree with those commenters concerned that 
allowing States to set their own reasonable risk ratio thresholds will 
allow them to set inappropriately high thresholds or that this 
flexibility will undermine the value of the required data collection 
and analysis. While States have the flexibility to set reasonable risk 
ratio thresholds and will not be required to seek Departmental approval 
of risk ratio thresholds prior to the implementation of the standard 
methodology, the Department intends to review risk ratio thresholds, 
and, in cases where a risk ratio threshold may not appear reasonable on 
its face, request that a State justify how the risk ratio threshold is 
reasonable. If, upon review of a State's explanation, the Department 
determines that the threshold is not reasonable, the Department may 
notify the State that it is not in compliance with the requirement in 
these regulations to set a reasonable risk ratio threshold. The 
Department may then take appropriate enforcement action authorized by 
law, ranging from requiring a corrective action plan, to imposing 
special conditions, to designating the State as high-risk status, to 
withholding a portion of the State's IDEA Part B funds. While we 
currently do not intend to issue a separate notification to all States 
in each instance in which the Department takes enforcement action with 
respect to any one State, we note that many of the aforementioned 
examples of possible enforcement actions result in publicly available 
information.
    Like the commenters, we believe it possible that States currently 
not identifying LEAs with significant disproportionality are using risk 
ratio thresholds that are not reasonable (for those States that are 
using the risk ratio as part of their current methodology for 
determining significant disproportionality). However, while we 
currently believe it would be unlikely for any State to have no 
significant disproportionality in any category of analysis, for 
purposes of these regulations, we do not find it appropriate to 
automatically consider a State's selection of risk ratio threshold 
unreasonable solely because no LEAs are identified. Theoretically, if 
risk ratio thresholds were always unreasonable simply because no LEAs 
were identified, it would be impossible for a State to resolve its 
significant disproportionality. In this circumstance, significant 
disproportionality would become an ever-moving target, where States 
would be forced to reduce thresholds again and again, potentially to a 
degree where disproportionality could no longer be considered 
significant. That is, the Department does not believe that any and all 
levels of disparity are significant.
    The Department also agrees with commenters that a State's unique 
characteristics can be helpful for the State and its stakeholders to 
consider when developing risk ratio thresholds. We believe it is 
reasonable, for example, for States to consider the racial and ethnic 
composition of the State and LEAs, unique enrollment demographics, as 
well as factors correlated with disability, when developing their risk 
ratio thresholds. These considerations should not, however, serve as 
bases for setting risk ratio thresholds that could allow LEAs with 
significant disproportionality not to be identified. In the end, the 
Department will assess the reasonableness of a given threshold by 
examining its capability to identify and address disproportionality 
that is significant and by taking into consideration all facts that 
bear upon the choice of a risk ratio threshold. The Department will, in 
short, determine reasonableness in the totality of the circumstances.
    Finally, the Department agrees with commenters that unbiased, data-
driven decision-making, tailored to the needs of a State, would more 
likely lead to the creation of a reasonable risk ratio threshold. 
However, we remind these commenters that, in setting risk ratio 
thresholds, States should do so with the intent of helping LEAs to 
identify, investigate, and address significant disproportionality.
    Changes: None.
    Comment: Several commenters requested the Department create a safe 
harbor for risk ratio thresholds that States could voluntarily adopt 
with the knowledge that it is reasonable under these regulations. Of 
these, one commenter suggested that the safe harbor be set in advance 
of the effective date of the regulations in order to ensure that the 
thresholds set by States do not result in an unlawful disparate impact 
on racial and ethnic groups and to minimize costs to States to correct 
risk ratio thresholds found to be

[[Page 92424]]

unreasonable. Another commenter recommended that the Department 
consider risk ratio thresholds within a range of 2.5 to 3.5 as a safe 
harbor. One commenter urged the Department to monitor whether States 
using thresholds higher than 2.0 are indeed capturing instances of 
significant disproportionality where they occur. Another commenter 
recommended that the final regulations include additional clarity 
regarding the criteria the Department will use to determine if a 
State's established threshold is reasonable, especially if risk ratio 
threshold is greater than those published in the Racial and Ethnic 
Disparities in Special Education: A Multi-Year Disproportionality 
Analysis by State, Analysis Category, and Race and Ethnicity.
    Discussion: We appreciate the comments, in response to Directed 
Question #5, about a possible ``safe harbor'' that would allow States 
to set risk ratio thresholds that they know would be considered 
reasonable by the Department. The Department does not believe, however, 
that it is in a position to mandate a particular risk ratio threshold. 
We have yet to justify the establishment of specific requirements 
regarding thresholds, including ranges, ``safe harbors,'' or other 
limitations. Moving forward, however, we intend to review State 
policies and practices to determine whether there emerges a standard 
practice or set of practices that may provide sufficient rationale for 
a particular threshold, a range of thresholds, or a cutoff under which 
the Department would consider a threshold reasonable.
    We note that the Department's published set of example risk ratio 
thresholds--in Racial and Ethnic Disparities in Special Education: A 
Multi-Year Disproportionality Analysis by State, Analysis Category, and 
Race/Ethnicity--were intended to provide the public with an 
illustration of racial and ethnic disparities in special education, and 
provide examples of what reasonable risk ratio threshold might look 
like. It was not the intent of the Department, in publishing those 
examples, to offer these thresholds to States as a ``safe harbor,'' to 
suggest that higher thresholds could not be reasonable, or to otherwise 
restrict States' to those example thresholds. Further, we note the risk 
ratio thresholds were calculated with consideration for the standard 
methodology as proposed in the NPRM. Now that the Department has 
amended portions of the standard methodology--including the provisions 
regarding population requirements--the risk ratio thresholds published 
in the report no longer function as appropriate examples.
    Changes: None.
    Comments: One commenter suggested that the median absolute 
deviation (MAD) may be inappropriate as a method to compute risk ratio 
thresholds. The commenter requested that the Department explain and 
justify, prior to the issuance of the final regulations, the use of 
risk ratio thresholds that exceed two MADs above the national median to 
determine significant disproportionality. The commenter also requested 
more detailed guidance to assist States in running this calculation on 
their own.
    Discussion: The Department did not intend to mandate that States 
use median absolute deviations as a method to compute risk ratio 
thresholds; rather, the approach was intended to illustrate one way to 
develop risk ratio thresholds that might be considered reasonable given 
national IDEA section 618 data. While acknowledging that the NPRM could 
have provided greater clarity on this point, it was not the 
Department's prime objective to suggest that States use median absolute 
deviations on their own to calculate risk ratio thresholds. This is 
especially true given that States, in examining only their own data, 
would have fewer LEAs, and, therefore, fewer risk ratio calculations 
from which to calculate the MADs, which could lead to significantly 
higher, and potentially unreasonable, risk ratio thresholds.
    The Department intends to provide guidance to States regarding how 
to work with stakeholders, and review data, to set reasonable risk 
ratio thresholds.
    Changes: None.
    Comment: A number of commenters responded to Directed Question #5, 
which inquired whether the Department should, at a future date, mandate 
national maximum risk ratio thresholds. Some commenters opposed this 
possibility outright. One commenter noted that a single national 
standard may not be feasible across the wide variety of regional, 
State, and local differences.
    Commenters strongly supported allowing States to determine, in 
conjunction with stakeholders, how their own thresholds will identify 
disproportionality that is significant. Other commenters supported 
leaving States flexibility to set their own thresholds, so long as the 
Department is able to ensure that those thresholds are reasonable. Some 
commenters noted that, given the statutory and fiscal consequences 
associated with significant disproportionality, States need to be able 
to defend their selected risk ratio thresholds to the States' 
constituents, which include legislators, State Education Departments, 
and LEAs. One commenter noted that each State is unique, and has its 
own plans with respect to IDEA and other Federal education programs to 
address those needs. The commenter concluded that requiring the same 
risk ratio thresholds in every State would fail to recognize each 
State's uniqueness. A number of commenters expressed support for 
permitting States to retain the discretion to determine the risk ratio 
threshold above which disproportionality is significant, so long as 
that threshold is reasonable and based on advice from their 
stakeholders, including their State Advisory Panels. One commenter 
stated that, if there is to be a mandated Federal requirement for 
consistent calculation of significant disproportionality across States 
using a risk ratio formula, States must be granted flexibility in 
applying those calculations and setting thresholds without onerous 
Federal involvement.
    On the other hand, a few commenters strongly believed that the 
Department should move toward mandating that all States use the same 
risk ratio threshold. One commenter generally noted that a clear 
picture of national disparities was precluded due to different States 
using different thresholds for significant disproportionality.
    Discussion: The Department recognizes the potential advantages and 
disadvantages of setting national risk ratio thresholds, and we thank 
the commenters for their thoughtful input on this important issue. At 
this time, the Department does not believe it has identified a 
sufficient justification for mandating any particular national risk 
ratio thresholds. However, moving forward, we will review State 
policies and practices to determine whether there emerges standard 
industry practice that may provide sufficient rationale at a later date 
for such a requirement.
    Changes: None.
Minimum Cell Sizes and Minimum N-Sizes (Sec.  300.647(a)(3) and (4); 
Sec.  300.647(b)(1)(i)(B) and (C); Sec.  300.647(b)(3) and (4); Sec.  
300.647(c)(1))
    Comments: This ``comment/response/changes'' section is not intended 
to respond to specific comments, but rather to provide a general 
introduction to minimum cell and n-sizes, and lay the foundation for 
responding to specific comments in the following sections.

[[Page 92425]]

    Discussion: Risk ratios may produce unreliable results when the 
calculation is done with small numbers of children in a particular 
category of analysis, and this could result in LEAs being 
inappropriately identified with significant disproportionality. The 
most common method States use to address this problem is to identify a 
minimum number of children who must be enrolled in an LEA within a 
specific racial or ethnic group or experiencing a particular outcome in 
order for the LEA to be analyzed for significant disproportionality. 
That is, risk ratios are not calculated for a specific racial or ethnic 
group within a specific category of analysis if LEAs do not have or 
enroll a minimum number of children from that racial or ethnic group 
within that category of analysis or a minimum number of children not in 
that racial or ethnic group experiencing that particular outcome.
    In this regulation, we refer to these minimum population 
requirements as minimum cell sizes and minimum n-sizes. (As noted 
elsewhere in this document, the term ``minimum n-size'' in this 
document aligns with the use of the term ``minimum cell size'' in the 
NPRM and the term ``minimum cell size'' herein refers to the number of 
children in a particular racial or ethnic group or groups experiencing 
a particular outcome.) As the minimum cell size and minimum n-size 
increase, the relative stability of the calculated risk ratios tends to 
increase. However, as these minimum population requirements increase, 
the number of districts that are excluded from the analysis in one or 
more specific categories of analysis also increases. The Department 
believes that States can balance the risks of inappropriately 
identifying districts because of small minimum cell sizes or n-sizes 
against the risk of inappropriately excluding large numbers of 
districts from analysis because of particularly large minimum cell 
sizes or n-sizes.
    In the NPRM, we proposed that States would be required to use a 
minimum n-size (the number of children in a particular racial or ethnic 
group enrolled in an LEA) of not more than 10 to determine significant 
disproportionality. We received numerous comments about the importance 
of allowing States to establish an additional minimum cell size 
requirement (a minimum number of children within a race or ethnicity 
experiencing a particular outcome in an LEA). Those comments are set 
out and discussed in greater detail elsewhere in this section. Upon 
reflection, we agree with the commenters, and thus in the final 
regulations, we will require States to set minimum n-sizes and cell 
sizes.
    Additionally, as discussed elsewhere in this section, the proposed 
requirement of minimum n-size of 10 was questioned by a number of 
commenters. Following publication of the NPRM, we became aware of 
significant vulnerabilities in applying the analysis utilized in the 
primary article on which we relied to support the n-size requirements 
in the NPRM to the standard methodology. Therefore, in these final 
regulations, we do not include an n-size of 10 or less, but rather 
specify that the n- and cell sizes States set must be reasonable. We 
also establish in Sec.  300.647(b)(1)(iv)(A) and (B), a rebuttable 
presumption that a minimum cell size of no greater than 10 and n-size 
of no greater than 30 are reasonable. A rebuttable presumption, in this 
context, means that, in reviewing minimum cell sizes and n-sizes 
established by States for reasonableness, and absent additional 
information to the contrary, the Department would consider a State's 
use of 10 or less for cell size and 30 or less for n-size to be 
reasonable.
    A Department review of data submitted through the IDEA State 
Supplemental Survey for school year 2013-14 found that States that used 
risk ratios in their determinations of significant disproportionality 
tended to set their cell size or n-size requirements at 30 or less. 
Based on these data, the Department determined that cell sizes of 10 
and n-sizes of 30 would allow the majority of States currently using 
risk ratios to retain their already established population 
requirements. We note that, to the extent States publicly report their 
calculations or share data with stakeholders, the cell size of 10 is a 
recognized standard in data suppression to protect privacy. We also 
note that reasonable n-sizes and cell sizes could be less than 10 and 
30 if smaller numbers are needed to maximize the number of LEAs 
examined for significant disproportionality. This is particularly 
relevant in categories of analysis where LEAs have small numbers, such 
as discipline. States, in making these determinations in consultation 
with their stakeholders, including State Advisory Panels, must 
carefully balance inclusion of LEAs and volatility.
    Changes: Changes made in response to this issue are discussed in 
more depth throughout this section.
    Comment: One commenter stated that, in the description of States' 
current population requirements in the NPRM, it was not clear whether 
the requirements described by the Department were minimum n-sizes or 
minimum cell sizes. The commenter further asserted that, in discussions 
with States, it appeared that many States are using a minimum cell 
size, and not a minimum n-size, as was proposed in the NPRM. One 
commenter expressed confusion as to whether the Department intended to 
allow States to set a minimum cell size of up to 10 children, or a 
minimum n-size of up to 10 children, or both.
    Discussion: The Department intended with proposed Sec.  
300.647(b)(3) and (4) to limit States' selection of minimum n-size to a 
figure no larger than 10. The NPRM included no provisions allowing 
States to set a minimum cell size. However, as we note earlier in this 
section, we agree with the commenters that States should be allowed to 
use a minimum cell size, in addition to a minimum n-size, in order to 
prevent inappropriate determinations of significant disproportionality.
    To ensure that these provisions are clear, we have also included in 
the notice a definition of minimum n-size and a definition of minimum 
cell size.
    Changes: We have revised Sec.  300.647(a) to include a definition 
of minimum n-size and a definition of minimum cell size.
    Comment: A few commenters agreed that, in combination with proposed 
Sec.  300.647(c)(1) allowing States to determine significant 
disproportionality by looking across three consecutive years of data, 
it is appropriate to have a minimum n-size in the calculation of 
significant disproportionality under proposed Sec.  300.647(b). These 
commenters stated that this will mean that the greatest number of LEAs 
will be able to examine their practices and to use funds to remediate 
the concerns they find.
    Discussion: With Sec.  300.647, it is the Department's goal to 
support State efforts to appropriately identify LEAs with significant 
disproportionality. We agree with the commenters' suggestion that, when 
LEAs are appropriately identified, they will benefit from the review 
(and, if necessary, revision) of policies, practices, and procedures, 
and from comprehensive CEIS. We also agree with the commenters that a 
reasonable minimum n-size, as well as the flexibility to use up to 
three consecutive years of data, will help States to both reduce and 
account for risk ratio volatility before making a determination of 
significant disproportionality. In this way, States can focus their 
efforts on LEAs with consistently high risk ratios, which may indicate 
systemic racial and ethnic disparities in need of intervention.

[[Page 92426]]

    Changes: None.
    Comment: A large number of commenters expressed their general 
support for efforts to standardize minimum n-sizes. Several commenters 
expressed support for retaining proposed Sec.  300.647(b)(3) and (4), 
with a minimum n-size of 10, and expressed concerns about using a 
higher figure that would exclude racial and ethnic groups from a review 
for significant disproportionality. One commenter noted that States' 
selection of high minimum n-sizes for each racial and ethnic group, 
such as 25 or higher, has likely been one method of reducing the 
identification of significant disproportionality. The commenter 
expressed concerns that large n-sizes would weight monitoring towards 
large urban LEAs and inappropriately exclude smaller LEAs.
    Discussion: The Department agrees with commenters that, as minimum 
n-sizes increase, fewer LEAs and fewer subgroups within LEAs are 
examined for significant disproportionality using the standard 
methodology. N-sizes that are too high increase the likelihood that 
States may fail to analyze and identify LEAs with highly 
disproportionate rates of identification, placement in particular 
settings, or discipline among racial and ethnic groups as having 
significant disproportionality. In such instances, States and LEAs may 
miss important opportunities to review and, if necessary, revise 
policies, practices, and procedures to ensure that all children are 
provided with the supports that they need to be successful.
    The Department initially proposed in Sec.  300.647(b)(3) and (4) to 
limit States' selection of minimum n-size (referred to as cell size in 
the NPRM) to a figure no larger than 10, based on an understanding that 
this figure represented an appropriate balance between two competing 
interests: the need to examine as many LEAs (and as many racial and 
ethnic groups within LEAs) as possible for significant 
disproportionality and the need to prevent inappropriate identification 
of LEAs due to risk ratio volatility. Smaller minimum n-sizes will 
include a larger number of LEAs in a State's annual analysis for 
significant disproportionality. However, smaller minimum n-sizes 
increase the volatility of the risk ratio, i.e. small changes in data 
from year to year could cause large changes in the risk ratio that do 
not reflect any other underlying change.
    Our use of the proposed requirement for the minimum n-size of 10 
was questioned by a number of commenters. Following publication of the 
NPRM, we became aware of significant vulnerabilities in the application 
of the analysis behind the primary article on which we relied to 
support that proposal. Therefore, in these final regulations, we will 
not include the proposed minimum n-size requirement of 10, but rather 
specify that States must set, with input from stakeholders, a 
reasonable minimum n-size and cell size.
    That said, Sec.  300.647(b)(1)(iv)(A) and (B) establish a 
rebuttable presumption that a minimum cell size of no greater than 10 
and a minimum n-size of no greater than 30 are reasonable. The 
Department's review of data submitted through the IDEA State 
Supplemental Survey for school year 2013-14 found that States that used 
risk ratios in their determinations of significant disproportionality 
tended to set their cell size or n-size requirements at 30 or less. 
Based on these data, the Department determined that cell sizes of up to 
10 and n-sizes of up to 30 would allow the majority of States currently 
using risk ratios to retain their already established population 
requirements.
    We also note that to the extent States publicly report their 
calculations or share data with stakeholders, the cell size of 10 is a 
recognized standard in data privacy. We note as well that, in adopting 
the rebuttable presumption, the Department is, in part, responding to 
the requests of commenters for flexibility in the standard methodology. 
We think this addition provides significant flexibility to States in 
implementing the standard methodology.
    Further, as stated in Sec.  300.647(b)(1)(iv), the Department will 
review the States' selections of risk ratio thresholds for 
reasonableness. To ensure that the Department may accurately and 
uniformly monitor all cell and n-sizes for reasonableness, and to 
inform our policy position, we have added a requirement in Sec.  
300.647(b)(7) that each State report to the Department all of its cell 
and n-sizes and the rationale for each. The Department has not yet 
determined the precise time and manner of these submissions, but it 
will do so through an information collection request. States are not 
obligated to comply with this reporting requirement until the Office of 
Management and Budget approves the Department's information collection 
request.
    If the Department identifies a State that may have unreasonable 
minimum cell or n-sizes, it would notify the State and may request 
clarification regarding how the State believes the minimum cell or n-
sizes the State is using are reasonable. If a State provides an 
insufficient response, the Department would notify the State that it is 
not in compliance with Sec.  300.647(b)(1)(i)(B) or (C), and the 
Department may take any enforcement action that is appropriate and 
authorized by law. Enforcement actions range from requiring a 
corrective action plan, imposing special conditions on the State's IDEA 
Part B grant, designating the State as a high-risk grantee, or 
withholding a portion of the State's IDEA Part B funds.
    Generally, while there are a number of factors that may influence 
whether certain minimum cell or n-sizes are reasonable for a State, the 
optimal choice will be a balance between the need to examine as many 
LEAs (and as many racial and ethnic groups within LEAs) as possible for 
significant disproportionality and the need to prevent inappropriate 
identification of LEAs due to risk ratio volatility. For example, the 
Department is more likely to consider minimum cell and n-sizes to be 
reasonable if, in comparison to lower minimum cell and n-sizes, it 
substantially reduces the volatility of risk ratio calculations. By 
contrast, the Department is more likely to determine that a State has 
selected unreasonable minimum cell or n-sizes if it results in the 
widespread exclusion of a racial or ethnic group from review for 
significant disproportionality in any of the categories of analysis. 
The Department may also consider smaller minimum cell or n-sizes to be 
reasonable for categories of analysis with lower incidence, such as 
some placement and discipline categories, to increase the number of 
LEAs analyzed despite the possibility of additional volatility. 
Further, the Department is more likely to determine that a State has 
selected unreasonable minimum cell or n-sizes if they result in the 
widespread exclusion of LEAs from any review for significant 
disproportionality. As such, the Department has added in Sec.  
300.647(b)(7) a requirement that the rationales submitted for the 
minimum cell- and n-sizes not presumptively reasonable must include a 
detailed explanation of why these numbers are reasonable and how they 
ensure that the State is appropriately analyzing LEAs for significant 
disproportionality.
    Changes: We have revised proposed Sec.  300.647(b)(3) and (4) to no 
longer limit States to a minimum n-size of up to 10. Section 
300.647(b)(1)(i) now requires States to select reasonable minimum cell 
and n-sizes, with advice from stakeholders, including the State 
Advisory Panel, subject to the Department's enforcement. Section 
300.647(b)(1)(iv)(A) and (B) state that a minimum cell size of no 
greater than 10 and a minimum n-size of no greater than

[[Page 92427]]

30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for n- and cell sizes that are not presumptively 
reasonable must include a detailed explanation of why the cell- and n-
sizes chosen are reasonable and how they help ensure an appropriate 
analysis for significant disproportionality.
    Comments: Many commenters stated that Federal investigators (which 
the Department interpreted to refer to the GAO) did not recommend that 
the Department set minimum n-sizes.
    Discussion: We agree that the GAO did not specifically recommend 
that the Department establish a minimum n-size. However, the GAO did 
recommend that the Department establish a standard method for 
determining significant disproportionality, and nothing in the GAO 
report precludes a minimum n-size as part of the standard methodology. 
Indeed, to the extent that establishing a minimum n-size is consistent 
with establishing a standard methodology, it is in keeping with the 
GAO's primary recommendation.
    Changes: None.
    Comments: A large number of commenters expressed their strong 
opposition to any attempt by the Department to place limits on States' 
minimum n-sizes. Many commenters noted that there is no Federal n-size 
in the latest authorization of the ESEA or other Federal education 
laws.
    Discussion: When possible, the Department prefers to provide States 
and LEAs with comparable policy provisions across programs, so long as 
those provisions meet the individual needs of both programs. However, 
nothing in the ESEA or IDEA precludes the Department from establishing 
requirements and provisions regarding the minimum n-size used for the 
analysis for significant disproportionality under IDEA section 618(d) 
that are different from the provisions affecting school accountability 
under ESEA.
    Further, we believe that some limitation on States' selection of 
minimum cell and n-sizes is appropriate. As we note earlier in this 
section, as minimum cell and n-sizes increase, fewer LEAs and fewer 
racial and ethnic subgroups within LEAs are examined for significant 
disproportionality using the standard methodology. As a result, it 
becomes increasingly likely that States may fail to identify LEAs with 
highly disproportionate rates of identification, placement in 
particular settings, or discipline among racial and ethnic groups as 
having significant disproportionality. For this reason, we believe it 
appropriate to limit States' choice of minimum cell and n-sizes to 
those that meet a standard of reasonableness that will be monitored and 
enforced by the Department.
    Changes: As discussed previously, we have revised proposed Sec.  
300.647(b)(3) and (4) to no longer limit States to a minimum n-size of 
up to 10. Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for n- and cell sizes that are not presumptively 
reasonable must include a detailed explanation of why the cell- and n-
sizes chosen are reasonable and how they help ensure an appropriate 
analysis for significant disproportionality.
    Comments: One commenter stated that Congress, in recent Federal 
education legislation, considered and rejected a federally imposed 
minimum n-size, clearly showing its preference that those decisions be 
left to States. Another commenter suggested that, in mandating that 
States use a Federal calculation, the regulation takes the opposite 
approach of the Every Student Succeeds Act, recent legislation that, 
according to the commenter, focuses on returning decision-making to 
States and LEAs, and that the matter is best left to Congress when it 
reauthorizes IDEA.
    Discussion: The Department appreciates these and other 
recommendations to provide States additional flexibility to set n-
sizes. After considering comments, the Department revised the final 
regulations to provide States a great deal of flexibility to set 
reasonable minimum n-sizes and cell sizes while balancing the need to 
place reasonable limits on this flexibility to ensure that as many LEAs 
are analyzed for significant disproportionality as is appropriate using 
the standard methodology. The Department has an interest in monitoring 
the conditions under which any LEA is so exempted from IDEA section 
618(d). As we discuss in A Standard Methodology for Determining 
Significant Disproportionality (Sec.  300.647)--General, as the risk 
ratio method of measuring significant disproportionality is susceptible 
to volatility, the Department aims to prevent ``false positive'' 
identification of significant disproportionality. Accordingly, States 
may exclude from their review any racial and ethnic groups within LEAs 
that do not meet State-set, reasonable population requirements, 
consistent with Sec.  300.647(b)(1). Unreasonably high minimum cell or 
n-sizes may inappropriately exclude LEAs, or racial and ethnic groups 
within LEAs, from a State's review of significant disproportionality, 
increasing the likelihood that States may fail to appropriately 
identify LEAs with highly disproportionate rates of identification, 
placement, and discipline.
    Given these issues, these regulations are an appropriate exercise 
of the Department's authority--in this case, to set reasonable 
population requirements necessary to ensure compliance with specific 
requirements of the statute. 20 U.S.C. 1406(a). Further, they are an 
appropriate exercise of the Department's authority--as the agency 
charged with administering IDEA (IDEA section 603(a), 20 U.S.C. 
1402(a))--to monitor and enforce IDEA's implementing regulations.
    When Congress begins the process of reauthorization, the Department 
intends to work closely with it on significant disproportionality, 
among other issues. In the interim, nothing in the ESEA or IDEA 
precludes the Department from establishing provisions regarding the 
minimum n-size used for the analysis for significant disproportionality 
under IDEA section 618(d), and it is appropriate for the Department to 
do so.
    Changes: As described earlier, we have revised proposed Sec.  
300.647(b)(3) and (4) to no longer limit States to a minimum n-size of 
up to 10. Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for minimum n- and cell sizes that are not

[[Page 92428]]

presumptively reasonable must include a detailed explanation of why the 
cell- and n-sizes chosen are reasonable and how they help ensure an 
appropriate analysis for significant disproportionality.
    Comments: A large number of commenters argued that there would be 
confusion and less accurate data if LEAs were required to use one 
minimum n-size for assessment purposes and disaggregation (which the 
Department interpreted to refer to school assessment for purposes of 
ESEA accountability) and a different minimum n-size for significant 
disproportionality. Other commenters requested that States have the 
flexibility to use the same minimum n-sizes used for other Federal 
education programs. Another commenter stated that, in one State, the 
minimum n-size used for accountability purposes was 25 and that it 
might make sense to align the minimum n-size with that requirement.
    Discussion: The Department appreciates the commenters' concerns 
about setting different population requirements across different 
Federal programs. When possible, the Department prefers to provide 
States and LEAs with comparable requirements across programs, so long 
as those requirements meet the individual needs of both programs.
    As we discussed earlier in this section, we have adjusted our 
original proposal to allow States to set their own reasonable minimum 
n-sizes based on input from stakeholders, including State Advisory 
Panels, subject to the Department's monitoring and enforcement for 
reasonableness. With this change, States may set minimum cell and n-
sizes comparable to what they use for other Federal programs.
    However, to the extent that aligning population requirements 
between ESEA and IDEA would result in a minimum cell or n-size that is 
unreasonable for purposes of IDEA section 618(d)--that is, it would 
result in a failure to identify LEAs with significant 
disproportionality who are identifying or disciplining certain racial 
and ethnic subgroups, or placing them in restrictive settings, at 
highly disproportionate rates--the choice of cell or n-size would not 
comply with the requirements of IDEA.
    Changes: None.
    Comments: A large number of commenters felt that, generally, States 
are best positioned to determine minimum n-size.
    Discussion: In the NPRM, the Department proposed to limit States' 
selection of a minimum n-size to a figure no larger than 10. Again, 
however, after further consideration and review of public comment, the 
Department has modified the final regulations to provide States greater 
flexibility in determining reasonable minimum n- and cell sizes.
    At the same time, we continue to believe that the Department has an 
interest--pursuant to OSEP's statutory obligation to ensure States' 
implementation of IDEA section 618(d)--in ensuring that States do not 
unreasonably exclude LEAs, or racial and ethnic groups within LEAs, 
from their review. Thus, we will monitor and enforce with regard to n- 
and cell-size reasonableness.
    To ensure that the Department may accurately and uniformly monitor 
all cell and n-sizes, and to inform our policy position, we have added 
a requirement in Sec.  300.647(b)(7) that each State report to the 
Department all of its cell and n-sizes and the rationale for each. The 
Department has not yet determined the precise time and manner of these 
submissions, but it will do so through an information collection 
request. States are not obligated to comply with this reporting 
requirement until the Office of Management and Budget approves the 
Department's information collection request.
    Generally, while there are a number of factors that may influence 
whether certain minimum cell or n-sizes are reasonable for a State, the 
optimal choice will be a balance between the need to examine as many 
LEAs (and as many racial and ethnic groups within LEAs) as possible for 
significant disproportionality and the need to prevent inappropriate 
identification of LEAs due to risk ratio volatility. For example, the 
Department is more likely to consider minimum cell and n-sizes to be 
reasonable if, in comparison to lower minimum cell and n-sizes, they 
substantially reduce the volatility of risk ratio calculations. By 
contrast, the Department is more likely to determine that a State has 
selected unreasonable minimum cell or n-sizes if they result in the 
widespread exclusion of a racial or ethnic group from review for 
significant disproportionality in any of the categories of analysis. 
The Department may also consider smaller minimum cell or n-sizes to be 
reasonable for categories of analysis with lower incidence, such as 
some placement and discipline categories, to increase the number of 
LEAs analyzed despite the possibility of additional volatility. 
Further, the Department is more likely to determine that a State has 
selected unreasonable minimum cell or n-sizes if they result in the 
widespread exclusion of LEAs from any review for significant 
disproportionality. As such, the Department has added in Sec.  
300.647(b)(7) a requirement that the rationales submitted for the 
minimum cell- and n-sizes which are not presumptively reasonable must 
include a detailed explanation of why these numbers are reasonable and 
how they ensure that the State is appropriately analyzing LEAs for 
significant disproportionality.
    Changes: Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for n- and cell sizes that are not presumptively 
reasonable which must include a detailed explanation of why the cell- 
and n-sizes chosen are reasonable and how they help ensure an 
appropriate analysis for significant disproportionality.
    Comments: Many commenters noted that a minimum n-size of 10 will 
result in many LEAs, particularly small LEAS, being identified with 
significant disproportionality. One commenter stated that the 
Department should do away with regulatory language that would lead to 
the identification of almost every LEA, as, when this result occurred 
under another Federal education statute, subsequent legislative efforts 
reversed much of what the regulations intended to accomplish.
    Discussion: As we note earlier in this section, the Department has 
amended its original proposal to restrict States to a minimum n-size no 
greater than 10, and, instead, will require States to set reasonable 
minimum cell and n-sizes. We believe this change to be responsive to 
both of the comments raised.
    However, we wish to note that, in circumstances where a State has 
identified a large number of LEAs, it is not necessarily the case that 
these determinations are inappropriate. By requiring States to follow 
the standard methodology under Sec.  300.647, it is the Department's 
intent to support more appropriate identification of significant 
disproportionality based on race and ethnicity in the identification, 
placement, and discipline of children with disabilities. If, in 
implementing the standard methodology (which will include State-
selected risk ratio thresholds, a State-selected minimum n-

[[Page 92429]]

size, and a State-selected minimum cell size) the State identifies a 
large number of LEAs, it may indicate the need for a broad-based State 
effort to improve practices and policies to address racial and ethnic 
disparities in special education.
    In cases where small LEAs are disproportionately, and 
inappropriately, identified with significant disproportionality due to 
the use of a low minimum cell or n-size, it may be appropriate for a 
State to review its data, and consult with stakeholders and State 
Advisory Panels, to determine whether adjustments should be made to the 
State's implementation of the standard methodology.
    Changes: We have amended Sec.  300.647(b)(3) and (4) to no longer 
restrict States to a minimum n-size of 10. Section 300.647(b)(1)(i) now 
requires States to select reasonable minimum cell and n-sizes, with 
advice from stakeholders, including the State Advisory Panel, subject 
to the Department's enforcement. Section 300.647(b)(1)(iv)(A) and (B) 
state that a minimum cell size of no greater than 10 and a minimum n-
size of no greater than 30, respectively, are presumptively reasonable. 
We have added Sec.  300.647(b)(7), which requires States to report to 
the Department, at a time and in a manner specified by the Secretary, 
all n- and cell sizes developed under Sec.  300.647(b)(1)(i)(B) and (C) 
and the rationale for each. The rationales for n-sizes and cell sizes 
that are not presumptively reasonable which must include a detailed 
explanation of why the cell- and n-sizes chosen are reasonable and how 
they help ensure an appropriate analysis for significant 
disproportionality.
    Comment: One commenter added that, if States used a minimum n-size 
of 10, then many States and LEAs would spend a significant amount of 
time, money, and labor on addressing issues that may not be able to be 
simply changed by utilizing early intervening dollars. Other commenters 
have experienced issues with small n-sizes, where LEAs are identified 
and must develop solutions for problems that rarely existed. Still more 
commenters stated that, with an n-size of 10, it will be virtually 
impossible for LEAs identified with significant disproportionality to 
correct the disparity. One commenter expressed concerns that flaws in 
the proposed regulation--specifically, the potential for LEAs to 
implement mandatory comprehensive CEIS due a finding of significant 
disproportionality that is the result of small numbers of children--
will make it impossible to identify metrics that could evaluate the 
connection between a finding of significant disproportionality in an 
LEA and improved outcomes for all children.
    Other commenters generally stated that a small LEA might be 
identified with significant disproportionality due to a few new 
families enrolling in the LEA with a child already diagnosed with 
autism.
    Discussion: As we note earlier in this section, the Department has 
amended its original proposal so that it no longer restricts States to 
a minimum n-size no greater than 10. Instead, the Department will 
require States to set reasonable minimum cell or n-sizes. We believe 
this change to be responsive to the comments raised by reducing the 
likelihood that an LEA may be identified with significant 
disproportionality due to minor changes in LEA enrollment. We agree 
with commenters that States should focus on systemic cases of 
significant disproportionality--rather than LEAs with simple numerical 
disparities based on the enrollment or changing needs of one or two 
children--and that the statutory remedies provided under IDEA section 
618(d)(2) (20 U.S.C. 1418(d)(2)) will be most effective in addressing 
the needs of LEAs with systemic racial and ethnic disparities.
    Changes: As noted above, Sec.  300.647(b)(1)(i) now requires States 
to select reasonable minimum cell and n-sizes, with advice from 
stakeholders, including the State Advisory Panel, subject to the 
Department's enforcement. Sections 300.647(b)(1)(iv)(A) and (B) state 
that a minimum cell size of no greater than 10 and a minimum n-size of 
no greater than 30, respectively, are presumptively reasonable. We have 
added Sec.  300.647(b)(7), which requires States to report to the 
Department, at a time and in a manner specified by the Secretary, all 
n- and cell sizes developed under Sec.  300.647(b)(1)(i)(B) and (C) and 
the rationale for each. Rationales for n- and cell sizes that are not 
presumptively reasonable must include a detailed explanation of why the 
cell- and n-sizes chosen are reasonable and how they help ensure an 
appropriate analysis for significant disproportionality.
    Comment: One commenter noted that a minimum n-size of 10 was 
empirically validated, and, based on literature, could guarantee risk 
ratio reliability.
    Two commenters stated that there is a significant increase in 
reliability in moving from a minimum n-size of 5 to 10 and a slightly 
greater increase when cell size moved up to 15. According to one 
commenter, one State chose to use a minimum n-size of 15, rather than 
10, in recognition of slightly greater reliability and LEA feedback. 
One commenter supported giving States flexibility to select a minimum 
n-size between 10 and 15. Another commenter supported a minimum n-size 
of 15 only if States made a determination of significant 
disproportionality based on a single year of data.
    Two commenters stated that using a minimum n-size of 10 can lead to 
problems with reliability when using the risk ratio. The commenters 
stated that, in the case of an n-size of 10 in the denominator, very 
small numbers can lead to unstable estimates of the risk index, leading 
to large swings in the risk ratio and a possible finding of significant 
disproportionality for very few children identified in the target 
group. Commenters opposing a cap of 10 for the minimum n-size offered 
other suggestions: A few suggested 20, many suggested 30, and a few 
suggested 40. One commenter stated that a minimum n-size of 25 or 
higher has likely been one method of reducing the identification of 
significant disproportionality.
    Discussion: The Department generally agrees with commenters that 
risk ratios are not reliable when calculated for a racial or ethnic 
group with too few children. As multiple commenters have expressed 
their concern that a minimum n-size of 10 may be small, and have 
provided a list of consequences that may ensue if minimum n-sizes are 
too low to safeguard against volatility (e.g., resistance to 
identifying children as children with disabilities or identifying 
children of a particular race or ethnicity as having disabilities, 
inability of small LEAs to resolve significant disproportionality, 
vulnerability of LEAs to small changes in enrollment), we now believe 
that it is appropriate to allow States flexibility to set their own 
reasonable minimum cell and n-sizes. We also find it appropriate that 
the States consult with stakeholders prior to setting minimum cell and 
n-sizes, as was done in one State mentioned by a commenter.
    In the NPRM, the Department proposed to limit States' selection of 
minimum n-size to a figure no larger than 10, based on an understanding 
that this figure represented an appropriate balance between risk ratio 
reliability and LEA inclusion. Bollmer, J., Bethel, J., Garrison-
Mogren, R., & Brauen, M., 2007. However, upon further examination of 
the study, which relied on 2001-2002 data from a non-representative, 
non-random sample of three States--we now believe that the study 
includes too many limitations to

[[Page 92430]]

provide the basis to mandate a national minimum n-size of 10.
    In these final regulations, States must set reasonable cell and n-
sizes, and in Sec.  300.647(b)(1)(iv)(A) and (B), we are establishing a 
rebuttable presumption that a minimum cell size of no greater than 10 
and n-size of no greater than 30, respectively, are reasonable 
thresholds. Again, as we stated earlier in this section, support for 
these thresholds includes information we have from the IDEA State 
Supplemental Survey, which shows that States tend to set their n-size 
or cell size at 30 or less. We also note that to the extent States 
publicly report their calculations or share data with stakeholders, the 
cell size of 10 is a recognized standard in data privacy. We do not 
have comparable or sufficient support for a national n-size of less 
than 30.
    States have the option, but are not required, to set the same cell 
or n-size for each category of analysis. States should consider, in 
consultation with their stakeholders, the impact of minimum n- and cell 
sizes in conjunction with the risk ratio thresholds they select for 
each category of analysis. The Department encourages States to consider 
a smaller minimum n-size for categories of analysis where LEAs have 
small numbers, such as discipline. States, in making these 
determinations in consultation with their stakeholders, including State 
Advisory Panels, must carefully balance inclusion of LEAs and 
volatility. Further, in certain circumstances such as when coupled with 
a larger minimum n-size, it may be reasonable for a State to select a 
minimum cell size of zero or one. However, the Department notes that 
selecting different n- or cell sizes based on race or ethnicity is 
problematic and could raise issues of constitutionality. As we evaluate 
additional data and information in the future, we may consider whether 
there is additional guidance we can provide to States about what 
constitutes a reasonable cell or n-size.
    Changes: Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for n- and cell sizes that are not presumptively 
reasonable must include a detailed explanation of why the cell- and n-
sizes chosen are reasonable and how they help ensure an appropriate 
analysis for significant disproportionality.
    Comments: Some commenters noted that a minimum n-size of 10 is 
unrealistic and will result in unintended and inappropriate negative 
consequences for the LEAs (including charter schools) in one State. One 
commenter observed that, in its State, parent choice and charter 
schools create unique configurations in enrollment that may give the 
appearance of significant disproportionality when a minimum cell size 
of 10 is used. A large number of commenters noted that the Department 
must allow States to use minimum n-sizes greater than 10 to reduce the 
likelihood of ``false positives'' due to small numbers. One commenter 
claimed that a minimum n-size of 10 would impact one State's ability to 
screen out false positive findings of significant disproportionality of 
White children, given that many LEAs in the State are homogenous.
    Discussion: As we note earlier in this section, the Department has 
amended its original proposal so that it no longer restricts States to 
a minimum n-size no greater than 10. Instead, the Department will 
require States to set reasonable minimum cell and n-sizes.
    Changes: As noted previously, Sec.  300.647(b)(1)(i) now requires 
States to select reasonable minimum cell and n-sizes, with advice from 
stakeholders, including the State Advisory Panel, subject to the 
Department's enforcement. Section 300.647(b)(1)(iv)(A) and (B) state 
that a minimum cell size of no greater than 10 and a minimum n-size of 
no greater than 30, respectively, are presumptively reasonable. We have 
added Sec.  300.647(b)(7), which requires States to report to the 
Department, at a time and in a manner specified by the Secretary, all 
n- and cell sizes developed under Sec.  300.647(b)(1)(i)(B) and (C) and 
the rationale for each. Rationales for n- and cell sizes that are not 
presumptively reasonable must include a detailed explanation of why the 
cell- and n-sizes chosen are reasonable and how they help ensure an 
appropriate analysis for significant disproportionality.
    Comment: A few commenters described the experience of one State 
that previously used a minimum n-size of 10, with a risk ratio 
threshold of 2.0, to review LEAs for significant disproportionality. 
The commenters did not provide the number of years taken into 
consideration. These commenters stated that the State experienced a 
number of unintended consequences.
    First, the LEAs in the State perceived the calculations to be an 
implicit quota system, where LEAs delayed or refused to evaluate 
children for possible identification and parents were led to believe 
that the LEA had already exceeded a limit on the number of children in 
their racial group that could be identified. Second, LEAs questioned 
the ethnicity reported by parents, and more than one LEA provided 
photos of individual children and requested that their reported 
ethnicity be changed. Third, when the State used a minimum n-size of 
10, it had to greatly increase the amount of State staff time devoted 
to identifying which calculations produced false positives. Meanwhile, 
both LEAs and State-level staff devoted considerable resources to the 
creation of corrective action plans and the implementation of 
prevention activities that impacted only one or two children. Fourth, 
the approach to identifying significant disproportionality often 
resulted in calculations that were not statistically significant.
    The commenter further stated that, after the State adjusted its 
minimum n-size and risk ratio threshold to align with the State's 
accountability plan, it had better confidence that those LEAs that were 
identified had potential to benefit from the required comprehensive 
CEIS and corrective action planning.
    One commenter provided a list of factors that, according to the 
commenter, unduly influenced an LEA's risk of identification with 
significant disproportionality when the State's minimum n-size was 10. 
The list includes small, rural LEAs with court-placed children from 
urban areas, families who adopt several non-White children with 
disabilities, charter schools with a special education focus, LEAs 
receiving families of color moving out of urban areas, and single 
events resulting in the discipline of multiple children.
    Discussion: We appreciate commenters' sharing their experience 
implementing IDEA section 618(d). The example provided highlights some 
of the methods that comprise the standard methodology as required under 
Sec.  300.647, including a minimum n-size and a risk ratio threshold.
    We think the commenters experience with a minimum n-size of 10 and 
how it potentially contributed to the inappropriate identification of 
LEAs with significant disproportionality is instructive. We note that, 
along with a minimum n-size of 10, the State also

[[Page 92431]]

used a relatively low risk ratio threshold of 2.0, which could have 
exacerbated issues of inappropriate identification of LEAs with 
significant disproportionality. The Department believes that it is 
important for States to consider both the impact of the reasonable 
minimum cell and n-sizes they select in conjunction with their 
selection of reasonable risk ratio thresholds. These factors can all 
potentially contribute to an inappropriate determination of significant 
disproportionality.
    As we note earlier in this section, the Department has amended its 
original proposal in the NPRM, which should address the concerns raised 
by these and other commenters. These final regulations do not restrict 
States to a minimum n-size of no greater than 10. Instead, the 
Department will require States to set reasonable minimum cell and n-
sizes.
    Finally, we disagree with the commenters' suggestion that LEAs 
should only be identified with significant disproportionality if they 
have racial and ethnic disparities that are statistically significant. 
Given that States have access to population data on the identification, 
placement, and discipline of children with disabilities, tests of 
statistical significance are inappropriate for States' determination of 
significant disproportionality given that those analyses are intended 
to be used to draw inferences when working with sample data.
    Changes: As noted previously, Sec.  300.647(b)(1)(i) now requires 
States to select reasonable minimum cell and n-sizes, with advice from 
stakeholders, including the State Advisory Panel, subject to the 
Department's enforcement. Section 300.647(b)(1)(iv)(A) and (B) state 
that a minimum cell size of no greater than 10 and a minimum n-size of 
no greater than 30, respectively, are presumptively reasonable. We have 
added Sec.  300.647(b)(7), which requires States to report to the 
Department, at a time and in a manner specified by the Secretary, all 
n- and cell sizes developed under Sec.  300.647(b)(1)(i)(B) and (C) and 
the rationale for each. Rationales for n- and cell sizes that are not 
presumptively reasonable must include a detailed explanation of why the 
cell- and n-sizes chosen are reasonable and how they help ensure an 
appropriate analysis for significant disproportionality.
    Comment: A number of commenters expressed concerns that the 
Department provided insufficient research support for its minimum n-
size in proposed Sec.  300.647(b)(3) and (4). Specifically, many 
commenters stated that there is no data available to support 10 as an 
appropriate number for a minimum n-size. Other commenters noted that 
the Department provided little rationale for selecting 10 for the 
minimum n-size, instead of any other number.
    Discussion: The Department recognizes commenters' concerns 
regarding the appropriateness of the research base to support our 
proposal to limit States to a minimum n-size no larger than 10. At the 
time of the NPRM, the Department's proposal was based on an 
understanding that this figure represented an appropriate balance 
between risk ratio reliability and LEA inclusion. However, upon further 
examination of the study, which relied on 2001-2002 data from a non-
representative, non-random sample of three States, we now find that the 
study includes too many limitations to provide a basis for a minimum n-
size of 10. Bollmer, J., Bethel, J., Garrison-Mogren, R., & Brauen, M., 
2007.
    Accordingly, the Department has amended the regulation so that it 
does not mandate a national minimum n-size. We will, rather, specify 
that States must set, with input from stakeholders, reasonable minimum 
n-size and cell sizes. In addition, Sec.  300.647(b)(1)(iv)(A) and (B) 
establish a rebuttable presumption that a minimum cell size of 10 and 
n-size of 30, respectively, are reasonable thresholds. Again, as we 
stated earlier, Department review of data submitted through the IDEA 
State Supplemental Survey for school year 2013-14 found that States 
that used risk ratios in their determinations of significant 
disproportionality tended to set their cell-size or n-size requirements 
at 30 or less. Based on these data, the Department determined that 
cell-sizes of no greater than 10 and n-sizes of no greater than 30 
would allow the majority of States currently using risk ratios to 
retain their already established population requirements. We note that 
to the extent States publicly report their calculations or share data 
with stakeholders, the cell size of 10 is a recognized standard in data 
privacy.
    Changes: Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable. We have added Sec.  
300.647(b)(7), which requires States to report to the Department, at a 
time and in a manner specified by the Secretary, all n- and cell sizes 
developed under Sec.  300.647(b)(1)(i)(B) and (C) and the rationale for 
each. Rationales for n- and cell sizes that are not presumptively 
reasonable must include a detailed explanation of why the cell- and n-
sizes chosen are reasonable and how they help ensure an appropriate 
analysis for significant disproportionality.
    Comment: A large number of commenters provided input as to whether 
the Department should allow States to set a minimum cell size--to apply 
to the numerator when calculating risk for a racial or ethnic group--as 
well as the appropriateness of particular minimum cell sizes. These 
commenters strongly cautioned the Department against limiting States 
solely to a minimum n-size of 10 when reviewing racial or ethnic groups 
within an LEA, as, in the absence of any consideration for the minimum 
cell size, these reviews will lead to false positive identifications of 
LEAs with significant disproportionality. A large number of commenters 
suggested that the Department allow States to adopt a minimum cell 
size, particularly when reviewing for significant disproportionality in 
the identification of children with disabilities, to decrease the 
likelihood of false positive identifications of significant 
disproportionality.
    A few commenters stated that using only a minimum n-size of 10 
allows very small groups of children--and potentially only one 
identified child (or one newly enrolled child with a disability)--to 
result in the LEA appearing to have significant disproportionality. 
Other commenters warned that, based on their previous experience with 
small n-sizes, having only one child in a subgroup has previously 
caused LEAs to be cited for significant disproportionality. One 
commenter provided examples of the number of LEAs, by State, that would 
be flagged for significant disproportionality, based on one child, if 
the Department's original proposal were implemented.
    A few commenters stated that, without the adoption of a minimum 
cell size, there is an increased likelihood that a risk ratio of a 
certain size will be likely to have occurred by chance. Another 
commenter argued that the identification, placement, or discipline of a 
single child from a particular racial or ethnic group could occur by 
chance.
    Discussion: The Department appreciates the commenters' suggestion 
to allow States to select a minimum cell size. The standard 
methodology, as originally proposed in Sec.  300.647, did not 
contemplate minimum population requirements other than minimum

[[Page 92432]]

n-size when examining racial and ethnic groups within LEAs for 
significant disproportionality. However, we agree with the commenters 
that States should be allowed to use minimum cell sizes, as a component 
of the standard methodology in addition to a minimum n-size, in order 
to prevent inappropriate determinations of significant 
disproportionality, such as a finding of significant disproportionality 
based only on one or two children.
    States will have the flexibility to set their own reasonable 
minimum cell sizes, limited, as is the selection of risk ratio 
threshold, by consultation with stakeholders, including the State 
Advisory Panels. It should be noted that States have the option to set 
a minimum cell size of zero or one if the State and its stakeholders 
believe their selection of a reasonable minimum n-size addresses the 
issues associated with small populations or low incidence categories of 
analysis.
    Accordingly, we have amended the regulation to allow States to 
select reasonable minimum cell sizes in the standard methodology.
    Changes: We have amended proposed Sec.  300.647(b)(1) to require 
States to select a reasonable minimum cell size with advice from 
stakeholders, including the State Advisory Panel, subject to the 
Department's enforcement.
    Comment: One commenter noted that most disabilities are rare 
events, meaning that only one or two percent of the children will be 
identified as having them. As a result, when analyzing LEA-level data, 
many LEAs will have no children with a given disability, and for an LEA 
in which children are identified, the result may be a large risk ratio. 
One commenter stated that LEAs with only 10 children in any given 
racial or ethnic group will be automatically disadvantaged for low 
incidence disabilities like autism, intellectual disability, and 
emotional disturbance, which the commenter cited as having an incidence 
rate of one percent or less. The commenter concluded that, even if an 
LEA qualifies only one child of a racial or ethnic group in any of the 
three categories, it will be found to have significant 
disproportionality.
    Discussion: We appreciate these commenters for raising their 
concerns regarding the low incidence of some impairments. In general, 
we agree with the commenters that LEAs with low incidence rates are 
likely to have more volatile risk ratios.
    We have amended proposed Sec.  300.647(b)(1)(i) to require States 
to select reasonable minimum cell sizes. With this change, States' use 
of minimum cell sizes will prevent the inappropriate identification of 
LEAs with low incidence rates to the extent that those rates coincide 
with small populations of children.
    Changes: Section 300.647(b)(1)(i)(B) requires States to set 
reasonable minimum cells sizes.
    Comment: Two commenters warned that LEAs identified with 
significant disproportionality due to only one or two children will 
continue to be identified due to those children so long as they remain 
in school. Another commenter argued that the identification, placement, 
or discipline of a single child from a particular racial or ethnic 
could occur by chance, and is not sufficient to demonstrate bias or 
discrimination within an LEA. A few commenters expressed concern that, 
if LEAs are identified with significant disproportionality based on one 
or two children, the regulation could discourage LEAs from identifying 
children of color with disabilities, or encourage LEAs to stigmatize 
the child that is identified. One commenter stated that there may be 
FERPA issues inherent in basing a determination of significant 
disproportionality on a single child, especially if the child's recent 
enrollment pushes the LEA's risk ratio over the State's threshold.
    Discussion: We agree with the commenters that a number of negative 
outcomes could result if LEAs are at risk of being identified with 
significant disproportionality based on the identification, placement, 
or discipline of only one or two children. We have amended proposed 
Sec.  300.647(b)(1) to require States to select a reasonable minimum 
cell size so that, when a racial or ethnic group of interest within an 
LEA has too few children experiencing a particular outcome, the State 
is not required to calculate the risk ratio for that racial or ethnic 
group, for that outcome, for that LEA. We believe this amendment to be 
responsive to the concerns the commenters' raised.
    Changes: Section 300.647(b)(1)(i)(B) requires States to set a 
reasonable minimum cell size.
    Comment: To avoid risk ratio volatility, a few commenters noted 
that minimums should apply to both the numerator and denominator. These 
commenters indicated that allowing States to apply the minimum cell 
size to the numerator of the risk calculations for the target racial or 
ethnic group would ensure that the risk calculations are based on a 
sufficient number of identified children. One commenter noted that, 
among the current population requirements employed by the States, one 
requirement was a minimum cell size for all impairments.
    Discussion: We agree with commenters that allowing the use of a 
minimum cell size and a minimum n-size will help prevent risk ratio 
volatility. We have amended the regulation to allow States to set both 
a reasonable minimum cell size and a reasonable minimum n-size.
    Changes: Section 300.647(b)(1)(i) now requires States to select 
reasonable minimum cell and n-sizes, with advice from stakeholders, 
including the State Advisory Panel, subject to the Department's 
enforcement. Section 300.647(b)(1)(iv)(A) and (B) state that a minimum 
cell size of no greater than 10 and a minimum n-size of no greater than 
30, respectively, are presumptively reasonable.
    Comment: One commenter suggested that the Department allow States 
the flexibility to choose a minimum cell size between two and four, and 
not so high that the State overlooks disproportionality for low-
incidence populations. The commenter noted that, for one western State, 
if the minimum cell size is set at 10, only about 10 percent of 
significant disproportionality findings would be for non-White children 
because of the small size of those populations. A number of commenters 
supported a minimum of 10, if applied to both the minimum cell size and 
minimum n-size. Two commenters suggested that a minimum cell size of at 
least six or greater would remove the possibility of an LEA being 
flagged for significant disproportionality based on chance. A few 
commenters noted that a minimum cell size and a minimum n-size for the 
target racial and ethnic group are necessary to avoid the inappropriate 
identification of LEAs and requested a minimum cell size of five to 
avoid false positive identification of significant disproportionality. 
Several commenters suggested the use of specific minimum cell sizes 
when calculating the risk of identification of a particular disability 
for a racial or ethnic group. A few commenters encouraged a minimum 
cell size of five children with a particular disability. Many more 
commenters encouraged minimum cell size of 10 children with a 
particular disability. One commenter noted that a minimum cell size of 
at least 10 is necessary for reliability and privacy and to avoid 
findings of significant disproportionality based on very small numbers 
of children. This commenter supported giving States flexibility to 
select a minimum cell size between 10 and 15. A few commenters noted 
that a minimum cell size of five would result in fewer false positive 
identification of significant disproportionality.

[[Page 92433]]

    Discussion: The Department appreciates the suggestions to select 
various minimum cell sizes in order to limit risk ratio volatility and 
the potential for inappropriate finding of significant 
disproportionality. In response to these comments, these final 
regulations provide States the flexibility to set their own reasonable 
minimum cell sizes, limited, as is the selection of risk ratio 
threshold, by consultation with stakeholders, including the State 
Advisory Panels and subject to the Departments monitoring and review 
for reasonableness. Accordingly, as with n-size, to ensure that the 
Department may accurately and uniformly monitor all cell sizes, we have 
added a requirement that each State report to the Department the cell 
sizes it selects and the rationale for selecting each. The Department 
has not yet determined the precise time and manner of these 
submissions, but it will do so through a subsequent information 
collection request. States are not obligated to comply with this 
reporting requirement until the Office of Management and Budget 
approves the Department's request.
    As to reasonableness of cell sizes in general, the Department 
assumes that a minimum cell size of up to 10 may be reasonable for most 
States. Of commenters that suggested a particular minimum cell size, 
all but one requested that the Department allow States to use a minimum 
cell size of up to 10. The Department also found that--based on a 
review of the SY 2013-2014 State Supplement Survey (SSS)--States that 
used risk ratios in their determinations of significant 
disproportionality tended to set their cell-size or n-size requirements 
at 30 or less. Based on these data, the Department determined that 
cell- of 10 and n-sizes of 30 would allow the majority of States 
currently using risk ratios to retain their already established 
population requirements. We note that to the extent States publicly 
report their calculations or share data with stakeholders, the cell 
size of 10 is a recognized standard in data privacy.
    Further, when reviewing States' minimum cell sizes for 
reasonableness, the Department may consider the same criteria used for 
minimum n-size, with one addition: the Department is more likely to 
consider a minimum cell size reasonable if, in comparison to a lower 
minimum cell size, it substantially reduces the potential that an LEA 
will be identified with a significant disproportionality based on small 
fluctuations in the number of children.
    The Department encourages States to consider a smaller minimum n-
size for categories of analysis with particularly low incidence, as 
appropriate, in order to include a larger percentage of LEAs in the 
review for significant disproportionality. Further, in certain 
circumstances such as when coupled with a larger minimum n-size, it may 
be reasonable for a State to select a minimum cell size of zero.
    The Department will continue to collect data and review research to 
help refine the selection of reasonable minimum cell sizes in order to 
ensure that States are reviewing as many LEAs for significant 
disproportionality as possible while limiting the volatility of risk 
ratios if cell sizes that are too low. The obligation to report cell 
sizes and their rationales will assist in this effort.
    Changes: The Department has added Sec.  300.647(b)(7), which 
requires States to report to the Department, at a time and in a manner 
specified by the Secretary, all cell sizes selected under Sec.  
300.647(b)(1)(i)(B) and the rationale for each. Rationales for n- and 
cell sizes that are not presumptively reasonable must include a 
detailed explanation of why the cell- and n-sizes chosen are reasonable 
and how they help ensure an appropriate analysis for significant 
disproportionality.
    Comment: One commenter suggested that the Department consider 
scaling the minimum n-size to be larger for lower incidence 
disabilities.
    Discussion: As we note earlier in this section, Sec.  300.647(b)(1) 
requires States to select reasonable minimum cell sizes. Nothing in 
these final regulations precludes a State from setting higher minimum 
cell sizes or n-sizes for particular categories of analysis based, in 
part, on the level of incidence of a particular disability and the 
potential impact it could have on the volatility of calculated risk 
ratios. However, as noted previously, any minimum cell size or n-size 
set by the State, in consultation with stakeholders, must be 
reasonable. With this change, States' use of minimum cell sizes, along 
with States' flexibility to use up to three consecutive years of data 
to make a determination of significant disproportionality, should 
prevent the inappropriate identification of LEAs due to low incidence 
rates in either the racial or ethnic group of interest or the 
comparison group.
    Changes: None.
    Comment: One commenter argued that a minimum cell size would be 
particularly important when analyzing LEAs for significant 
disproportionality due to suspensions and expulsions. The commenter 
stated that LEAs cannot fully control the administration of 
disciplinary removals, as State or LEA regulations may require a child 
to be moved when weapons or drugs are brought in the school. The 
commenter concluded that a minimum cell size would prevent those 
incidents from resulting a finding of significant disproportionality 
for the LEA.
    Discussion: We agree with the commenter that a single incident that 
requires a mandatory disciplinary removal generally should not result 
in a finding of significant disproportionality by race and ethnicity 
and that States should have the flexibility to focus on their efforts 
on LEAs with consistently high risk ratios, which may indicate systemic 
racial and ethnic disparities in need of intervention. We believe that 
the standard methodology is responsive to the commenter, as, under 
Sec.  300.647(b)(1), States may establish reasonable minimum cell sizes 
and, under Sec.  300.647(d)(1), States may use up to three consecutive 
years of data prior to making a determination of significant 
disproportionality.
    However, we also believe that, in cases where an LEA experiences 
multiple incidents requiring a mandatory removal, and, as a result, a 
particular racial or ethnic group faces consistently disproportionate 
treatment over the course of multiple years, it would be appropriate 
for the LEA to be identified with significant disproportionality.
    Changes: None.
    Comments: Two commenters noted that, when the n-size of a risk 
calculation falls below 20 children, at least 6 children are required 
in the numerator to achieve sufficient statistical power for results to 
be reliable.
    Discussion: The Department agrees that the selection of minimum 
cell sizes should be made with consideration for minimum n-sizes and 
encourages States to take any interactions between the two into account 
when setting these two minimums. Further, we would encourage States to 
also take into consideration how its particular combination of 
reasonable risk ratio threshold, minimum n-sizes, and minimum cell 
sizes will help or hinder its efforts to identify significant 
disproportionality.
    Changes: None.
    Comment: A few commenters responded to Directed Question #6 in the 
NPRM, which inquired whether the Department's proposed limit on minimum 
n-size aligned with State privacy laws.
    A few commenters indicated that Department's proposal to allow 
States to set a minimum n-size up to 10 was compliant with State 
privacy laws. Other commenters noted that a minimum n-size of 10 would 
not

[[Page 92434]]

comply with State privacy laws, but that a minimum cell size of 10 
would. One of these commenters noted that a minimum cell size of less 
than 10 would raise privacy concerns. One commenter stated that a 
Federal statistical agency recommended a minimum population requirement 
of 10 for confidentiality purposes. (The Department was unable to 
determine whether the commenter intended to refer to cell size or n-
size.)
    A few commenters spoke more generally about the relationship 
between minimum cell sizes, minimum n-sizes, and privacy. One commenter 
noted that a minimum cell size requirement would resolve the issue of 
publishing data that violates privacy laws. However, a few commenters 
stated that, as there did not appear to be any requirement that States 
make the data utilized in the risk ratio calculations publicly 
available, the issue of privacy was not applicable. One commenter 
questioned how, if the Department limits minimum n-sizes to 10 for 
significant disproportionality, and States choose higher minimum n-
sizes for other calculations to safeguard privacy, the inconsistency 
would be explained to the public.
    One commenter recommended that the Department research the 
implications of its proposal for existing State privacy laws with the 
goal of ensuring the privacy rights of children with disabilities. 
Another commenter generally recommended that the Department require 
FERPA protections in situations in which there are fewer than 10 
children in a group.
    Discussion: We appreciate the thoughtful comments that we received 
on this issue and recognize that, at particular minimum n-sizes and 
minimum cell sizes, States would potentially have to suppress some data 
prior to public reporting, as they do in other reporting instances. As 
State and Federal privacy laws apply, additional privacy protections in 
these regulations are not necessary.
    Changes: None.
    Comment: A number of commenters requested that States have 
flexibility to apply both a minimum n-size and a minimum cell size to 
the comparison group. Commenters indicated that allowing States to 
apply the minimum cell size to the numerator of the risk calculations 
for the comparison group would ensure that the risk calculations are 
based on a sufficient number of identified children. One commenter 
suggested that the Department allow States to adopt a minimum cell size 
that will decrease the likelihood of identifying an LEA as having 
significant disproportionality when the results are likely to have 
occurred by chance.
    Another commenter strongly opposed the use of a minimum cell size 
for the comparison group, if the result was that the racial or ethnic 
group of interest would not be reviewed for significant 
disproportionality. The commenter expressed concern that the starkest 
disparities would be overlooked in racially homogenous LEAs.
    Discussion: In reviewing the commenters' suggestions and 
perspectives, we were not always certain whether the commenters assumed 
that a population requirement, when applied to a comparison group, 
would (1) determine whether a particular racial or ethnic group in an 
LEA would be exempted from a review of significant disproportionality, 
or (2) determine whether the alternate risk ratio was necessary to 
review that racial or ethnic group.
    We believe the challenge associated with an inappropriately low 
minimum cell size or minimum n-size for racial and ethnic groups is 
similar to those that arise when dealing with comparison groups--
namely, risk ratio volatility. For this reason, it is our intent that, 
under Sec.  [thinsp]300.647(b)(5), States will use their reasonable 
minimum cell sizes and n-sizes to determine whether there is an 
adequate number of children in the comparison group to calculate the 
risk ratio or if the alternate risk ratio must be used.
    In general, the Department does not believe that the absence of a 
comparison group--or a small comparison group--within an LEA is a 
sufficient basis to exclude a racial or ethnic group from States' 
review for significant disproportionality. It is the Department's 
intention, rather, that States calculate the alternate risk ratio--
using a State-level comparison group--when the comparison group within 
the LEA includes too few children for a reliable analysis or when the 
risk to the comparison group within the LEA is zero.
    However, we have also added Sec.  [thinsp]300.647(c)(2) to clarify 
that, when the alternate risk ratio is required, and the comparison 
group within the State does not meet the minimum cell size or minimum 
n-size, the State is not required to calculate either the risk ratio or 
alternate risk for the applicable racial and ethnic group and category.
    Changes: We have added Sec.  [thinsp]300.647(c)(2) to allow States 
to not calculate either the risk ratio or alternate risk ratio for a 
given racial or ethnic group if the comparison groups at the LEA level 
and State level do not meet the State's minimum n-sizes and minimum 
cell sizes.
    Comment: A large number of commenters strongly suggested that the 
Department not mandate an n-size of 10 be applied to number of children 
in the comparison group as this might lead to false positives.
    Discussion: As we note earlier in this section, the Department has 
amended its original proposal so that it no longer restricts States to 
a minimum n-size no greater than 10. Instead, the Department will 
require States to set reasonable minimum n-sizes. We believe this 
change to be responsive to the comments raised by reducing the 
likelihood that an LEA may be identified with significant 
disproportionality due to small numbers of children.
    Changes: None.
    Comment: One commenter stated that a minimum cell size need not 
apply to the comparison group, as the commenter recommends that States 
use a different approach, including a risk ratio and risk difference to 
examine LEAs that are mostly homogenous. The Department interprets the 
comment to suggest that, as risk difference should be used to analyze 
homogenous LEAs, and can be calculated even when a comparison group has 
a cell size of zero, there is no need for a minimum cell size for the 
comparison group.
    Discussion: As we explain earlier in Risk Ratios (Sec.  300.646(b); 
Sec.  300.647(a)(2); Sec.  300.647(a)(3); Sec.  300.647(b)), we decline 
to allow States to use risk difference to examine LEAs for significant 
disproportionality. States are required under Sec.  300.646(b)(3), (4), 
and (5) to calculate the risk ratio--or the alternate risk ratio--and 
these methods cannot be calculated when the comparison group has a cell 
size of 0, and cannot be calculated reliably when the comparison group 
has a low cell or n-size. For these reasons, we disagree with the 
commenter and will require States to apply minimum cell sizes to 
comparison groups, under Sec.  300.646(b)(5), to determine whether the 
alternate risk ratio will be used in place of the risk ratio.
    Changes: None.
    Comments: A number of commenters requested that, without the 
flexibility to include both a minimum n-size and a minimum cell size, 
States be allowed to include a test of statistical significance to 
determine whether the risk ratio is statistically different from the 
risk ratio threshold. Other commenters inquired about the use of 
statistical significance tests on specific pieces of the risk 
calculation prior to a finding of significant disproportionality.

[[Page 92435]]

    Discussion: Given that States have access to population data on the 
identification, placement, and discipline of children with 
disabilities, tests of statistical significance would be inappropriate.
    Further, the Department notes that commenters generally wanted 
States to have the flexibility to conduct these tests in the absence of 
flexibility to use minimum cell sizes. Given that States may set their 
own reasonable minimum cell sizes and minimum n-sizes, we believe the 
commenters' concerns to be addressed without allowing the use of 
statistical significance testing.
    Changes: None.
    Comments: A large number of commenters requested that the 
Department offer States flexibility to determine how to apply a minimum 
population requirement to LEAs. These commenters wanted States to have 
flexibility to add additional criteria beyond the minimum n-size to 
avoid identifying significant disproportionality that is simply the 
result of small numbers. One commenter noted that a minimum n-size of 
10 fails to account for the overall size of an LEA. Another commenter 
noted that one State uses a population requirement for the general 
student population. A few commenters encouraged the Department to allow 
States to consider, in implementing the standard methodology, the size 
of the racial and ethnic group size in relation to the size of the LEA. 
One commenter requested flexibility to use additional criteria beyond a 
minimum n-size, such as requiring 30 or more children with an IEP for 
calculations.
    Discussion: The Department recognizes that there are multiple ways 
that States could use data on the number of children in an LEA to 
determine whether to exclude that LEA from its analysis for significant 
disproportionality. For example, it is possible to devise a system in 
which LEAs that do not have at least 500 children enrolled are not 
subject to the standard methodology, or one in which an LEA is excluded 
from analyzing a particular racial or ethnic group if that group 
constitutes less than 1 percent of total enrollment in an LEA. However, 
we believe that exclusions on these bases would be inappropriate, as 
they are not closely related to concerns about data volatility and 
could result in an inappropriately high number of LEAs being excluded. 
Further, as every child with a disability is entitled to a free 
appropriate public education in the least restrictive environment, 
regardless of the size of the LEA or the proportion of enrolled 
children who are in their particular racial or ethnic subgroup, we 
believe it would be inappropriate to allow the exclusion of LEAs for 
reasons unrelated to data volatility. We believe that State flexibility 
to set reasonable minimum cell sizes and minimum n-sizes is sufficient 
to address commenters' concerns regarding small numbers of children.
    Changes: None.
    Commenter: A commenter recommended that the Department require 
States to report risk ratios that are corrected--using advanced 
mathematical methods of correction or estimation--when LEAs have a cell 
size of zero.
    Discussion: In developing the standard methodology, the Department 
placed a priority on selecting methods that were easy to comprehend, 
that supported transparency, and that facilitated comparisons between 
States' approaches to identifying significant disproportionality. With 
a population requirement, such as the minimum cell size included in 
Sec.  300.647(b)(1), LEAs can easily determine which racial and ethnic 
groups the State will review for significant disproportionality, and 
what categories of analysis will be reviewed. Further, they can 
calculate for themselves the likely outcome of the review.
    While the commenters' suggestion might enable States to review 
additional LEAs for significant disproportionality, it would do so at 
the cost of transparency, given the complexity of the analysis. For 
this reason, the Department declines to require States to use this 
analysis.
    Changes: None.
    Comment: One commenter stated that population requirements have 
varied between LEAs, with some having a minimum of just 9 children 
while other LEAs have set the minimum as large as 30 children. The 
commenter expressed concern that population requirements that require a 
greater number of children may result in significant disproportionality 
being missed entirely in some LEAs.
    Discussion: We agree with the commenter that, in general, LEAs with 
significant disproportionality may be overlooked if either minimum n-
sizes or minimum cell sizes are too large. For this reason, under Sec.  
300.647(b)(1), States will be required to set reasonable minimum cell 
sizes and reasonable minimum n-sizes with input from State Advisory 
Panels, and the States' chosen population requirements would also be 
subject to the Department's enforcement of reasonableness. Further, 
this provision requires States to identify and apply minimum n-sizes 
and minimum cell sizes. LEAs will not be permitted to set their own 
population requirements to determine whether the LEA, or if the racial 
and ethnic groups within the LEA, will be reviewed by the State for 
significant disproportionality.
    Changes: None.
Alternate Risk Ratios (Sec.  300.647(a)(1); Sec.  300.647(b)(5); Sec.  
300.647(c)(2))
    Comment: A number of commenters responded to Directed Question #7 
in the NPRM, which requested public input regarding the use of the 
alternate risk ratio method in situations where the comparison group 
does not meet the minimum n-size. Directed Question #7 also asked for 
input on whether the use of the alternate risk ratio method would be 
appropriate in other situations.
    Some commenters opposed the use of an alternate risk ratio method. 
Of these, some stated that an alternate risk ratio method would seldom 
be appropriate because, in some States, few LEAs have demographics that 
are similar to the State's overall demographics. This commenter 
suggested that using an alternate risk ratio method will increase the 
likelihood of false positive identification of LEAs with significant 
disproportionality. A number of commenters expressed concern that, with 
the alternate risk ratio, LEAs would be dependent upon States to 
provide the data to calculate their risk ratios. These commenters 
expressed a preference for calculations that LEAs would run independent 
of the State. Another commenter expressed opposition to a standard 
methodology in general and stated that the alternate risk ratio method 
is similarly deficient because it fails to take into account factors, 
such as poverty, that could affect the need for special education 
services. Similarly, some commenters stated that, while the use of an 
alternate risk ratio method may be appropriate in certain situations, 
the Department should further consider allowing States to use 
methodologies other than a risk ratio.
    A few commenters expressed support for the use of an alternate risk 
ratio approach in limited situations, such as when subgroup sizes are 
small in number, or when the risk ratio is volatile across three years 
of data. Other commenters supported the Department's proposal to allow 
States to use the alternate risk ratio in instances where the total 
number of children in a comparison group is less than 10 or when the 
risk to children in a comparison group is zero.
    Discussion: Under proposed Sec.  300.647(b)(5), States would have 
used the alternate risk ratio, instead of the

[[Page 92436]]

risk ratio, whenever the comparison group at the LEA-level had an n-
size of fewer than 10 children (or children with disabilities, as 
appropriate) or had a risk of 0 percent (i.e., had a cell size of 0). 
This requirement was designed to prevent the possibility that States 
might, from LEA to LEA, choose from either the risk ratio or alternate 
risk ratio with the goal of avoiding an identification of significant 
disproportionality.
    As the Department has revised Sec.  300.647(b)(1) to allow States, 
with input from stakeholders (including the State Advisory Panel), to 
set reasonable minimum n-sizes and minimum cell sizes, we have likewise 
revised Sec.  300.647(b)(5) to require States the use of the alternate 
risk ratio when, within an LEA, the comparison group does not meet 
either a reasonable minimum n-size or minimum cell size. While the 
flexibility to determine reasonable minimum n-sizes and minimum cell 
sizes will not allow States the option to simply choose, from LEA to 
LEA, whether to apply the alternate risk ratio due to concerns about 
risk ratio volatility, it would provide States the ability to avoid 
risk ratio volatility due to small comparison group sizes. Likewise, 
the ability of a State to determine reasonable minimum cell sizes and 
minimum n-sizes should provide sufficient flexibility to avoid false 
positives identification of significant disproportionality that might 
result when examining small target or comparison groups.
    With respect to the comment regarding the potential difficulty in 
obtaining State data for use in the alternative risk ratio, we note 
that the requirement to analyze LEAs is applicable to States, and 
States have access to the State-wide data necessary to use when 
applying the alternate risk ratio method. In reviewing LEAs for 
significant disproportionality with respect to identification, we 
generally expect that States will use the same IDEA section 618 data 
that is reported to the Department for data regarding children with 
disabilities, and data submitted to the Institute for Education 
Sciences for the Common Core of Data, for enrollment data. OMB Control 
No. 1875-0240. In reviewing LEAs for significant disproportionality 
with respect to placement or discipline, we generally expect that 
States will use the same section 618 data reported to the Department. 
For IDEA section 618 data, discipline data is a cumulative count from 
July 1st through June 30th, while IDEA section 618 child count data is 
a point-in-time count that occurs in the fall. OMB Control No. 1875-
0240.
    We disagree with commenters that the Department should allow States 
to consider additional factors that might affect significant 
disproportionality. Under the current regulations, the GAO noted that 
``the discretion that states have in defining significant 
disproportionality has resulted in a wide range of definitions that 
provides no assurance that the problem [of significant 
disproportionality] is being appropriately identified across the 
nation.'' It was this finding by the GAO, public comments the 
Department received in a response to a 2014 request for information (79 
FR 35154), and the Department's review of State definitions of 
significant disproportionality that convinced the Department to issue 
regulations to require that all States follow a standard methodology. 
The Department believes that the proposed standard methodology--
including the use of the risk ratio or alternative risk ratio method--
is a necessary step to achieve those goals.
    Changes: We have revised Sec.  300.647(b)(5) to require States the 
use of the alternate risk ratio when, within an LEA, the comparison 
group does not meet either a reasonable minimum n-size or minimum cell 
size, as determined by the State in accordance with revised Sec.  
300.647(b)(1).
    Comment: A number of commenters suggested the Department provide 
the flexibility to allow States to determine when and under what 
circumstances the alternate risk ratio method would be most 
appropriate. One of these commenters noted that one State currently 
uses the alternate risk ratio in all instances and urged the Department 
to allow this State to continue to do so rather than limiting the use 
of the alternate risk ratio method to those situations when the risk 
ratio method is not applicable. According to the commenter, the LEAs in 
this State are familiar with the alternate risk ratio and understand 
its calculation. In addition, the commenter asserted that the alternate 
risk ratio provides the ability for comparability of results among the 
LEAs in the State.
    Other commenters asserted that while flexibility to use the 
alternate risk ratio may be appropriate, a requirement to use the 
alternate risk ratio method was not. Some of these commenters argued 
that the alternate risk ratio, which uses the State's risk for the 
comparison group, is inappropriate in States in which the racial and 
ethnic composition of LEAs differs significantly from that of the 
State. These commenters indicated that allowing States to use a minimum 
cell size for both the racial or ethnic group of interest and the 
comparison group would eliminate the need for the alternate risk ratio 
calculation.
    Another commenter noted that the use of an alternate risk ratio for 
some LEAs or some subgroups within an LEA will create disparities in 
the application of the regulation. The commenter requested that States 
have the flexibility to use either the risk ratio or the alternate risk 
ratio for all of the LEAs and subgroups within the State.
    Still another commenter suggested that the Department allow, but 
not require, the alternate risk ratio method, stating that, while the 
alternate risk ratio may solve the problem of low cell size for the 
comparison population, it precludes an accurate measure of 
disproportionality because it relies on a comparison of two dissimilar 
populations. According to the commenter, if referral rates in an LEA 
are high in general, application of the risk ratio method would not 
suggest significant disproportionality; use of the alternate risk ratio 
method, however, where the LEA's generally high referral rates would be 
compared to the State's average referral rates, would result in all 
groups being found to be disproportionate. This commenter further 
stated that the alternate risk ratio will create a substantial risk in 
States with predominantly White rural areas that a large number of LEA 
findings will be due to significant overrepresentation for White 
children. The commenter questioned whether Congress, in framing IDEA in 
2004, intended to address the disparate treatment of White children. 
The commenter argued that, while the issue of over-referral to special 
education could be an issue for OSEP or SEAs to address, comprehensive 
CEIS should be a vehicle to monitor significant disproportionality, not 
referral rates.
    Another commenter noted that, when an LEA suspends just one or two 
children of one racial or ethnic group and none of any other racial or 
ethnic group, the alternate risk ratio will kick in and, due to small 
numbers that produce a high risk for one particular racial or ethnic 
group, a high alternate risk ratio will be produced and trigger a 
finding of significant disproportionality Other commenters arrived at a 
similar conclusion: They advised the Department to not require the use 
of the alternate risk ratio calculation as, according to them, it only 
provides a viable option for examining racial or ethnic disparities in 
a limited number of circumstances (e.g., when the comparison group does 
not meet the minimum n-size or cell size), failing to address very 
small target populations.

[[Page 92437]]

    Discussion: We appreciate the comments regarding the required use 
of the alternative risk ratio. With respect to comments suggesting that 
the Department permit States to apply the alternate risk ratio whenever 
they deem it appropriate, we reiterate that the alternative risk ratio 
may be used only when the risk ratio method is not available. As we 
stated in the NPRM, it is the Department's position that, whenever 
possible, analyses for significant disproportionality under IDEA 
section 618(d) should compare identification, placement, and discipline 
rates in an LEA to those rates for other racial and ethnic groups in 
the same LEA.
    We disagree with commenters suggesting that States should have 
flexibility to exclude from a review of significant disproportionality 
those racial or ethnic groups within LEAs that do not have a 
sufficiently large comparison group. For similar reasons, we disagree 
with commenters objecting to the alternate risk ratio due to 
demographic differences between the State and LEA. The Department 
believes that, in racially or ethnically homogenous LEAs--including 
rural, predominantly White districts--and LEAs with markedly different 
demographic characteristics than a State, there is a possibility that a 
particular racial or ethnic group is identified, placed, or 
disciplined, at markedly higher rates than their peers. In these cases, 
the absence of a comparison group should not excuse either the State or 
the LEA from their responsibility under IDEA section 618(d) to identify 
and address significant disproportionality.
    We disagree with the suggestion that IDEA section 618(d) was not 
intended to address significant disproportionality that impacts White 
children. The plain language of IDEA section 618(d) (20 U.S.C. 1418(d)) 
requires States to identify significant disproportionality, based on 
race or ethnicity, without any further priority placed on specific 
racial or ethnic groups. For that reason, the Department believes that 
the statute directs States to address significant disproportionality 
impacting all children with disabilities.
    We further disagree with commenters that an alternate risk ratio 
requirement does not measure racial and ethnic disparity. Most measures 
of racial and ethnic disparity include some comparison of risk; in the 
case of the alternate risk ratio, the comparison is not to a State risk 
index, but to a State-level comparison group (e.g., Black children in 
an LEA, compared with non-Black children in the State).
    Finally, with respect to the possibility that, for any one LEA with 
high referral rates across all groups, all racial and ethnic groups 
could trigger a finding of significant disproportionality if an 
alternate risk ratio is required, we do not believe that there is a 
high likelihood of that scenario occurring. The alternate risk ratio 
would only be utilized in cases where, for a particular racial or 
ethnic group, there is a small comparison group at the LEA-level or the 
comparison group's risk is zero at the LEA-level. Likewise, the 
flexibility to set reasonable minimum cell sizes and minimum n-sizes 
should allow States to avoid identifying LEAs based on a small number 
of children in a particular group. In either case, it is likely that 
the racial and ethnic groups that comprise the comparison group would 
not be reviewed for significant disproportionality, as, per Sec.  
300.647(c)(1), States will have the flexibility to exclude from their 
review for significant disproportionality those racial and ethnic 
groups they do not meet both a minimum n-size and minimum cell size.
    Changes: None.
    Comment: One commenter suggested that the alternate risk ratio 
would be appropriate in situations where an LEA is home to highly 
specialized programs for children with autism or hearing impairments, 
or where the mobility rate is significantly discrepant from the State 
average.
    Discussion: We disagree. As we stated in the NPRM, it is the 
Department's position that, whenever possible, analyses for significant 
disproportionality under IDEA section 618(d) should compare 
identification, placement, and discipline rates in an LEA to those 
rates for other racial and ethnic groups in the same LEA. Generally, 
variations from statewide trends is not an ideal indicator of whether 
significant disproportionality exists, which is why the Department 
initially proposed to limit the use of the alternate risk ratio to 
instances in which the comparison group is particularly small or the 
risk to that group is zero. In instances where an intra-LEA analysis 
either does not create mathematical quandaries (i.e., dividing by zero) 
or does not rely on particularly small comparison groups, racial and 
ethnic groups within an LEA should be compared with other groups within 
the LEA. Under Sec.  300.647(b)(5), the Department will limit the use 
of the risk ratio to instances where the comparison group does not meet 
either the State's reasonable minimum cell size or minimum n-size.
    In instances where LEAs have highly specialized programs, LEAs 
should work to ensure that these programs are equally accessible to all 
children eligible for the program, regardless of race or ethnicity. 
Similarly, LEAs should ensure that decisions to place particular 
children with disabilities in segregated settings are based on the 
individual needs of those children consistent with civil rights laws. 
Unnecessarily removing children with disabilities from an integrated 
setting and concentrating them in separate schools runs contrary to the 
integration goal that lies at the heart of the Americans with 
Disabilities Act (ADA). (See, e.g. 28 CFR 35.130(b)(1)(ii), (b)(1)(iv), 
(b)(2); see also, Olmstead v. L.C., 527 U.S. 581, 597 (1999) 
(``Unjustified isolation, we hold, is properly regarded as 
discrimination based on disability'' under title II of the ADA).)
    Further, as discussed earlier, the level of student mobility in an 
LEA does not obviate that LEA's obligation under IDEA to ensure that 
all children with disabilities have access to a free appropriate public 
education in the least restrictive environment. LEAs should ensure that 
they are meeting this obligation for all children, and that they are 
doing so without regard to a child's race or ethnicity.
    Finally, it is not clear to the Department how a calculation of an 
alternate risk ratio, rather than a risk ratio, would result in a more 
accurate assessment of significant disproportionality for LEAs with 
specialized programs or highly mobile student populations.
    Changes: None.
    Comments: One commenter suggested that if an SEA uses multiple 
years of data, and an LEA's racial composition requires the use of the 
alternate risk ratio in one year, then the State should have the 
flexibility to use the alternate risk ratio in the other years to 
determine significant disproportionality. The commenter suggested, for 
example, that an SEA using three years of data be permitted to apply 
the alternate risk ratio to years one and three of the data even if the 
alternate risk ratio was only triggered in year two of the data.
    Discussion: The Department does not believe it appropriate to allow 
States to use the alternate risk ratio for LEAs in the years just prior 
to, or immediately following, years when it is required to do so 
because the comparison group does not meet the State's reasonable 
minimum n-size or reasonable minimum cell size. As we stated in the 
NPRM, it is the Department's position that, whenever possible, LEA data 
is

[[Page 92438]]

preferable to State-wide data for the purpose of identifying 
significant disproportionality as they best represent the practices of 
the LEA and the experiences of the children enrolled in the LEA. 81 FR 
10967. In years when an LEA has a sufficiently large population of 
children, or children with disabilities, to meet the State's reasonable 
minimum cell size and minimum n-size, it is the Department's preference 
that States use the LEA's information to identify if significant 
disproportionality is taking place.
    Changes: None.
Flexibilities--Three Consecutive Years of Data, Sec.  300.647(d)(1)
    Comment: One commenter expressed concern that allowing States to 
identify LEAs with significant disproportionality by examining up to 
three prior consecutive years in proposed Sec.  300.647(c)(1) is 
ambiguous. Further, the commenter stated that it is not clear whether 
the regulation is written to mean that an LEA could be identified in 
the year in which their data exceeded the State-defined threshold or if 
the LEA could exceed the threshold for three years and then be 
determined to have significant disproportionality in the fourth year. 
If the regulation is written to mean the latter, the commenter 
expressed that four years is an unnecessarily long delay. Another 
commenter stated that it is unclear whether the State may begin 
consideration of the three years of data on the date the regulations go 
into effect.
    Discussion: The Department appreciates the opportunity to clarify 
this flexibility. Under final Sec.  300.647(d)(1), States may make a 
determination that an LEA has significant disproportionality after the 
LEA has exceeded a risk ratio threshold for a particular racial or 
ethnic group and category of analysis for up to three prior consecutive 
years preceding the identification. Under this provision, a State is 
prohibited from waiting four years to identify an LEA with significant 
disproportionality if it has exceeded the State's risk ratio threshold 
for up to three prior consecutive years. The use of the term ``prior'' 
is meant to clarify that any determination of significant 
disproportionality uses the most recent year for which data are 
available and up to two previous consecutive years of data.
    For example, if a State is making a determination in the 2018-2019 
school year, it can rely on up to three years of data to make its 
determinations (e.g., 2015-2016, 2016-2017, and 2017-2018). If an LEA 
exceeds the risk ratio threshold for a particular racial or ethnic 
group for a particular category of analysis in each of those years, the 
State must identify that LEA as having significant disproportionality. 
The fact that the determination made in 2018-2019 is based, in part, on 
data from 2015-2016 does not constitute a delay of four years to make a 
determination, but is a result of data lags that occur regardless of 
how many prior years of data a State analyzes (e.g., 2018-2019 child 
count, placement, and discipline data are not typically available in 
time for States' determinations in the 2018-2019 school year).
    The flexibility to determine significant disproportionality after 
one, two, or three consecutive years was designed to account for 
volatility--small changes in data from year to year that may cause 
large changes in a risk ratio and cause an LEA to be identified with 
significant disproportionality. Allowing States to take into 
consideration up to three consecutive years of data provides an 
opportunity for the States to determine which LEAs have significant 
disproportionality on the basis of consistently elevated risk ratios, 
rather than what may be a single year increase.
    Also, as we noted in the NPRM, using three consecutive years of 
data was the most common approach to identifying significant 
disproportionality among the States in 2012-2013. Of the 23 States that 
reported using multiple years of data in the SY 2012-2013 State 
Supplement Survey (SSS), 13 States required an LEA to exceed the 
threshold for three consecutive years before finding significant 
disproportionality, while 9 States required 2 consecutive years.
    Changes: None.
    Comment: Regarding proposed Sec.  300.647(c)(1), a large number of 
commenters expressed support for requiring, rather than allowing, 
States to rely on three years of data before making a determination of 
significant disproportionality. Several other commenters supported 
States choosing to identify an LEA as having significant 
disproportionality only after the LEA exceeds a risk ratio threshold 
over a period of time (such as three consecutive years) as a matter of 
best practice to avoid the identification of significant 
disproportionality due to data anomalies.
    Discussion: Final Sec.  300.647(d)(1) will permit, but not require, 
States to rely on up to three years of data in order to make a 
determination of significant disproportionality. The Department 
believes that States should have the flexibility to make a 
determination of significant disproportionality based on one, two, or 
three consecutive years of data. The Department also believes that this 
flexibility will help States both account for year-to-year volatility 
in the risk ratio and focus on LEAs with consistently high risk ratios.
    At the same time, we do not believe it appropriate to require 
States to use three consecutive years of data--rather than two 
consecutive years, or only one year--prior to identifying significant 
disproportionality. Given the flexibility States will have under Sec.  
300.647 to set reasonable population requirements--which will also 
reduce risk ratio volatility--reasonable risk ratio thresholds, and 
standards for reasonable progress, States may determine that a 
particular combination of these methods appropriately identifies 
significant disproportionality using one or two years of data. In these 
cases, the Department does not want to require States to wait an 
additional year, or an additional two years, to make an identification 
of significant disproportionality when they have confidence that the 
racial and ethnic disparities within an LEA require more immediate 
intervention.
    Changes: None.
    Comment: Many commenters expressed general support for allowing 
States to use up to three consecutive years of data, under proposed 
Sec.  300.647(c)(1), prior to making a determination of significant 
disproportionality. One commenter expressed support for allowing up to 
three consecutive years of data, so long as States continue to be 
required to annually calculate risk ratios to determine significant 
disproportionality. That same commenter argued that analyzing three 
consecutive years of data gives LEAs more advanced notice, flexibility, 
and support in which to implement systemic changes before a finding of 
significant disproportionality can occur. A few commenters expressed 
that allowing States to wait for more than three consecutive years--
that is, longer than the period specified in the Department's 
proposal--before identifying significant disproportionality would mean 
that thousands of misidentified, misplaced, and over-disciplined 
children would continue to be denied the high quality education they 
need.
    Discussion: The Department appreciates the commenters' support and 
believes that this flexibility will help States account for volatility 
in risk ratios. Allowing States to take into consideration the data of 
up to three consecutive years provides an opportunity for the States to 
focus their efforts on LEAs with consistently high

[[Page 92439]]

risk ratios year over year, rather than only those with a single year 
of a high risk ratio. Further, we agree with the commenter's 
interpretation of proposed Sec.  300.647(c)(1) (now Sec.  
300.647(d)(1)) that States must examine their LEAs for significant 
disproportionality every year. The flexibility in this section allows 
the State to limit their findings of significant disproportionality to 
LEAs that exceed the State's risk ratio threshold for up to three prior 
consecutive years, as is already the common practice in a number of 
States. As we noted in the NPRM (81 FR 10985), based on the SY 2013-14 
State Supplement Survey, 23 States require that LEAs exceed a specified 
level of disparity for multiple years for at least one category of 
analysis for at least one racial or ethnic group before the LEA is 
identified as having significant disproportionality. Of these 23 
States, 13 require 3 consecutive years of risk ratios exceeding an 
established threshold. We therefore agree with the comment that a 
longer period of analysis would not be appropriate.
    Changes: None.
Flexibilities--Reasonable Progress, Sec.  300.647(d)(2)
    Comment: Many commenters expressed support for proposed Sec.  
300.647(c)(2) allowing States to exempt LEAs from a determination of 
significant disproportionality if they show reasonable progress.
    Discussion: The Department appreciates commenters' support for this 
flexibility. We believe it is important to allow States the flexibility 
to not identify LEAs with significant disproportionality if, for 
example, a prior review and revision of policies, practices, and 
procedures and effective use of funds for comprehensive CEIS has 
resulted in a reasonable reduction in risk ratios in each of the two 
prior consecutive years. In such an LEA, a continued finding of 
significant disproportionality, including an ongoing annual review of 
policies, practices, and procedures, may actually divert State 
attention from LEAs in which substantial problems continue to occur and 
are not improving.
    Changes: None.
    Comments: Two commenters asked for additional Federal guidance 
regarding what constitutes reasonable progress because allowing States 
to interpret ``reasonable progress'' may allow LEAs to ``backslide.'' 
One commenter stated that the Department should place restrictions on 
the definition of ``reasonable progress'' if trend data indicates that 
different rates of progress are appropriate for different demographic 
groups across identification, placement, and discipline. Other 
commenters recommended clearly defining ``reasonable progress'' and 
including a rubric for determining whether the State is correctly 
applying ``reasonable progress'' and monitoring trends across States 
for appropriate definitions of reasonable progress. Finally, one 
commenter posited that, without a clearer definition of reasonable 
progress, the flexibility may become a loophole allowing States to 
avoid identifying LEAs.
    Discussion: We appreciate commenters' concerns regarding the 
reasonable progress flexibility. While the Department believes that 
States should retain broad flexibility to set a standard for 
``reasonable progress,'' it was not our intent to allow States 
unfettered flexibility in this area. We have revised the regulations to 
ensure that a State's standard for reasonable progress is meaningful, 
and to reduce the likelihood that an LEA might meet the standard due to 
reductions in risk ratios resulting from a data anomaly. Under final 
Sec.  300.647(d)(2), LEAs must be making reasonable progress in 
lowering the risk ratio or alternate risk ratio for the group and 
category for each of the two prior consecutive years, rather than the 
immediate preceding year. As such, if an LEA is not reducing risk 
ratios over each of the two prior consecutive years, a State cannot 
exercise this flexibility. Further, we have revised Sec.  
300.647(b)(1), to require each State to consult with its stakeholders, 
including State Advisory Panels, before setting a standard for 
reasonable progress. This revision also clarifies that the State's 
standard for reasonable progress, under Sec.  300.647(d)(2), is subject 
to the Department's monitoring and enforcement for reasonableness.
    While, in the NPRM, the Department suggested that States might make 
a determination of ``reasonable progress'' on a case-by-case basis, we 
no longer find this degree of flexibility to be appropriate. While 
States would retain the flexibility to set a standard for reasonable 
progress--including the flexibility to set a standard that requires 
different risk ratio reductions for each of the categories in 
paragraphs (b)(3) and (4)--this standard must be developed with the 
advice of stakeholders, including the State Advisory Panel, and 
implemented uniformly across the State. We do not, however, believe 
that a standard that requires different risk ratio reductions for LEAs 
that exceed the State's risk ratio threshold for different racial or 
ethnic groups would meet constitutional scrutiny.
    The proposed regulations also included additional restrictions to 
how a State may implement Sec.  300.647(d)(2), which we retain in these 
final regulations. If an LEA is reducing risk ratios generally, but not 
for the specific group and category for which its risk ratio exceeded 
the State's risk ratio threshold, a State cannot exercise this 
flexibility. Similarly, if an LEA exceeds the risk ratio threshold in 
four areas and is making reasonable progress in only three of them, a 
State could not use this flexibility to not identify the LEA with 
significant disproportionality in the area in which the LEA is not 
making reasonable progress. Therefore, while States can determine 
specific standards for what constitutes reasonable progress (e.g., a 
reduction of the risk ratio by 0.5 in each of the two prior consecutive 
years), they can do so only within a specified set of circumstances.
    In sum, the Department does not believe that this flexibility 
represents an unchecked loophole for States. The Department plans to 
monitor States' implementation of this flexibility and, as appropriate, 
will provide technical assistance on best practices as they become 
evident. The Department may also take appropriate enforcement action, 
ranging from requiring a corrective action plan, to imposing special 
conditions, to designating the State as high-risk status, to 
withholding a portion of the State's IDEA Part B funds.
    Changes: We have revised Sec.  300.647(b)(1) to clarify that the 
State's standard of ``reasonable progress'' must be developed with the 
advice of stakeholders, including State Advisory Panels, and is subject 
to the Department's monitoring and enforcement for reasonableness. We 
have also revised Sec.  300.647(b)(1) to clarify that a State may, but 
is not required to, set the standards for measuring reasonable progress 
at different levels for each of the categories described in paragraphs 
(b)(3) and (4). In addition, we have revised Sec.  300.647(d)(2) to 
require that an LEA make reasonable progress in reducing the 
appropriate risk ratio (or alternate risk ratio) in each of two prior 
consecutive years, rather than the immediate preceding year.
    Comments: Several commenters supported giving States significant 
flexibility in defining ``reasonable progress,'' and emphasized that 
there should be no additional restrictions on State flexibility to 
define ``reasonable progress.''

[[Page 92440]]

    Discussion: We appreciate the commenters' perspective. While we 
believe that States should have broad flexibility to set a standard for 
``reasonable progress,'' it was the Department's intent to restrict 
States to only those standards that are reasonable and are indicative 
of meaningful progress. As we note earlier in this section, we believe 
that two changes to regulation are necessary to help States to select a 
standard that is reasonable and to reduce the likelihood that data 
anomalies will prevent the appropriate identification of LEAs with 
significant disproportionality.
    Changes: We have revised Sec.  300.647(b)(1) to clarify that the 
State's standard of ``reasonable progress'' must be developed with the 
advice of stakeholders, including State Advisory Panels, and is subject 
to the Department's monitoring and enforcement for reasonableness. We 
have revised Sec.  300.647(d)(2) to require that an LEA make reasonable 
progress in reducing the appropriate risk ratio (or alternate risk 
ratio) in each of the two prior consecutive years, rather than the 
immediate preceding year.
    Comment: A commenter requested clarity regarding the best way to 
determine whether an LEA has achieved reasonable progress such that a 
determination of significant disproportionality is no longer required.
    Discussion: In general, the Department expects that States 
implementing the revised final Sec.  300.647(d)(2) will examine LEAs 
for reasonable progress in reducing their risk ratios in each of the 
two prior consecutive years. For example, a State may choose to review 
LEAs for significant disproportionality in SY 2018-2019 based on data 
from SYs 2017-18, 2016-17, and 2015-16. Should the State identify an 
LEA that exceeds a particular risk ratio threshold for all three years, 
the State has the option, under final Sec.  300.647(d)(2), not to make 
a finding of significant disproportionality if the LEA has achieved at 
least a reasonable decrease in their risk ratios between SYs 2015-2016 
and 2016-17, and between SYs 2016-2017 and 2017-2018. The State does 
not have the option to postpone a finding of significant 
disproportionality if the LEA has only achieved a decrease in their 
risk ratios over a multiple year period; that is, if an LEA reduced its 
risk ratio from 2015-2016 to 2017-2018, but not from 2015-2016 to 2016-
2017, the State does not have the flexibility to not identify the LEA 
as having significant disproportionality if it otherwise exceeds the 
State's risk ratio threshold. So long as an LEA exceeds a risk ratio 
threshold, the LEA must make continuous progress, in each of the two 
prior consecutive years, in reducing its risk ratio to avoid a finding 
of significant disproportionality.
    Changes: None.
    Comment: One commenter stated that, in a State that uses three 
years of data, the data used to consider a determination of significant 
disproportionality is old and likely includes a substantial number of 
children who no longer attend the LEA. The commenter also stated that, 
because of the time it will take for the LEA to develop a plan, and 
report to the Department any improvement, years will have passed 
between the original identification of significant disproportionality 
and data showing the results of LEA-level changes.
    Discussion: We recognize that, given the time necessary to collect, 
prepare, and analyze data, the information States will use to identify 
significant disproportionality may be delayed a number of years, 
particularly when States are also exercising the flexibility under 
Sec.  300.647(d)(1) to consider up to three prior consecutive years of 
data. The data analyzed may indeed include children no longer enrolled 
within the LEA. However, the data lag is, in part, necessary to ensure 
accuracy of the information on which findings are based. It would be 
impossible for a State to make a determination of significant 
disproportionality regarding discipline for the current year based on 
the current year's data, as the school year is currently ongoing and 
the State would therefore be basing determinations on incomplete data. 
These limitations do not reduce the value of these analyses, 
particularly as IDEA section 618(d) was intended to address those LEAs 
with systemic racial and ethnic disparities in special education, 
rather than providing specific relief to specific children with 
disabilities. Other provisions of IDEA are meant to address the 
individual rights of children with disabilities to a free appropriate 
public education in the least restrictive environment.
    Changes: None.
    Comments: Two commenters suggested that reasonable progress should 
be defined so that it is meaningful.
    Discussion: We agree with the commenters that the standard for 
reasonable progress should represent a meaningful degree of improvement 
in the performance of the LEA. To ensure this, the Department will now 
require States to consult with stakeholders, including State Advisory 
Panels, prior to setting a standard for reasonable progress under Sec.  
300.647(d)(2). Further, each State's standard for reasonable progress 
will be subject to the Department's monitoring and enforcement for 
reasonableness.
    In addition, States should set their reasonable progress standards 
based on whether the progress realized by LEAs in lowering risk ratios 
represents a meaningful benefit to children in the LEA, rather than 
statistical noise or chance. To increase the likelihood that States' 
standards will accomplish this goal, the Department will now allow 
States to make a determination of reasonable progress only after an LEA 
has made reasonable progress in reducing its risk ratio in each of the 
two prior consecutive years.
    Changes: We have revised Sec.  300.647(b)(1) to clarify that the 
State's standard for ``reasonable progress'' must be developed with the 
advice of stakeholders, including State Advisory Panels, and is subject 
to the Department's monitoring and enforcement for reasonableness. We 
have revised Sec.  300.647(d)(2) to require that an LEA make reasonable 
progress in reducing the risk ratio (or alternate risk ratio) in each 
of the two prior consecutive years, rather than only from the immediate 
preceding year.
    Comments: One commenter suggested that, to show reasonable 
progress, an LEA must consistently reduce risk ratios across a three 
year period and requested clarification as to how consistent progress 
must be for a State using three years of data.
    Discussion: The Department appreciates the recommendation. We 
understood the commenter to be recommending that, when looking across a 
three year period (e.g., 2015-16, 2016-17, and 2017-18), an LEA should 
both show a year to year decrease in their risk ratio and an overall 
downward trend across the period, regardless of whether the first year 
of the period (e.g., 2015-16) was a decrease from the preceding year 
(e.g., 2014-15). We agree with the commenter that the LEA should make 
progress each year in reducing its risk ratio, and have revised the 
regulations to allow States to not identify an LEA with significant 
disproportionality if the LEA achieves reasonable progress, under Sec.  
300.647(d)(2), in reducing its risk ratio (or alternate risk ratio) 
from the preceding year in each of the two prior consecutive years. We 
believe this mirrors the recommendation of the commenter. We decline to 
require that LEAs reduce their risk ratio over a longer period of time, 
as it would require States to examine four or more years of data to 
determine whether the LEA had achieved reasonable progress.

[[Page 92441]]

Under the revised regulation, the Department will allow States to 
implement both Sec.  300.647(d)(1) and (2) using only three prior 
consecutive years of data.
    For example, State A has a risk ratio threshold of 3.0 and two LEAs 
in the State have risk ratios 3.6 (LEA 1) and 4.3 (LEA 2) in SY 2020-
2021. If the State opts to use the reasonable progress flexibility, the 
State would have to examine the risk ratios for those LEAs, for the 
particular group and category, for the two preceding years. If LEA 1 
had a risk ratio of 4.9 in 2018-2019 and a risk ratio of 4.3 in 2019-
2020, the State could determine that this LEA had demonstrated 
reasonable progress in reducing its risk ratios and not make a 
determination of significant disproportionality (assuming a reduction 
from 4.9 to 4.3 to 3.6 met the State's identified standard).
    However, if LEA 2 had a risk ratio in 2018-2019 of 4.9 and a risk 
ratio of 3.6 in 2019-2020, the State must identify that LEA as having 
significant disproportionality because it did not reduce its risk ratio 
in each year for two consecutive years. Even though the risk ratio of 
4.3 in 2020-2021 is less than the risk ratio in 2018-2019, the increase 
from 2019-2020 to 2020-2021 means the LEA has not made reasonable 
progress in reducing its risk ratio.

    Table 1--Example Risk Ratios by Year in Demonstrating Reasonable
                                Progress
------------------------------------------------------------------------
                     2019     2020     2021              Notes
------------------------------------------------------------------------
LEA 1............      4.9      4.3      3.6  State can determine LEA
                                               made reasonable progress
                                               because of decrease in
                                               risk ratio from prior
                                               year for two consecutive
                                               years.
LEA 2............      4.9      3.6      4.3  State may not determine
                                               LEA made reasonable
                                               progress because risk
                                               ratio increased from 2020
                                               to 2021.
------------------------------------------------------------------------

    Changes: None.
    Comment: A commenter suggested that the Department allow States to 
determine that an LEA has made reasonable progress if the LEA provides 
evidence that it is actively addressing the significant 
disproportionality, regardless of whether the LEA's data reflects that 
progress has been achieved.
    Discussion: As noted above, Sec.  300.647(d)(2) allows a State not 
to identify an LEA with significant disproportionality if it is making 
reasonable progress in lowering the risk ratios for the group or 
category in each of the two prior consecutive years. Further, IDEA 
section 618(d) (20 U.S.C. 1418(d)) requires States to base their 
determination of significant disproportionality on a collection and 
examination of data. For these reasons, States are not permitted to use 
information other than data on racial and ethnic disparities to 
distinguish whether significant disproportionality is occurring within 
an LEA or to determine whether that LEA is making reasonable progress 
under Sec.  300.647(d)(2).
    Changes: None.
    Comments: One commenter stated that providing States with the 
flexibility not to identify LEAs demonstrating reasonable progress in 
lowering the risk ratio will not remedy matters of identification due 
solely to small cell size. The Department interpreted this comment to 
suggest that proposed Sec.  300.647(c)(2) will not prevent the 
inappropriate identification of LEAs due to small populations of 
children.
    Discussion: The Department agrees with the commenter and did not 
intend for proposed Sec.  300.647(c)(2) (now Sec.  300.647(d)(2)) to 
prevent the identification of LEAs with significant disproportionality 
due to the volatility in risk ratios that can result from small numbers 
of children. Two other provisions are intended to address that issue. 
Under Sec.  300.647(b)(1)(i)(B) and (C), States must set minimum n-
sizes and minimum cell sizes. If a particular racial or ethnic group 
being analyzed in an LEA does not meet the minimum n-size and minimum 
cell size established by the State, the State is not required to use 
the standard methodology. We believe that this flexibility is 
sufficient to address concerns about identification of an LEA as having 
significant disproportionality on the basis of small numbers of 
children.
    Changes: None.
    Comment: Multiple commenters expressed concerns with the use of 
risk ratio as a measurement of reasonable progress under proposed Sec.  
300.647(c)(2). These commenters argued that absolute reductions in 
risk, and not risk ratios, should be used to measure progress, 
especially for restrictive placements and discipline.
    Discussion: The Department appreciates the concerns raised by 
commenters. However, as noted above, IDEA section 618(d) (20 U.S.C. 
1418(d)) is primarily concerned with significant disproportionality 
across racial and ethnic groups, rather than the specific rates of 
identification, placement in particular settings, or discipline for 
children with disabilities. As such, we believe it would be 
inappropriate to provide States the flexibility not to identify an LEA 
with significant disproportionality on the basis of a criterion that is 
not related to the relative numbers of children (or children with 
disabilities) experiencing a particular outcome across racial or ethnic 
groups.
    Changes: None.
    Comments: A number of commenters stated that risk ratios are 
inappropriate measures of progress when the underlying risk of 
placement in restrictive settings or of disciplinary removal is 
unacceptably high. For example, they argued that increasing the risk 
level for the lower incidence group in the risk ratio comparison would 
also reduce the risk ratio but not the overall exclusion of children 
from the classroom; according to the commenters, that scenario should 
never be considered reasonable progress. Commenters stated that a 
necessary component of any State's determination of reasonable progress 
must be that the racial or ethnic group with the highest risk level 
sees a reduction in its risk level.
    Discussion: The Department recognizes and appreciates the 
commenters' concerns. For several years, the Department has worked to 
assist States to strengthen behavioral supports to children with the 
goal of reducing schools' reliance on suspensions and expulsions. For 
this reason, the Department appreciates that commenters examined this 
component of the regulation for potential unintended incentives that 
could inhibit the progress of States and LEAs in reducing disciplinary 
removals. However, in considering the issues that the commenters have 
raised, the Department disagrees that allowing States to use the risk 
ratio to measure reasonable progress with respect to disciplinary 
removals would create an incentive to raise rates of suspension or 
expulsion.

[[Page 92442]]

    We find it highly unlikely that LEAs would respond to a finding of 
significant disproportionality by systematically seeking out children 
with disabilities in other racial or ethnic groups and suspending or 
expelling them solely to meet the State's definition of reasonable 
progress. Further, to the extent that an LEA was engaging in those 
practices, we would expect a State to take strong administrative action 
to prevent them, as they clearly represent a denial of a free 
appropriate public education in the least restrictive environment.
    The Department has worked to provide educators and schools with 
easy access to information regarding school discipline reform. Tools, 
data, and resources are available at www.ed.gov/school-discipline.
    Changes: None.
    Comment: One commenter noted that, in general, reducing discipline 
frequencies will tend to increase, not reduce, relative difference in 
discipline rates.
    Discussion: We recognize that, in an LEA that is generally reducing 
rates of discipline for all children with disabilities, it may become 
markedly more difficult to demonstrate reasonable progress in lowering 
risk ratios. For example, if an LEA suspended 15 percent of Hispanic 
children with disabilities and 3 percent of all other children with 
disabilities, it would have a risk ratio of 5.0. In order to 
demonstrate a reduction in the risk ratio of 0.1, the LEA would have to 
reduce the suspension rate for Hispanic children with disabilities to 
14.7 percent if the rate for all other children remained the same. 
However, if the LEA reduced the suspension rates for non-Hispanic 
children with disabilities to 2 percent, an LEA would actually have to 
reduce its suspension rate for Hispanic children with disabilities to 
9.8 percent to achieve the same 0.1 reduction in their risk ratio, a 
much larger reduction for the same ``effect size.'' Nonetheless, the 
difficulty of demonstrating reasonable progress in lowering the risk 
ratio does not invalidate the worthy goal of reducing disparities on 
the basis of race and ethnicity. Further, we note that, to the extent 
that the number of children with disabilities being suspended or 
expelled in an LEA decreases below the State's minimum cell size, a 
State is not required to use the standard methodology for determining 
whether there is significant disproportionality in the LEA.
    Changes: None.
    Comment: One commenter suggested that proposed Sec.  300.647 
include a flexibility to not identify LEAs with significant 
disproportionality if the State can identify through a review of data 
that the disproportionality is not the result of the actions of the 
LEA.
    Discussion: The Department recognizes that States have a vested 
interest in ensuring that their support of LEAs identified with 
significant disproportionality is appropriately targeted and may wish 
to avoid the statutory remedies in the event that an LEA with 
apparently strong policies, practices, and procedures nonetheless has 
significantly disproportionate rates of identification, placement and 
discipline for particular racial or ethnic groups. However, as noted 
above, IDEA section 618(d) (20 U.S.C. 1418(d)) clearly establishes that 
the basis for a finding of significant disproportionality is a 
disparity in the identification, placement and discipline of children 
on the basis of race and ethnicity and the review of policies, 
practices, and procedures a consequence of, rather than a part of, a 
determination of significant disproportionality. As such, the 
Department is precluded from waiving, or allowing States to waive, such 
a finding on the basis of criteria unrelated to those disparities. 
Further, regardless of whether any particular disparity in the 
identification, placement, and discipline of children on the basis of 
race and ethnicity can be linked to a specific LEA action, LEAs may 
still benefit from the review and, if necessary, revision of their 
policies, practices, and procedures and the reservation of funds for 
comprehensive CEIS to address those disparities.
    Changes: None.
    Comment: None.
    Discussion: Upon further consideration of the regulatory language 
originally proposed under Sec.  300.647(c)(2), we believe that 
provision includes an inappropriate, and potentially confusing, 
reference to alternate risk ratio thresholds. Under Sec.  
300.647(b)(1), States are required to establish one or more reasonable 
risk ratio thresholds, and, under Sec.  300.647(b)(6), identify an LEA 
with significant disproportionality if any of the LEA's risk ratios or 
alternate risk ratios exceed the reasonable risk ratio threshold. The 
Department did not include in Sec.  300.647 any provision that would 
allow States to establish an alternate risk ratio threshold--both risk 
ratios and alternate risk ratios are to be compared to the State's 
reasonable risk ratio threshold.
    While it was the Department's intention, with proposed Sec.  
300.647(c)(2), to allow States the flexibility to not identify an LEA 
that exceeds a risk ratio threshold when the LEA makes reasonable 
progress in reducing the risk ratio or alternate risk ratio for the 
applicable racial and ethnic group and category of analysis, the 
proposed provision inappropriately extended this flexibility to 
circumstances where LEAs exceeded an alternate risk ratio threshold. 
This gives the mistaken impression that States have the option to 
create separate alternate risk ratio thresholds.
    Changes: We have revised proposed Sec.  300.647(c)(2), now Sec.  
300.647(d)(2), to remove the reference to an alternate risk ratio 
threshold.

III. Clarification that Statutory Remedies Apply to Disciplinary 
Actions (Sec.  300.646(a)(3) and (c))

    Comments: A number of commenters supported our clarification in 
proposed Sec.  300.646(c) that States must address significant 
disproportionality in the incidence, duration, and type of disciplinary 
actions for children with disabilities, including suspensions and 
expulsions, just as they address significant disproportionality in the 
identification and placement of children with disabilities--by ensuring 
the review of and, if necessary, the revision of and reporting on LEAs' 
policies, practices, and procedures and by setting aside 15 percent of 
Part B IDEA funds to provide comprehensive CEIS.
    Discussion: We appreciate commenters' support for the proposed 
regulation that would incorporate the Department's long-standing 
position on this issue.
    Changes: None.
    Comments: One commenter argued that the clarification, even if it 
embodies a long-standing position of the Department, misreads the 
statute. The plain language of IDEA section 618(d)(1) (20 U.S.C. 
1418(d)(1)) requires States to determine whether in the State and its 
LEAs there is significant disproportionality with respect to race and 
ethnicity in the identification, placement, and discipline of children 
with disabilities. Section 618(d)(2) (20 U.S.C. 1418(d)(2)), however, 
only mentions identification and placement. As such, the commenter 
argued that the application of the statutory remedies based on a 
finding related to discipline was not supported by the statute, a 
reading the commenter stated was supported by a number of canons of 
statutory construction.
    Discussion: As we stated in the NPRM, when Congress added 
discipline to IDEA section 618(d)(1) (20 U.S.C. 1418(d)(1)), it made no 
corresponding change to IDEA section 618(d)(2) (20 U.S.C. 1418(d)(2)), 
which created an ambiguity because IDEA section

[[Page 92443]]

618(d)(2) does not explicitly state that the remedies in IDEA section 
618(d)(2) apply to removals from placement that are the result of 
disciplinary actions. The Department reads the term ``placement'' in 
the introductory paragraph of section 618(d)(2) to include disciplinary 
actions that are also removals of the child from his or her current 
placement for varying lengths of time, including removals that may 
constitute a change in placement under certain circumstances. IDEA 
section 615(k)(1), 20 U.S.C. 1415(k)(1). A disciplinary removal of up 
to 10 school days is considered a removal from placement under section 
615(k)(1)(B) (``[s]chool personnel under this subsection may remove a 
child with a disability who violates a code of student conduct from 
their current placement to an appropriate interim alternative 
educational setting, another setting, or suspension, for not more than 
10 school days (to the extent such alternatives are applied to children 
without disabilities)''), while a disciplinary removal from placement 
that exceeds 10 school days is considered a change in placement under 
section 615(k)(1)(C).
    The Department is the agency charged with administering IDEA and 
has the authority under IDEA section 607(a) (20 U.S.C. 1406(a)) to 
issue regulations to ensure compliance with the specific requirements 
of IDEA. Therefore, the Department has the authority to resolve the 
statutory ambiguity and incorporate into the regulations its long-
standing interpretation, which is and has been that the required 
remedies in IDEA section 618(d)(2) apply when there is significant 
disproportionality in identification, placement, or any type of 
disciplinary removal from placement. (See, 71 FR 46540, 46738 (August 
14, 2006); OSEP Memorandum 07-09, April 24, 2007; OSEP Memorandum 08-
09, July 28, 2008; June 3, 2008, letter to Ms. Frances Loose, 
Supervisor, Michigan Office of Special Education and Early 
Intervention.)
    Changes: None.
    Comments: Some commenters sought stronger monitoring, technical 
assistance, and guidance from the Department on significant 
disproportionality in discipline, others wrote in favor of applying 
discipline consistently, and one commenter asked the Department to 
establish national criteria for disciplining children and consistent 
guidelines for documenting and reporting disproportionate disciplinary 
actions.
    Discussion: While these issues are largely beyond the scope of 
these regulations, we appreciate the opportunity to address them. We 
agree with the commenters that discipline should be applied 
consistently regardless of race or ethnicity. The Department has 
recently engaged in extensive outreach, technical assistance, and 
guidance activities related to discipline, which can be found online at 
www.ed.gov/rethinkdiscipline. However, many aspects of this issue, 
including establishing national standards for school discipline, are 
beyond the Department's statutory authority in the context of these 
regulations.
    Changes: None.
    Commenters: One commenter recommended a minor wording change in the 
regulation, to reduce confusion. This commenter suggested that the 
Department rewrite proposed Sec.  300.647(b)(4) so that disciplinary 
removals, or proposed Sec.  300.647(b)(4)(iv) through (viii), are 
separated from educational placements in proposed Sec.  
300.647(b)(4)(i) through (iii), and placed under a heading of 
discipline. The commenter argued that ``given that many students with 
disabilities are removed from regular class settings, it is important 
to make clear that data must be collected on exclusionary removals of 
all students with disabilities regardless of the restrictiveness of the 
setting in which that are served.''
    Discussion: We do not think it necessary, nor appropriate, to 
change proposed Sec.  300.647(b)(4) so that disciplinary removals are 
separated and placed under a heading of discipline. As written, Sec.  
300.647(b)(4) is consistent with the language of IDEA section 618(d) 
(20 U.S.C. 1418(d)), which directs States to collect and examine data 
to determine whether significant disproportionality based on race and 
ethnicity is occurring with respect to ``the incidence, duration and 
type of disciplinary actions, including suspensions and expulsion''. As 
we explained in the NPRM, we interpret the statute to require States to 
apply the statutory remedies if an LEA is identified with significant 
disproportionality with respect to disciplinary removals from 
placement. Therefore, we decline to change proposed Sec.  300.647(b)(4) 
so that disciplinary removals are separated and placed under a heading 
of discipline.
    Changes: None.

IV. Clarification of the Review and Revision of Policies, Practices, 
and Procedures (Sec.  300.646(c))

Review of Policies, Practices, and Procedures--Requirements
    Comments: A number of commenters supported proposed Sec.  
300.646(c) and our clarifying the requirement for the annual review of 
an LEA's policies, practices, and procedures in the case of a 
determination of significant disproportionality. One commenter noted 
that this review can change the behavior of LEAs that are improperly 
identifying children for special education and related services. Other 
commenters, however, objected to proposed Sec.  300.646(c), stating 
that an annual review was unnecessary and burdensome.
    Another commenter objected and suggested that most significant 
disproportionality arises as a result of poor practices, a problem not 
addressed by a review of policies and procedures. This commenter 
recommended that the review of policies and procedures only occur when 
an LEA amends its policies or procedures. Another commenter suggested 
that no review be required if an LEA's policies, procedures, and 
practices are compliant with IDEA, appropriate, and fair, and suggested 
that a review occur only once every three years or at the end of a CEIS 
``cycle.'' Additional commenters argued that the underlying issues 
affecting disproportionality in an LEA do not change as quickly as 
annually, and so the annual review, which can be expensive, does not 
make sense.
    Discussion: As we stated in the NPRM, the requirement to review 
policies, practices, and procedures subsequent to a determination of 
significant disproportionality would impose no new obligations. Under 
IDEA section 618(d) (20 U.S.C. 1418(d)), every year a State is required 
to collect and examine data to determine whether significant 
disproportionality based on race and ethnicity is occurring the State 
and the LEAs of the State with respect to the identification, 
placement, and discipline of children with disabilities. Under IDEA 
section 618(d)(2)(A) (20 U.S.C. 1418(d)(2)(A)) and final Sec.  
300.646(c)(1), the review of policies, practices, and procedures must 
be conducted in every year in which an LEA is identified as having 
significant disproportionality. As the review and determinations occur 
annually, each year an LEA is identified as having significant 
disproportionality represents a separate determination and therefore 
triggers the requirements of IDEA section 618(d)(2). As such, the

[[Page 92444]]

requirements of final Sec.  300.646(c)(1) are consistent with the 
statute and the Department does not have the authority to reduce the 
frequency of the review or change the conditions under which it is 
required by statute.
    We understand and appreciate the complexity of the many social and 
societal factors that contribute to disproportionality. Nonetheless, 
under IDEA section 618(d)(2) (20 U.S.C. 1418(d)(2)), the review of 
policies, procedures, and practices must occur in every year in which 
an LEA is identified with significant disproportionality.
    Changes: None.
    Comments: A number of commenters suggested that the Department 
emphasize that, under proposed Sec.  300.646(c)(1), an annual review of 
an LEA's policies, practices, and procedures in the case of a 
determination of significant disproportionality should include making 
certain that the LEA adheres to child find procedures; conducting 
robust and timely screenings and assessments, manifestation 
determinations, and functional behavioral assessments; and developing 
appropriate IEPs and behavioral intervention Plans.
    Another commenter suggested that the review should include a review 
of any disciplinary practices that disrupt a child's placement, even if 
the disruption does not amount to a change in placement, such as a 
suspension for fewer than 10 days.
    Discussion: We appreciate the commenters' suggestions regarding the 
scope of review required whenever a LEA reviews its policies, 
practices, and procedures subsequent to a determination of significant 
disproportionality. Under IDEA section 618(d)(2)(A) (20 U.S.C. 
1418(d)(2)(A)) the State must provide for the review, and if 
appropriate, revision of policies, procedures, and practices used in 
the area in which an LEA is identified with significant 
disproportionality (identification, placement or disciplinary removals) 
to ensure they comply with the requirements of IDEA.
    For example, in an LEA identified with significant 
disproportionality with respect to identification, the State must 
provide for the review of policies, practices, and procedures used in 
identification. This should include a review of child find and 
evaluation policies, practices, and procedures to ensure they comply 
with IDEA. Consider that LEA Y has a risk ratio for identification of 
white students as students with autism that exceeds the State-defined 
risk ratio threshold. As a result, the State identifies LEA Y as having 
significant disproportionality and provides for a review of the LEA's 
policies, procedures, and practices as required by IDEA section 
618(d)(2)(A). This review results in the LEA identifying that it has a 
long-standing practice of requiring students to have a medical 
diagnosis of autism in order to receive special education services as a 
child with autism. However, minority students in LEA Y were much less 
likely to be able to obtain such a diagnosis for a number of reasons, 
including a lack of consistent care and early screening and referral 
conducted by health professionals. Given that LEAs are not allowed, 
under the IDEA, to set eligibility criteria for special education and 
related services absent a State-wide requirement or criteria that is 
consistent with the IDEA (i.e., the child's parent does not incur a 
cost for the medical diagnosis and the requirement does not result in a 
delay in the special education and related services that are required 
for a child to receive a free appropriate public education) and the 
fact that the State where LEA Y is located does not require a medical 
diagnosis for autism, the LEA's practice is inconsistent with IDEA.
    In this instance, the overrepresentation that resulted in the LEA 
being identified with significant disproportionality in the 
identification of white children as children with autism is due to 
under-identification of minority children, as a result of a district 
practice that does not comply with the requirements of the IDEA and a 
failure of the LEA to appropriately screen children and help them 
secure diagnostic testing. To address the significant 
disproportionality, the LEA must eliminate or revise its practice of 
requiring students to have a medical diagnosis of autism in order to 
receive special education services. In addition, the LEA could address 
the impact of that criteria by using funds reserved for comprehensive 
CEIS to increase developmental screenings.
    Similarly, for an LEA identified with significant 
disproportionality with respect to discipline, the State must provide 
for the review of policies, practices, and procedures used in the 
discipline of children with disabilities. This should include a review 
of the LEA's polices, practices, and procedures related to 
manifestation determinations, functional behavioral assessments, or 
behavioral intervention plans or school-wide discipline rules to ensure 
they comply with IDEA.
    Changes: None.
Guidance
    Comments: A number of commenters, remarking upon the complexity of 
the various underlying social and societal causes that may contribute 
to significant disproportionality and the limited ability of schools to 
provide a remedy through a review of its policies, practices and 
procedures, asked for additional oversight and guidance from the 
Department. Some sought evidence-based practices that address economic, 
cultural, and linguistic barriers to instruction. Others invited the 
Department to consult with the States to find alternative means of 
addressing the causes of significant disproportionality.
    Discussion: Under IDEA section 618(d)(2)(A) (20 U.S.C. 
1418(d)(2)(A), when States make a determination of significant 
disproportionality, they must provide for the review and, if 
appropriate, revision of the policies, procedures, and practices used 
in the identification, placement or discipline of children with 
disabilities. The purpose of the review is to determine if the 
policies, practices, and procedures comply with the requirements of 
IDEA. The review is statutorily required by IDEA section 618(d)(2) as a 
consequence of a determination of significant disproportionality in an 
LEA.
    The Department understands that not all factors contributing to a 
determination of significant disproportionality can be remedied through 
a review of policies, practices, and procedures. However, when aligned 
with the other remedies required in final Sec.  300.646(c) and (d), we 
believe that the review of policies, practices and procedures can be a 
valuable tool to LEAs when addressing significant disproportionality. 
IDEA does not prohibit States from using remedies, other than those 
required in Sec.  300.646(c) and (d), to address significant 
disproportionality in conjunction with those required in Sec.  300.646.
    That said, as we evaluate additional information and research in 
the future, we will consider whether there is further guidance or 
technical assistance we can provide that will make evidence-based 
practices available.
    Changes: None.
Clarifications
    Comment: One commenter asked whether, under proposed Sec.  
300.646(c)(2), an LEA must publicly report on the revision of policies, 
practices, and procedures if it concludes after review of its policies, 
practices, and procedures that no change is necessary.
    Discussion: No, an LEA is not required to publicly report if no

[[Page 92445]]

revisions to its policies, practices, or procedures are necessary.
    Changes: None.
    Comments: One commenter supported the Department's clarification, 
in proposed Sec.  300.646(c)(2), that LEAs must safeguard children's 
individual confidential information when publicly posting any revisions 
to policies, practices, and procedures.
    Discussion: We appreciate the commenter's support for incorporating 
into the regulation that LEAs must safeguard children's individual 
confidential information when publicly posting any revisions to their 
policies, practices, or procedures.
    Changes: None.
    Comment: Another commenter requested that the Department clarify 
whether and how the annual review of policies, practices, and 
procedures are not duplicative of a one-year verification process for 
correcting noncompliance as required by Sec.  300.600(e) and explained 
in OSEP Memorandum 09-02. The commenter stated that, as correction of 
noncompliance in larger LEAs generally takes up to one year, a 
requirement that LEAs repeat review of policies practices, and 
procedures the following year is duplicative.
    Discussion: A State's identification of significant 
disproportionality within an LEA is not the same as a finding of 
noncompliance. An LEA identified with significant disproportionality is 
not necessarily out of compliance with IDEA; rather, the significant 
disproportionality is an indication that the policies, practices, and 
procedures in the LEA warrant further attention. If an LEA is 
identified with significant disproportionality, the State must provide 
for review and, if appropriate, revision of policies, practices, and 
procedures used in identification or placement in particular education 
settings, including disciplinary removals, to ensure they comply with 
the requirements of IDEA. If the State identifies noncompliance with a 
requirement of IDEA through this review, the State must ensure, in 
accordance with Sec.  300.600(e), that the noncompliance is corrected 
as soon as possible, and in no case later than one year after the 
State's identification of the noncompliance. As explained in OSEP 
Memorandum 09-02 when verifying the correction of identified 
noncompliance, the State must ensure that the LEA has corrected each 
individual case of noncompliance, unless the child is no longer within 
the jurisdiction of the LEA and the State determines that the LEA is 
correctly implementing the specific regulatory requirement(s) based on 
a review of updated data such as data subsequently collected through 
on-site monitoring or a State data system. If in a subsequent year, the 
LEA continues to be identified with significant disproportionality, the 
State must continue to provide for a review of policies, practices, and 
procedures to determine if there is any new or continuing non-
compliance with IDEA. The fact that an LEA was previously identified 
with noncompliance through the review process does not relieve the 
State of its responsibility to conduct an annual review of the LEA's 
policies, practices, and procedures. We note that while IDEA section 
618(d)(2)(A) requires that States provide for the review of policies, 
practices, and procedures, the State may select another entity, such as 
the LEA, to actually conduct the review.
    Changes: None.

V. Expanding the Scope of Comprehensive Coordinated Early Intervening 
Services (Sec.  300.646(d))

Use of Comprehensive CEIS for Specific Populations
    Comments: Most commenters supported proposed Sec.  300.646(d)(2), 
which would expand the population of children who can be served with 
IDEA Part B funds reserved for comprehensive CEIS to include children 
with disabilities and children ages three through five, with and 
without disabilities. One commenter provided a legal argument 
supporting the Department's interpretation of IDEA to allow the use of 
comprehensive CEIS to serve children with disabilities and children 
ages three through five. The commenter argued that canons of statutory 
construction support the Department's position. Further, the commenter 
added that the proposed flexibility ensures that an LEA can address the 
significant disproportionality in ways appropriate to the context. The 
commenter also stated that the flexibility to serve children with 
disabilities recognizes that these children have the potential to 
develop behavioral needs if their disability is misidentified, if their 
placement is inappropriate, or if they receive inappropriate behavioral 
assessments and plans. Another commenter noted that the expansion of 
comprehensive CEIS removes a source of inequity in previous 
interpretations, in which the very children treated disproportionately 
could not be the beneficiaries of comprehensive CEIS. One commenter 
argued that providing comprehensive CEIS only to non-disabled children 
is unlikely to address significant disproportionality in the discipline 
of children with disabilities.
    Most commenters supported the use of funds reserved for 
comprehensive CEIS for children with disabilities and preschool 
children ages three through five, with and without disabilities. Some 
of these commenters elaborated on their reasons for supporting Sec.  
300.646(d)(2), noting that research on early intervention shows that it 
improves outcomes and reduces disproportionality. One noted that the 
existing requirement that comprehensive CEIS funds be used only for 
non-disabled children was a disincentive to change inappropriate 
practices in special education. Another commenter noted that the change 
would make clear that children with disabilities can participate in 
whole-school programs meant to address disproportionality, and a few 
stated that the change would be consistent with the September 14, 2015, 
statement by Federal agencies on including children with disabilities 
in early childhood programs. U.S. Department of Education & U.S. 
Department of Health and Human Services, 2015.
    Discussion: We appreciate the commenters' support for the proposal, 
and agree that the expansion of comprehensive CEIS to include children 
with disabilities and children ages three through five, with and 
without disabilities, is consistent with IDEA section 618(d) (20 U.S.C. 
1418(d)) and will help LEAs to better address significant 
disproportionality.
    Changes: None.
    Comments: Several commenters argued that the Department lacks the 
authority to expand the population that can be served with IDEA Part B 
funds reserved for comprehensive CEIS under IDEA. In particular, they 
argued that proposed Sec.  300.646(d)(2) is inconsistent with IDEA 
because IDEA section 613(f) (20 U.S.C. 1413(f)) allows LEAs to 
voluntarily reserve IDEA Part B funds to provide coordinated early 
intervening services only to children in kindergarten through grade 12 
who have not been identified as needing special education and related 
services.
    These commenters also noted that proposed Sec.  300.646(d)(2) 
represents a change in the Department's position. The commenters 
pointed out that OSEP Memorandum 08-09, dated July 28, 2008, stated 
that IDEA section 613(f) permits ``IDEA funds for CEIS for children in 
kindergarten through grade 12 . . . who are not currently identified as 
needing special education or related services . . . .'' The commenters 
also pointed out that the Department's

[[Page 92446]]

preamble to the 2006 IDEA Part B regulations, in discussing current 
Sec.  300.226, stated that early intervening services ``are for 
children who are not currently identified as needing special education 
or related services.'' 71 FR 46626 (August 14, 2006).
    Discussion: We disagree that the Department lacks the authority to 
permit LEAs identified with significant disproportionality to use IDEA 
Part B funds reserved for comprehensive CEIS to serve children with 
disabilities and preschool children ages three through five, with and 
without disabilities. We acknowledged in the NPRM that the Department 
has previously interpreted the terms ``CEIS'' and ``comprehensive 
CEIS'' to apply to children in kindergarten through grade 12 who are 
not currently identified as needing special education and related 
services but who need additional academic and behavioral support to 
succeed in a general education environment. (81 FR 10979)
    The Department proposed to change its interpretation in a proper 
and legally permissible manner. Under IDEA section 607(a) (20 U.S.C. 
1406(a)), the Secretary has the authority to issue regulations to the 
extent regulations are necessary to ensure compliance with the 
requirements of Part B of IDEA. Based on information in the 2013 GAO 
report, comments received in response to the June 2014 request for 
information expressing concern about the effectiveness of comprehensive 
CEIS, and the Department's experience over the last twelve years in 
implementing IDEA section 618(d) (20 U.S.C. 1418(d)), the Department 
believes that these changes are necessary to ensure that the statutory 
remedies are implemented in a manner that meaningfully addresses any 
significant disproportionality identified.
    Our proposal to change our interpretation was based on careful 
review of the statutory language and legislative history of the 
significant disproportionality provision in IDEA section 618(d) (20 
U.S.C. 1418(d)).
    Under IDEA section 613(f) (20 U.S.C. 1413(f)), an LEA may 
voluntarily reserve up to 15 percent of its IDEA Part B funds to 
provide coordinated early intervening services to students in 
kindergarten through grade 12 who have not been identified as needing 
special education or related services, but who need additional academic 
and behavioral support to succeed in a general education environment 
(K-12 children). IDEA section 618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B)) 
provides that in a case of a determination of significant 
disproportionality, an LEA must reserve the maximum amount of funds 
under section 613(f) (15 percent of its IDEA Part B funds) to provide 
``comprehensive'' CEIS to serve children in the LEA, particularly 
children in those groups that were significantly overidentified. 
Congress did not define ``comprehensive,'' nor did it explain how 
``comprehensive CEIS'' in IDEA section 618(d) differs from the ``CEIS'' 
in IDEA section 613(f). Congress' inclusion of the term 
``comprehensive'' in one provision and not the other creates an 
ambiguity. Therefore, the Department has the authority to interpret the 
term ``comprehensive CEIS.''
    We believe that this interpretation is consistent with the 
legislative history of this provision, which indicates that in prior 
versions of the bills, the House used the phrase ``comprehensive 
coordinated prereferral support services'' in section 618(d) and 
section 613(f) and that the Senate version did not include any 
provision for using section 613(f) funds for CEIS in section 
618(d)(2)(B) but did use the phrase ``coordinated, early intervening 
educational services'' in section 613(f). In the final conference bill 
and enacted statute, however, without a clear explanation, Congress 
used ``comprehensive'' to describe CEIS only in section 618(d)(2)(B)--
omitting the term from section 613(f).
    We also believe that our interpretation, under final Sec.  
300.646(d), is reasonable given the purpose of the statutory remedies 
in IDEA section 618(d)(2) (20 U.S.C. 1418(d)(2)). Other commenters, 
both to the NPRM and to the June 2014 request for information, agreed 
and noted that States currently cannot use IDEA Part B funds reserved 
for comprehensive CEIS to provide services to children with 
disabilities, even if they were in the groups with significant 
disproportionality in identification, placement, and disciplinary 
removal. In other words, it is difficult for the very children whose 
significant disproportionality gives rise to the requirement to provide 
comprehensive CEIS to directly benefit from comprehensive CEIS.
    It is our intent that Sec.  300.646(d) improve comprehensive CEIS 
as a remedy for significant disproportionality. For example, as we 
noted in the NPRM, providing comprehensive CEIS to preschool children 
may help LEAs to address significant disproportionality in 
identification by allowing funds reserved for comprehensive CEIS to be 
used to provide more timely supports and services to younger children. 
For example, an LEA identified with significant disproportionality 
might use IDEA Part B funds reserved for comprehensive CEIS to 
implement universal screening to better identify and support children 
with developmental delays before they enter kindergarten. These 
activities will also assist in ensuring that children with disabilities 
in the LEA are appropriately identified.
    Further, as we noted in the NPRM, providing comprehensive CEIS to 
children with disabilities is more likely to address significant 
disproportionality in placement and discipline by allowing LEAs to 
directly improve the supplementary aids and services and positive 
behavioral interventions and supports provided to children with 
disabilities. We believe that final Sec.  300.646(d)(2) is, therefore, 
consistent with the purpose of the statutory remedies, which is to 
reduce significant disproportionality.
    Section 300.646(d)(2) does not address voluntary CEIS, implemented 
under IDEA section 613(f) (20 U.S.C. 1413(f)) and IDEA Part B funds an 
LEA voluntarily reserves for CEIS must be used to serve students in 
kindergarten through grade 12 who have not been identified as needing 
special education or related services, but who need additional academic 
and behavioral support to succeed in a general education environment.
    Changes: None.
    Comments: Some commenters did not support the expansion of 
comprehensive CEIS to preschool children with or without disabilities. 
Some of these commenters stated that comprehensive CEIS was unproven 
and ineffective and that ``more of the same'' does not make for good 
public policy. Others took a broader view, stating that 
disproportionality in race and ethnicity has many causes beyond the 
ability of schools and LEAs to solve, such as poverty, drug abuse, 
incarceration, and the disproportionality of adverse childhood 
experiences among children of color. Expanding the use of comprehensive 
CEIS funds, some of these commenters stated, cannot address these 
causes, and, therefore, redirecting IDEA funds to comprehensive CEIS is 
unfair to the LEAs and the children who stand to lose the use of, and 
services funded by, the money diverted. Some commenters noted that, 
generally, comprehensive CEIS would negatively impact LEAs, especially 
small LEAs, by adversely impacting their ability to provide for the 
needs of children with disabilities.
    Discussion: We understand that disproportionality is deeply 
complicated and that many social and societal causes may contribute to 
racial

[[Page 92447]]

disparities in special education. Nonetheless, the Department has an 
obligation to work within the statutory framework in IDEA and with the 
tools it provides.
    The Department recognizes that providing comprehensive CEIS will 
not, by itself, eliminate all causes of racial and ethnic 
disproportionality and that LEAs cannot reach all of the causes of 
disproportionality. There are, however, causes of significant 
disproportionality that LEAs can address and effects that LEAs can 
mitigate. It is our intention that, in implementing final Sec.  
300.647(d)(1)(ii), an LEA will identify and address the factors that 
contribute to the significant disproportionality by carrying out 
activities that LEAs typically conduct, such as providing services and 
supports to students or professional development to staff.
    We do not regard using comprehensive CEIS funds to identify and 
address factors contributing to the significant disproportionality and 
allowing LEAs to provide comprehensive CEIS to preschool children and 
children with disabilities as ``more of the same.'' Previously, IDEA's 
implementing regulations did not require LEAs to identify and address 
factors contributing to the significant disproportionality as part of 
their implementation of comprehensive CEIS. In addition, we believe 
allowing LEAs to use funds reserved for comprehensive CEIS to serve 
children with disabilities is more likely to address significant 
disproportionality in placement and discipline. For example, as one 
commenter suggested, if LEAs can use IDEA Part B funds reserved for 
comprehensive CEIS to implement a schoolwide program to address 
problems in discipline and serve both children with and without 
disabilities, then significant disproportionality in discipline may be 
reduced or eliminated. Similarly, using funds reserved for 
comprehensive CEIS to serve preschool children, where their needs can 
be assessed and addressed early, is likely to address significant 
disproportionality in the identification of children with disabilities.
    Based on its identification of the factors contributing to the 
significant disproportionality, an LEA may use IDEA Part B funds 
reserved for comprehensive CEIS to provide a targeted array of services 
and supports to address those factors, including professional 
development and educational and behavioral evaluations, services and 
supports in both the general and special education population. Section 
300.646(d) underscores the importance of allowing an LEA to determine 
which factors contribute to a determination of significant 
disproportionality and how to effectively target IDEA Part B funds 
reserved for comprehensive CEIS to address those factors.
    It is important to note that while States are required to include 
preschool children in the State's determination of significant 
disproportionality related to discipline and to identification 
(beginning July 1, 2020), final Sec.  300.646(d)(2) allows, but does 
not require, LEAs to provide comprehensive CEIS to preschool children, 
with or without disabilities (unless, under Sec.  300.646(d)(1)(ii), a 
State determines that there is significant disproportionality in an 
LEA, and the LEA determines that providing comprehensive CEIS to 
preschool children is necessary to address the factors contributing to 
the disproportionality).
    Change: None.
    Comments: One commenter recommended that the Department revise 
proposed Sec.  300.646(d)(3) to limit the use of comprehensive CEIS for 
children with disabilities to an established proportion, set by the 
Department and based on an evidence-based determination of the relative 
advantages of (1) early intervention to prevent disparities in 
disability identification and (2) subsequent interventions to address 
disparities in placement and disciplinary removal.
    Discussion: While we agree with the commenter that apportioning 
funds reserved for comprehensive CEIS based, in part, on the 
expectation that specific uses will lead to reducing significant 
disproportionality in the area or areas in which the LEA is identified, 
we do not believe it would be appropriate to set a single, national 
percentage of funds to be dedicated to each allowable activity under 
comprehensive CEIS. Those decisions are best made by LEAs based on 
determining the best ways to address the specific issues that face each 
LEA, in accordance with final Sec.  300.646(d)(1)(ii). Therefore, we 
decline to make this change.
    Further, under final Sec.  300.646(d)(3), an LEA may not limit the 
provision of comprehensive CEIS to children with disabilities. 
Therefore, an LEA must use some of the funds reserved for comprehensive 
CEIS to serve children who are not currently identified as needing 
special education and related services, but who need additional 
academic and behavioral support to succeed in a general education 
environment. However, we decline to limit the amount of comprehensive 
CEIS funds an LEA may use to serve children with disabilities because 
we want to give each LEA the flexibility to determine the amount of 
funds it will use for children with disabilities based on its analysis 
of the factors contributing to significant disproportionality in in the 
LEA.
    Change: None.
    Comments: Some commenters, stating both that IDEA is underfunded 
and that there is a possibility of additional reservations of IDEA Part 
B money for comprehensive CEIS, argued that IDEA funds should be used 
primarily or exclusively for children with disabilities, not children 
without disabilities. One of the commenters suggested an amendment to 
the language at Sec.  300.646(d)(3) which prohibits LEAs from providing 
comprehensive CEIS solely to children with disabilities.
    Discussion: We understand these comments to refer to proposed Sec.  
300.646(d)(3), which prohibits LEAs from providing comprehensive CEIS 
solely to children with disabilities. As we explained in the NPRM at 81 
FR 10986, recognizing the statutory emphasis on providing early 
behavioral and academic supports before a child is identified, we 
believe allowing LEAs to provide comprehensive CEIS only to children 
with disabilities works directly against the aims and intentions of 
IDEA. For example, limiting comprehensive CEIS solely to children with 
disabilities would prohibit an LEA from providing early behavioral and 
academic supports and services to children before they are identified 
as having a disability, which is one way to reduce significant 
disproportionality in the identification of children as children with 
disabilities. Limiting comprehensive CEIS solely to children with 
disabilities would prohibit an LEA from using IDEA Part B funds 
reserved for comprehensive CEIS to implement a schoolwide program to 
address problems in discipline, which is one way to reduce significant 
disproportionality in discipline. Therefore, the Department declines to 
revise Sec.  300.646(d)(3) to allow LEAs to provide comprehensive CEIS 
solely to children with disabilities.
    Under final Sec.  300.646(d)(1)(ii), LEAs would have to use IDEA 
Part B funds reserved for comprehensive CEIS to identify and address 
the factors contributing to the significant disproportionality 
identified by the State. Nothing in the regulations prohibits an LEA 
from providing comprehensive CEIS primarily, but not exclusively, to 
children with disabilities.
    Changes: None.

[[Page 92448]]

    Comments: One commenter noted that the prohibition in proposed 
Sec.  300.646(d)(3) on using comprehensive CEIS funds solely for 
children with disabilities does not make sense in the context of 
placement in a restrictive educational setting because only children 
with disabilities who have IEPs are subject to this kind of placement.
    Discussion: We agree that final Sec.  300.646(d)(3) prohibits an 
LEA identified with significant disproportionality in placement from 
using comprehensive CEIS funds solely to provide comprehensive CEIS to 
children with disabilities. However, we note that, in many instances, 
circumstances in the LEA that may give rise to disproportionate 
placement in segregated settings may have an impact on children with 
and without disabilities. We encourage LEAs that are identified with 
significant disproportionality to closely examine their policies, 
practices, and procedures to identify the root causes of their 
disproportionality and target their use of funds reserved for 
comprehensive CEIS to address those causes. There are appropriate ways 
that an LEA identified with significant disproportionality related to 
placement may use IDEA Part B funds reserved for comprehensive CEIS for 
children without disabilities. For example, an LEA may provide 
professional development to regular education teachers on the supports 
that they can provide to enable a child with a disability to be 
educated in the regular class and participate in extracurricular and 
other nonacademic activities with nondisabled children. We understand 
some LEAs may find that there are a number of children without 
disabilities who are impacted by the same root cause in other ways and 
could also benefit from the funding.
    Changes: None.
    Comments: One commenter objected on practical grounds to proposed 
Sec.  300.646(d)(2) and the use of comprehensive CEIS funds for 
preschool children. The commenter indicated that, in some States, the 
range of possible placements for preschool children with disabilities 
includes settings where the State does not have general supervision 
authority to regulate discipline procedures or practices or require 
data reporting.
    Discussion: We appreciate the commenter's concern and note that 
under final Sec.  300.646(d)(2), an LEA may, but is not required to, 
use funds reserved for comprehensive CEIS for children ages three 
through five.
    Separately, we note that under IDEA section 612(a), a State must 
make FAPE available to all eligible children with disabilities residing 
in the State, including children with disabilities aged three through 
five, and in some States, two year old children who will turn three 
during the school year. Thus, all of the requirements in Part B of IDEA 
apply equally to all preschool children with disabilities. The SEA must 
ensure that a child with a disability, including a preschool child, who 
is placed in or referred to a private school or facility by a public 
agency is provided special education and related services in conformity 
with his or her IEP and at no cost to the parents; is provided an 
education that meets the standards that apply to education provided by 
the SEA and LEAs, including the requirements of IDEA; and has all of 
the rights of a child with a disability who is served by a public 
agency. (See, 34 CFR 300.146.)
    Changes: None.
Funding Comprehensive CEIS
    Comment: A number of commenters indicated that IDEA has never been 
fully funded, and a few of these commenters stated that they could not 
support proposed Sec.  300.646(d) until Federal funding under Part B of 
IDEA is increased. Commenters stated that, as current IDEA funding only 
covers a fraction of special education's high total cost, some LEAs 
choose to devote the full amount of their Federal dollars to special 
education.
    Discussion: The Department understands the concern about reserving 
IDEA Part B funds to provide comprehensive CEIS when IDEA is not funded 
at the maximum level allowed under IDEA section 611(a)(2)(B). However, 
under IDEA section 618(d) (20 U.S.C. 1418(d)), an LEA found to have 
significant disproportionality based on race or ethnicity must reserve 
15 percent of its IDEA B funds for comprehensive CEIS while continuing 
to properly identify children in need of special education and related 
services and to provide them with a FAPE in accordance with the 
requirements of IDEA and its implementing regulations. Under IDEA 
sections 612(a)(11) and 616(a)(1)(C) (20 U.S.C. 1412(a)(11) and 1416 
(a)(1)(C)), the State must conduct monitoring activities to ensure that 
all LEAs meet these statutory requirements.
    Changes: None.
    Comment: Some commenters opposed proposed Sec.  300.646(d), 
concerned that it would result in LEAs reserving more money for 
comprehensive CEIS. This, these commenters stated, may or may not 
address significant disproportionality but would create hardships for 
children with disabilities and their teachers and staff, such as 
reduced services and the inability to hire special education teachers 
and other support staff. Other commenters noted that some LEAs already 
struggle to support the needs of children with disabilities. One 
commenter noted that any reduction in funding for special education 
services would be harmful, due to increases in the number of children 
identified with autism.
    Discussion: The Department appreciates the commenters' concerns and 
recognizes that LEAs function within challenging funding environments. 
However, regardless of IDEA funding levels, States must comply with all 
IDEA requirements, including the requirements related to significant 
disproportionality.
    Under IDEA section 618(d) (20 U.S.C. 1418(d)), an LEA found to have 
significant disproportionality based on race or ethnicity must reserve 
15 percent of its IDEA B funds for comprehensive CEIS. Under Sec.  
300.646(d)(1)(ii), in implementing comprehensive CEIS, the LEA must 
identify and address the factors contributing to the significant 
disproportionality. We acknowledge that the provision of comprehensive 
CEIS has the potential to benefit both special education and general 
education. However, we emphasize that the LEA has the flexibility to 
determine, based on its identification of factors contributing to the 
significant disproportionality identified in the LEA, which activities 
will be funded using IDEA Part B funds reserved for comprehensive CEIS.
    Changes: None.
    Comment: Some commenters noted that ESEA, rather than IDEA, is the 
most appropriate mechanism for providing children not yet identified 
with disabilities with support and that IDEA is not the appropriate 
vehicle for addressing significant disproportionality. These commenters 
also stated that other Federal funds, such as those made available 
through title I of the ESEA, as amended, should also be used to provide 
comprehensive CEIS.
    Discussion: The Department supports the flexible use of Federal 
funds, particularly in the area of school-wide reforms, as long as the 
Federal funds are used in accordance with applicable requirements. To 
that end, we issued guidance on maximizing flexibility in the 
administration of Federal grants. OESE Letter to State Directors 
(September 13, 2013).
    Further, we note that section 613(f)(5) of IDEA states that funds 
an LEA voluntarily reserves for CEIS may be used to carry out services 
aligned with activities funded by, and carried out

[[Page 92449]]

under, ESEA if those funds are used to supplement, and not supplant, 
funds made available under the ESEA for those activities. Thus, if IDEA 
funds an LEA voluntary reserves for CEIS, or is required to reserve for 
comprehensive CEIS, do not supplant ESEA funds, they may be used to 
supplement school improvement activities conducted under other 
programs, such as title I, that are being implemented in an LEA. See, 
IDEA section 613(f)(5) (20 U.S.C. 1413(f)(5)); OSEP Memorandum 08-09 
(July 28, 2008).
    That said, however, the Department does not have the authority to 
require the reservation of funds under the ESEA pursuant to a 
determination of significant disproportionality under IDEA unless 
specified in law.
    Changes: None.
    Comments: A number of commenters objected to proposed Sec.  
300.646(d), which would require an LEA, upon a determination of 
significant disproportionality by the State, to reserve 15 percent of 
its IDEA Part B funds, the ``maximum amount of funds under section 
613(f),'' for comprehensive CEIS. These commenters argued that the 
requirement is rigid and unnecessarily redirects money from children 
with disabilities. The commenters suggested a variety of alternatives 
to requiring reservation of IDEA Part B funds to address significant 
disproportionality.
    Some commenters suggested limiting the requirement for reserving 15 
percent of IDEA Part B funds to only those circumstances in which a 
State finds an LEA uses discriminatory policies, practices, and 
procedures in implementing IDEA. Some commenters suggested taking the 
15 percent from unspecified administrative costs or sources other than 
IDEA Part B funds. Others suggested that LEAs found with significant 
disproportionality be required to create remediation plans that may 
include reserving IDEA Part B funds for comprehensive CEIS. Still 
others suggested allowing LEAs to remedy significant disproportionality 
using whatever percentage of IDEA funds (up to 15 percent) is 
appropriate to the circumstances and the interventions needed. One 
commenter suggested that the Department provide an exemption from the 
15 percent mandate for LEAs that already remedy significant 
disproportionality effectively. Another encouraged the Department to 
approach the regulation by providing supports, rather than 
administering punitive action, such as providing additional funds and 
support to LEAs with disproportionate disciplinary actions and 
identification methods, since the root cause of disproportionality is 
an under-informed or under-resourced work force. A few commenters 
suggested eliminating the 15 percent mandate altogether or to allow 
Congress to address the issue in the next reauthorization of IDEA.
    Discussion: We appreciate both the range of ideas suggested and the 
difficulties that reserving 15 percent of IDEA Part B funds may cause 
LEAs. Nevertheless, the language of IDEA section 618(d)(2)(B) is 
explicit: ``the State shall . . . require'' any LEA identified with 
significant disproportionality ``to reserve the maximum amount of funds 
under section 613(f) to provide'' comprehensive CEIS to serve children 
in the LEA. Under section 613(f)(1), the maximum amount that can be 
reserved is 15 percent of the amount of IDEA Part B funds the LEA 
receives for any fiscal year. Therefore, the Department lacks the 
authority either to vary the amount that must be reserved or to 
eliminate the requirement altogether.
    Further, each LEA, in implementing comprehensive CEIS, may carry 
out activities that include professional development, behavioral 
evaluations, hiring reading or math specialists or providing other 
supports and services that the LEA has determined will address the 
factors contributing to the significant disproportionality. In 
addition, under certain conditions, comprehensive CEIS funds may be 
used in combination with funds available under title I to supplement 
school improvement activities that are being implemented in the LEA to 
address an ``under-informed and under-resourced'' work force, as long 
as IDEA funds and ESEA funds are used in accordance with applicable 
program requirements. See, OESE Letter to State Directors (September 
13, 2013).
    Changes: None.
    Comments: A few commenters asked whether funds for providing 
comprehensive CEIS to preschool children under proposed Sec.  
300.646(d)(2) would have to come from funds awarded to an LEA under 
IDEA Part B section 611, IDEA section 619, or both.
    Discussion: Neither the final regulations nor IDEA specify the 
specific source of funding (section 611 or section 619) from which an 
LEA is required to reserve funds if it is determined that said LEA has 
significant disproportionality. While the amount of the 15 percent 
reservation must be calculated on the basis of both the LEA's section 
611 and 619 allocations, LEAs retain full flexibility regarding whether 
they actually take the reservation from section 611 funds, section 619 
funds, or both. LEAs also retain this flexibility regardless of the age 
of the children receiving comprehensive CEIS.
    Changes: None.
    Comment: None.
    Discussion: When an LEA is identified as having significant 
disproportionality, it is required to reserve funds for the provision 
of comprehensive CEIS. This requirement is, clearly, an LEA-level 
requirement. Each LEA is required to maintain documentation that 15 
percent of its IDEA Part B funds were reserved for that purpose and 
that those funds were used to support allowable activities under Sec.  
300.646(d). However, an LEA does have flexibility in how these funds 
are allocated within the LEA how these funds are expended. Nothing in 
these regulations prevents an LEA from distributing funds reserved for 
comprehensive CEIS to its schools to carry out activities authorized 
under final Sec.  300.646(d), nor are there requirements for the 
process an LEA must use when deciding how to allocate those funds if 
they choose to do so. As such, if an LEA determines that it is best 
able to address the root cause of the identified significant 
disproportionality by providing a portion of its reserved funds to a 
particular subset of schools to support comprehensive CEIS activities, 
it is permitted to do so under these regulations, so long as it ensures 
that those funds are expended in accordance with final Sec.  
300.646(d). Under Sec.  300.202(a)(1), an LEA must expend IDEA Part B 
funds in accordance with the applicable provisions of Part B. Under 34 
CFR 76.731, an LEA must keep records to show its compliance with 
program requirements. Therefore, an LEA must maintain documentation to 
demonstrate that it expended IDEA Part B funds reserved for 
comprehensive CEIS in accordance with final Sec.  300.646(d).
    In a growing number of LEAs nationwide, schools are implementing 
the flexibilities provided under ESEA section 1114(b) to consolidate 
Federal funds in a schoolwide program. Section 300.206(a) makes clear 
that IDEA Part B funds may be consolidated in such a school and 
instructs States and LEAs how to calculate the amount of funds that may 
be used for this purpose. Further, Sec.  300.206(b)(1) and (2) provide 
that these funds must be considered Federal Part B funds for the 
purposes of calculating LEA MOE and excess cost under Sec.  
300.202(a)(2) and (3), and that these funds may be used without regard 
to the requirements of Sec.  300.202(a)(1). Regardless, the LEA is 
still responsible for meeting all other requirements of

[[Page 92450]]

IDEA Part B, including ensuring that children with disabilities in 
schoolwide program schools ``[r]eceive services in accordance with a 
properly developed IEP [individualized education program]'' and ``[a]re 
afforded all of the rights and services guaranteed to children with 
disabilities under the Act [IDEA].'' See, Sec.  300.206(c)(1) and (2).
    LEAs are not prohibited from providing funds reserved for 
comprehensive CEIS to schools operating a schoolwide program. Further, 
the requirement to reserve funds for comprehensive CEIS does not 
override the flexibilities described in Sec.  300.206. Instead, LEAs 
are only required to ensure that any school operating a schoolwide 
program to which it provides funds for comprehensive CEIS is able to 
appropriately document that at least the amount of funds provided to 
the school for that purpose were so expended. For example, if an LEA 
provides $100 of the funds it has reserved for comprehensive CEIS to a 
school implementing a schoolwide program, that school is not required 
to separately track and account for those funds if it is otherwise 
consolidating IDEA Part B funds. Instead, the LEA would only need to 
ensure that it can document that the school spent at least $100 on 
allowable activities under comprehensive CEIS. It is not required to 
demonstrate that the school expended $100 of IDEA Part B funds. We 
believe that this interpretation of the applicable statutes and 
regulations provide maximum flexibility to both schools and LEAs in 
implementing both title I schoolwide programs and comprehensive CEIS.
    Changes: None.
Implications for IEPs
    Comments: Many commenters responded to the Department's Directed 
Question #12, which sought comments on whether additional restrictions, 
beyond the requirement in Sec.  300.646(d) to use comprehensive CEIS to 
identify and address the factors contributing to significant 
disproportionality, on the use of comprehensive CEIS funds, are 
appropriate for children who are already receiving services under Part 
B of IDEA. Most commenters objected to any restriction of how 
comprehensive CEIS funds should be used for children already receiving 
services under Part B of IDEA. Instead, these commenters discussed the 
many supports and services where comprehensive CEIS could be used to 
enhance student progress. For example, some suggested that the funds be 
used to provide functional behavioral assessments (FBAs) and behavioral 
intervention plans (BIPs). Additionally, the commenters noted that 
comprehensive CEIS funds could be used to train key personnel on how to 
develop effective FBAs and BIPS or other instructional supports. Some 
of these commenters stated that local officials are best positioned to 
say how comprehensive CEIS funds should be used and that they should 
not be limited in their choices in how to address significant 
disproportionality.
    Discussion: We appreciate the concerns expressed by the commenters 
and note that the services and activities they mention--training and 
professional development on effective FBAs and BIPs, a review of 
behavioral intervention and supports included in IEPs, positive 
behavioral interventions and supports, multi-tiered systems of 
supports--are all permitted under Sec.  300.646(d)(1)(i) (``An LEA may 
carry out activities that include professional development and 
educational and behavioral evaluations, services, and supports . . 
.''). These services and activities are also permitted under Sec.  
300.646(d)(1)(ii) to the extent that they address factors that the LEA 
has identified as contributing to the significant disproportionality 
identified in the LEA. We agree that local officials should have the 
flexibility and discretion to decide how comprehensive CEIS funds are 
best allocated and spent.
    Under proposed Sec.  300.646(d)(1)(ii), the LEA must use 
comprehensive CEIS funds to address factors contributing to the 
significant disproportionality identified by the State. These factors 
may include, as enumerated in proposed Sec.  300.646(d)(1)(ii), a lack 
of access to scientifically based instruction and economic, cultural, 
or linguistic barriers to appropriate identification or placement in 
particular educational settings, including disciplinary removals. This 
requirement is fundamental to the use of comprehensive CEIS funds, and 
it carries with it a practical limitation: An LEA may use comprehensive 
CEIS funds for training and professional development and behavioral 
evaluations and supports, such as FBAs, BIPs, and positive behavioral 
interventions and supports, but only to the extent that it is doing so 
to address the factors identified by the LEA as contributing to the 
significant disproportionality identified by the State. Therefore, if 
comprehensive CEIS funds are used to provide services that address 
factors contributing to the significant disproportionality identified 
by the State, then the fact that those services are also identified in 
some children's IEPs does not make the services impermissible or the 
expenditures improper. Conversely, however, we generally would not 
expect that using comprehensive CEIS funds for the purpose of providing 
services already identified on a child's IEP would address factors 
contributing to the significant disproportionality identified by the 
State, as is required by proposed Sec.  300.646(d).
    Changes: None.
    Comment: One commenter asked for further explanation about how 
including children with disabilities within the scope of comprehensive 
CEIS under proposed Sec.  300.646(d)(2)(ii) would affect services 
provided to these children in accordance with their IEPs. The commenter 
stated that, if a child is receiving services under an IEP, then 
receiving comprehensive CEIS is ``contradictory.'' In particular, the 
commenter asked whether the provisions guaranteeing FAPE to a child 
with disabilities takes precedent over provisions governing 
comprehensive CEIS, who decides which services a child gets, and 
whether proposed Sec.  300.646(d) created a two-tiered system of 
services that could treat some children unfairly.
    Discussion: We believe that the commenter's concerns conflate the 
obligation to provide FAPE to a child with disabilities and the 
obligation to reserve 15 percent of IDEA Part B funds upon a finding by 
the State of significant disproportionality.
    To begin with, it is optional under final Sec.  300.646(d)(2) for 
an LEA to use IDEA Part B funds reserved for comprehensive CEIS to 
serve children with disabilities. If an LEA chooses to do so, this in 
no way affects any child's entitlement to a FAPE.
    In implementing comprehensive CEIS, an LEA must identify and 
address the factors contributing to the significant disproportionality 
identified by the State. As we stated earlier, these services may, but 
do not necessarily, overlap with services identified on a child's IEP, 
given that we generally would not expect that using funds reserved for 
comprehensive CEIS to provide services already identified on a child's 
IEP would address factors contributing to the significant 
disproportionality identified by the State. The fact that services 
provided as comprehensive CEIS may in some cases overlap with services 
already identified on a child's IEP does not relieve the LEA of its 
responsibility to ensure that all of the special education and related 
services and supplementary aids and services identified on a child's 
IEP are provided to that child in accordance with his or her IEP. There 
is no

[[Page 92451]]

contradiction, no displacement of IEP services by comprehensive CEIS 
services, and no ``two-tier'' system created.
    To the extent that the commenter is concerned about there being 
insufficient Part B funds to fund services to children with 
disabilities if 15 percent of an LEA's IDEA Part B funds are reserved 
for comprehensive CEIS, we address that issue under Use of 
Comprehensive CEIS for Specific Populations elsewhere in this document.
Implications for LEA Maintenance of Effort (MOE)
    Comment: A few commenters asked whether extending comprehensive 
CEIS to children with disabilities would increase LEA maintenance of 
effort (MOE) expenditures under Sec.  300.203. Several commenters 
indicated that they did not support these regulations because it could 
increase the amount of local, or State and local, funds an LEA would be 
required to expend for the education of children with disabilities to 
meet the LEA MOE requirement in subsequent years including years in 
which an LEA is no longer identified with significant 
disproportionality.
    For example, one commenter wrote that if an LEA shifts special 
education spending from its Part B funds to local funds in order to 
meet its obligation to set aside 15 percent of its Part B funds for 
comprehensive CEIS, its local MOE expenditure increases. However, when 
the LEA is no longer identified with significant disproportionality, 
the LEA can't subsequently reduce its local MOE expenditures. Further, 
to ensure that LEAs maintain their local expenditures in case of a 
year-over-year reduction in IDEA, Part B allocation, some commenters 
requested that the Department require that the maximum amount of funds 
available for comprehensive CEIS be reduced by the reduction in the 
subgrant. Similarly, another commenter noted that, given that IDEA is 
underfunded, the regulation would force LEAs to pass tax increases so 
that local funds could support the regulation. Other commenters 
expressed that, since special education must be provided regardless of 
Federal funding, LEAs will be forced to use State and local funds to 
backfill 15 percent used for comprehensive CEIS.
    Discussion: Using IDEA Part B funds reserved to provide 
comprehensive CEIS for children with disabilities may, but does not 
necessarily, affect the amount of local, or State and local funds, an 
LEA must expend to meet the MOE requirement in Sec.  300.203.
    Generally, under Sec.  300.203(b), an LEA may not reduce the amount 
of local, or State and local, funds that it spends for the education of 
children with disabilities below the amount it spent from the same 
source for the preceding fiscal year. The calculation is based only on 
local, or State and local--not Federal--funds.
    We understand that when an LEA identified with significant 
disproportionality is required to use 15 percent of its IDEA Part B 
funds for comprehensive CEIS, it should consider the effect that 
decreasing the available IDEA Part B funds might have on the amount of 
local or State and local funds an LEA must expend to meet the LEA MOE 
requirement. As one commenter noted, if under Sec.  300.646(d) an LEA 
is required to reserve 15 percent of its IDEA Part B funds for 
comprehensive CEIS after a determination of significant 
disproportionality, it may choose to use local, or State and local, 
funds to provide special education and related services to children 
with disabilities to replace IDEA Part B funds used to provide 
comprehensive CEIS. If that is the case, then the higher level of 
local, or State and local, expenditures for the education of children 
with disabilities becomes the LEA's new required level of effort for 
the subsequent year.
    The effect would be the same under prior Sec.  300.646 if, after a 
finding of significant disproportionality, an LEA reserved 15 percent 
of its IDEA Part B funds for comprehensive CEIS and increased by 15 
percent the amount of local, or State and local, funds it used to 
provide special education and related services to children with 
disabilities.
    In short, Sec.  300.646(d) makes no changes to the regulations 
governing LEA MOE.
    We note that an LEA identified with significant disproportionality 
will not be able to take advantage of the LEA MOE adjustment that would 
otherwise be available under Sec.  300.205 because of the way that the 
MOE adjustment provision and the authority to use Part B funds for CEIS 
are interconnected. As a result, no matter how much is available for 
comprehensive CEIS or for the MOE adjustment, an LEA that is required 
to reserve the maximum 15 percent of its Part B allocation for 
comprehensive CEIS will not be able to use Sec.  300.205(a) to reduce 
its MOE obligation.
    Appendix D to part 300 of the Code of Federal Regulations sets out 
a number of examples for the basic calculation. We provide the 
following example involving practical applications over multiple fiscal 
years.
    Generally, an LEA may reserve IDEA Part B funds that it is required 
to reserve for comprehensive CEIS either from the funds awarded for the 
Federal fiscal year (FFY) following the date on which the State 
identified the significant disproportionality or from funds awarded 
from the appropriation for a prior FFY. For example, State X uses data 
on identification collected for school year 2015-2016, which is 
reported in April 2016, to make a determination in February 2017 that 
LEA Y has significant disproportionality related to identification and 
therefore must set aside 15% of its IDEA Part B funds for comprehensive 
CEIS. The State makes this determination before FFY 2017 funds become 
available on July 1, 2017. The LEA has the following three options. The 
LEA may set aside: (1) 15 percent of the funds that the LEA receives 
from its FFY 2017 IDEA Part B allocation (available for obligation from 
July 1, 2017, through September 30, 2019); (2) 15 percent of the funds 
that the LEA received from its FFY 2016 IDEA Part B allocation 
(available for obligation from July 1, 2016, through September 30, 
2018); or (3) 15 percent of the funds that it received from the FFY 
2015 IDEA Part B allocation (available for obligation from July 1, 2015 
through September 30, 2017) only if the LEA did not use the adjustment 
to reduce its required level of effort in the fiscal year covering 
school year (FY) 2015-2016 under Sec.  300.205.
    If an LEA selects option 1, the LEA will not be able to use the 
adjustment to reduce its required level of effort under Sec.  300.205 
in FY 2017-2018.
    If an LEA selects option 2, the LEA will not be able to use the 
adjustment to reduce its required level of effort under Sec.  300.205 
in FY 2016-2017.
    An LEA can only select option 3 if the LEA did not use the 
adjustment in Sec.  300.205 to reduce its required level of effort in 
FY 2015-2016. Because FY 2015-2016 would have ended at the time the LEA 
is identified with significant disproportionality in February 2017, the 
LEA would already know whether it used the adjustment in Sec.  300.205 
to reduce its required level of effort in FY 2015-2016, and if it had 
done so, could not use its FFY 2015 IDEA Part B funds to provide 
comprehensive CEIS because of the way the MOE adjustment provision and 
the authority to use IDEA Part B funds for comprehensive CEIS are 
interconnected.
    Information describing the actions that States and LEAs must take 
to meet MOE requirements and answers to frequently asked questions 
about LEA MOE can be found at www2.ed.gov/about/offices/list/osers/osep/policy.htm.

[[Page 92452]]

(See, OSEP Memorandum 08-09, Coordinated Early Intervening Services 
(CEIS) under Part B of the Individuals with Disabilities Education Act 
(IDEA) dated July 28, 2008, response to Question #23.)
    Changes: None.
    Comment: Some commenters indicated that an expansion of the 
allowable uses of comprehensive CEIS to include K-12 children with 
disabilities and preschool children with and without disabilities would 
cause a significant increase in the burden associated with the 
Department's IDEA Part B Maintenance of Effort (MOE) Reduction and 
Coordinated Early Intervening Services (CEIS) data collection. Others 
suggested that the Department will have to expand this data collection 
to account for the additional children served by, and for the funds 
spent on, comprehensive CEIS. Some commenters suggested that the 
Department require States to submit data on CEIS expenditures, 
disaggregated to show spending related to identification, placement, 
and disciplinary removals.
    Discussion: Current Sec.  300.226(d) requires each LEA that 
implements CEIS to report to the State on the number of children who 
received CEIS and the number of those children who subsequently 
received special education and related services under Part B during the 
preceding two-year period (i.e., the two years after the child has 
received CEIS). 71 FR 46540, 46628 (Aug. 14, 2006). A State's decision 
to provide comprehensive CEIS to children with disabilities and 
preschool children with or without disabilities may expand the number 
of children who receive CEIS and may increase the numbers reported. We 
are sensitive to the practical difficulties that might arise. After 
these regulations become final, the Department will consider what, if 
any, modifications to IDEA Part B Maintenance of Effort (MOE) Reduction 
and Coordinated Early Intervening Services (CEIS) data collection may 
be needed to assist States and LEAs in meeting their obligations under 
IDEA section 613(f)(4) (20 U.S.C. 1413(f)(4)) and 34 CFR 300.226(d)). 
As we noted in the NPRM, after finalizing these regulations, the 
Department intends to provide additional guidance on relevant data 
collection and reporting requirements. (81 FR 10979).
    Changes: None.
General Uses of Comprehensive CEIS Funds
    Comments: Commenters suggested many uses for IDEA Part B funds 
reserved for comprehensive CEIS. These included a wide variety of 
detailed suggestions for training and professional development in 
particular subject areas or in interventions, assessments, and forms of 
instruction; hiring teachers and staff with specific credentials, 
licenses, or experience; implementing various school-wide programs; and 
investing in technology.
    Some of these commenters asked the Department whether comprehensive 
CEIS funds, when used to identify and address the factors contributing 
to significant disproportionality, could be ``braided'' with other 
funds.
    Discussion: While the commenters suggested important uses for IDEA 
Part B funds reserved for comprehensive CEIS, the question of whether 
they are permissible uses of those funds depends upon a State's 
specific finding and analysis of significant disproportionality. That 
is, funds reserved for comprehensive CEIS must be used in accordance 
with the requirements of Sec.  300.646(d)(1)(i) and (ii). Under Sec.  
300.646(d)(1)(i), comprehensive CEIS funds may be used to carry out a 
broad range of activities that ``include professional development and 
educational and behavioral evaluations, services, and supports.'' Under 
Sec.  300.646(d)(1)(ii), comprehensive CEIS funds must be used to 
identify and address factors contributing to the significant 
disproportionality identified by the State.
    Finally, CEIS funds may be combined with other Federal funds, 
provided that the applicable requirements for both funding streams are 
met. On September 13, 2013, the Department issued guidance on 
maximizing flexibility in the administration of Federal grants. OESE 
Letter to State Directors.
    Changes: None.
    Comments: Some commenters supported proposed Sec.  
300.646(d)(1)(ii), which would require that in implementing 
comprehensive CEIS, an LEA must identify and address the factors 
contributing to significant disproportionality. These commenters stated 
that this promotes improved outcomes and a more focused use of 
resources and further added that the exercise of identifying and 
addressing contributing factors promoted better transparency and 
accountability when addressing significant disproportionality. Other 
commenters asked that the Department provide specific technical 
assistance to help States and LEAs to identify these factors and 
evidence-based practices to address significant disproportionality in 
the LEA. One of these commenters pointed out that there are practical 
limitations on personnel and funds and, therefore, that States' ability 
to provide assistance to LEAs is limited. Another commenter noted that 
simply requiring LEAs to identify and address the factors contributing 
to disproportionality does not provide sufficient guidance or 
information for an LEA to know what those factors would be or how to 
bring about systems change. That commenter further noted that multiple 
indicators, beyond the risk ratio, might be necessary to self-assess 
and determine effective methods of addressing these factors. One 
commenter stated that, unless States are required to assist LEAs in 
their efforts to identify and address the factors contributing to the 
significant disproportionality, this portion of the Sec.  
300.646(d)(1)(ii) will be meaningless.
    Discussion: We recognize the commenters' concern that LEAs would 
like additional guidance or information on identifying and addressing 
the factors that may contribute to significant disproportionality. 
Therefore, we have added examples such as inappropriate use of 
disciplinary removals; lack of access to appropriate diagnostic 
screenings; differences in academic achievement levels; and policies, 
practices, or procedures that contribute to the significant 
disproportionality to the list of factors in Sec.  300.646(d)(1)(ii) 
that may contribute to significant disproportionality. We encourage 
LEAs identified with significant disproportionality in identification 
that determine the overrepresentation of one racial or ethnic group is 
occurring due to under-identification of another racial or ethnic group 
or groups, to consider how differences in academic achievement levels 
may contribute to the significant disproportionality in identification.
    We have also added a new Sec.  300.646(d)(1)(iii) to clarify that 
as part of implementing comprehensive CEIS, an LEA must address a 
policy, practice, or procedure it identifies as contributing to the 
significant disproportionality, including a policy, practice, or 
procedure that results in a failure to identify, or the inappropriate 
identification of, a racial or ethnic group (or groups). An LEA has the 
discretion as to how to address the policy, practice or procedure, by 
eliminating, revising or changing how it is implemented to ensure that 
it does not contribute to the significant disproportionality, including 
that it does not result in a failure to identify, or the inappropriate 
identification of, a racial or ethnic group (or groups).
    In addition, the Department intends to issue guidance to provide 
responsible

[[Page 92453]]

public agencies with information to assist them in meeting their 
obligations under IDEA and its implementing regulations, including 
those provisions related to significant disproportionality. To that 
end, the Department maintains a technical assistance and dissemination 
network of services and supports that address a variety of topics. For 
more information, see www.osepideasthatwork.org.
    Changes: We have revised Sec.  300.646(d)(1)(ii) to include 
additional factors that may contribute to significant 
disproportionality and added a new Sec.  300.646(d)(1)(iii) to clarify 
that in implementing comprehensive CEIS, an LEA must address policies, 
practices, or procedures it identifies as contributing to significant 
disproportionality.
    Comment: One commenter noted that, while administrators may choose 
to use Federal funding for de-leading, this type of expenditure may not 
be a wise use of Federal special education resources.
    Discussion: While using funds reserved for comprehensive CEIS for 
de-leading activities is not specifically prohibited by the final 
regulations, it is our intention that LEAs will identify and address 
the factors that contribute to the significant disproportionality 
identified by the State by carrying out activities that LEAs typically 
conduct, such as providing services and supports to students or 
professional development to staff. We agree with the commenter that 
using funds reserved for comprehensive CEIS for de-leading activities 
may not be an effective use of IDEA Part B funds reserved for 
comprehensive CEIS, especially given other potential funding sources 
available for de-leading activities and the amount of funds that may be 
needed to carry out these activities. We note that under IDEA section 
605 (20 U.S.C. 1404), an LEA must obtain approval from the State prior 
to using IDEA Part B funds for equipment, construction, or alteration 
of facilities. See also, 2 CFR 200.439.
    Changes: None.
Implications for Voluntary Implementation of CEIS
    Comments: Many commenters provided recommendations to address the 
low utilization rate of voluntary CEIS under IDEA section 613(f)(20 
U.S.C. 1413(f)). A number of these commenters suggested that the 
Department should, or asked whether the Department intended to, extend 
voluntary CEIS to children with disabilities and children ages three 
through five under current Sec.  300.226 (``voluntary CEIS''). One 
commenter in particular noted that this would enable States and LEAs to 
provide CEIS prior to being identified for significant 
disproportionality and would address the current low rate of voluntary 
CEIS use among LEAs.
    Further, commenters noted that the voluntary use of IDEA funds to 
provide early intervention services comes with additional reporting 
requirements.
    Discussion: Under IDEA section 613(f) (20 U.S.C. 1413(f)), an LEA 
may voluntarily use up to 15 percent of its IDEA Part B funds to 
provide CEIS to children in kindergarten through grade 12 (with a 
particular emphasis on children in kindergarten through grade 3) who 
have not been identified as needing special education or related 
services but who need additional academic and behavioral support to 
succeed in a general education environment. Therefore, the Department 
lacks the authority to expand the population of children who can be 
provided voluntary CEIS under IDEA section 613(f).
    As to reporting requirements, the State must report in the IDEA 
Part B LEA Maintenance of Effort Reduction and Coordinated Early 
Intervening Services data collection on the amount of IDEA Part B funds 
each LEA in the State voluntarily uses for CEIS and, consistent with 
the information each LEA must report annually to the State under Sec.  
300.226(d), the total number of children who received CEIS during the 
reporting period, and the number of children who received CEIS during 
the two school years prior to the reporting period and received special 
education and related services during the reporting year for each LEA. 
See, www.ed.gov/edfacts for further information.
    Changes: None.
    Comments: A few commenters, though not opposing proposed Sec.  
300.646(d)(2), noted that including children with disabilities and 
children from ages three through five within the scope of comprehensive 
CEIS, but not voluntary CEIS, could create some practical difficulties. 
One of these commenters noted that this would create different 
reporting requirements for comprehensive and voluntary CEIS. Another 
commenter stated that having different reporting requirements was 
burdensome and asked that the disparate reporting requirements be 
streamlined. Still another commenter noted that the different 
eligibility requirements for comprehensive CEIS might create budgeting, 
accounting, or documentation problems because voluntary CEIS funds 
cannot be freely substituted for comprehensive CEIS funds. Services for 
children with disabilities begun with funds reserved for comprehensive 
CEIS, for example, could not be continued with funds reserved for 
voluntary CEIS, which cannot be used to provide comprehensive early 
intervening services to preschool children.
    Discussion: We are sensitive to the practical difficulties that 
might arise from the differences between comprehensive and voluntary 
CEIS. As part of the Part B Maintenance of Effort (MOE) Reduction and 
Coordinated Early Intervening Services (CEIS) data collection, States 
must report data submitted by LEAs, pursuant to IDEA section 613(f)(4) 
and Sec.  300.226(d), including the total number of children who 
received CEIS during the reporting period, and the number of children 
who received CEIS during the two school years prior to the reporting 
period and received special education and related services during the 
reporting year.
    After these regulations become final, the Department will consider 
what, if any, modifications to the Part B Maintenance of Effort (MOE) 
Reduction and Coordinated Early Intervening Services (CEIS) data 
collection may be needed to assist States and LEAs in meeting their 
obligations under IDEA section 613(f)(4) (20 U.S.C. 1413(f)(4)) and 
Sec.  300.226(d).
    However, the Department disagrees with commenters that the 
differences in eligibility between CEIS and comprehensive CEIS will 
present significant challenges to LEAs working to address significant 
disproportionality and to prevent its reoccurrence. Consider an LEA 
that includes children with disabilities in its implementation of 
comprehensive CEIS, and, in so doing, successfully addresses the 
factors contributing to the significant disproportionality. In a year 
in which the State does not identify the LEA with significant 
disproportionality, the LEA is not required to reserve 15 percent of 
its IDEA Part B funds for comprehensive CEIS. The LEA may not use funds 
it voluntarily reserves under IDEA section 613(f) (20 U.S.C. 1413(f)) 
to provide children with disabilities with CEIS; however, the LEA may 
continue to serve these children using its IDEA, Part B funds in 
accordance with Sec.  300.202 and IDEA section 613(a)(2)(A) (20 U.S.C. 
1413(a)(2)(A)). Further, the LEA may not use funds it voluntarily 
reserves under IDEA section 613(f) (20 U.S.C. 1413(f)) to provide CEIS 
to preschool children ages three through five who are not in 
kindergarten; however, the LEA may continue to serve preschool children 
with disabilities ages three through five using its IDEA, Part B funds 
in accordance with Sec.  300.202 and IDEA

[[Page 92454]]

section 613(a)(2)(A) (20 U.S.C. 1413(a)(2)(A)).
    Changes: None.
Miscellany
    Comment: Some commenters argued that proposed Sec.  300.646(d) 
would create an incentive to not identify children for special 
education and related services in order to reduce disproportionality 
numbers and show that comprehensive CEIS is working.
    Discussion: As we noted earlier in this document, under General-- 
Proposed Regulation Would Create Racial Quotas, the Department 
recognizes the possibility that, in cases where States select 
particularly low risk ratio thresholds, LEAs may have an inappropriate 
incentive to avoid identifying children from particular racial or 
ethnic groups in order to avoid a determination of significant 
disproportionality and the reservation of IDEA Part B funds for 
comprehensive CEIS. However, these actions would be inconsistent with 
IDEA's child find requirements in section 612(a)(3) (20 U.S.C. 
1412(a)(3)) and the evaluation requirements in section 612(a)(7) and 
section 614(a)-(c) of IDEA (20 U.S.C. 1412(a)(7) and 20 U.S.C. 1414(a)-
(c)). All these provisions require an individualized determination of 
whether a child has a disability and the nature and extent of the 
special education and related services that a child needs. IDEA 
requires that these decisions be based solely on the individual needs 
of the child, and not to avoid a determination of significant 
disproportionality. For this reason, Sec.  300.647(b)(1) provides 
States the flexibility to set their own reasonable risk ratio 
thresholds, with input from stakeholders and State Advisory Panels. It 
is the Department's expectation that, as part of the process of setting 
risk ratio thresholds, States will work with stakeholders to identify 
particular risk ratio thresholds that help the State to address large 
racial and ethnic disparities without undermining the appropriate 
implementation of child find and evaluation procedures. We note that 
States have an obligation under IDEA both to identify significant 
disproportionality, based on race and ethnicity, in the identification 
of children with disabilities and to ensure that LEAs implement child 
find and evaluation procedures appropriately. (20 U.S.C. 1412(a)(3); 34 
CFR 300.111).
    Changes: None.
    Comments: A commenter suggested that, in proposed Sec.  
300.646(d)(2), the Department replace the term ``over-identified'' with 
``overrepresented'' to avoid misconceptions that the clause only refers 
to the over-identification of disabilities.
    Discussion: We appreciate the commenter's concern, however, the 
language in question is taken directly from IDEA and therefore we 
decline to change it. Section 300.646(d)(2) refers to comprehensive 
coordinated early intervening services. The underlying statute, IDEA 
section 618(d)(2)(B) (20 U.S.C. 1418(d)(2)(B), specifically provides 
that States must require LEAs identified with significant 
disproportionality under section 618(d)(1) to reserve the maximum 
amount of funds under 613(f) to provide comprehensive coordinated early 
intervening services to children in the LEA, ``particularly children in 
those groups that were significantly overidentified'' under section 
618(d)(1).
    Changes: None.
    Comment: One commenter suggested that the Department require States 
to specify, as part of their reporting on comprehensive CEIS, a listing 
of the types of technical assistance and professional development that 
will be offered to LEAs.
    Discussion: While the Department encourages States to make 
technical assistance available to LEAs, and the Department intends to 
do the same, we decline to require States to specify, as part of their 
reporting on comprehensive CEIS, a listing of the types of technical 
assistance and professional development that will be offered to LEAs. 
We believe that the benefit of reporting on the technical assistance 
that will be offered to LEAs would not justify the burden of requiring 
States to collect and report this information to the Department.
    Changes: None.

References

Bollmer, J., Bethel, J., Garrison-Mogren, R., & Brauen, M. (2007). 
Using the Risk Ratio to Assess Racial/Ethnic Disproportionality in 
Special Education at the School-District Level. Journal of Special 
Education, 41(3), 186-198.
Data Accountability Center (2013). IDEA, Part B Dictionary (revised 
January 2013). Retrieved from www2.ed.gov/programs/osepidea/618-data/collection-documentation/legacy-data-collection-information/data-dictionary/b-datadictionary.pdf.
Donovan, M.S., and Cross, T. (Eds.) (2002). Minority Students in 
Special and Gifted Education. Washington, DC: National Academies of 
Sciences, Committee on Minority Representation in Special Education.
Klingner, J.K., Artiles, A.J., Kozleski, E., Harry, B., Zion, S., 
Tate, W., Duran, G.Z.; Riley, D. (2005). Addressing the 
Disproportionate Representation of Culturally and Linguistically 
Diverse Students in Special Education through Culturally Responsive 
Educational Systems. Education Policy Analysis Archives, 13(38). 
Retrieved from http://files.eric.ed.gov/fulltext/EJ846743.pdf.
Morgan, P.L., Farkas, G., Hillemeier, M.M., Mattison, R., Maczuga, 
S., Li, H. & Cook, M. (2015). Minorities Are Disproportionately 
Underrepresented in Special Education: Longitudinal Evidence Across 
Five Disability Conditions. Education Researcher, 44(5), 1-15.
Oswald, Coutinho, & Best (2002). Community and School Predictors of 
Overrepresentation of Minority Children In Special Education. 
Harvard Education Press, Cambridge: 375-377.
Skiba, R., Artiles, A., Kozleski, E., Losen, D. and Harry, E. 
(2015). Risks and Consequences of Oversimplifying Educational 
Inequities: A Response to Morgan et al. Educational Researcher, 
45(3), 221-225.
U.S. Department of Education, Office of Planning, Evaluation and 
Policy Development. ``FILE C002--Children With Disabilities (IDEA) 
School Age File Specifications.'' Washington, DC, 2013. Retrieved 
from www2.ed.gov/about/inits/ed/edfacts/eden/non-xml/c002-10-0.doc.
U.S. Department of Education, National Center for Education 
Statistics. ``Statistical Methods for Protecting Personally 
Identifiable Information in Aggregate Reporting.'' NCES 2011-603 
(December 2010, Brief 3). Retrieved from https://nces.ed.gov/pubs2011/2011603.pdf.
U.S. Department of Education, Office of Elementary and Secondary 
Education. ``Maximizing Flexibility in the Administration of Federal 
Grants: IDEA, Title I, Title II, and Non-Federal Funds in Schoolwide 
Programs.'' September 13, 2013. Retrieved from www2.ed.gov/programs/titleiparta/flexswp091313.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``Disproportionality of Racial and Ethnic Groups in Special 
Education.'' Memorandum OSEP 07-09, April 24, 2007. Retrieved from 
www2.ed.gov/policy/speced/guid/idea/memosdcltrs/osep07-09disproportionalityofracialandethnicgroupsinspecialeducation.doc.
U.S. Department of Education, Office of Special Education Programs. 
``Reporting on Correction of Noncompliance in the Annual Performance 
Report Required under Sections 616 and 642 of the Individuals with 
Disabilities Education Act.'' Memorandum OSEP 09-02, October 17, 
2008. Retrieved from www2.ed.gov/policy/speced/guid/idea/memosdcltrs/osep09-02timelycorrectionmemo.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``Coordinated Early Intervening Services (CEIS) Under Part B of the 
Individuals with Disabilities Act (IDEA).'' Memorandum OSEP 08-09, 
July 28, 2008. Retrieved from www2.ed.gov/policy/speced/guid/idea/ceis.html.
U.S. Department of Education, Office of Special Education Programs. 
``Dear

[[Page 92455]]

Colleague Letter Regarding Education of Children with Disabilities 
Attending Public Virtual Schools.'' August 5, 2016. Retrieved from 
www2.ed.gov/policy/speced/guid/idea/memosdcltrs/dcl-virtual-schools-08-05-2016.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``OSEP Dear Colleague Letter on Ensuring Equity and Providing 
Behavioral Supports to Students with Disabilities.'' August 1, 2016. 
Retrieved from www2.ed.gov/policy/gen/guid/school-discipline/files/dcl-on-pbis-in-ieps-08-01-2016.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``Questions and Answers on Disproportionality.'' June 2009. 
Retrieved from www2.ed.gov/policy/speced/guid/idea/disproportionality-q-a.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``A Response to Intervention (RTI) Process Cannot Be Used to Delay-
Deny an Evaluation for Eligibility under the Individuals with 
Disabilities Education Act (IDEA).'' Washington, DC. Retrieved from 
www2.ed.gov/policy/speced/guid/idea/memosdcltrs/osep11-07rtimemo.pdf.
U.S. Department of Education, Office of Special Education and 
Rehabilitative Services (2015). 37th Annual Report to Congress on 
the Implementation of the Individuals with Disabilities Education 
Act (2015), Washington, DC. Retrieved from www2.ed.gov/about/reports/annual/osep/2015/parts-b-c/index.html.
U.S. Department of Education, Office of Special Education Programs. 
``Letter to Texas Education Agency Associate Commissioner Susan 
Barnes.'' December 8, 2003. Retrieved from www2.ed.gov/policy/speced/guid/idea/letters/2003-4/barnes121803charter4q2003.pdf.
U.S. Department of Education, Office of Special Education Programs. 
``Letter to Ms. Frances Loose, Supervisor, Michigan Office of 
Special Education and Early Intervention.'' June 3, 2008. Retrieved 
from www2.ed.gov/policy/speced/guid/idea/letters/2008-2/loose060308disprop2q2008.pdf.
U.S. Department of Education, Office of Special Education and 
Rehabilitative Services. (2015). Racial and Ethnic Disparities in 
Special Education: A Multi-Year Disproportionality Analysis by 
State, Category, and Race/Ethnicity Analysis, Washington, DC. 
Retrieved from www2.ed.gov/programs/osepidea/618-data/LEA-racial-ethnic-disparities-tables/disproportionality-analysis-by-state-analysis-category.pdf.
U.S. Department of Education, EDFacts Metadata and Process System 
(EMAPS), OMB Control No. 1820-0689: ``IDEA Part B Maintenance of 
Effort (MOE) Reduction and Coordinated Early Intervening Services 
(CEIS),'' 2015.
U.S. Department of Education, EDFacts Data Warehouse (EDW), OMB 
Control No. 1875-0240: ``IDEA Part B Child Count and Educational 
Environments Collection,'' 2015.
U.S. Department of Education, EDFacts Data Warehouse (EDW), OMB 
Control No. 1875-0240: ``IDEA Part B Discipline Collection,'' 2014.
U.S. Department of Education, U.S. Department of Health and Human 
Services, 2015. Policy Statement on Inclusion of Children With 
Disabilities in Early Childhood Programs. Retrieved from 
www2.ed.gov/about/inits/ed/earlylearning/inclusion/index.html.
U.S. Government Accountability Office. (2013). INDIVIDUALS WITH 
DISABILITIES EDUCATION ACT--Standards Needed to Improve 
Identification of Racial and Ethnic Overrepresentation in Special 
Education (GAO-13-137). Retrieved from www.gao.gov/products/GAO-13-137.
White House, Office of Management and Budget. ``Statistical Policy 
Working Paper 22: Report on Statistical Disclosure Limitation 
Methodology.'' Second version, 2005. Retrieved at www.hhs.gov/sites/default/files/spwp22.pdf.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    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 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 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 stated in the 
Executive order.
    This regulatory action is a significant regulatory action subject 
to review by OMB under section 3(f) of Executive Order 12866.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor their regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things, and to the extent practicable--the costs 
of cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than specifying the behavior or manner of compliance that regulated 
entities must adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including providing economic incentives--such as user fees 
or marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these final regulations only upon a reasoned 
determination that their benefits justify their costs. In choosing 
among alternative regulatory approaches, we selected those approaches 
that maximize net benefits. Based on the analysis that follows, the 
Department believes that these regulations are consistent with the 
principles in Executive Order 13563.
    We also have determined that this regulatory action would not 
unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.
    In this Regulatory Impact Analysis we discuss the need for 
regulatory action, alternatives considered, the potential costs and 
benefits, net budget impacts, assumptions, limitations, and data 
sources.
Need for These Regulations
    As we set out in detail in the preamble to the NPRM, the 
overrepresentation of children of color in special education has been a 
national concern for more than 40 years. In its

[[Page 92456]]

revisions of IDEA, Congress noted the problem and put a mechanism in 
place through which States could identify and address significant 
disproportionality on the basis of race and ethnicity for children with 
disabilities. For a description of how the significant 
disproportionality statutory provisions apply to States and LEAs along 
with the corresponding remedies, please refer to the text of the 
preamble.
    Also, as stated in the preamble, IDEA does not define ``significant 
disproportionality,'' and, in our August 2006 regulations, the 
Department left the matter to the discretion of the States. Since then, 
States have adopted different methodologies across the country, and, as 
a result, far fewer LEAs are identified as having significant 
disproportionality than may be anticipated given the widespread 
disparities in rates of identification, placement, and disciplinary 
removal across racial and ethnic groups, as noted by the GAO study and 
supported by the Department's own data analysis. The lack of 
consistency, and relatively low number of LEAs identified as having 
significant disproportionality, raises concerns about whether the prior 
approach was being implemented to meet Congress' intent to address 
racial and ethnic disparities in special education and to ensure 
compliance with IDEA. Therefore, there is a need for a common 
methodology for States to apply when making determinations of 
significant disproportionality, to address the complex, manifold causes 
of the issue and ensure compliance with the requirements of IDEA.
    In addition, there is a corresponding need to expand comprehensive 
CEIS to include children from age 3 through grade 12, with and without 
disabilities, and to require LEAs to provide comprehensive CEIS to 
identify and address factors contributing to the significant 
disproportionality. The current allowable uses of IDEA Part B funds 
reserved for comprehensive CEIS prohibit LEAs from directing resources 
to children with disabilities directly impacted by inappropriate 
identification, placement, or discipline and also prohibit LEAs from 
providing early intervening services to preschool children. This latter 
prohibition is especially problematic, since early intervening services 
have been shown to reduce the need for more extensive services in the 
future. Therefore, expanding the provision of comprehensive CEIS to 
preschool children allows LEAs to identify and address learning 
difficulties in early childhood, reducing the need for interventions 
and services later on.
Alternatives Considered
    Currently, IDEA does not define ``significant disproportionality'' 
or prescribe to States how it must be measured. As a result, States 
have adopted numerous methodologies for determining if LEAs 
demonstrated significant disproportionality based on race and 
ethnicity. In the NPRM, the Department proposed that all States use a 
standard methodology--the risk ratio--to make determinations of 
significant disproportionality in the LEAs of the State. The Department 
reviewed and considered various alternatives to the proposed 
regulations submitted by commenters in response to the NPRM.
    The Department considered comments requesting that the Department 
withdraw the NPRM and not require States to apply a standard 
methodology to identify significant disproportionality. Some of these 
commenters suggested that the Department first pilot a standard 
methodology in several States, gather that data for analysis, and then 
provide resources and technical assistance to help States and LEAs 
address significant disproportionality. Other commenters stated that 
LEAs are better positioned to determine the factors that contribute to 
significant disproportionality and are uniquely positioned to address 
those factors without the imposition of a standard methodology that did 
not consider local demographics. Other commenters stated that schools 
had no control over the poverty, health factors or other social ills 
that contribute to disability and that mandating a standard methodology 
would do nothing to address those issues or the number of children of 
color in special education. The Department's effort to establish a 
standard methodology for States and LEAs to determine whether 
significant disproportionality exists based on race or ethnicity is 
designed to: (1) Address Congress' concern ``that more minority 
children continue to be served in special education than would be 
expected from the percentage of minority children in the general 
education.'' IDEA section 601(c)(12)(B) (20 U.S.C. 1400(c)(12)(B)); and 
(2) address the GAO report (GAO-13-137) which stated that the 
Department's oversight of racial and ethnic overrepresentation in 
special education is hampered by the flexibility States have to 
individually define significant disproportionality. The GAO recommended 
that the Department, to promote consistency, develop a standard 
approach to defining significant disproportionality to be used by all 
States. As to the potential impact of a standard methodology, the 
Department acknowledges that mandating a standard methodology to 
measure significant disproportionality will not resolve poverty, poor 
health and environmental conditions or other factors thought to 
contribute to significant disproportionality. However, the Department 
believes that there is a need for a common methodology for 
determinations of significant disproportionality in order for States 
and the Department to better identify and address the complex, manifold 
causes of the issue and ensure compliance with the requirements of 
IDEA.
    In applying the risk ratio method to determine significant 
disproportionality, the proposed regulations required States to use a 
standard methodology which included a risk ratio, or if appropriate, an 
alternate risk ratio; a reasonable risk ratio threshold; and a minimum 
n-size (referred to as ``cell size'' in the NPRM) as the standard 
methodology to determine whether there is significant 
disproportionality based on race or ethnicity in the State and its 
LEAs. States would have to analyze an LEA for significant 
disproportionality if the LEA had at least 10 children in a racial or 
ethnic group (for purposes of identification), or at least 10 children 
with disabilities in the racial or ethnic group (for purposes of 
placement or discipline). In general, most comments about the minimum 
n-size addressed the tension between setting a n-size too low and 
producing unreliable results and setting a n-size too high and 
exempting LEAs from being reviewed for significant disproportionality. 
Many commenters opposed the n-size limitation of 10 and requested that 
it be raised to 30 or 40, or eliminated entirely and leave the n-size 
to State discretion. These commenters argued that a larger minimum n-
size is necessary for reliable analysis to avoid LEA identification for 
significant disproportionality based on a very small numbers of 
children. Other commenters expressed support for the Department's 
minimum n-size proposal of 10 but were willing to accept an increase to 
15, to ensure that the maximum number of LEAs is reviewed for 
significant disproportionality. The Department recognizes that 
selecting an appropriate minimum number of children necessary to 
include an LEA in the State's analysis of significant 
disproportionality can be difficult. If the minimum n-size is too 
small, more LEAs would be included in the analysis but the likelihood 
of dramatic,

[[Page 92457]]

statistically anomalous changes in risk ratio from one year to the next 
would increase. By contrast, if the minimum number is set too high, a 
larger number of LEAs would be excluded from the analysis and States 
would not identify as many LEAs with significant disproportionality as 
there might be. The Department has amended its proposal of a minimum n-
size of 10 and will now allow States to select reasonable minimum n-
sizes and reasonable minimum cell sizes, based on advice from 
stakeholders including State Advisory Panels and subject to monitoring 
and enforcement for reasonableness, that strike a balance between 
volatility and inclusion of LEAs in the analysis for significant 
disproportionality.
    Many commenters agreed with the Department's requirement that all 
States use the risk ratio as the standard methodology for determining 
significant disproportionality. These commenters noted that the use of 
a common analytical method for determining significant 
disproportionality would increase transparency in LEA identification 
across States for LEA, State and Federal officials, as well as the 
general public. However, some commenters indicated that the Department 
should not allow States to set a reasonable risk ratio threshold or 
allow States to vary the application of the risk ratio analysis to 
account for State differences. These commenters stated that 
methodological alignment across States is needed to advocate on behalf 
of children with disabilities, reduce time and effort needed for data 
analysis and to enact appropriate policies, procedures and practices to 
address disproportionality on the basis of race or ethnicity. The 
Department considered these concerns and acknowledges the need for a 
common methodology for determinations of significant disproportionality 
in order to better identify and address the complex causes of 
significant disproportionality. However, as some commenters noted, LEAs 
vary widely as to size and population. Some LEAs include specialized 
schools, hospitals or community services that may draw large numbers of 
children with disabilities and their families. States are better 
positioned to identify and address the factors contributing to 
significant disproportionality in the LEAs. The final regulations allow 
States, in the determination of significant disproportionality, to set 
reasonable risk ratio thresholds, reasonable minimum cell sizes and 
reasonable minimum n-sizes, based on advice from stakeholders including 
the State Advisory Panel.
Discussion of Costs, Benefits and Transfers
    The Department has analyzed the costs of complying with the final 
requirements. Due to the considerable discretion the final regulations 
provide States (e.g., flexibility to determine their own risk ratio 
thresholds, reasonable minimum n-sizes and cell sizes, and the extent 
to which LEAs have made reasonable progress under Sec.  300.647(d)(2) 
in lowering their risk ratios or alternate risk ratios), we cannot 
evaluate the costs of implementing the final regulations with absolute 
precision. However, we estimate that the total cost of these 
regulations over ten years would be between $50.1 and $91.4 million, 
plus additional transfers between $298.4 and $552.9 million. These 
estimates assume discount rates of three to seven percent. Relative to 
these costs, the major benefits of these requirements, taken as a 
whole, would include: Ensuring increased transparency regarding each 
State's definition of significant disproportionality; establishing an 
increased role for State Advisory Panels in determining States' risk 
ratio thresholds, minimum n-sizes, and minimum cell sizes; reducing the 
use of potentially inappropriate policies, practices, and procedures as 
they relate to the identification of children as children with 
disabilities, placements in particular educational settings for these 
children, along with the incidence, duration, and type of disciplinary 
removals from these placements, including suspensions and expulsions; 
and promoting and increasing comparability of data across States in 
relation to the identification, placement, and discipline of children 
with disabilities by race or ethnicity. Additionally, the Department 
believes that expanding the eligibility of children ages three through 
five to receive comprehensive CEIS would give LEAs new flexibility to 
use additional funds received under Part B of IDEA to provide 
appropriate services and supports at earlier ages to children who might 
otherwise later be identified as having a disability, which could 
reduce the need for more extensive special education and related 
services for these children in the future.
Benefits
    The Department believes this regulatory action to standardize the 
methodology States use to identify significant disproportionality will 
provide clarity to the public, increase comparability of data across 
States, and enhance the overall level of transparency regarding the 
appropriateness of State-level policies, practices, and procedures as 
they relate to the identification, placement, and discipline of 
children with disabilities in LEAs. The Department further believes 
that methodological alignment across States will improve upon current 
policy, which has resulted in numerous State definitions of significant 
disproportionality of varying complexity that may be difficult for 
stakeholders to understand and interpret. The wide variation in 
definitions and methodologies across States under current policy also 
makes it difficult for stakeholders to advocate on behalf of children 
with disabilities, and for researchers to examine the extent to which 
LEAs have adequate policies, practices, and procedures in place to 
provide appropriate special education and related services to children 
with disabilities. We believe that a standardized methodology will 
accrue benefits to stakeholders in reduced time and effort needed for 
data analysis and a greater capacity for meaningful advocacy. 
Additionally, we believe that the standardized methodology will accrue 
benefits to all children (including children with disabilities), by 
promoting greater transparency and supporting the efforts of all 
stakeholders to enact appropriate policies, practices, and procedures 
that address disproportionality on the basis of race or ethnicity.
    Requiring that States set reasonable risk ratio thresholds, minimum 
n-sizes, and minimum cell sizes based on the advice from State Advisory 
Panels will also give stakeholders an increased role in setting State 
criteria for identifying significant disproportionality. The Department 
hopes that this will give States and stakeholders an opportunity, and 
an incentive, to thoughtfully examine existing State policies and 
ensure that they appropriately identify LEAs with significant and 
ongoing disparities in the identification of children with 
disabilities, their placements in particular educational settings, and 
their disciplinary removals. Further, we hope that States will also 
take this opportunity to consult with their State Advisory Panels on 
the States' approaches to reviewing policies, practices, and 
procedures, to ensure that they comply with IDEA and have the capacity 
to provide appropriate support.
    In addition, there is widespread evidence on the short- and long-
term negative impacts of suspensions and expulsions on student academic

[[Page 92458]]

outcomes. In general, suspended children are more likely to fall 
behind, to become disengaged from school, and to drop out of a school. 
(Lee, Cornell, Gregory, & Xitao, 2011; Brooks, Shiraldi & Zeidenberg, 
2000; Civil Rights Project, 2000.) The use of suspensions and 
expulsions is also associated with an increased likelihood of contact 
with the juvenile justice system in the year following those 
disciplinary actions. (Council of Statement Governments, 2011.)
    The Department believes that suspensions and expulsions can often 
be avoided, particularly if LEAs use appropriate school-wide 
interventions, and appropriate student-level supports and 
interventions, including proactive and preventative approaches that 
address the underlying causes or behaviors and reinforce positive 
behaviors. We believe that the final regulations clarify each State's 
responsibility to implement the statutory remedies whenever significant 
disproportionality in disciplinary removals is identified, and will 
prompt States and LEAs to initiate efforts to reduce schools' reliance 
on suspensions and expulsions as a core part of their efforts to 
address significant disproportionality. In so doing, we believe that 
LEAs will increase the number of children participating in the general 
education curriculum on a regular and sustained basis, thus accruing 
benefits to children and society through greater educational gains.
    Under section 613(f) of IDEA and Sec.  300.226, LEAs are not 
authorized to voluntarily use funds for CEIS to serve children with 
disabilities or children ages three through five. By clarifying that 
comprehensive CEIS can also be used to support children with 
disabilities and children ages three through five, the final 
regulations will allow LEAs to direct resources in a more purposeful 
and impactful way to improve outcomes for those children in subgroups 
that have been most affected by significant disproportionality. For 
example, LEAs would be able to use comprehensive CEIS to expand the use 
of multi-tiered systems of support, which could help LEAs determine 
whether children identified with disabilities have access to 
appropriate, targeted supports and interventions to allow them to 
succeed in the general education curriculum. Additionally, by expanding 
the eligibility of children ages three through five to receive 
comprehensive CEIS, LEAs identified as having significant 
disproportionality will have additional resources to provide high-
quality early intervening services, which research has shown can 
increase children's language, cognitive, behavioral, and physical 
skills, and improve their long-term educational outcomes. LEAs could 
use funds reserved for comprehensive CEIS to provide appropriate 
services and supports at earlier ages to children who might otherwise 
later be identified as having a disability, which could reduce the need 
for more extensive special education and related services for these 
children in the future.
    While the Department cannot, at this time, meaningfully quantify 
the economic impacts of the benefits outlined above, we believe that 
they are substantial and outweigh the estimated costs of these final 
regulations.
    The following section provides a detailed analysis of the estimated 
costs of implementing the requirements contained in the new 
regulations.
Number of LEAs Newly Identified
    In order to accurately estimate the fiscal and budgetary impacts of 
these regulations, the Department must estimate not only the costs 
associated with State compliance with these regulations, but also the 
costs borne by any LEAs that would be identified as having significant 
disproportionality under this new regulatory scheme that would not have 
been identified had the Department not regulated. However, at this 
time, the Department does not know, with a high degree of certainty, 
how many LEAs will be newly identified in future years. Given that a 
large proportion of the cost estimates in this section are driven by 
assumptions regarding the number of LEAs that SEAs might identify in 
any given year, these estimates are highly sensitive to those 
assumptions. In 2012-2013, the most recent year for which data are 
available, States identified 449 out of approximately 16,000 LEAs 
nationwide as having significant disproportionality. For purposes of 
our estimates, the Department used this level of identification as a 
baseline, only estimating costs for the number of LEAs over 449 that 
would be identified in future years.
    These regulations largely focus on methodological issues related to 
the consistency of State policies and do not require States to identify 
LEAs at a higher rate than they currently do. As such, it is possible 
that these regulations may not result in any additional LEAs being 
identified as having significant disproportionality. However, we 
believe that this is unlikely and therefore would represent an extreme 
lower bound estimate of the cost of this regulation.
    We believe it is much more likely that the regulation will provide 
States and advocates with an opportunity to make meaningful and 
substantive revisions to their current approaches to identifying and 
addressing significant disproportionality. To the extent that States 
and State Advisory Panels, as part of the shift to the new standard 
methodology, establish risk ratio thresholds, minimum n-sizes, and 
minimum cell sizes that identify more LEAs than they currently do, it 
is likely that there will be an increase in the number of LEAs 
identified nationwide. We do not specifically know what risk ratio 
thresholds, minimum n-sizes, and minimum cell sizes States will set in 
consultation with their State Advisory Panels and therefore do not know 
the number of LEAs that would be identified under those new thresholds. 
However, for purposes of these cost estimates, we assume that those 
changes would result in 400 additional LEAs being identified each year 
nationwide. This number represents an approximately ninety percent 
increase in the overall number of LEAs identified by States 
collectively each year. The Department assumes that changes in State 
policies and procedures are one potential and likely outcomes of these 
regulations; therefore, the number of new LEAs that may be identified 
is also reflected in our cost estimates.
    As noted in the Costs and Burden of the Proposed Regulations 
section, the Department does not agree with commenters who assert that 
these final regulations will result in determinations of significant 
disproportionality for nearly half the LEAs in the country. Therefore, 
we have not changed the number of LEAs identified and corresponding 
costs associated with those LEAs. The Department also believes that 
changes in the final regulations, outlined in the Minimum Cell Sizes 
and Minimum N-Sizes Section, that allow States to set reasonable 
minimum n-sizes and cell sizes within the bounds prescribed in the 
preamble will likely result in far fewer LEAs identified than some 
commenters predict.
    To the extent that States identify fewer than 400 additional LEAs 
in each year or that the number of LEAs identified decreases over time, 
the estimates presented below are overestimates of the actual costs. 
For a discussion of the impact of this assumption on our cost 
estimates, see the Sensitivity Analysis section of this Regulatory 
Impact Analysis.
General Changes in the Cost Estimates From the NPRM
    The Department has increased the estimated cost of these 
regulations in

[[Page 92459]]

response to both changes to the final regulations and comments from the 
public. The final regulations require States to set reasonable minimum 
n-sizes, minimum cell sizes, and if the State uses the flexibility 
described in Sec.  300.646(d)(2), standards for determining reasonable 
progress in consultation with their State Advisory Panels, which could 
result in additional burden for Federal and State level staff. States 
will also have some additional burden associated with reporting these 
data to the Department. The Department also agrees with commenters that 
the NPRM likely underestimated the time required to modify data 
collection protocols, technical assistance activities, and 
communication required to implement the rule. We have therefore 
increased the estimated number of hours to better reflect the work 
required to adequately implement these regulations in a number of 
sections, including the ``State-level Review and Compliance With the 
New Rule,'' the ``Annual Calculation of Risk Ratios and Notification of 
LEAs,'' and the ``Federal Review of State Risk Ratio Thresholds'' 
sections. Finally, the Department modified the State level cost 
estimates in the NPRM because the final regulations do not require the 
use of the standard methodology when both the LEA and the State fail to 
meet the State's minimum n-size and minimum cell size. Therefore, in 
this final estimate, the Department removed costs associated the Bureau 
of Indian Education (BIE) because BIE will not typically have a 
comparison group and mathematically cannot calculate risk ratios for 
any racial or ethnic group. This change resulted in a slight decrease 
for State level costs associated with BIE.
Cost of State-Level Activities
    These regulations require every State to use a standard methodology 
to determine if significant disproportionality based on race and 
ethnicity is occurring in the State and LEAs of the State with respect 
to the identification of children as children with disabilities, the 
placement in particular educational settings of these children, and the 
incidence, duration, and type of disciplinary removals from placement, 
including suspensions and expulsions. These regulations require States 
to set and report to the Department risk ratio thresholds, above which 
LEAs would be identified as having significant disproportionality, and 
provide States the flexibility to: (1) Use up to three years of data to 
make a determination of significant disproportionality; (2) set and 
report to the Department reasonable minimum n-sizes and minimum cell 
sizes consistent with the limitations outlined in these regulations, 
and; (3) if a State uses the flexibility described in paragraph (d)(2), 
set and report standards for determining whether LEAs have made 
reasonable progress under Sec.  300.647(d)(2) in lowering their risk 
ratios or alternate risk ratios. Finally, these regulations clarify 
that LEAs must identify and address the factors contributing to 
significant disproportionality when implementing comprehensive CEIS.
State-Level Review and Compliance With the New Rule
    The extent of the initial burden placed on States by the regulation 
will depend on the amount of staff time required to understand the new 
regulation, modify existing data collection and calculation tools, meet 
with State Advisory Panels to develop and report to the Department risk 
ratio thresholds, minimum n-sizes, minimum cell sizes, and standards 
for reasonable progress, draft and disseminate new guidance to LEAs, 
and review and update State systems that examine the policies, 
practices, and procedures of LEAs identified as having significant 
disproportionality.
    To comply with the final regulations, States will have to take time 
to review the regulations, determine how these regulations will affect 
existing State policies, practices, and procedures, and plan for any 
actions necessary to comply with the new requirements. To estimate the 
cost per State, we assume that State employees involved in this work 
would likely include a Special Education Director ($63.04), a Database 
Manager ($52.32), two Management Analysts ($44.64), and a Lawyer 
($61.66), at 16 hours each for a total one-time cost for the 50 States, 
the District of Columbia, Puerto Rico, Guam, American Samoa, and the 
Virgin Islands of $234,345.\4\
---------------------------------------------------------------------------

    \4\ Unless otherwise noted, all hourly wages are loaded wage 
rates and are based on median hourly earnings as reported in the May 
2014 National Occupational Employment and Wage Estimates from the 
Bureau of Labor Statistics (see www.bls.gov/oes/current/999201.htm) 
multiplied by an employer cost for employee compensation of 1.57 
(see www.bls.gov/news.release/ecec.toc.htm).
---------------------------------------------------------------------------

    Since no State currently calculates significant disproportionality 
using the exact methodology in this regulation, each State will need to 
modify its data collection tools. To estimate the cost per State, the 
Department doubled the time estimates contained in the NPRM. We assume 
that State employees would likely include a Database Manager ($52.32) 
and a Management Analyst ($44.64) at 32 hours each for a total one-time 
cost for the 50 States, the District of Columbia, Puerto Rico, Guam, 
American Samoa, and the Virgin Islands of $170,648. While we recognize 
that these costs will vary widely from State to State, we believe that 
this total represents an appropriate estimate of the costs across all 
States.
    States will also need to draft, issue, and disseminate new guidance 
documents to LEAs regarding these regulatory changes, including a 
discussion of any new data collection tools or processes and revised 
procedures for identifying and notifying LEAs. We assume States would 
have to communicate changes in policy and would likely use a mixture of 
teleconferences, Webinars, and guidance documents to ensure that LEAs 
understand and comply with revised policies. To estimate the cost per 
State, the Department doubled the previous time estimates from the 
NPRM. We assume that State employees would likely include a Special 
Education Director ($63.04) for 6 hours, 5 Management Analysts ($44.64) 
for 32 hours, 2 Administrative Assistants ($25.69) for 16 hours, a 
Computer Support Specialist ($35.71) for 4 hours, and 2 lawyers 
($61.66) for 32 hours, for a total one-time cost for the 50 States, the 
District of Columbia, Puerto Rico, Guam, American Samoa, and the Virgin 
Islands of $683,748.
    Additionally, changes under Sec.  300.646(d) require LEAs 
identified as having significant disproportionality to use funds 
reserved for comprehensive CEIS to identify and address the factors 
contributing to significant disproportionality. States will have to 
review their existing processes to ensure that LEAs are provided with 
appropriate support to identify these contributing factors and use 
funds for comprehensive CEIS in ways that are appropriately targeted to 
address those factors. To estimate the cost per State, we assume that 
State employees involved in these activities would likely include a 
Special Education Director ($63.04) for 4 hours, 2 Management Analysts 
($44.64) for 16 hours, an Administrative Assistant ($25.69) for 2 
hours, and a Manager ($51.50) for 8 hours for a total one-time cost for 
the 50 States, the District of Columbia, Puerto Rico, Guam, American 
Samoa, and the Virgin Islands of $117,922.
    Under the new regulations, States must also determine risk ratio 
thresholds, minimum n-sizes, minimum cell sizes, and a standard for 
reasonable progress, based on the advice of stakeholders, including 
State Advisory Panels, as provided under IDEA section 
612(a)(21)(D)(iii). In order to estimate

[[Page 92460]]

the cost of implementing these requirements including the new 
requirement that States set reasonable minimum n-sizes and cell sizes, 
the Department doubled the previous time estimates from the NPRM. We 
assume that the average State would likely initially meet this 
requirement in Year 1 and revisit the thresholds and cell sizes every 
five years thereafter. We further assume that the meetings with the 
State Advisory Panels would include at least the following 
representatives from the statutorily required categories of 
stakeholders: One parent of a child with disabilities; one individual 
with disabilities; one teacher; one representative of an institution of 
higher education that prepares special education and related services 
personnel; one State and one local education official, including an 
official who carries out activities under subtitle B of title VII of 
the McKinney-Vento Homeless Assistance Act; one Administrator of 
programs for children with disabilities; one representative of other 
State agencies involved in the financing or delivery of related 
services to children with disabilities; one representative of private 
schools and public charter schools; one representative of a vocational, 
community, or business organization concerned with the provision of 
transition services to children with disabilities; one representative 
from the State child welfare agency responsible for foster care; and 
one representative from the State juvenile and adult corrections 
agencies. To estimate the cost of participating in these meetings for 
the required categories of stakeholders, we assume that each meeting 
would require 16 hours of each participant's time (including 
preparation for and travel to and from the meeting and the time for the 
meeting itself) and use the following national median hourly wages \5\ 
for full-time State and local government workers employed in these 
professions: Postsecondary education administrators, $44.28 (1 
stakeholder); primary, secondary, and special education school 
teachers, $35.66 \6\ (1 stakeholder); State social and community 
service managers, $32.86 (5 stakeholders); local social and community 
service managers, $37.13 (1 stakeholder); other management occupations, 
$40.22 (1 stakeholder); elementary and secondary school education 
administrator, $42.74 (1 stakeholder).\7\ For the opportunity cost for 
the parent and individual with disabilities, we use the average median 
wage for all workers of $17.09. We also assume that State staff would 
prepare for and facilitate each meeting, including the Special 
Education Director ($63.04) for 4 hours, one State employee in a 
managerial position ($51.50) for 32 hours, one Management Analyst 
($44.64) for 32 hours, and one Administrative Assistant ($25.69) for 32 
hours. Based on these participants, we estimate that consultation with 
the State Advisory Panels would have a cumulative one-year cost of 
$578,988 for the 50 States, the District of Columbia, Puerto Rico, 
Guam, American Samoa, and the Virgin Islands.
---------------------------------------------------------------------------

    \5\ Wages in this section do not reflect loaded wage rates.
    \6\ Hourly earnings were estimated using the annual salary for 
this job classification as reported in the May 2014 National 
Occupational Employment and Wage Estimates from the Bureau of Labor 
Statistics (see http://www.bls.gov/oes/current/999201.htm) divided 
by the number of workdays and hours per day assuming 200 workdays 
and 8 hours per day.
    \7\ Hourly earnings were estimated using the annual salary for 
this job classification as reported in the May 2014 National 
Occupational Employment and Wage Estimates from the Bureau of Labor 
Statistics (see http://www.bls.gov/oes/current/999201.htm) divided 
by the number of work weeks and hours per week assuming 52 weeks and 
40 hours per week.
---------------------------------------------------------------------------

    New Sec.  300.647(b)(7) will require States to report all risk 
ratio thresholds, minimum cell sizes, minimum n-sizes, standards for 
measuring reasonable progress, and the rationales for each to the 
Department at a time and in a manner determined by the Secretary. To 
estimate the cost per State, we assume that State employees would 
likely include a Database Manager ($52.32) for 5 hours and a Management 
Analyst ($44.64) for 20 hours for an annual cost for the 50 States, the 
District of Columbia, Puerto Rico, Guam, American Samoa, and the Virgin 
Islands of $63,491.
Annual Calculation of Risk Ratios and Notification of LEAs
    In addition to the costs outlined above, States will incur annual 
costs associated with calculating risk ratios, making determinations of 
significant disproportionality, and notifying LEAs of determinations.
    New Sec.  300.647 requires every State to annually calculate 
significant disproportionality for each LEA using a risk ratio or 
alternate risk ratio method in every category of analysis (as defined 
in this document) that meets the minimum n-size and cell size 
requirements, as determined by the State. States are required to 
identify LEAs above the risk ratio threshold with significant 
disproportionality. When making a determination of significant 
disproportionality, States will be allowed to use up to three years of 
data, and take into account whether LEAs demonstrate reasonable 
progress, under Sec.  300.647(d)(2), in lowering their risk ratios or 
alternate risk ratios. To estimate the annual cost per State, the 
Department doubled the time estimates included in the NPRM. In this 
notice of final regulations, we assume that State employees involved in 
this calculation will include 3 Management Analysts ($44.64) for 48 
hours and one Administrative Assistant ($25.69) for 12 hours for an 
annual cost of $370,500 for the 50 States, the District of Columbia, 
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
    After identifying LEAs with significant disproportionality, States 
would have to notify LEAs of their determination. We assume that a 
State employee in a managerial position ($51.50) would call each 
identified LEA with the assistance of one Administrative Assistant 
($25.69) and take approximately 15 minutes per LEA. We assume 400 new 
LEAs will be identified with significant disproportionality, resulting 
in an annual cost of $7,719.
Review and Revision of Policies, Practices, and Procedures
    States are required to provide for the review and, if appropriate, 
revision of policies, practices, and procedures related to the 
identification, placement, and discipline of children with disabilities 
to ensure the policies, practices, and procedures comply with 
requirements of IDEA and publicly report any revisions. We assume 
States will ensure LEAs are complying with these requirements though 
desk audits, meetings or phone calls with LEAs, analysis of data, or 
sampling of IEPs and evaluations. To estimate the annual cost at the 
State level, we assume that State employees would likely include one 
Special Education Director ($63.04) for 0.5 hours, one State employee 
in a managerial position ($51.50) for 1 hour, one Administrative 
Assistant ($25.69) for 1 hour, and 1 Management Analyst ($44.64) for 6 
hours for each LEA. We assume 400 new LEAs are identified with 
significant disproportionality each year, the annual cost would be 
$150,621 for the 50 States, the District of Columbia, Puerto Rico, 
Guam, American Samoa, and the Virgin Islands.
    States are required to ensure that LEAs identified with significant 
disproportionality review their policies, practices, and procedures 
related to the identification, placement, and discipline of children 
with disabilities to ensure the policies, practices, and procedures 
comply with requirements

[[Page 92461]]

of IDEA. We assume this would require LEAs to examine data, identify 
areas of concern, visit schools, review IEPs and evaluations, and 
review any other relevant documents. To estimate the annual cost to 
review policies, practices, and procedures at the LEA level, we assume 
that LEA employees would likely include one District Superintendent 
($85.74) for 5 hours, one local employee in a managerial position 
($58.20) for 60 hours, one local Special Education Director ($66.52) 
for 20 hours, two local Administrative Assistants ($28.43) for 15 
hours, four Special Education teachers ($58.47 \8\) for 2 hours, and 
two Education Administrators ($70.37 \9\) for 8 hours for each LEA. If 
we assume 400 new LEAs are identified with significant 
disproportionality, the annual cost to LEAs would be $3,079,030.
---------------------------------------------------------------------------

    \8\ Hourly earnings were estimated using the annual salary for 
this job classification as reported in the May 2014 National 
Occupational Employment and Wage Estimates from the Bureau of Labor 
Statistics (see www.bls.gov/oes/current/999201.htm) divided by the 
number of work days and hours per day assuming 200 workdays and 8 
hours per day.
    \9\ Hourly earnings were determined using the annual salary for 
this job classification as reported in the May 2014 National 
Occupational Employment and Wage Estimates from the Bureau of Labor 
Statistics (see www.bls.gov/oes/current/999201.htm) divided by the 
number of work weeks and hours per week assuming 52 weeks and 40 
hours per week.
---------------------------------------------------------------------------

    After reviewing their policies, practices, and procedures related 
to the identification, placement, and discipline of children with 
disabilities, LEAs are required, if appropriate, to revise those 
policies, practices, and procedures to ensure they comply with 
requirements of IDEA. We assume LEAs will have to spend time developing 
a plan to change any policies, practices, and procedures identified in 
their review based on relevant data. To estimate the annual cost to 
revise policies, practices, and procedures we assume that LEA staff 
would likely include one District Superintendent ($85.74) for 2 hours, 
one local employee in a managerial position ($58.20) for 60 hours, one 
local Special Education Director ($66.52) for 20 hours, and two local 
Administrative Assistants ($28.43) for 8 hours for each LEA. If we 
assume half of the new LEAs identified with significant 
disproportionality (200 LEAs) would need to revise their policies, 
practices, and procedures the annual cost would be $1,089,730.
Planning for and Tracking the Use of Funds for Comprehensive CEIS
    LEAs identified with significant disproportionality are required by 
statute to reserve 15 percent of their IDEA Part B funds for 
comprehensive CEIS. Any LEAs fitting into this category will also have 
to plan for the use of funds reserved for comprehensive CEIS. To 
estimate the annual cost of planning for the use of IDEA Part B funds 
for comprehensive CEIS, we assume that LEA employees involved in these 
activities would likely include one District Superintendent ($85.74) 
for 1 hour, one local employee in a managerial position ($58.20) for 16 
hours, one local Special Education Director ($66.52) for 4 hours, and 
one local Budget Analyst ($49.97) for 24 hours for each LEA. If we 
assume 400 new LEAs are identified with significant disproportionality, 
the annual cost would be $992,890.
    LEAs reserving IDEA Part B funds for comprehensive CEIS will also 
have to track the actual use of those funds. We assume LEAs will have 
to commit staff time to ensure they are meeting the fiscal requirements 
associated with the use of funds for comprehensive CEIS. To estimate 
the annual cost of tracking the use of funds for comprehensive CEIS, we 
assume that one local Budget Analyst ($49.97) would be required for 8 
hours for each LEA. If we assume 400 new LEAs are identified with 
significant disproportionality, the annual cost would be $159,900.
    LEAs providing comprehensive CEIS are also currently required to 
track the number of children served under comprehensive CEIS and the 
number of children served under comprehensive CEIS who subsequently 
receive special education and related services during the preceding 
two-year period. To estimate the annual cost of tracking children 
receiving services under comprehensive CEIS, we assume that LEA 
employees would likely include one Database Manager ($50.63) for 40 
hours and one local Administrative Assistant ($28.43) for 8 hours for 
each LEA. If we assume 400 new LEAs are identified with significant 
disproportionality, the annual cost would be $901,016.
    States are required to annually review each LEA's application for a 
subgrant under IDEA Part B. As noted above, LEAs identified with 
significant disproportionality are required to reserve 15 percent of 
their Part B funds for comprehensive CEIS and many States require LEAs 
to reflect that reservation as part of their application for IDEA Part 
B funds. To estimate the annual cost stemming from State reviews of LEA 
applications to ensure compliance for all newly identified LEAs, we 
assume that State employees would likely include one Management Analyst 
($44.64) and take 0.25 hours for each LEA. If we assume 400 new LEAs 
are identified with significant disproportionality, the annual cost 
would be $4,464.
Federal Review of State Risk Ratio Thresholds
    Under Sec.  300.647(b)(1)(iii), the risk ratio thresholds, minimum 
n-sizes, minimum cell sizes, and standards for reasonable progress 
established by States are subject to monitoring and enforcement by the 
Department. At this time, the Department expects that it would conduct 
monitoring of all States in the first year that States set the 
thresholds, minimum n-sizes, minimum cell sizes, and standards for 
reasonable progress and then monitor the thresholds, minimum n-sizes, 
minimum cell sizes, and standards for reasonable progress again in any 
year in which a State changes these standards. To estimate the annual 
cost of reviewing risk ratio thresholds, minimum n-sizes, minimum cell 
sizes, and the standards for reasonable progress, the Department 
assumes the new requirements would increase staff time four fold. We 
assume that Department staff involved in these reviews would likely 
include one management analyst at the GS-13 level ($73.95 \10\), and 
take 4 hour each for the 50 States, the District of Columbia, Puerto 
Rico, Guam, American Samoa, and the Virgin Islands. If we assume the 
Department would have to review every State in year one, 25 States in 
year 2, 10 States in year 3, and 5 States in each year thereafter, the 
average annual cost over the ten year time horizon would be $3,058 at a 
7 percent discount rate.
---------------------------------------------------------------------------

    \10\ This loaded hourly wage rate is based on the hourly 
earnings of a GS-13 step 3 federal employee in Washington, DC. (See: 
www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/16Tables/html/DCB_h.aspx).
---------------------------------------------------------------------------

Transfers
    Under IDEA, LEAs identified with significant disproportionality are 
required to reserve 15 percent of their IDEA Part B allocation for 
comprehensive CEIS. Consistent with the Office of Management and Budget 
Circular A-4, transfers are monetary payments from one group to another 
that do not affect total resources available to society; therefore, 
this reservation constitutes a transfer. Using data collected under 
section 618 from the SY 2011-2012, the Department estimates that 15 
percent of the average LEA section 611 and section 619 subgrants will 
be $106,220. Assuming 400 new LEAs are identified with significant 
disproportionality each year, the total annual transfer would be 
$42,488,000. It is important to note that

[[Page 92462]]

these formula funds would not be subgranted to new entities, but rather 
that the beneficiaries of these funds would change. As noted elsewhere 
in this final rule, the regulations clarify that funds reserved for 
comprehensive CEIS can be used to provide services to children with 
disabilities. To the extent that LEAs use their funds reserved for 
comprehensive CEIS to provide services to these children, the total 
amount of the transfer will be lower than what is estimated here.
Sensitivity Analysis
    As noted elsewhere in the Discussion of Costs, Benefits, and 
Transfers, the estimated costs associated with this regulation are 
highly sensitive to the Department's assumption regarding the total 
number of LEAs nationwide that States will identify in each year. For 
purposes of the estimates outlined above, the Department assumed that 
400 additional LEAs above the baseline of 449 would be identified in 
each year. However, since we do not know how many LEAs States will 
actually identify as a result of the changes, for the purpose of this 
sensitivity analysis, we develop and present what we consider to be 
reasonable upper- and lower-bound estimates. To establish a reasonable 
lower-bound, we estimate that no additional LEAs above the baseline 
number would be identified in the out years. We believe that this would 
represent an extreme lower bound for the likely costs of this 
regulation because we consider it highly unlikely that there would be 
no additional LEAs identified. As noted above, the Department's 
estimate of 400 LEAs is based on a view that at least some, if not 
most, States will take advantage of the opportunity presented by the 
transition to the standard methodology to set risk ratio thresholds and 
reasonable n-size and cell size requirements that identify more LEAs. 
We believe that this assumption of 400 LEAs above baseline represents 
the most reasonable estimate of the likely costs associated with these 
final rules. In order to estimate an upper bound, the Department 
assumes that States could set much more aggressive thresholds or small 
n-size or cell size requirements for identifying LEAs with significant 
disproportionality, ultimately identifying an additional 1,200 LEAs 
above baseline each year. As with the estimate of 400 LEAs, it is 
important to note that the regulation itself would not require States 
to identify additional LEAs. Rather, the Department is attempting to 
estimate a range of potential State-level responses to the regulation, 
including making proactive decisions to shift State policies related to 
identification of LEAs. In the table below, we show the impact of these 
varying assumptions regarding the number of additional LEAs identified 
on the estimated costs. Costs and transfers outlined in this table are 
calculated at a three percent discount rate.

          Table 2--Sensitivity of Cost Estimates to Number of Additional LEAs Assumed To Be Identified
----------------------------------------------------------------------------------------------------------------
                                                                                       Costs
                            Category                             -----------------------------------------------
                                                                      0 LEAs         400 LEAs       1,200 LEAs
----------------------------------------------------------------------------------------------------------------
State-level review and compliance with the new rule (modifying        $3,362,902      $3,362,902      $3,362,902
 data collection tools, meeting with State Advisory Panels,
 drafting and issuing guidance to LEAs, reporting data).........
Annual calculation of risk ratios and notification of LEAs......       4,821,062       4,921,510       5,122,405
Review and, if necessary, revision of policies, practices, and                 0      56,312,177     168,722,536
 procedures.....................................................
Planning for and tracking the use of funds for comprehensive                   0      26,782,849      80,348,546
 CEIS...........................................................
----------------------------------------------------------------------------------------------------------------
                            Category                                                 Transfers
----------------------------------------------------------------------------------------------------------------
Reservation of funds for comprehensive CEIS.....................               0     552,867,164   1,658,601,491
----------------------------------------------------------------------------------------------------------------

Paperwork Reduction Act of 1995
    This final rule contains information collection requirements that 
are approved by OMB under OMB control number 1820-0689. It also 
contains a new regulatory requirement, in Sec.  300.647(b)(7), that 
implicates the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) 
(PRA). We will meet all applicable PRA requirements before we collect 
any information pursuant to the new requirement.
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 the Department's 
specific plans and actions for this program.
Assessment of Educational Impact
    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and on our review, we have 
determined that these final regulations do not require transmission of 
information that any other agency or authority of the United States 
gathers or makes available.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the program contact person 
listed under FOR FURTHER INFORMATION CONTACT.
    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: 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.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

List of Subjects in 34 CFR Part 300

    Administrative practice and procedure, Education of individuals 
with disabilities, Elementary and secondary education, Equal 
educational opportunity, Grant programs--education, Privacy, Private 
schools, Reporting and recordkeeping requirements.


[[Page 92463]]


    Dated: December 12, 2016.
John B. King, Jr.,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary of 
Education amends title 34 of the Code of Federal Regulations as 
follows:

PART 300--ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH 
DISABILITIES

0
1. The authority citation for part 300 continues to read as follows:

Authority: 20 U.S.C. 1221e-3, 1406, 1411-1419, 3474, unless 
otherwise noted.



0
2. Section 300.646 is revised to read as follows:


Sec.  300.646   Disproportionality.

    (a) General. Each State that receives assistance under Part B of 
the Act, and the Secretary of the Interior, must provide for the 
collection and examination of data to determine if significant 
disproportionality based on race and ethnicity is occurring in the 
State and the LEAs of the State with respect to--
    (1) The identification of children as children with disabilities, 
including the identification of children as children with disabilities 
in accordance with a particular impairment described in section 602(3) 
of the Act;
    (2) The placement in particular educational settings of these 
children; and
    (3) The incidence, duration, and type of disciplinary removals from 
placement, including suspensions and expulsions.
    (b) Methodology. The State must apply the methods in Sec.  300.647 
to determine if significant disproportionality based on race and 
ethnicity is occurring in the State and the LEAs of the State under 
paragraph (a) of this section.
    (c) Review and revision of policies, practices, and procedures. In 
the case of a determination of significant disproportionality with 
respect to the identification of children as children with disabilities 
or the placement in particular educational settings, including 
disciplinary removals of such children, in accordance with paragraphs 
(a) and (b) of this section, the State or the Secretary of the Interior 
must--
    (1) Provide for the annual review and, if appropriate, revision of 
the policies, practices, and procedures used in identification or 
placement in particular education settings, including disciplinary 
removals, to ensure that the policies, practices, and procedures comply 
with the requirements of the Act.
    (2) Require the LEA to publicly report on the revision of policies, 
practices, and procedures described under paragraph (c)(1) of this 
section consistent with the requirements of the Family Educational 
Rights and Privacy Act, its implementing regulations in 34 CFR part 99, 
and Section 618(b)(1) of the Act.
    (d) Comprehensive coordinated early intervening services. Except as 
provided in paragraph (e) of this section, the State or the Secretary 
of the Interior shall require any LEA identified under paragraphs (a) 
and (b) of this section to reserve the maximum amount of funds under 
section 613(f) of the Act to provide comprehensive coordinated early 
intervening services to address factors contributing to the significant 
disproportionality.
    (1) In implementing comprehensive coordinated early intervening 
services an LEA--
    (i) May carry out activities that include professional development 
and educational and behavioral evaluations, services, and supports.
    (ii) Must identify and address the factors contributing to the 
significant disproportionality, which may include, among other 
identified factors, a lack of access to scientifically based 
instruction; economic, cultural, or linguistic barriers to appropriate 
identification or placement in particular educational settings; 
inappropriate use of disciplinary removals; lack of access to 
appropriate diagnostic screenings; differences in academic achievement 
levels; and policies, practices, or procedures that contribute to the 
significant disproportionality.
    (iii) Must address a policy, practice, or procedure it identifies 
as contributing to the significant disproportionality, including a 
policy, practice or procedure that results in a failure to identify, or 
the inappropriate identification of, a racial or ethnic group (or 
groups).
    (2) An LEA may use funds reserved for comprehensive coordinated 
early intervening services to serve children from age 3 through grade 
12, particularly, but not exclusively, children in those groups that 
were significantly overidentified under paragraph (a) or (b) of this 
section, including--
    (i) Children who are not currently identified as needing special 
education or related services but who need additional academic and 
behavioral support to succeed in a general education environment; and
    (ii) Children with disabilities.
    (3) An LEA may not limit the provision of comprehensive coordinated 
early intervening services under this paragraph to children with 
disabilities.
    (e) Exception to comprehensive coordinated early intervening 
services. The State or the Secretary of the Interior shall not require 
any LEA that serves only children with disabilities identified under 
paragraphs (a) and (b) of this section to reserve funds to provide 
comprehensive coordinated early intervening services.
    (f) Rule of construction. Nothing in this section authorizes a 
State or an LEA to develop or implement policies, practices, or 
procedures that result in actions that violate the requirements of this 
part, including requirements related to child find and ensuring that a 
free appropriate public education is available to all eligible children 
with disabilities.

(Authority: 20 U.S.C. 1413(f); 20 U.S.C. 1418(d))



0
3. Section 300.647 is added to read as follows:


Sec.  300.647   Determining significant disproportionality.

    (a) Definitions. (1) Alternate risk ratio is a calculation 
performed by dividing the risk of a particular outcome for children in 
one racial or ethnic group within an LEA by the risk of that outcome 
for children in all other racial or ethnic groups in the State.
    (2) Comparison group consists of the children in all other racial 
or ethnic groups within an LEA or within the State, when reviewing a 
particular racial or ethnic group within an LEA for significant 
disproportionality.
    (3) Minimum cell size is the minimum number of children 
experiencing a particular outcome, to be used as the numerator when 
calculating either the risk for a particular racial or ethnic group or 
the risk for children in all other racial or ethnic groups.
    (4) Minimum n-size is the minimum number of children enrolled in an 
LEA with respect to identification, and the minimum number of children 
with disabilities enrolled in an LEA with respect to placement and 
discipline, to be used as the denominator when calculating either the 
risk for a particular racial or ethnic group or the risk for children 
in all other racial or ethnic groups.
    (5) Risk is the likelihood of a particular outcome (identification, 
placement, or disciplinary removal) for a specified racial or ethnic 
group (or groups), calculated by dividing the number of children from a 
specified racial or ethnic group (or groups) experiencing that outcome 
by the total number of children from that racial or

[[Page 92464]]

ethnic group or groups enrolled in the LEA.
    (6) Risk ratio is a calculation performed by dividing the risk of a 
particular outcome for children in one racial or ethnic group within an 
LEA by the risk for children in all other racial and ethnic groups 
within the LEA.
    (7) Risk ratio threshold is a threshold, determined by the State, 
over which disproportionality based on race or ethnicity is significant 
under Sec.  300.646(a) and (b).
    (b) Significant disproportionality determinations. In determining 
whether significant disproportionality exists in a State or LEA under 
Sec.  300.646(a) and (b)--
    (1)(i) The State must set a:
    (A) Reasonable risk ratio threshold;
    (B) Reasonable minimum cell size;
    (C) Reasonable minimum n-size; and
    (D) Standard for measuring reasonable progress if a State uses the 
flexibility described in paragraph (d)(2) of this section.
    (ii) The State may, but is not required to, set the standards set 
forth in paragraph (b)(1)(i) of this section at different levels for 
each of the categories described in paragraphs (b)(3) and (4) of this 
section.
    (iii) The standards set forth in paragraph (b)(1)(i) of this 
section:
    (A) Must be based on advice from stakeholders, including State 
Advisory Panels, as provided under section 612(a)(21)(D)(iii) of the 
Act; and
    (B) Are subject to monitoring and enforcement for reasonableness by 
the Secretary consistent with section 616 of the Act.
    (iv) When monitoring for reasonableness under paragraph 
(b)(1)(iii)(B) of this section, the Department finds that the following 
are presumptively reasonable:
    (A) A minimum cell size under paragraph (b)(1)(i)(B) of this 
section no greater than 10; and
    (B) A minimum n-size under paragraph (b)(1)(i)(C) of this section 
no greater than 30.
    (2) The State must apply the risk ratio threshold or thresholds 
determined in paragraph (b)(1) of this section to risk ratios or 
alternate risk ratios, as appropriate, in each category described in 
paragraphs (b)(3) and (4) of this section and the following racial and 
ethnic groups:
    (i) Hispanic/Latino of any race; and, for individuals who are non-
Hispanic/Latino only;
    (ii) American Indian or Alaska Native;
    (iii) Asian;
    (iv) Black or African American;
    (v) Native Hawaiian or Other Pacific Islander;
    (vi) White; and
    (vii) Two or more races.
    (3) Except as provided in paragraphs (b)(5) and (c) of this 
section, the State must calculate the risk ratio for each LEA, for each 
racial and ethnic group in paragraph (b)(2) of this section with 
respect to:
    (i) The identification of children ages 3 through 21 as children 
with disabilities; and
    (ii) The identification of children ages 3 through 21 as children 
with the following impairments:
    (A) Intellectual disabilities;
    (B) Specific learning disabilities;
    (C) Emotional disturbance;
    (D) Speech or language impairments;
    (E) Other health impairments; and
    (F) Autism.
    (4) Except as provided in paragraphs (b)(5) and (c) of this 
section, the State must calculate the risk ratio for each LEA, for each 
racial and ethnic group in paragraph (b)(2) of this section with 
respect to the following placements into particular educational 
settings, including disciplinary removals:
    (i) For children with disabilities ages 6 through 21, inside a 
regular class less than 40 percent of the day;
    (ii) For children with disabilities ages 6 through 21, inside 
separate schools and residential facilities, not including homebound or 
hospital settings, correctional facilities, or private schools;
    (iii) For children with disabilities ages 3 through 21, out-of-
school suspensions and expulsions of 10 days or fewer;
    (iv) For children with disabilities ages 3 through 21, out-of-
school suspensions and expulsions of more than 10 days;
    (v) For children with disabilities ages 3 through 21, in-school 
suspensions of 10 days or fewer;
    (vi) For children with disabilities ages 3 through 21, in-school 
suspensions of more than 10 days; and
    (vii) For children with disabilities ages 3 through 21, 
disciplinary removals in total, including in-school and out-of-school 
suspensions, expulsions, removals by school personnel to an interim 
alternative education setting, and removals by a hearing officer.
    (5) The State must calculate an alternate risk ratio with respect 
to the categories described in paragraphs (b)(3) and (4) of this 
section if the comparison group in the LEA does not meet the minimum 
cell size or the minimum n-size.
    (6) Except as provided in paragraph (d) of this section, the State 
must identify as having significant disproportionality based on race or 
ethnicity under Sec.  300.646(a) and (b) any LEA that has a risk ratio 
or alternate risk ratio for any racial or ethnic group in any of the 
categories described in paragraphs (b)(3) and (4) of this section that 
exceeds the risk ratio threshold set by the State for that category.
    (7) The State must report all risk ratio thresholds, minimum cell 
sizes, minimum n-sizes, and standards for measuring reasonable progress 
selected under paragraphs (b)(1)(i)(A) through (D) of this section, and 
the rationales for each, to the Department at a time and in a manner 
determined by the Secretary. Rationales for minimum cell sizes and 
minimum n-sizes not presumptively reasonable under paragraph (b)(1)(iv) 
of this section must include a detailed explanation of why the numbers 
chosen are reasonable and how they ensure that the State is 
appropriately analyzing and identifying LEAs with significant 
disparities, based on race and ethnicity, in the identification, 
placement, or discipline of children with disabilities.
    (c) Exception. A State is not required to calculate a risk ratio or 
alternate risk ratio, as outlined in paragraphs (b)(3), (4), and (5) of 
this section, to determine significant disproportionality if:
    (1) The particular racial or ethnic group being analyzed does not 
meet the minimum cell size or minimum n-size; or
    (2) In calculating the alternate risk ratio under paragraph (b)(5) 
of this section, the comparison group in the State does not meet the 
minimum cell size or minimum n-size.
    (d) Flexibility. A State is not required to identify an LEA as 
having significant disproportionality based on race or ethnicity under 
Sec.  300.646(a) and (b) until--
    (1) The LEA has exceeded a risk ratio threshold set by the State 
for a racial or ethnic group in a category described in paragraph 
(b)(3) or (4) of this section for up to three prior consecutive years 
preceding the identification; and
    (2) The LEA has exceeded the risk ratio threshold and has failed to 
demonstrate reasonable progress, as determined by the State, in 
lowering the risk ratio or alternate risk ratio for the group and 
category in each of the two prior consecutive years.

(Authority: 20 U.S.C. 1418(d).)


[FR Doc. 2016-30190 Filed 12-16-16; 8:45 am]
 BILLING CODE 4000-01-P