[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Rules and Regulations]
[Pages 61532-61546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26095]


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DEPARTMENT OF EDUCATION

34 CFR Chapter II

[Docket ID ED-2018-OII-0062]
RIN 1855-AA14


Final Priorities, Requirements, Definitions, and Selection 
Criteria--Expanding Opportunity Through Quality Charter Schools 
Program; Grants to Charter Management Organizations for the Replication 
and Expansion of High-Quality Charter Schools

AGENCY: Office of Innovation and Improvement, Department of Education.

ACTION: Final priorities, requirements, definitions, and selection 
criteria.

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SUMMARY: The Acting Assistant Deputy Secretary for Innovation and 
Improvement announces priorities, requirements, definitions, and 
selection criteria for Grants to Charter Management Organizations for 
the Replication and Expansion of High-Quality Charter Schools (CMO 
grants or CMO grant program) under the Expanding Opportunity Through 
Quality Charter Schools Program (CSP), Catalog of Federal Domestic 
Assistance (CFDA) number 84.282M. We may use one or more of these 
priorities, requirements, definitions, and selection criteria for 
competitions in fiscal year (FY) 2019 and later years. We take this 
action to support the replication and expansion of high-quality charter 
schools by charter management organizations (CMOs) throughout the 
Nation, particularly those that serve educationally disadvantaged 
students, such as students who are individuals from low-income 
families, students with disabilities, and English learners; and 
students who traditionally have been underserved by charter schools, 
such as Native American students and students in rural communities.

DATES: These priorities, requirements, definitions, and selection 
criteria are effective November 30, 2018.

FOR FURTHER INFORMATION CONTACT: Allison Holte, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 4W243, Washington, DC 20202. 
Telephone: (202) 205-7726.
    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: Summary of the Major Provisions of This 
Regulatory Action: We announce these final priorities, requirements, 
definitions, and selection criteria to achieve two main goals.
    First, we seek to continue to use funds under this program to 
support high-quality applications from highly qualified applicants. To 
that end, we announce priorities, requirements, definitions, and 
selection criteria that encourage or require applicants to describe, 
for example: Past successes working with academically poor-performing 
public schools; \1\ experience operating or managing multiple charter 
schools; plans to expand their reach into new and diverse communities; 
logical connections between their proposed projects and intended 
outcomes for the students they propose to serve; and plans to evaluate 
the extent to which their proposed projects, if funded, yield intended 
outcomes.
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    \1\ Italicized terms are defined in the Final Definitions 
section of this document.
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    Second, these final priorities, requirements, definitions, and 
selection criteria are designed to increase the likelihood that CMO 
grants support expanded high-quality educational opportunities for 
educationally disadvantaged students, as well as students who 
traditionally have been underserved by charter schools, such as Native 
American students and students in rural communities. Specifically, 
among other things, the final priorities, requirements, definitions, 
and selection criteria enable the Department to give

[[Page 61533]]

priority to applications that propose to: Replicate or expand high-
quality charter schools with an intentional focus on recruiting 
students from racially and socioeconomically diverse backgrounds, and 
maintaining racially and socioeconomically diverse student bodies, 
consistent with nondiscrimination requirements contained in the U.S. 
Constitution and Federal civil rights laws; serve a meaningful 
proportion of students who are individuals from low-income families; 
and replicate or expand high-quality charter schools that serve high 
school students, students in rural communities, and Native American 
students. Further, in order to meet the final requirements announced in 
this document, CMO applicants must describe how the schools they intend 
to replicate or expand would recruit and enroll educationally 
disadvantaged students and support such students in mastering State 
academic standards.
    Costs and Benefits: The Department of Education (Department) 
believes that the benefits of this regulatory action outweigh any 
associated costs, which we believe would be minimal. While this action 
imposes cost-bearing requirements on participating CMOs, we expect that 
applicants will include requests for funds to cover such costs in their 
proposed project budgets. We believe this regulatory action strengthens 
accountability for the use of Federal funds by helping to ensure that 
the Department awards CSP grants to CMOs that are most capable of 
expanding the number of high-quality charter schools available to our 
Nation's students. Please refer to the Regulatory Impact Analysis in 
this document for a more detailed discussion of costs and benefits.
    Purpose of Program: The major purposes of the CSP are to: Expand 
opportunities for all students, particularly students facing 
educational disadvantages and students who traditionally have been 
underserved by charter schools, to attend high-quality charter schools 
and meet challenging State academic standards; provide financial 
assistance for the planning, program design, and initial implementation 
of public charter schools; increase the number of high-quality charter 
schools available to students across the United States; evaluate the 
impact of charter schools on student achievement, families, and 
communities; share best practices between charter schools and other 
public schools; encourage States to provide facilities support to 
charter schools; and support efforts to strengthen the charter school 
authorizing process. Through the CMO grant program, the Department 
provides funds to CMOs on a competitive basis to enable them to 
replicate or expand one or more high-quality charter schools. More 
specifically, grant funds may be used to expand the enrollment of one 
or more existing high-quality charter schools, or to open one or more 
high-quality charter schools by replicating an existing high-quality 
charter school model.
    Program Authority: Title IV, Part C of the Elementary and Secondary 
Education Act of 1965, as amended by the Every Student Succeeds Act 
(ESEA).
    We published a notice of proposed priorities, requirements, 
definitions, and selection criteria for this program in the Federal 
Register on July 27, 2018 (83 FR 35571) (NPP). The NPP contained 
background information and our reasons for proposing the particular 
priorities, requirements, definitions, and selection criteria.
    There are several significant differences between the NPP and this 
notice of final priorities, requirements, definitions, and selection 
criteria (NFP). First, we have revised the title and focus of Priority 
2 (which was proposed as ``School Improvement through Restart 
Efforts'') to clarify that applicants addressing the priority should be 
focused on reopening, and not restarting, academically low-performing 
public schools as charter schools. In addition, we have revised 
Priority 2 to require applicants to address each subpart in order to 
meet the priority. Second, we have revised Priority 3--High School 
Students to clarify that there is a broad range of postsecondary 
education options for which high-quality charter schools that serve 
high school students may prepare their students, including certain one-
year training programs as well as two- and four-year colleges and 
universities. We have also revised Priority 3 to specify that high 
school students include educationally disadvantaged students. In 
addition, we have revised Priority 4--Low-Income Demographic to require 
applicants receiving priority points to demonstrate that they will 
maintain a poverty threshold that is the same as, or substantially 
similar to, the level specified in the grant application for the entire 
grant period. Further, we have revised Priority 7 and related 
definitions to include students who are Native Hawaiian or Native 
American Pacific Islander, as well as students who are Indians 
(including Alaska Natives), and to clarify that applicants must 
meaningfully collaborate with community leaders. Finally, we have 
revised Selection Criterion (b)--Significance of Contribution in 
Assisting Educationally Disadvantaged Students to emphasize students 
with disabilities \2\ and English learners. We discuss these changes in 
detail in the Analysis of Comments and Changes section of this 
document.
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    \2\ For purposes of these final priorities, requirements, 
definitions, and selection criteria, ``students with disabilities'' 
or ``student with a disability'' has the same meaning as ``children 
with disabilities'' or ``child with a disability,'' respectively, as 
defined in section 8101(4) of the Elementary and Secondary Education 
Act of 1965, as amended by the Every Student Succeeds Act (ESEA). 
Under section 8101(4), ``child with a disability'' has the same 
meaning given that term in section 602 of the Individuals with 
Disabilities Education Act.
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    Public Comment: In response to our invitation in the NPP, 36 
parties submitted comments on the proposed priorities, requirements, 
definitions, and selection criteria.
    We group major issues according to subject. Generally, we do not 
address technical and other minor changes. In addition, we do not 
address comments that raised concerns not directly related to the 
proposed priorities, requirements, definitions, or selection criteria.
    Analysis of Comments and Changes: An analysis of the comments and 
changes in the priorities, requirements, definitions, and selection 
criteria since publication of the NPP follows.

General

    Comments: One commenter suggested that we include a focus on 
students from military families, noting that military families may not 
be able to afford charter school tuition.
    Discussion: First, we note that charter schools are public schools 
and, by definition, may not charge tuition (ESEA section 4310(2)). 
Nonetheless, we agree that military- and veteran-connected students 
often face unique challenges. On March 2, 2018, the Department 
published in the Federal Register (83 FR 9096) the Secretary's Final 
Supplemental Priorities and Definitions for Discretionary Grant 
Programs (Supplemental Priorities), which are available for use in all 
of the Department's discretionary grant programs, including the CMO 
grant program. In recognition of the unique challenges faced by 
military families, Priority 11 in the Supplemental Priorities focuses 
on ensuring that service members, veterans, and their families have 
access to high-quality educational options. In any fiscal year in which 
the Department awards new grants under the CMO grant program, we may 
use this supplemental priority in conjunction with the priorities, 
requirements, definitions, and selection

[[Page 61534]]

criteria in the ESEA and established in this document. Therefore, we 
decline to revise the final priorities, requirements, definitions, and 
selection criteria to add a focus on military families.
    Changes: None.
    Comments: Seven commenters urged the Department to clarify through 
these final priorities, requirements, definitions, and selection 
criteria that virtual charter schools must ensure that all students, 
particularly students with disabilities, can access virtual and online 
content. Several commenters requested that we require all virtual 
public schools, including virtual charter schools, to demonstrate 
compliance with the Web Content Accessibility Guidelines (WCAG). Other 
commenters suggested that applicants proposing to replicate or expand 
virtual charter schools be required to focus on enrollment and 
retention of, and academic outcomes for, educationally disadvantaged 
students, and make performance and compliance data available publicly 
and in a timely manner. One commenter suggested that we refrain from 
awarding grants to virtual charter schools altogether.
    Discussion: Section 4310(2)(G) of the ESEA requires charter schools 
receiving CSP funds to comply with various laws, including section 504 
of the Rehabilitation Act of 1973 (Section 504), the Americans with 
Disabilities Act of 1990 (ADA), and Part B of the Individuals with 
Disabilities Education Act (IDEA). Thus, consistent with the 
requirements in Section 504 and Title II of the ADA, virtual charter 
schools must ensure that all content is accessible to students with 
disabilities enrolled in the school as well as prospective students 
with disabilities and parents or guardians. Similarly, like other local 
educational agencies (LEAs), public charter schools that operate as 
LEAs under State law, including virtual charter school LEAs and LEAs 
that include virtual charter schools among their public schools, must 
ensure that eligible students with disabilities enrolled in these 
schools receive a free appropriate public education (FAPE) in 
accordance with the requirements of Part B of the IDEA.\3\ To meet this 
obligation, these schools must provide instructional materials to 
students with disabilities in accessible formats, consistent with the 
requirements in Section 504 and Title II of the ADA. If web-based 
instruction or online instructional platforms are used, these schools 
must ensure that the information provided through those sources is 
accessible to students with disabilities, consistent with the 
requirements in Section 504 and Title II of the ADA. Because these 
requirements are already established by Federal law, we decline to 
revise these final priorities, requirements, definitions, or selection 
criteria.
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    \3\ Students with disabilities attending public charter schools 
and their parents retain all rights under Part B of the IDEA. 
Further, charter schools that operate as LEAs under State law, as 
well as LEAs that include charter schools among their public 
schools, are responsible for ensuring that the requirements of Part 
B of the IDEA are met, unless State law assigns that responsibility 
to some other entity. See 34 CFR 300.209.
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    Further, while we understand that WCAG is designed to make web 
content accessible to a wide range of individuals with disabilities and 
that demonstrating compliance with WCAG is a widely accepted method for 
public schools, including virtual public charter schools, to meet the 
obligations discussed above, the Department does not require grantees 
to adopt a particular standard to ensure accessibility of web content 
or online platforms to meet their obligations under Section 504 or 
Title II of the ADA. Moreover, the WCAG standards are updated 
periodically.
    With respect to requiring virtual charter schools to focus on the 
enrollment and retention of, and academic outcomes for, educationally 
disadvantaged students, to receive a grant under the CMO grant program, 
an applicant must provide, among other things, student assessment 
results and attendance and retention rates for all students served by 
its schools, including educationally disadvantaged students (ESEA 
section 4305(b)(3)(A)). Further, CMO grantees must assure that each 
charter school receiving CSP funds makes annual performance and 
enrollment data publicly available (ESEA section 4303(f)(2)(G)(v)). CMO 
applicants must also provide the Department with information on 
existing significant compliance and management issues (ESEA section 
4305(b)(3)(A)(iii)). These requirements apply to all CMO grantees, 
regardless of whether they intend to replicate or expand virtual or 
brick-and-mortar charter schools.
    Finally, while we recognize that virtual charter schools can 
present unique challenges with respect to the enforcement of CSP 
requirements, the ESEA does not preclude virtual charter schools from 
receiving CSP funds. For this reason, we decline to adopt the 
commenter's suggestion that we preclude applicants that propose to 
replicate or expand virtual charter schools from applying for funds 
under this program.
    Changes: None.
    Comments: Several commenters requested that we clarify that charter 
schools are obligated to serve students with disabilities. One 
commenter stated that charter schools must adhere to the IDEA, hold 
regular individualized education plan meetings, and offer face-
inclusive policies as codified by State law. Another commenter urged 
the Department to focus specifically on the needs of students with 
Tourette's syndrome and obsessive compulsive disorder. Several 
commenters suggested that we include a priority for applicants that 
propose to replicate or expand high-quality charter schools that serve 
students with disabilities.
    Discussion: It is unclear what the commenter meant by ``face-
inclusive policies,'' but we agree that students with disabilities face 
unique educational challenges. As stated above, all eligible students 
with disabilities attending public charter schools and their parents 
retain all rights under Part B of the IDEA, including the right to 
receive FAPE. In addition, these final priorities, requirements, 
definitions, and selection criteria include a requirement that 
applicants for CMO grants describe how they intend to comply with Part 
B of the IDEA.
    Further, a number of priorities, requirements, definitions, and 
selection criteria under this program focus on educationally 
disadvantaged students, which include students who are children with 
disabilities, as defined in section 8101(4) of the ESEA. The 
Supplemental Priorities also include two priorities that focus on the 
needs of students with disabilities and could be used in future CMO 
grant competitions. These priorities are: Priority 1--Empowering 
Families and Individuals to Choose a High-quality Education that Meets 
their Unique Needs (which includes a specific option for focusing on 
students with disabilities) and Priority 5--Meeting the Unique Needs of 
Students and Children with Disabilities and/or Those with Unique Gifts 
and Talents. For these reasons, we decline to include a specific 
priority for students with disabilities or to focus this priority on 
students with a particular disability or impairment, such as Tourette's 
Syndrome or obsessive compulsive disorder.
    Changes: None.
    Comments: Several commenters urged the Department to clarify 
whether applicants could still apply for CMO grants as groups or 
consortia and, if so, what the Department's expectations are for how a 
group or consortium application should be organized.
    Discussion: Federal regulations at 34 CFR 75.127-75.129 
specifically

[[Page 61535]]

authorize applicants to apply as a group or consortium, and prescribe 
the requirements governing such applications. These final priorities, 
requirements, definitions, and selection criteria do not alter the 
requirements for group applications in 34 CFR 75.127-75.129. Therefore, 
we decline to make any changes in this area.
    Changes: None.
    Comments: One commenter suggested that the Department allow high-
performing applicants to submit streamlined applications for CMO 
grants. The commenter also suggested that we increase per-seat funding 
caps for CMOs that are expanding grades in schools because grade 
expansion can often be as costly as opening new schools. In addition, 
the commenter asked that we allow CMOs to apply for CMO grants and 
subgrants under section 4303 of the ESEA. Finally, the commenter asked 
that we issue nonregulatory guidance that would broadly interpret the 
term ``minor facilities repairs'' to ensure that charter schools can 
use CSP funds to ensure that students attend safe, clean, and well-
maintained schools.
    Discussion: Although the Department may have information regarding 
the past performance of some applicants--in particular, CMOs that have 
received CSP grants previously--we rely on the expertise of independent 
peer reviewers to evaluate the quality of applications submitted under 
a grant competition in order to ensure the fairness and integrity of 
the competition. Further, each application proposes to carry out 
different activities, and an applicant's successful implementation of 
one project does not guarantee the successful implementation of 
subsequent projects. To ensure an equal playing field, we believe it is 
critical that all applicants be required to submit the same general 
information for review. Therefore, we decline to enable high-performing 
applicants to submit streamlined applications, as suggested by the 
commenter.
    With respect to the commenter's suggestion to raise per-seat 
funding caps, no revisions to these final priorities, requirements, 
definitions, or selection criteria are necessary for the Department to 
change per-seat funding caps for CMO grants in a given year. Under 34 
CFR 75.101 and 75.104(b), the Secretary may establish maximum funding 
amounts for grants by publishing a notice in the Federal Register. When 
establishing funding limits under a CMO grant competition for a given 
fiscal year, the Department considers a number of factors, including 
the availability of funds.
    We also note that section 4303 of the ESEA authorizes the CSP 
Grants to State Entities (State Entities) program, under which the 
Department awards grants to State entities, and State entities, in 
turn, award subgrants to eligible applicants (i.e., charter school 
developers and charter schools) to enable such eligible applicants to 
open and prepare for the operation of new charter schools and 
replicated high-quality charter schools, and to expand high-quality 
charter schools. The ESEA does not explicitly prohibit an entity that 
qualifies as a CMO and an eligible applicant from applying for both a 
CMO grant under section 4305(b) and a subgrant under section 4303(b). 
In order to receive funds under both programs, however, the CMO must 
propose to carry out different activities under each application and 
demonstrate that it has the resources and capability to administer 
multiple projects effectively and efficiently.
    Finally, we agree that students learn best in safe, clean, and 
well-maintained environments. Section 4303(h)(3) of the ESEA authorizes 
the use of CSP funds to ``[carry] out necessary renovations to ensure 
that a new school building complies with applicable statutes and 
regulations, and minor facilities repairs (excluding construction)'' 
(20 U.S.C. 7221b(h)(3)).\4\ We believe this provision affords CMO 
grantees the flexibility they need to ensure that the charter schools 
they manage occupy buildings and facilities that are safe, clean, and 
well-maintained. For examples of the types of repairs that could 
qualify as ``minor facilities repairs'' under section 4305(c), please 
see the Department's nonregulatory guidance entitled, ``Charter Schools 
Program New Flexibilities under the Every Student Succeeds Act (ESSA): 
Frequently Asked Questions.'' \5\
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    \4\ Under section 4305(c) of the ESEA, ``the same terms and 
conditions'' that apply to State Entity grants under section 4303 
apply to CMO grants.
    \5\ See https://innovation.ed.gov/files/2017/12/CSP-ESSA-Flexibilities-FAQ-2017.pdf.
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    Changes: None.
    Comments: One commenter suggested that we add a priority for CMOs 
that propose to replicate or expand high-quality charter schools that 
focus on dropout recovery and academic re-entry in order to maintain 
consistency with the authorizing statute.
    Discussion: We agree that these final priorities, requirements, 
definitions, and selection criteria should align with the ESEA and 
believe that they do. Section 4305(b)(5)(D) of the ESEA authorizes the 
Secretary to give priority to applicants that ``propose to operate or 
manage high-quality charter schools that focus on dropout recovery and 
academic re-entry.'' We believe this statutory language is clear. Like 
the other statutory priorities as well as the priorities established 
under this NFP, the Secretary may choose to apply the statutory 
priority for dropout recovery and academic re-entry charter schools 
under a CMO grant competition in FY 2019 and future years. Accordingly, 
we decline to add a priority for CMOs that propose to replicate or 
expand high-quality charter schools that focus on dropout recovery and 
academic re-entry.
    Changes: None.
    Comments: Several commenters suggested that we designate specific 
priorities as absolute priorities or competitive preference priorities 
for competitions in FY 2019 and later years.
    Discussion: Federal regulations at 34 CFR 75.105 authorize the 
Department to establish annual priorities and to designate the 
priorities as invitational, competitive preference, or absolute. 
Therefore, we do not need to revise the final priorities in order to 
designate them as absolute or competitive preference priorities for 
competitions in FY 2019 and in later years. In accordance with 34 CFR 
75.105(c), we will designate specific priorities as invitational, 
absolute or competitive preference priorities for the FY 2019 
competition, and competitions in later years, through a notice inviting 
applications (NIA) in the Federal Register.
    Changes: None.

Priority 1--Promoting Diversity

    Comments: Several commenters expressed support for a priority that 
encourages diverse student populations. One commenter recommended that 
we follow a specific methodology for assessing whether applicants meet 
the priority. Several commenters questioned whether an applicant could 
meet this priority and Priority 4--Low-Income Demographic, stating that 
it may be difficult for a school focused on socioeconomic diversity to 
maintain a high percentage of students who are individuals from low-
income families. Some commenters recommended that the Department expand 
the scope of the priority to include students with disabilities, in 
addition to students from racially and socioeconomically diverse 
backgrounds. Finally, two commenters expressed concern about the 
priority's effect on communities and school districts more broadly. 
Specifically, one commenter argued that providing incentives for CMOs 
that propose to replicate or expand charter schools with diverse 
student bodies is unlikely to be

[[Page 61536]]

successful because students typically attend schools in or near their 
neighborhoods, and neighborhoods, particularly in cities, tend to be 
segregated due to decades of deeply rooted societal forces, including 
racially motivated housing practices and school assignments. Another 
commenter suggested that we revise the priority to require that any 
efforts to replicate or expand high-quality charter schools with an 
intentional focus on diversity yield ``zero net effect'' on the 
demographics of the schools from which the students are recruited.
    Discussion: We believe that students can benefit from attending 
high-quality charter schools with racially and socioeconomically 
diverse student bodies. We agree that following a rubric, or 
methodology, for determining whether an applicant meets the priority 
can be useful. We will determine an appropriate method for reviewing 
applications addressing this priority in the NIA for a given 
competition.
    We agree with the commenters that some aspects of Priority 1--
Promoting Diversity could potentially conflict with certain subparts of 
Priority 4--Low-Income Demographic and, as such, it may be challenging 
for a CMO grant application to meet both priorities. The Department has 
flexibility in choosing priorities, requirements, and selection 
criteria for its grant competitions. In FY 2019 and in future years, we 
will select a combination of priorities, requirements, and selection 
criteria that is appropriate for the CMO program and aligned with the 
Secretary's policy objectives.
    In addition, we share the commenters' concerns about ensuring that 
students with disabilities receive FAPE. However, this priority focuses 
specifically on diversity with respect to race and socioeconomic 
status. Race and socioeconomic status are commonly cited in research on 
diversity and its relationship with student academic achievement as two 
demographic factors that have a major impact.\6\ Further, we believe it 
is important that the final priority aligns with the statutory priority 
for this program in ESEA section 4305(b)(5)(A), which focuses on 
replicating or expanding high-quality charter schools with racially and 
socioeconomically diverse student bodies.
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    \6\ See, e.g.: The Century Foundation (2018). Diverse by Design 
Charter Schools. https://tcf.org/content/report/diverse-design-charter-schools/.
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    We agree with the commenter that cultivating and maintaining a 
diverse student body can be difficult and is unlikely to happen 
overnight. We also agree that high-quality charter schools can be a 
powerful option for educationally disadvantaged students but that many 
factors, such as safe and reliable transportation to and from school, 
can impact a family's realistic educational choices. This priority 
focuses on applicants that propose to replicate or expand high-quality 
charter schools with an intentional focus on racial and socioeconomic 
diversity, but it does not dictate how a CMO should approach this work. 
Promising practices for promoting diversity continue to emerge, and 
charter schools have great flexibility to choose an educational program 
that attracts students from diverse backgrounds and geographic areas 
outside of the immediate area surrounding the school. The intent of 
this priority is to encourage CMOs to replicate or expand high-quality 
charter schools with purposefully diverse student bodies through 
strategies that comply with non-discrimination requirements in the U.S. 
Constitution and in Federal civil rights laws, make sense for their 
local contexts, and are aligned with reliable research on the 
relationship between academic achievement and racial and socioeconomic 
diversity in schools.
    Finally, we agree with the commenter that CMOs should consider the 
community context when replicating or expanding high-quality charter 
schools, particularly charter schools with an intentional focus on 
racial and socioeconomically diverse student bodies. However, we do not 
think it is appropriate or practical to require that CMOs demonstrate 
to the Department a net zero effect on surrounding schools. For these 
reasons, we decline to revise the priority.
    Changes: None.
    Comment: None.
    Discussion: Upon further review, we determined that it is critical 
to remind applicants addressing Priority 1 of their nondiscrimination 
obligations under Federal law. As such, we are revising the priority to 
clarify that proposed projects must be consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws.
    Changes: We have added the phrase ``consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws'' to the priority.

Priority 2--Reopening Academically Poor-Performing Public Schools as 
Charter Schools

    Comments: Several commenters expressed support for this priority. 
One commenter asked that we revise the priority to encourage 
applications from CMOs that can share best practices for turning around 
low-performing traditional public schools. Two commenters requested 
that we clarify whether an applicant could address the priority by 
proposing to open a new charter school, rather than to reopen an 
academically poor-performing public school as a charter school. One 
commenter suggested that we focus the priority on reopening 
academically poor-performing middle and high schools as charter 
schools.
    Discussion: We agree with the commenters that the purpose of this 
priority--to ``reopen'' academically poor-performing charter schools--
could be clearer. An applicant proposing only to open new charter 
schools, and not ``reopen'' an academically poor-performing public 
school as a charter school, would not meet this specific priority (but 
could meet other priorities established in this NFP). Therefore, in 
order to clarify the purpose of this priority, we are replacing the 
term ``restart'' with ``reopen.'' In addition, we agree that starting a 
new school is an important endeavor, and note that opening new high-
quality charter schools is a key element of the CSP. We also believe 
that charter schools can play an important role in helping to improve 
academic outcomes for students in low-performing public schools. 
Therefore, this priority is specifically focused on CMOs that propose 
to reopen academically poor-performing public schools as charter 
schools.
    We also agree that applicants should be required to demonstrate 
past success working with low-achieving public schools in order to meet 
the priority. Accordingly, we are revising the stem of the priority to 
require applicants to address each subpart of the priority, including 
the subpart focused on demonstrating past success working with at least 
one academically poor-performing public school or schools that were 
designated as persistently lowest-achieving schools or priority schools 
under the School Improvement Grant program or ESEA flexibility. Under 
this standard, an applicant can share best practices working with 
traditional public schools as well as nontraditional public schools, 
such as public charter schools.
    Finally, we agree that a focus on middle schools and high schools 
may be appropriate in specific contexts, and have included a priority 
for applications that propose to replicate or expand high-quality 
charter schools that serve high school students. Under this priority, 
an applicant can propose to

[[Page 61537]]

reopen an academically poor-performing middle school or high school as 
a charter school as it sees fit. Therefore, we decline to revise the 
priority to focus on reopening academically poor-performing middle 
schools and high schools.
    Changes: We have revised the priority to replace the term 
``restart'' with ``reopen.'' In addition, we have revised the stem of 
the priority so that all subparts must be addressed in order for an 
applicant to meet the priority.
    Comments: Several commenters opined that there is a 
disproportionately high percentage of students with disabilities in 
turnaround schools and suggested that we require CMOs proposing to 
reopen academically poor-performing public schools as charter schools 
to address the issue.
    Discussion: A major goal of these priorities, requirements, 
definitions, and selection criteria is to expand high-quality 
educational opportunities for educationally disadvantaged students, 
including students with disabilities. CMO grantees, and the charter 
schools they manage, must comply with applicable laws, including Part B 
of the IDEA, Section 504, and Title II of the ADA. Further, to meet the 
priority, an applicant must propose a strategy that targets a student 
population that is demographically similar to that of the academically 
poor-performing public school. Therefore, we decline to revise this 
priority in the manner suggested by the commenter.
    Changes: None.
    Comments: Several commenters requested that the Department clarify 
its policy regarding admissions lotteries, including how a CMO might 
use a weighted lottery to address this priority. One commenter urged 
the Department to ensure that any grantee using a weighted lottery meet 
all relevant statutory requirements, and another commenter suggested 
that we ensure that any weighted lotteries are designed to enroll 
students with disabilities in proportion to the enrollment of such 
students in neighboring schools. Several commenters suggested that the 
Department update its nonregulatory guidance to clarify that CMOs that 
are reopening academically poor-performing public schools as charter 
schools could exempt from admissions lotteries students who are 
enrolled in the academically poor-performing public school at the time 
it is reopened.
    Discussion: Under section 4303(c)(3) of the ESEA, charter schools 
receiving funds under a CMO grant generally may use ``a weighted 
lottery to give slightly better chances for admission to all, or a 
subset of, educationally disadvantaged students,'' so long as weighted 
lotteries in favor of such students are not prohibited under State law 
and are not used to create schools that would serve a particular group 
of students exclusively.\7\ Therefore, a charter school could use a 
weighted lottery for the purpose of enrolling a proportionate number of 
students with disabilities in the charter school as compared to the 
number of such students enrolled in neighboring schools. As such, the 
Department declines to expand the statutory requirements for weighted 
lotteries as they apply to CMO grants.
---------------------------------------------------------------------------

    \7\ As stated above, under section 4305(c) of the ESEA, CMO 
grantees generally are subject to the same terms and conditions as 
State entity grantees funded under section 4303.
---------------------------------------------------------------------------

    Further, the Department's most recent update to the CSP 
nonregulatory guidance was issued in January 2014.\8\ Although that 
guidance was issued prior to enactment of the ESSA, much of it is 
applicable to the CSP lottery requirement in section 4310(2)(H) of the 
ESEA. Specifically, the January 2014 CSP Nonregulatory Guidance 
identifies several categories of students who may be exempted from a 
charter school's lottery, including students who are enrolled in a 
public school at the time it is converted into a charter school. The 
Department may update this guidance to address changes to the CSP made 
by the ESSA. In the meantime, CMO grantees may continue to follow the 
guidelines in the January 2014 CSP Nonregulatory Guidance regarding the 
categories of students who may be exempted from the lottery 
requirement.
---------------------------------------------------------------------------

    \8\ See http://www2.ed.gov/programs/charter/fy14cspnonregguidance.doc.
---------------------------------------------------------------------------

    Changes: None.
    Comments: One commenter recommended that we use Priority 2 
cautiously because available research on charter school performance is 
mixed.
    Discussion: We agree that, where possible, Federal funding should 
be used primarily to support strategies that are based on research. To 
meet this priority, applicants would need to demonstrate past success 
working with academically poor-performing public schools. In addition, 
all applicants, regardless of whether they address this priority, must 
disclose compliance issues, provide a logic model for how they will 
replicate or expand high-quality charter schools, and describe how they 
currently operate or manage high-quality charter schools. This program 
specifically supports the replication and expansion of high-quality 
charter schools, and the final priorities, requirements, definitions, 
and selection criteria are designed to differentiate between high-
quality applications that are likely to be successful and low-quality 
applications that have little chance of succeeding.
    Changes: None.
    Comment: None.
    Discussion: Upon further review, we determined that it is critical 
to remind applicants addressing Priority 2 of their nondiscrimination 
obligations under Federal law. As such, we are revising the priority to 
clarify that proposed projects must be consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws.
    Changes: We have added the phrase ``consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws'' to the priority.

Priority 3--High School Students

    Comments: Several commenters expressed support for the priority but 
asked that we revise it to require applicants to demonstrate that their 
proposed strategy for replicating or expanding high-quality charter 
high schools is evidence-based. One commenter also suggested that 
applicants be required to provide data on former students' 
postsecondary degree attainment and employment. Conversely, another 
commenter suggested we use this priority cautiously due to a lack of 
research on charter high schools.
    Discussion: We agree that using research to inform CMO grant 
proposals is useful in certain contexts, but we also understand that 
research in this area is limited. The Department's regulations at 34 
CFR 75.226 specifically authorize the Secretary to give priority to 
applications that are supported by ``evidence.'' The Department may 
choose to implement such a priority under the CMO grant competition in 
a given year.
    Likewise, we agree that obtaining data on students' postsecondary 
degree attainment and employment may be relevant and encourage 
applicants to submit such information, as appropriate. On the other 
hand, the Department must balance its interest in obtaining sufficient 
information to assist peer reviewers in evaluating the quality of 
applications with its interest in minimizing the burden on applicants. 
In order to meet the priority, an applicant must describe how it will 
prepare students for postsecondary education and provide support for 
its graduates who enroll in institutions of higher education (IHEs) and 
certain one-year training programs that prepare students for gainful 
employment in a recognized occupation. In addition, applicants must 
establish one or more project-specific

[[Page 61538]]

performance measures that will provide reliable information about the 
grantee's progress in meeting the objectives of the project. We believe 
these requirements will generate the necessary information to enable 
peer reviewers to evaluate the quality of applications without placing 
an undue burden on applicants. For these reasons, we decline to revise 
the priority in the manner suggested by the commenters.
    Changes: None.
    Comments: Several commenters suggested that we broaden the priority 
to focus on high schools that prepare students for paths to career and 
technical training and military service, as well as enrollment in two- 
and four-year colleges and universities. Several other commenters 
suggested that we revise the priority to encompass high schools that 
focus on transitional programming for students with disabilities.
    Discussion: We agree that sending students to two- or four-year 
colleges and universities is not the only measure of a charter high 
school's success and that, for some students, getting a job or 
attending technical school may be the best option immediately after 
high school. Accordingly, we are revising subparts (ii) and (iii) of 
the priority to encompass a broader range of postsecondary education, 
training, and career options. Specifically, for this priority, 
postsecondary education institutions include both IHEs and educational 
institutions that offer one-year training programs that prepare 
students for gainful employment in a recognized occupation (as 
described in section 101(b)(1) of the Higher Education Act of 1965, as 
amended (HEA)). For clarity, we are also defining ``IHE'' in this NFP. 
The definition we are adding to the NFP is the same as the definition 
of ``IHE'' in section 8101(29) of the ESEA.
    Further, while a career in the military can be very rewarding, the 
Department's mission is to promote student academic achievement and 
preparation for global competitiveness by fostering educational 
excellence and ensuring equal access. Therefore, we believe the primary 
goal of elementary and secondary education should be preparing students 
for success at the postsecondary education level. Nevertheless, charter 
schools have great flexibility to establish a unique mission and 
educational focus. Thus, an applicant may propose to replicate or 
expand charter schools with a wide range of educational programs, 
including a military (i.e., Reserve Officers' Training Corps (ROTC)) 
focus, so long as the charter school meets the definition of ``high-
quality charter school'' in section 4310(8) of the ESEA and the terms 
of its charter. Our ultimate focus remains on ensuring that students 
graduate from high school prepared to succeed in a wide variety of 
postsecondary education options.
    We also agree with the commenters that ensuring that students with 
disabilities (as well as other educationally disadvantaged students) 
graduate from high school with adequate preparation for postsecondary 
education options is paramount. Therefore, we are revising the priority 
to include specific references to educationally disadvantaged students 
where appropriate. Also, as stated above, eligible students with 
disabilities attending public charter schools and their parents retain 
their right to receive FAPE, and the IDEA requirements for transition 
services apply beginning with the first individualized education plan 
(IEP) to be in effect when the student turns 16, or younger if 
determined appropriate by the IEP team.\9\ Further, in order to be 
considered a high-quality charter school (a key aspect of this 
program), a charter school that serves high school students must have 
demonstrated success in increasing student academic achievement and 
graduation rates, and must provide that information disaggregated by 
subgroups of students defined in section 1111(c)(2) of the ESEA, which 
includes children with disabilities, as defined in the IDEA. Therefore, 
while we are revising the priority to include specific references to 
educationally disadvantaged students, we decline to revise the priority 
to include a specific focus on high schools that provide transitional 
programming (i.e., preparation for specific postsecondary education 
options) for students with disabilities.
---------------------------------------------------------------------------

    \9\ See 20 U.S.C. 1414(d)(1)(A)(i)(VIII) and 34 CFR 300.320(b); 
see also 20 U.S.C. 1401(34) and 34 CFR 300.43.
---------------------------------------------------------------------------

    Changes: We have revised Priority 3--High School Students to 
include specific references to educationally disadvantaged students and 
to clarify that the priority applies to high-quality charter schools 
that prepare high school students to attend IHEs, which generally 
consist of two- and four-year colleges and universities, as well as 
certain postsecondary education institutions that offer one-year 
training programs. We have also added a definition for ``IHE;'' this 
change is discussed later in this notice.

Priority 4--Low-Income Demographic

    Comments: Several commenters expressed support for the priority but 
requested that we revise it to support only CMOs that can demonstrate 
that at least 60 percent of the students across all of the charter 
schools they operate or manage are individuals from low-income 
families. One commenter stated that the vast majority of CMOs operate 
schools with at least 60 percent students who are individuals from low-
income families, so this priority would not meaningfully differentiate 
applicants. Another commenter suggested that we keep the priority's 
original structure but revise it to support CMOs that can demonstrate 
that 60 to 90 percent, instead of 40 to 60 percent, of the students 
across all of the charter schools that they operate or manage are 
individuals from low-income families.
    Discussion: We believe that this priority is essential to provide 
incentives for CMOs to support charter schools that serve student 
populations with the most need. As written, the priority affords the 
Secretary discretion to establish a poverty threshold of 40 percent, 50 
percent, or 60 percent individuals from low-income families under the 
CMO grant competition in a given fiscal year. We believe that 40 
percent is an appropriate lower bound for this priority because it is 
aligned with the poverty threshold a Title I school generally must meet 
in order to operate a schoolwide program under section 1114 of the 
ESEA. For this reason, we decline to revise the priority to establish 
only one poverty threshold of 60 percent individuals from low-income 
families.
    We also decline to revise the priority to require that CMOs operate 
or manage charter schools with 60 to 90 percent students who are 
individuals from low-income families since, as stated above, the 
priority could potentially conflict with Priority 1--Promoting 
Diversity in a single competition. We recognize that many CMOs focus 
their efforts in high-need communities, but we believe it is also 
important to support high-quality charter schools that are designed 
with an intentional focus on racial and socioeconomic diversity. In any 
given year, we may include in an NIA one or more of these final 
priorities, requirements, definitions, and selection criteria 
individually or in combination with each other; therefore, we decline 
to revise the priority as suggested by the commenters.
    Changes: None.
    Comments: One commenter stated that applicants addressing this 
priority must demonstrate past success. The commenter also suggested 
that we revise the priority to encourage applicants to provide 
transportation and meal services to students.

[[Page 61539]]

    Discussion: While applicants' past performance is not an explicit 
focus of this priority, it is embedded in the program through the 
various application priorities, requirements, definitions, and 
selection criteria, including the Quality of the Eligible Applicant 
selection criterion. We also recognize that transportation and meals 
are important issues for charter schools that serve large numbers of 
low-income students. While CSP funds may be used to provide 
transportation and ``healthy snacks'' for students in limited 
circumstances, a number of other Federal, State, and local programs 
(such as the United States Department of Agriculture's National School 
Lunch Program) provide resources specifically for those purposes. For 
this reason, we decline to revise the priority to encourage applicants 
to provide transportation and meal services to students.
    Changes: None.
    Comments: One commenter asked that we expand the priority to focus 
on other high-need populations, such as students with disabilities and 
English learners.
    Discussion: Many aspects of the CMO grant program and these 
priorities, requirements, definitions, and selection criteria focus on 
educationally disadvantaged students, which include students with 
disabilities and English learners. In addition, we are revising some 
selection factors under the Contribution in Assisting Educationally 
Disadvantaged Students criterion to include specific references to 
students with disabilities and English learners. Further, the 
Supplemental Priorities, which may be used under the CMO grant program, 
include several priorities (e.g., Priority 1(b)(ii) and (iii) and 
Priority 5) that focus on students with disabilities and English 
learners. Therefore, we decline to revise this priority to focus on 
other high-need groups, such as students with disabilities or English 
learners.
    Changes: None.
    Comments: One commenter requested that we clarify how the priority 
would work as a competitive preference priority in a competition. 
Specifically, the commenter asked us to clarify whether points would be 
awarded on a sliding scale (e.g., one point for an applicant that can 
demonstrate its schools have at least 40 percent students who are 
individuals from low-income families, two points for an applicant that 
can demonstrate its schools have at least 50 percent students who are 
individuals from low-income families, and three points for an applicant 
that can demonstrate its schools have at least 60 percent students who 
are individuals from low-income families). The commenter expressed 
concern that an applicant could receive the maximum number of priority 
points for a higher poverty threshold, but only be required to maintain 
the minimum threshold throughout its grant project. The commenter also 
expressed concern that the focus of the priority is on all schools 
operated or managed by the CMO, and not only on the charter schools to 
be replicated or expanded as part of the grant project.
    Discussion: While the priority is written in a manner that gives 
the Department flexibility to apply one, two, or all three poverty 
standards in a single competition, we do not anticipate applying more 
than one poverty standard in a single competition or assigning points 
on a sliding scale.
    We agree with the commenter that an applicant receiving points for 
this priority should be required to maintain the same, or a 
substantially similar, poverty threshold throughout the life of the 
grant. As such, we are revising the priority to clarify that an 
applicant must demonstrate not only that its current portfolio of 
schools meets the specified poverty threshold, but also that it will 
maintain the same, or a substantially similar, poverty level in the 
charter schools that it replicates or expands, as well as its other 
schools, for the entire grant period. We recognize that the percentage 
of students who are individuals from low-income families may fluctuate 
on an annual basis and, for this reason, believe the priority should 
focus on all schools operated by a CMO and not just the charter schools 
to be replicated or expanded as part of the grant project.
    Changes: We have added a requirement that applicants demonstrate 
that they will maintain for the entire grant period a poverty threshold 
across the schools they operate or manage that is the same as, or 
substantially similar to, the poverty level proposed in the grant 
application.

Priority 5--Number of Charter Schools Operated or Managed by the 
Eligible Applicant

    Comments: Several commenters suggested that we use the priority 
sparingly or remove it altogether. One commenter noted that the size of 
a CMO does not directly correlate to the quality of its schools, and 
another cited recent research suggesting that CMO size should not be 
used as a proxy for other characteristics. Other commenters expressed 
concern that the priority would dilute the quality of funded 
applications because it would create several smaller competitions for 
CMO grants. One commenter questioned the purpose of the priority, 
noting that if the intent is to support smaller, less-established CMOs, 
we may get better results using the priority for novice applicants in 
34 CFR 75.225.
    Discussion: We agree that size is not necessarily positively 
correlated with quality. We note, however, that the Department can 
employ several mechanisms, established in the ESEA and these final 
priorities, requirements, definitions, and selection criteria, to 
assess the quality of an applicant and its proposal. This priority, by 
itself, is not intended to assess quality with respect to the size of 
the applicant. Rather, this priority is designed primarily to enable 
the Secretary to give a competitive advantage to small, medium, or 
large CMOs in a given year based on the Department's policy objectives 
for that year. We understand the concern that this priority could be 
used to create smaller sub-competitions that would decrease the amount 
of available funds for other CMOs. In any year in which we announce a 
competition, we will select a combination of priorities, requirements, 
and selection criteria that meet the requirements of the CMO grant 
program and is aligned with the Secretary's policy objectives.
    Finally, we agree that 34 CFR 75.225 provides a useful tool for 
encouraging applications from novice applicants. The Department will 
continue to follow the requirements in 34 CFR 75.225 to give priority 
to novice applicants in future CMO grant competitions, as we deem 
appropriate.
    Changes: None.

Priority 6--Rural Community

    Comments: Several commenters expressed support for the priority but 
questioned whether an applicant could meet the priority by proposing to 
replicate or expand schools in a combination of rural communities and 
other communities.
    Discussion: As written, this priority gives the Department 
flexibility to establish an absolute or competitive preference priority 
for applications that propose to replicate or expand one or more high-
quality charter schools in a rural community or one or more high-
quality charter schools in a non-rural community. To meet the priority, 
an applicant would need to propose to replicate or expand at least one 
high-quality charter school in a rural community or at least one high-
quality charter school in a non-rural community, depending on the 
Department's policy objectives in a given year and which prong of the

[[Page 61540]]

priority the applicant is addressing. The priority language does not 
preclude an applicant from also proposing to replicate or expand high-
quality charter schools in other communities. We believe the priority 
is clear and, therefore, decline to revise it.
    Changes: None.
    Comments: One commenter asked that we revise the priority to focus 
on opening new charter schools in rural areas. Conversely, another 
commenter raised concerns that new charter schools in rural areas would 
drain resources from traditional public schools.
    Discussion: The purpose of the CMO grant program is to replicate or 
expand high-quality charter schools. Although replicated charter 
schools are based on educational models at existing high-quality 
charter schools, for all practical purposes, they are new charter 
schools. Further, in light of the unique challenges faced by rural 
communities, we believe prospective applicants for CMO grants should 
have the flexibility to design their projects in a way that meets the 
specific needs of the communities they plan to serve, including 
determining whether a particular rural community would be best served 
by creating a new, or replicated, charter school or by expanding an 
existing charter school.
    In addition, we recognize that replicating or expanding high-
quality charter schools will impact the surrounding community and is 
likely to have a greater impact in a rural community. The Department's 
broad focus is on expanding high-quality educational options for all 
students, including students in rural communities. Ideally, increasing 
access to high-quality educational options in rural communities will 
help improve student academic achievement not only in charter schools, 
but also in traditional public schools in the community. For these 
reasons, we decline to revise the priority.
    Changes: None.

Priority 7--Replicating or Expanding High-Quality Charter Schools To 
Serve Native American Students

    Comments: Several commenters urged the Department to add a priority 
that would support Indian students by encouraging CMOs to replicate or 
expand dual language immersion schools that focus primarily on Indian 
languages. Another commenter suggested that the Department consider a 
CMO's ability to meaningfully engage with Tribal communities when 
making CMO grant decisions.
    Discussion: As discussed in the ``Definitions'' section below, we 
have replaced the term ``students who are Indians'' with the term 
``Native American students'' in this priority. These changes allow 
applicants to receive priority points for proposing to replicate or 
expand high-quality charter schools that serve Native Hawaiian and 
Native American Pacific Islander students, as well as students who are 
Indians (including Alaska Natives). We agree with the commenters that 
cultivating strong relationships with the communities to be served is 
crucial, and that focusing on Native American language immersion is a 
promising strategy for building and maintaining those relationships and 
improving academic outcomes for Native American students. To meet this 
priority, an applicant must propose to replicate or expand a high-
quality charter school that will meet the unique needs of Native 
American students. The applicant may employ various strategies that 
reflect and preserve Native American language, culture, and history, 
including a ``dual language immersion'' program that focuses on Native 
American languages. Thus, an applicant proposing to replicate or expand 
a high-quality charter school with a dual language immersion program 
that focuses on Native American languages could meet this priority.
    In addition, while we believe that a requirement for applicants to 
demonstrate a commitment to meaningfully collaborate with Tribal 
communities would result in actual collaborations, we agree that the 
language in the priority could be clearer with respect to requiring 
applicants to meaningfully engage with Tribal communities. Therefore, 
we are revising the priority to clarify that applicants must do more 
than demonstrate a commitment to collaborate.
    Changes: We have revised the priority to replace the phrase 
``demonstrate a commitment to meaningfully collaborate'' with 
``meaningfully collaborate.''
    Comments: One commenter expressed support for the priority but 
suggested that we revise it to require applicants to submit a 
resolution or official document, rather than a letter, from surrounding 
Indian Tribes or Indian organizations that demonstrates their support 
for the proposed project. The commenter also suggested that we clarify 
our expectations for the composition of the board for a charter school 
to be replicated or expanded under the grant, and suggested that we 
require the board to have a percentage of Indian Tribe or Indian 
organization members that is comparable to the percentage of Native 
American students enrolled in the school. Finally, the commenter 
suggested that we revise the priority to require that applicants 
demonstrate a record of success in Tribal communities, particularly for 
applicants proposing to replicate or expand virtual charter schools.
    Discussion: We agree that a CMO with strong support from 
surrounding Indian Tribes or Indian organizations is more likely to 
succeed in replicating or expanding high-quality charter schools that 
serve a high proportion of Native American students. Accordingly, in 
order to meet this priority, the applicant must submit a letter of 
support from an Indian Tribe or Indian organization located in the area 
to be served by the charter school. While a resolution is not required, 
an applicant is not precluded from submitting a resolution, or other 
official document, to demonstrate support.
    Likewise, we believe that charter school developers and charter 
schools in the communities where the charter school will be located are 
best suited to assemble a school board that understands the unique 
educational needs of the students to be served. We believe that 
requiring a specific percentage or number of board members from Indian 
Tribes or Indian organizations could limit the ability of applicants to 
fully respond to the needs of the communities they propose to serve. In 
order to meet the priority, however, CMOs will need to collaborate with 
an Indian Tribe or Indian organization in the communities in which they 
propose to replicate or expand high-quality charter schools to ensure 
that school boards represent their students appropriately. While a 
school board with a percentage of members of Indian Tribes or Indian 
organizations that is comparable to the percentage of Native American 
students to be served could satisfy the substantial percentage 
requirement in this priority, there may be circumstances where a 
smaller or larger percentage of members from an Indian Tribe or Indian 
organization is appropriate. For these reasons, we decline to revise 
the priority as suggested by the commenter.
    Finally, while an applicant is not precluded from demonstrating 
past success working with Tribal communities, we decline to revise the 
priority to impose such a requirement. In order to receive CMO funds, 
all applicants must describe how they operate or manage the charter 
schools (including virtual charter schools) for which they have 
presented evidence of success (see Requirement (e)). We believe that 
Indian Tribes and Indian

[[Page 61541]]

organizations located in the community to be served by the replicated 
or expanded charter school are in the best position to determine 
whether a particular CMO applicant has the requisite knowledge and 
experience to serve Native American students effectively. Therefore, 
the requirements that an applicant obtain a letter of support from, and 
meaningfully collaborate with, a local Indian Tribe or Indian 
organization should prevent CMOs that lack the knowledge and experience 
necessary to serve Tribal communities successfully from meeting the 
priority. For these reasons, we decline to revise the priority in the 
manner suggested by the commenter.
    Changes: None.
    Comment: None.
    Discussion: Upon further review, we determined that it is critical 
to remind applicants addressing Priority 7 of their nondiscrimination 
obligations under Federal law. As such, we are revising the priority to 
clarify that proposed projects must be consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws.
    Changes: We have added the phrase ``consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws'' to the priority.
    Requirements
    Comments: A few commenters requested that we clarify which 
requirements we would include in future CMO grant competitions. One 
commenter also requested that we clarify which requirements represent 
existing obligations under Federal law.
    Discussion: As a general matter, the CSP statute prescribes the 
priorities, requirements, definitions, and selection criteria that 
apply to all CMO grants, regardless of the fiscal year in which the 
grant is awarded. In addition, the Department's regulations at 34 CFR 
part 75 prescribe the procedures the Department must follow when 
awarding and administering discretionary grants. The main purposes of 
these final priorities, requirements, definitions, and selection 
criteria are to clarify the Department's interpretation of certain 
statutory requirements and to establish other priorities, requirements, 
definitions, and selection criteria consistent with congressional 
intent. The Department generally has discretion to choose specific 
priorities, requirements, definitions, and selection criteria to apply 
to CMO grants in a given year based on the Department's policy 
objectives for that year. All of the requirements in this NFP are 
aligned with existing requirements for CMO grants under the ESEA and 
the Department's regulations.
    Changes: None.
    Comments: One commenter suggested that we require applicants to 
disclose whether any charter schools in their network meet the 
definition of ``academically poor-performing public school.'' The 
commenter also suggested that we differentiate between ``schools'' and 
``campuses'' because States vary in how they define the two terms.
    Discussion: We agree that knowing whether an applicant has 
``academically poor-performing public schools'' in its network could 
give the Department an indication of the overall quality of the CMO's 
charter schools. On the other hand, there are many reasons why a 
charter school may qualify as an academically poor-performing public 
school and, ultimately, the existence of one or more academically poor-
performing public schools in a CMO's network is not necessarily 
dispositive proof that the CMO is unable to administer a CMO grant 
effectively and efficiently. For example, it would not be unusual for 
an applicant that has reopened one or more low-achieving public schools 
to have an academically poor-performing public school in its network. 
Under Requirement (e), any CMO that receives a grant must provide 
evidence of success, regardless of whether the CMO has operated or 
managed academically poor-performing public schools.
    In addition, Requirement (a) provides that applicants must 
demonstrate that they operate more than one charter school. Requirement 
(a) clearly states that, for purposes of the CMO grant program, 
multiple charter schools are considered to be separate schools if each 
school meets the definition of ``charter school'' in section 4310(2) of 
the ESEA and is treated as a separate school by its authorized public 
chartering agency and the State in which the charter school is located, 
including for purposes of accountability and reporting under Title I, 
Part A of the ESEA. For these reasons, we decline to revise the 
priority as suggested by the commenter.
    Changes: None.
    Definitions
    Comments: Several commenters requested that we clarify the 
definition of ``high proportion,'' as that term is used in Priority 7. 
One commenter provided data suggesting that the definition of ``high 
proportion'' may not be ambitious enough. Conversely, one commenter 
suggested that we define ``high proportion'' as 25 percent students who 
are Indians, consistent with one of the requirements in section 6112 of 
the ESEA.
    Discussion: As discussed above, we are revising Priority 7--
Replicating or Expanding High-Quality Charter Schools to Serve Native 
American Students to replace ``students who are Indians'' with ``Native 
American students.'' As written, the priority gives applicants an 
opportunity to explain why the number of Native American students it 
proposes to serve constitutes a ``high proportion,'' based on the 
specific circumstances and context of the community in which the 
charter school is or will be located. For this reason, we decline to 
require charter schools to serve a specific percentage of Native 
American students, such as 25 percent, in order to meet the priority.
    We appreciate that some data may suggest that many charter schools 
have student bodies comprised of 75 percent or more Native American 
students. Such schools would generally meet the definition of high 
proportion established in this document. On the other hand, if an 
applicant proposes to replicate or expand a charter school that has 
less than a majority of Native American students but provides a 
compelling rationale for why the school should be considered to have a 
high proportion of Native American students, we may consider the 
applicant to have met the standard. Applicants addressing Priority 7 
must, among other things, meaningfully collaborate with Indian Tribes 
or Indian organizations and must replicate or expand high-quality 
charter schools that have an academic program purposely designed to 
meet the unique needs of Native American students. We believe that all 
of the components of Priority 7, including the definition of ``high 
proportion,'' set an appropriately rigorous bar for CMO applicants 
while also affording some flexibility. Therefore, we decline to revise 
the definition of high proportion as suggested by the commenters.
    Changes: None.
    Comments: A few commenters suggested that we revise the definition 
of ``Indian'' to include Native Hawaiians.
    Discussion: We agree that Native Hawaiian students have many of the 
same unique educational needs as students who are Indians. We also 
believe that students who are Native American Pacific Islanders have 
similar educational needs. Therefore, as stated above, we are replacing 
the terms ``Indian'' and ``Indian language,'' respectively, with 
``Native American'' and ``Native American language'' throughout the 
final priorities, requirements, definitions, and selection criteria. 
Likewise, we are removing the definition of the term ``Indian'' and

[[Page 61542]]

adding definitions for ``Native American'' and ``Native American 
language,'' based on the definitions for those terms in section 
8101(34) of the ESEA.\10\ The ESEA definition of ``Native American'' 
explicitly includes Indians (including Alaska Natives), Native 
Hawaiians, and Native American Pacific Islanders.
---------------------------------------------------------------------------

    \10\ Section 8101(34) defines ``Native American'' and ``Native 
American language'' as having the same meaning given those terms in 
section 103 of the Native American Languages Act of 1990 (NALA). 
Under section 103, ``Native American'' includes Indians (including 
Alaska Natives), Native Hawaiians, and Native American Pacific 
Islanders.
---------------------------------------------------------------------------

    Changes: We have removed the definition of ``Indian'' and added 
definitions for ``Native American'' and ``Native American language.''
    Comments: One commenter suggested that we use the term ``Tribal 
organization'' instead of ``Indian organization'' because ``Tribal 
organization'' is the term used in the ESEA.
    Discussion: While the term ``Tribal organization'' is used under 
several ESEA programs, the term is not defined in section 8101 of the 
ESEA, which provides general definitions that apply to programs 
authorized under the ESEA. The term ``Indian organization'' is used in 
the authorizing statute for the Department's Indian Education program 
(20 U.S.C. 7401-7492) and defined in the Department's regulations 
implementing the Indian Education program at 34 CFR 263.20. We think it 
is important to maintain consistency with the Indian Education program.
    Changes: None.

Selection Criteria

    Comments: One commenter suggested that we revise Selection 
Criterion (b)--Contribution in assisting educationally disadvantaged 
students to enable the Department to assess better the extent to which 
an applicant would effectively support students with disabilities. 
Specifically, the commenter suggested that we add a selection factor 
focused on attendance rates and outcomes for educationally 
disadvantaged students, including students with disabilities and 
English learners, and revise the existing selection factors to focus on 
effective instructional strategies for educationally disadvantaged 
students.
    Discussion: Two major purposes of the CSP are to expand educational 
opportunities for educationally disadvantaged students and to assist 
such students in meeting State academic content and performance 
standards. As written in the NPP, this selection criterion would enable 
the Department to evaluate the quality of an application with respect 
to achieving these two objectives. While educationally disadvantaged 
students include students with disabilities, we agree with the 
commenter that an emphasis should be placed on students with 
disabilities and English learners because enrollment of such students 
in charter schools tends to be lower than enrollment of such students 
in neighboring traditional public schools. Therefore, we are revising 
the selection criterion to emphasize students with disabilities and 
English learners.
    Changes: We have revised two selection factors in Selection 
Criterion (b) to sharpen the criterion's focus on serving educationally 
disadvantaged students. We also have revised the title of the criterion 
to clarify the focus on the significance of the contribution in 
assisting educationally disadvantaged students.

Final Priorities

Priority 1--Promoting Diversity

    Under this priority, applicants must propose to replicate or expand 
high-quality charter schools that have an intentional focus on 
recruiting students from racially and socioeconomically diverse 
backgrounds and maintaining racially and socioeconomically diverse 
student bodies in those charter schools, consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws.

Priority 2--Reopening Academically Poor-Performing Public Schools as 
Charter Schools

    Under this priority, applicants must--
    (i) Demonstrate past success working with one or more academically 
poor-performing public schools or schools that previously were 
designated as persistently lowest-achieving schools or priority schools 
under the former School Improvement Grant program or in States that 
exercised ESEA flexibility, respectively, under the ESEA, as amended by 
the No Child Left Behind Act of 2001; and
    (ii) Propose to use grant funds under this program to reopen one or 
more academically poor-performing public schools as charter schools 
during the project period by--
    (A) Replicating one or more high-quality charter schools based on a 
successful charter school model for which the applicant has provided 
evidence of success; and
    (B) Targeting a demographically similar student population in the 
replicated charter schools as was served by the academically poor-
performing public schools, consistent with nondiscrimination 
requirements contained in the U.S. Constitution and Federal civil 
rights laws.

Priority 3--High School Students

    Under this priority, applicants must propose to--
    (i) Replicate or expand high-quality charter schools to serve high 
school students, including educationally disadvantaged students;
    (ii) Prepare students, including educationally disadvantaged 
students, in those schools for enrollment in postsecondary education 
institutions through activities such as, but not limited to, 
accelerated learning programs (including Advanced Placement and 
International Baccalaureate courses and programs, dual or concurrent 
enrollment programs, and early college high schools), college 
counseling, career and technical education programs, career counseling, 
internships, work-based learning programs (such as apprenticeships), 
assisting students in the college admissions and financial aid 
application processes, and preparing students to take standardized 
college admissions tests;
    (iii) Provide support for students, including educationally 
disadvantaged students, who graduate from those schools and enroll in 
postsecondary education institutions in persisting in, and attaining a 
degree or certificate from, such institutions, through activities such 
as, but not limited to, mentorships, ongoing assistance with the 
financial aid application process, and establishing or strengthening 
peer support systems for such students attending the same institution; 
and
    (iv) Propose one or more project-specific performance measures, 
including aligned leading indicators or other interim milestones, that 
will provide valid and reliable information about the applicant's 
progress in preparing students, including educationally disadvantaged 
students, for enrollment in postsecondary education institutions and in 
supporting those students in persisting in and attaining a degree or 
certificate from such institutions. An applicant addressing this 
priority and receiving a CMO grant must provide data that are 
responsive to the measure(s), including performance targets, in its 
annual performance reports to the Department.
    (v) For purposes of this priority, postsecondary education 
institutions include institutions of higher education, as defined in 
section 8101(29) of the Elementary and Secondary Education Act of 1965, 
as amended by the Every

[[Page 61543]]

Student Succeeds Act, and one-year training programs that meet the 
requirements of section 101(b)(1) of the HEA.

Priority 4--Low-Income Demographic

    Under this priority, applicants must demonstrate one of the 
following--
    (i) That at least 40 percent of the students across all of the 
charter schools the applicant operates or manages are individuals from 
low-income families, and that the applicant will maintain the same, or 
a substantially similar, percentage of such students across all of its 
charter schools during the grant period;
    (ii) That at least 50 percent of the students across all of the 
charter schools the applicant operates or manages are individuals from 
low-income families, and that the applicant will maintain the same, or 
a substantially similar, percentage of such students across all of its 
charter schools during the grant period; or
    (iii) That at least 60 percent of the students across all of the 
charter schools the applicant operates or manages are individuals from 
low-income families, and that the applicant will maintain the same, or 
a substantially similar, percentage of such students across all of its 
charter schools during the grant period.

Priority 5--Number of Charter Schools Operated or Managed by the 
Eligible Applicant

    Under this priority, applicants must demonstrate one of the 
following--
    (i) That they currently operate or manage two to five charter 
schools;
    (ii) That they currently operate or manage six to 20 charter 
schools; or
    (iii) That they currently operate or manage 21 or more charter 
schools.

Priority 6--Rural Community

    Under this priority, applicants must propose to replicate or expand 
one or more high-quality charter schools in--
    (i) A rural community; or
    (ii) A community that is not a rural community.

Priority 7--Replicating or Expanding High-Quality Charter Schools To 
Serve Native American Students

    Under this priority, applicants must--
    (i) Propose to replicate or expand one or more high-quality charter 
schools that--
    (A) Utilize targeted outreach and recruitment in order to serve a 
high proportion of Native American students, consistent with 
nondiscrimination requirements contained in the U.S. Constitution and 
Federal civil rights laws;
    (B) Have a mission and focus that will address the unique 
educational needs of Native American students, such as through the use 
of instructional programs and teaching methods that reflect and 
preserve Native American language, culture, and history; and
    (C) Have a governing board with a substantial percentage of members 
who are members of Indian Tribes or Indian organizations located within 
the area to be served by the replicated or expanded charter school;
    (ii) Submit a letter of support from at least one Indian Tribe or 
Indian organization located within the area to be served by the 
replicated or expanded charter school; and
    (iii) Meaningfully collaborate with the Indian Tribe(s) or Indian 
organization(s) from which the applicant has received a letter of 
support in a timely, active, and ongoing manner with respect to the 
development and implementation of the educational program at the 
charter school.

Types of Priorities

    When inviting applications for a competition using one or more 
priorities, we designate the type of each priority as absolute, 
competitive preference, or invitational through a notice in the Federal 
Register. The effect of each type of priority follows:
    Absolute priority: Under an absolute priority, we consider only 
applications that meet the priority (34 CFR 75.105(c)(3)).
    Competitive preference priority: Under a competitive preference 
priority, we give competitive preference to an application by (1) 
awarding additional points, depending on the extent to which the 
application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) 
selecting an application that meets the priority over an application of 
comparable merit that does not meet the priority (34 CFR 
75.105(c)(2)(ii)).
    Invitational priority: Under an invitational priority, we are 
particularly interested in applications that meet the priority. 
However, we do not give an application that meets the priority a 
preference over other applications (34 CFR 75.105(c)(1)).

Final Requirements

    Applicants for funds under this program must meet one or more of 
the following requirements--
    (a) Demonstrate that the applicant currently operates or manages 
more than one charter school. For purposes of this program, multiple 
charter schools are considered to be separate schools if each school--
    (i) Meets each element of the definition of ``charter school'' 
under section 4310(2) of the ESEA; and
    (ii) Is treated as a separate school by its authorized public 
chartering agency and the State in which the charter school is located, 
including for purposes of accountability and reporting under title I, 
part A of the ESEA.
    (b) Provide information regarding any compliance issues, and how 
they were resolved, for any charter schools operated or managed by the 
applicant that have--
    (i) Closed;
    (ii) Had their charter(s) revoked due to problems with statutory or 
regulatory compliance, including compliance with sections 4310(2)(G) 
and (J) of the ESEA; or
    (iii) Had their affiliation with the applicant revoked or 
terminated, including through voluntary disaffiliation.
    (c) Provide a complete logic model (as defined in 34 CFR 77.1) for 
the grant project. The logic model must include the applicant's 
objectives for replicating or expanding one or more high-quality 
charter schools with funding under this program, including the number 
of high-quality charter schools the applicant proposes to replicate or 
expand.
    (d) If the applicant currently operates, or is proposing to 
replicate or expand, a single-sex charter school or coeducational 
charter school that provides a single-sex class or extracurricular 
activity (collectively referred to as a ``single-sex educational 
program''), demonstrate that the existing or proposed single-sex 
educational program is in compliance with title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681, et seq.) and its implementing 
regulations, including 34 CFR 106.34.
    (e) Describe how the applicant currently operates or manages the 
high-quality charter schools for which it has presented evidence of 
success and how the proposed replicated or expanded charter schools 
will be operated or managed, including the legal relationship between 
the applicant and its schools. If a legal entity other than the 
applicant has entered or will enter into a performance contract with an 
authorized public chartering agency to operate or manage one or more of 
the applicant's schools, the applicant must also describe its 
relationship with that entity.
    (f) Describe how the applicant will solicit and consider input from 
parents and other members of the community on the implementation and 
operation of each replicated or expanded charter

[[Page 61544]]

school, including in the area of school governance.
    (g) Describe the lottery and enrollment procedures that will be 
used for each replicated or expanded charter school if more students 
apply for admission than can be accommodated, including how any 
proposed weighted lottery complies with section 4303(c)(3)(A) of the 
ESEA.
    (h) Describe how the applicant will ensure that all eligible 
children with disabilities receive a free appropriate public education 
in accordance with part B of the IDEA.
    (i) Describe how the proposed project will assist educationally 
disadvantaged students in mastering challenging State academic 
standards.
    (j) Provide a budget narrative, aligned with the activities, target 
grant project outputs, and outcomes described in the logic model, that 
outlines how grant funds will be expended to carry out planned 
activities.
    (k) Provide the applicant's most recent independently audited 
financial statements prepared in accordance with generally accepted 
accounting principles.
    (l) Describe the applicant's policies and procedures to assist 
students enrolled in a charter school that closes or loses its charter 
to attend other high-quality schools.
    (m) Provide--
    (i) A request and justification for waivers of any Federal 
statutory or regulatory provisions that the applicant believes are 
necessary for the successful operation of the charter schools to be 
replicated or expanded; and
    (ii) A description of any State or local rules, generally 
applicable to public schools, that will be waived, or otherwise not 
apply, to such schools.

Final Definitions

    Academically poor-performing public school means:
    (a) A school identified by the State for comprehensive support and 
improvement under section 1111(c)(4)(D)(i) of the ESEA; or
    (b) A public school otherwise identified by the State or, in the 
case of a charter school, its authorized public chartering agency, as 
similarly academically poor-performing.
    Educationally disadvantaged student means a student in one or more 
of the categories described in section 1115(c)(2) of the ESEA, which 
include children who are economically disadvantaged, students who are 
children with disabilities, migrant students, English learners, 
neglected or delinquent students, homeless students, and students who 
are in foster care.
    High proportion, when used to refer to Native American students, 
means a fact-specific, case-by-case determination based upon the unique 
circumstances of a particular charter school or proposed charter 
school. The Secretary considers ``high proportion'' to include a 
majority of Native American students. In addition, the Secretary may 
determine that less than a majority of Native American students 
constitutes a ``high proportion'' based on the unique circumstances of 
a particular charter school or proposed charter school, as described in 
the application for funds.
    Indian organization means an organization that--
    (1) Is legally established--
    (i) By Tribal or inter-Tribal charter or in accordance with State 
or Tribal law; and
    (ii) With appropriate constitution, by-laws, or articles of 
incorporation;
    (2) Includes in its purposes the promotion of the education of 
Indians;
    (3) Is controlled by a governing board, the majority of which is 
Indian;
    (4) If located on an Indian reservation, operates with the sanction 
or by charter of the governing body of that reservation;
    (5) Is neither an organization or subdivision of, nor under the 
direct control of, any institution of higher education; and
    (6) Is not an agency of State or local government.
    Indian Tribe means a federally-recognized or a State-recognized 
Tribe.
    Individual from a low-income family means an individual who is 
determined by a State educational agency or local educational agency to 
be a child from a low-income family on the basis of (a) data used by 
the Secretary to determine allocations under section 1124 of the ESEA, 
(b) data on children eligible for free or reduced-price lunches under 
the Richard B. Russell National School Lunch Act, (c) data on children 
in families receiving assistance under part A of title IV of the Social 
Security Act, (d) data on children eligible to receive medical 
assistance under the Medicaid program under title XIX of the Social 
Security Act, or (e) an alternate method that combines or extrapolates 
from the data in items (a) through (d) of this definition.
    Institution of higher education means an educational institution in 
any State that--
    (i) Admits as regular students only persons having a certificate of 
graduation from a school providing secondary education, or the 
recognized equivalent of such a certificate, or persons who meet the 
requirements of section 484(d)of the HEA;
    (ii) Is legally authorized within such State to provide a program 
of education beyond secondary education;
    (iii) Provides an educational program for which the institution 
awards a bachelor's degree or provides not less than a 2-year program 
that is acceptable for full credit toward such a degree, or awards a 
degree that is acceptable for admission to a graduate or professional 
degree program, subject to review and approval by the Secretary;
    (iv) Is a public or other nonprofit institution; and
    (v) Is accredited by a nationally recognized accrediting agency or 
association, or if not so accredited, is an institution that has been 
granted preaccreditation status by such an agency or association that 
has been recognized by the Secretary for the granting of 
preaccreditation status, and the Secretary has determined that there is 
satisfactory assurance that the institution will meet the accreditation 
standards of such an agency or association within a reasonable time.
    Native American means an Indian (including an Alaska Native), 
Native Hawaiian, or Native American Pacific Islander.
    Native American language means the historical, traditional 
languages spoken by Native Americans.
    Rural community means a community that is served by a local 
educational agency that is eligible to apply for funds under the Small 
Rural School Achievement (SRSA) program or the Rural and Low-Income 
School (RLIS) program authorized under title V, part B of the ESEA. 
Applicants may determine whether a particular local educational agency 
is eligible for these programs by referring to information on the 
following Department websites. For the SRSA program: www2.ed.gov/programs/reapsrsa/eligible16/index.html. For the RLIS program: 
www2.ed.gov/programs/reaprlisp/eligibility.html.

Final Selection Criteria

    (a) Quality of the eligible applicant. In determining the quality 
of the eligible applicant, the Secretary considers one or more of the 
following factors:
    (i) The extent to which the academic achievement results (including 
annual student performance on statewide assessments, annual student 
attendance and retention rates, and, where applicable and available, 
student academic growth, high school graduation rates, college 
attendance rates, and college persistence rates) for educationally 
disadvantaged students served by the charter schools operated or 
managed by the applicant have exceeded the average academic

[[Page 61545]]

achievement results for such students served by other public schools in 
the State.
    (ii) The extent to which one or more charter schools operated or 
managed by the applicant have closed; have had a charter revoked due to 
noncompliance with statutory or regulatory requirements; or have had 
their affiliation with the applicant revoked or terminated, including 
through voluntary disaffiliation.
    (iii) The extent to which one or more charter schools operated or 
managed by the applicant have had any significant issues in the area of 
financial or operational management or student safety, or have 
otherwise experienced significant problems with statutory or regulatory 
compliance that could lead to revocation of the school's charter.
    (b) Significance of contribution in assisting educationally 
disadvantaged students.
    In determining the significance of the contribution the proposed 
project will make in expanding educational opportunities for 
educationally disadvantaged students and enabling those students to 
meet challenging State academic standards, the Secretary considers one 
or more of the following factors:
    (i) The extent to which charter schools currently operated or 
managed by the applicant serve educationally disadvantaged students, 
particularly students with disabilities and English learners, at rates 
comparable to surrounding public schools or, in the case of virtual 
charter schools, at rates comparable to public schools in the State.
    (ii) The quality of the plan to ensure that the charter schools the 
applicant proposes to replicate or expand will recruit, enroll, and 
effectively serve educationally disadvantaged students, particularly 
students with disabilities and English learners.
    (c) Quality of the evaluation plan for the proposed project.
    In determining the quality of the evaluation plan for the proposed 
project, the Secretary considers the extent to which the methods of 
evaluation include the use of objective performance measures that are 
clearly related to the intended outcomes of the proposed project, as 
described in the applicant's logic model (as defined in 34 CFR 77.1), 
and that will produce quantitative and qualitative data by the end of 
the grant period.
    (d) Quality of the management plan.
    In determining the quality of the applicant's management plan, the 
Secretary considers the ability of the applicant to sustain the 
operation of the replicated or expanded charter schools after the grant 
has ended, as demonstrated by the multi-year financial and operating 
model required under section 4305(b)(3)(B)(iii) of the ESEA.
    This document does not preclude us from proposing additional 
priorities, requirements, definitions, or selection criteria, subject 
to meeting applicable rulemaking requirements.
    Note: This document does not solicit applications. In any year in 
which we choose to use one or more of these priorities, requirements, 
definitions, and selection criteria, we invite applications through a 
notice in the Federal Register.

Executive Orders 12866, 13563, and 13771

Regulatory Impact Analysis

    Under Executive Order 12866, it must be determined 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 final regulatory action is not a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    Under Executive Order 13771, for each new rule that the Department 
proposes for notice and comment or otherwise promulgates that is a 
significant regulatory action under Executive Order 12866, and that 
imposes total costs greater than zero, it must identify two 
deregulatory actions. For Fiscal Year 2019, any new incremental costs 
associated with a new regulation must be fully offset by the 
elimination of existing costs through deregulatory actions. Because the 
proposed regulatory action is not significant, the requirements of 
Executive Order 13771 do not apply.
    We have also reviewed this final regulatory action 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 its 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 the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including 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 priorities, requirements, definitions, 
and selection criteria only on 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 this 
regulatory action is consistent with the principles in Executive Order 
13563.
    We also have determined that this regulatory action does not unduly 
interfere with State, local, and Tribal

[[Page 61546]]

governments in the exercise of their governmental functions.
    In accordance with these Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs are those 
resulting from statutory requirements and those we have determined as 
necessary for administering the Department's programs and activities.

Discussion of Potential Costs and Benefits

    The Department believes that this regulatory action does not impose 
significant costs on eligible entities, whose participation in this 
program is voluntary. While this action does impose some requirements 
on participating CMOs that are cost-bearing, the Department expects 
that applicants for this program will include in their proposed budgets 
a request for funds to support compliance with such cost-bearing 
requirements. Therefore, costs associated with meeting these 
requirements are, in the Department's estimation, minimal.
    This regulatory action strengthens accountability for the use of 
Federal funds by helping to ensure that the Department selects for CSP 
grants the CMOs that are most capable of expanding the number of high-
quality charter schools available to our Nation's students, consistent 
with a major purpose of the CSP as described in section 4301(3) of the 
ESEA. The Department believes that these benefits to the Federal 
government and to State educational agencies outweigh the costs 
associated with this action.

Regulatory Alternatives Considered

    The Department believes that the priorities, requirements, 
definitions, and selection criteria are needed to administer the 
program effectively. As an alternative to the selection criteria 
announced in this document, the Department could choose from among the 
selection criteria authorized for CSP grants to CMOs in section 4305(b) 
of the ESEA (20 U.S.C. 7221c) and the general selection criteria in 34 
CFR 75.210. We do not believe that these criteria provide a sufficient 
basis on which to evaluate the quality of applications. In particular, 
the criteria do not sufficiently enable the Department to assess an 
applicant's past performance with respect to the operation of high-
quality charter schools or with respect to compliance issues that the 
applicant has encountered.
    We note that several of the final priorities, requirements, 
definitions, and selection criteria are based on priorities, 
requirements, definitions, selection criteria, and other provisions in 
the authorizing statute for this program.

Paperwork Reduction Act of 1995

    The final priorities, requirements, and selection criteria contain 
information collection requirements that are approved by OMB under OMB 
control number 1894-0006; the final priorities, requirements, and 
selection criteria do not affect the currently approved data 
collection.
    Intergovernmental Review: This program is subject to Executive 
Order 12372 and the regulations in 34 CFR part 79. One of the 
objectives of the Executive order is to foster an intergovernmental 
partnership and a strengthened federalism. The Executive order relies 
on processes developed by State and local governments for coordination 
and review of proposed Federal financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or 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. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations 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 the Department published in the Federal Register, in text 
or 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.

    Dated: November 27, 2018.
James C. Blew,
Acting Assistant Deputy Secretary for Innovation and Improvement.
[FR Doc. 2018-26095 Filed 11-29-18; 8:45 am]
 BILLING CODE 4000-01-P