[Federal Register Volume 87, Number 16 (Tuesday, January 25, 2022)]
[Rules and Regulations]
[Pages 3659-3661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01336]



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DEPARTMENT OF EDUCATION

34 CFR Part 226

[DOCKET ID ED-2021-OESE-0147]
RIN 1810-AB62


Charter School Programs (CSP) State Charter School Facilities 
Incentive Grants Program

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

ACTION: Final rule.

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SUMMARY: The Department of Education (Department) amends the 
regulations that govern the State Charter School Facilities Incentive 
Program to align the regulations with the Elementary and Secondary 
Education Act of 1965 (ESEA), as amended by the Every Student Succeeds 
Act (ESSA), and the Tax Cut and Jobs Act of 2017.

DATES: These regulations are effective January 25, 2022.

FOR FURTHER INFORMATION CONTACT: Clifton Jones, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 3E211, Washington, DC 20202. 
Telephone: (202)205-2204. Email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: The Department is making technical changes 
to its regulations in 34 CFR part 226, to align them with the ESEA, as 
amended by the ESSA. The ESSA, which was signed into law on December 
10, 2015, reauthorized the ESEA, previously amended by the No Child 
Left Behind Act of 2001 (NCLB). We are also making changes to reflect 
the repeal of the Qualified Zone Academy Bonds (QZAB) under the Tax Cut 
and Jobs Act of 2017. These final regulations update ESEA citations, 
remove obsolete references, and make other technical changes in 34 CFR 
part 226, specifically Sec. Sec.  226.4(a), 226.11(a), 226.12(d)(3) and 
(e), 226.13, and 226.14.
    This final rule is separate and apart from any notice of proposed 
priorities, requirements, selection criteria, or definitions that we 
may publish for the State Charter School Facilities Incentive Program.

Part 226--State Charter School Facilities Incentive Program

    Statute: Section 4310 of the ESEA.
    Current Regulations: Section 226.4(a) specifies the definitions 
that apply to the State Charter School Facilities Incentive program. 
Section 226.4(a) states that ``charter school'' is defined in section 
5210 of the ESEA.
    New Regulations: In Sec.  226.4(a) of these final regulations, we 
update the citation for the definition of ``charter school'' to section 
4310 of the ESEA.
    Reasons: Amendments to the ESEA by the ESSA resulted in a change to 
the citation for the statute's definition section. The definitions for 
the program are now in section 4310 of the ESEA, as amended by ESSA.

    Statute: Section 5202(e) of the ESEA.
    Current Regulations: Section 226.11(a) states that the Secretary 
evaluates applications, in part, on the basis of competitive preference 
priorities in Sec.  226.13. Section 226.13 provides that the Secretary 
shall award additional points under the four statutory funding 
priorities in section 5202(e)(2) and (3)(A), (B), and (C) of the ESEA 
of.
    New Regulations: In Sec.  226.11(a) of these final regulations, we 
remove the reference to Sec.  226.13.
    Reasons: The ESSA amendments to the ESEA removed section 5202(e) 
from the statute.

    Statute: Section 4304 of the ESEA.
    Current Regulations: Section 226.12 establishes the selection 
criteria that the Secretary uses in evaluating applications for CSP 
State Charter Schools Facilities Incentive Grants. Under selection 
criterion (d)(3), the Secretary evaluates the extent to which the 
applicant's non-Federal share exceeds the minimum percentages of the 
per-pupil facilities aid program in section 5205(b)(2)(C) of the ESEA.
    New Regulations: Section 226.12(d)(3) of these final regulations 
cites section 4304(k)(2)(C) of the ESEA, as amended by the ESSA, when 
referencing the extent to which the non-Federal share exceeds the 
minimum percentages of the per-pupil facilities aid program.
    Reasons: The current citation, section 5205(b)(2)(C), is from the 
ESEA, as amended by NCLB. In these final regulations, we update the 
citation in Sec.  226.12(d)(3) to section 4304(k)(2)(C) to reference 
the ESEA, as amended by the ESSA.

    Statute: Section 13404 of the Tax Cuts and Jobs Act of 2017.
    Current Regulations: Section 226.12 establishes the selection 
criteria that the Secretary uses in evaluating applications for CSP 
State Charter Schools Facilities Incentive Grants. Under Sec.  
226.12(e), the Secretary evaluates the State's experience in addressing 
the facility needs of charter schools. Specifically, Sec.  226.12(e) 
references experience in using QZABs as an example of how the State 
could demonstrate experience addressing facility needs of charter 
schools.
    New Regulations: In Sec.  226.12(e), we are removing reference to 
the use of QZABs as an example of how the State could demonstrate 
experience addressing the facility needs of charter schools.
    Reasons: The Tax Cuts and Jobs Act enacted in December 2017 
repealed the States' authority to issue tax credit bonds, such as 
QZABs, after December 31, 2017.

    Statute: Section 5202(e) of the ESEA.
    Current Regulations: Section 226.13 establishes statutory funding 
priorities that the Secretary may use in making awards. Specifically, 
it lists the priorities described in section 5202(e)(2) and (3)(A), 
(B), and (C) of the ESEA: (a) Periodic review and evaluation; (b) 
number of high-quality charter schools; (c) one authorized public 
chartering agency other than a local educational agency, or an appeals 
process; and (d) high degree of autonomy.
    New Regulations: We are removing Sec.  226.13.
    Reasons: The ESSA amendments to the ESEA removed section 5202(e) 
from the statute.

    Statute: Title I, Section 1111 of the ESEA.
    Current Regulations: Section 226.14--titled ``What other funding 
priorities may the Secretary use in making a grant award?''--provides 
that the Secretary may award additional points under competitive 
preference priorities related to the capacity of charter schools to 
offer public school choice in those communities with the greatest need 
based on three factors. The three factors are: (1) The extent to which 
the applicant would target services to geographic areas in which a 
large proportion or number of public schools have been identified for 
improvement, corrective action, or restructuring under title I of the 
ESEA; (2) The extent to which the applicant would target services to 
geographic areas in which a large proportion of students perform poorly 
on State academic assessments; and (3) The extent to which the 
applicant would target services to communities with large proportions 
of low-income students.
    New Regulations: We are removing the word ``other'' from the 
section title. Additionally, we are revising the first factor, which is 
defined in Sec.  226.14(a)(1), to refer to the extent to which the 
applicant targets services to geographic areas in which a large portion 
or number of public schools have been identified for comprehensive

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support and improvement or targeted support and improvement under Title 
I of the ESEA, as amended by the ESSA.
    Reasons: The ESSA amendments to the ESEA removed the statutory 
priorities established in section 5202(e), leaving one set of funding 
priorities; hence the word ``other'' in the section heading is not 
needed. The ESSA amendments to the ESEA also revised the categories of 
schools that States must identify under Title I, section 1111. States 
no longer identify schools for improvement, corrective action, or 
restructuring; instead, States identify schools for comprehensive 
support and improvement or targeted support and improvement.

Waiver of Proposed Rulemaking and Delayed Effective Date

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the 
Department generally offers interested parties the opportunity to 
comment on proposed regulations. However, the APA provides that an 
agency is not required to conduct notice and comment rulemaking when 
the agency, for good cause, finds that the requirement is 
impracticable, unnecessary, or contrary to the public interest. 5 
U.S.C. 553(b)(B). There is good cause here for waiving rulemaking 
because these regulations make technical changes only to align with 
current law and do not establish substantive policy.
    The APA also generally requires that regulations be published at 
least 30 days before their effective date, unless the agency has good 
cause to implement its regulations sooner (5 U.S.C. 553(d)(3)). Again, 
because these final regulations are merely technical, there is good 
cause to make them effective on the day they are published.

Executive Orders 12866 and 13563

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 significant and, therefore, not 
subject to review by OMB under Executive Order 12866.
    We have also reviewed these regulations under Executive Order 
13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only on 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.''
    In choosing among alternative regulatory approaches, we selected 
those approaches that maximize net benefits. Based on the analysis that 
follows, the Department believes that these regulations are consistent 
with the principles in Executive Order 13563.
    We also have determined that this regulatory action is not 
significant and would not unduly interfere with State, local, and 
Tribal governments in the exercise of their governmental functions.
    In accordance with both Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action.

Potential Costs and Benefits

    The Department believes that this final rule does not impose costs 
because it makes only technical changes that do not impose additional 
burden. Moreover, any costs associated with this rule are outweighed by 
the benefit of providing necessary clarification.

Need for Regulatory Action

    The Secretary amends the State Charter School Facilities Incentive 
Grants program regulations to reflect changes made to the program 
statute by ESSA. These technical amendments are needed to provide 
clarity in program administration for prospective applicants and the 
public.

Net Budget Impacts

    The Department estimates that these final regulations will add an 
additional cost of $0.

Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act does not apply to this rulemaking 
because there is good cause to waive notice and comment under 5 U.S.C. 
553.

Paperwork Reduction Act of 1995

    The final regulations do not create any new information collection 
requirements.

Intergovernmental Review

    The State Charter School Facilities Incentive Grants Program is 
subject to Executive Order 12372 and the regulations in 34 CFR part 79.
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is

[[Page 3661]]

the document published in the Federal Register. You may access the 
official edition of the Federal Register and the Code of Federal 
Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or portable document format (PDF). To 
use PDF, you must have Adobe Acrobat Reader, which is available free at 
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    You may also access documents of the Department published in the 
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www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

List of Subjects in 34 CFR Part 226

    Education, Educational facilities, Grant programs--education, 
Reporting and recordkeeping requirements, Schools.

Miguel A. Cardona,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary amends 
part 226 of title 34 of the Code of Federal Regulations as follows:

PART 226--STATE CHARTER SCHOOL FACILITIES INCENTIVE PROGRAM

0
1. The authority citation for part 226 continues to read as follows:

    Authority: 20 U.S.C. 1221e-3; 7221d(b), unless otherwise noted.


Sec.  226.4   [Amended]

0
2. Section 226.4 is amended in paragraph (a) introductory text by 
removing ``5210'' and adding in its place ``4310''.


Sec.  226.11  [Amended]

0
3. Section 226.11 is amended in paragraph (a) by removing ``Sec.  
226.13 and''.

0
4. Section 226.12 is amended:
0
a. In paragraph (d)(3), by removing ``5205(b)(2)(C)'' and adding, in 
its place, ``4304(k)(2)(C)''; and
0
b. By revising paragraph (e).
    The revision reads as follows:


Sec.  226.12  What selection criteria does the Secretary use in 
evaluating an application for a State Charter School Facilities 
Incentive program grant?

* * * * *
    (e) State experience. The experience of the State in addressing the 
facility needs of charter schools through various means, including 
providing per-pupil aid and access to State loan or bonding pools.
* * * * *


Sec.  226.13  [Removed and Reserved]

0
5. Section 226.13 is removed and reserved.


Sec.  226.14  [Amended]

0
6. Section 226.14 is amended:
0
A. In the section heading, by removing ``other''.
0
B. In paragraph (a)(1), by removing ``improvement, corrective action, 
or restructuring under title I of the ESEA'' and adding, in its place, 
``comprehensive support and improvement or targeted support and 
improvement under the ESEA''.

[FR Doc. 2022-01336 Filed 1-24-22; 8:45 am]
BILLING CODE 4000-01-P