[Federal Register: August 26, 2005 (Volume 70, Number 165)]
[Proposed Rules]
[Page 50257-50261]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au05-32]
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DEPARTMENT OF EDUCATION
34 CFR Part 226
State Charter School Facilities Incentive Program
AGENCY: Office of Innovation and Improvement, Department of Education.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Secretary issues these proposed regulations to administer
the State Charter School Facilities Incentive program. Under this
program, the Department of Education (``Department'') provides
competitive grants to States to help charter schools meet their need
for facilities.
DATES: We must receive your comments on or before September 26, 2005.
ADDRESSES: Address all comments about these proposed regulations to Jim
Houser, U.S. Department of Education, 400 Maryland Avenue, SW., room
4W245, Washington, DC 20202-6140. If you prefer to send your comments
through the Internet, you may address them to us at the U.S. Government
Web site: http://www.regulations.gov; or you may send your Internet comments to us at the following address: comments@ed.gov.
You must include the term ``state incentive'' in the subject line
of your electronic message.
If you want to comment on the information collection requirements,
you must send your comments to the Office of Management and Budget
(OMB) at the address listed in the Paperwork Reduction Act section of
this preamble. You may also send a copy of these comments to the
Department representative named in this section.
FOR FURTHER INFORMATION CONTACT: Ann Margaret Galiatsos or Jim Houser,
U.S. Department of Education, 400 Maryland Avenue, SW., Washington, DC
20202-6140. Telephone: (202) 205-9765 or via Internet:
charter.facilities@ed.gov.
[[Page 50258]]
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Relay Service (FRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION:
Invitation To Comment
We invite you to submit comments regarding these proposed
regulations. To ensure that your comments have maximum effect in
developing the final regulations, we urge you to identify clearly the
specific section or sections of the proposed regulations that each of
your comments addresses and to arrange your comments in the same order
as the proposed regulations.
We also invite you to assist us in complying with the specific
requirements of Executive Order 12866 and its overall requirement of
reducing regulatory burden that might result from these proposed
regulations. Please let us know of any further opportunities we should
take to reduce potential costs or increase potential benefits while
preserving the effective and efficient administration of the program.
During and after the comment period, you may inspect all public
comments about these proposed regulations in room 4W259, 400 Maryland
Avenue, SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m.,
Eastern time, Monday through Friday of each week except Federal
holidays.
Assistance to Individuals With Disabilities in Reviewing the Rulemaking
Record
On request, we will supply an appropriate aid, such as a reader or
print magnifier, to an individual with a disability who needs
assistance to review the comments or other documents in the public
rulemaking record for these proposed regulations. If you want to
schedule an appointment for this type of aid, please contact the person
listed under FOR FURTHER INFORMATION CONTACT.
Background
These proposed regulations would apply to the State Charter School
Facilities Incentive program, which is authorized under title V, part
B, subpart 1 of the Elementary and Secondary Education Act of 1965, as
amended by the No Child Left Behind Act of 2001 (Pub. L. 107-110,
enacted January 8, 2002) (Act). The purpose of this program is to
assist charter schools in meeting their facilities needs. Under this
program, funds are provided on a competitive basis to States to create
new or enhance existing per-pupil facilities aid programs on behalf of
charter schools.
In this notice, we are proposing to establish selection criteria
and funding priorities for this program's discretionary grant
competitions after fiscal year (FY) 2004. The proposed criteria are
designed to award grants to States that are assisting charter schools
with meeting their facility needs, but still have an unmet need. The
proposed criteria also would be used to assess the quality of the
applicant's plan, the proposed grant project team, and the proposed
budget. These criteria would appear in Sec. 226.12 and are similar to
the criteria that the Department used to award grants under this
program in FY 2004.
Section 226.14 of the proposed regulations would include two
competitive preference priorities. The proposed priority in Sec.
226.14(a) is designed to meet the need for facilities in areas with the
greatest need for public school choice. In some cases, there are an
insufficient number of classroom seats to provide public school choice.
Under the proposed priority in Sec. 226.14(b), we would award
additional points to States that have not previously received a grant
under the program.
Section 226.21 of the proposed regulations would clarify that
construction and the purchase of real property are allowable
expenditures under this program. Under 34 CFR 75.533, these
expenditures are prohibited unless either the program statute or the
implementing regulations explicitly authorize them. Because
expenditures for construction and the purchase of real property are
critical to implementing successful school facility programs, we are
proposing that they be authorized in the implementing regulations.
Proposed Sec. 226.21 also lists other allowable uses of grant funds
under this program.
Proposed Sec. 226.22 indicates the types of expenditures that
would fall under the five percent cap on administrative expenses. This
proposed regulation is based on a statutory cap of five percent that
applies to evaluation, technical assistance, and dissemination.
Proposed Sec. 226.22 is designed to maximize the amount of funds
available for charter schools while still providing States with
sufficient funds to adequately administer the program.
Executive Order 12866
1. Potential Costs and Benefits
Under Executive Order 12866, we have assessed the potential costs
and benefits of this regulatory action.
The potential costs associated with the proposed regulations are
those resulting from statutory requirements and those we have
determined to be necessary for administering this program effectively
and efficiently. Elsewhere in this SUPPLEMENTARY INFORMATION section we
identify and explain burdens specifically associated with information
collection requirements. See the heading Paperwork Reduction Act of
1995.
In assessing the potential costs and benefits--both quantitative
and qualitative--of this regulatory action, we have determined that the
benefits would justify the costs.
We have also determined that this regulatory action would not
unduly interfere with State, local, and tribal governments in the
exercise of their governmental functions.
Summary of Potential Costs and Benefits
The Secretary believes that these regulations are necessary to
clarify complex statutory provisions. As noted elsewhere in this
notice, these proposed regulations add clarity where the statute is
ambiguous or reorganize statutory material to facilitate a better
understanding of the statute's requirements. Nearly all of the benefits
and costs of these proposed regulations stem from the underlying
statute and not the regulations. The costs associated with these
proposed regulations are not only minimal but are also justified in
terms of the benefits that applicants for these discretionary grants
will receive. The statute requires an application, but the types of
information that would be collected through the proposed selection
criteria should be readily available to applicants under this program
and would impose minimal burden on applicants.
2. Clarity of the Regulations
Executive Order 12866 and the Presidential memorandum on ``Plain
Language in Government Writing'' require each agency to write
regulations that are easy to understand.
The Secretary invites comments on how to make these proposed
regulations easier to understand, including answers to questions such
as the following:
Are the requirements in the proposed regulations clearly
stated?
[[Page 50259]]
Do the proposed regulations contain technical terms or
other wording that interferes with their clarity?
Does the format of the proposed regulations (grouping and
order of sections, use of headings, paragraphing, etc.) aid or reduce
their clarity?
Would the proposed regulations be easier to understand if
we divided them into more (but shorter) sections? (A ``section'' is
preceded by the symbol ``Sec. '' and a numbered heading; for example,
Sec. 226.1 What is the State Charter School Facilities Incentive
program?)
Could the description of the proposed regulations in the
``Supplementary Information'' section of this preamble be more helpful
in making the proposed regulations easier to understand? If so, how?
What else could we do to make the proposed regulations
easier to understand?
Send any comments that concern how the Department could make these
proposed regulations easier to understand to the person listed in the
ADDRESSES section of the preamble.
Regulatory Flexibility Act Certification
The Secretary certifies that these proposed regulations would not
have a significant economic impact on a substantial number of small
entities. The small entities that would be tangentially affected by
these proposed regulations are small grantees and, tangentially, small
charter schools that ultimately benefit from services provided by
grantees. In addition, we do not believe that the regulations would
have a significant economic impact on the limited number of small
charter schools affected because the proposed regulations would not
impose excessive regulatory burdens on those entities or require
unnecessary Federal supervision.
The proposed regulations would benefit both small and large
entities in that they clarify confusing and complex statutory
requirements. Also, because the statute requires State Charter School
Facilities Incentive applicants to apply to the Department if they wish
to receive discretionary funds, it would be difficult for the
Department to award funds without the application information specified
in the proposed regulations. The proposed regulations will ensure that
applicants do not provide a significant amount of information that is
already available to the Department.
The proposed regulations would impose minimal requirements for all
applicants and minimal requirements with which grant recipients must
comply. However, the Secretary specifically invites comments on the
effects of the proposed regulations on small entities, and on whether
there may be further opportunities to reduce any potential adverse
impact or increase potential benefits resulting from these proposed
regulations without impeding the effective and efficient administration
of the State Charter School Facilities Incentive program.
Paperwork Reduction Act of 1995
Sections 226.12, 226.13, and 226.14 of these proposed regulations
contain information collection requirements. Under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department has submitted
a copy of these sections to OMB for its review.
Collection of Information: State Charter School Facilities
Incentive Grant program.
The Department will use the information collected through the
selection criteria and competitive preference priorities to determine
whether to fund applicants. Since the statute requires applicants to
apply for funds, the Department would not be able to award these funds
without the application to collect the required information.
We estimate the annual reporting and recordkeeping burden for this
collection of information to average 40 hours for each respondent for
10 applicants, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Thus, we
estimate the total annual reporting and recordkeeping burden for this
collection to be 400 hours.
If you want to comment on the information collection requirements,
please send your comments to the Office of Information and Regulatory
Affairs, OMB, room 10235, New Executive Office Building, Washington, DC
20503; Attention: Desk Officer for U.S. Department of Education. You
may also send a copy of these comments to the Department representative
named in the ADDRESSES section of this preamble.
We consider your comments on this proposed collection of
information in--
Deciding whether the proposed collection is necessary for
the proper performance of our functions, including whether the
information will have practical use;
Evaluating the accuracy of our estimate of the burden of
the proposed collection, including the validity of our methodology and
assumptions;
Enhancing the quality, usefulness, and clarity of the
information we collect; and
Minimizing the burden on those who must respond. This
includes exploring the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology (e.g., permitting electronic submission of
responses).
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, to ensure that OMB gives your comments full consideration,
it is important that OMB receives the comments within 30 days of
publication. This does not affect the deadline for your comments to us
on the proposed regulations.
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.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at the following site:
http://www.ed.gov/news/fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC, area at (202) 512-1530.
You may also view this document in PDF at the following site:
http://www.ed.gov/programs/charterfacilities/index.html.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html
.
(Catalog of Federal Domestic Assistance Number 84.354A State Charter
School Facilities Incentive program.)
[[Page 50260]]
The Secretary of Education has delegated authority to the Assistant
Deputy Secretary for Innovation and Improvement to issue these proposed
amendments to 34 CFR Chapter II.
List of Subjects in 34 CFR Part 226
Charter Schools, Education, Educational facilities, Elementary and
secondary education, Grant programs--education, Report and
recordkeeping requirements, Schools.
Dated: August 23, 2005.
Nina Shokraii Rees,
Assistant Deputy Secretary for Innovation and Improvement.
For the reasons discussed in the preamble, the Secretary proposes
to amend title 34 of the Code of Federal Regulations by adding a new
part 226 to read as follows:
PART 226--STATE CHARTER SCHOOL FACILITIES INCENTIVE PROGRAM
Subpart A--General
Sec.
226.1 What is the State Charter School Facilities Incentive program?
226.2 Who is eligible to receive a grant?
226.3 What regulations apply to the State Charter School Facilities
Incentive program?
226.4 What definitions apply to the State Charter School Facilities
Incentive program?
Subpart B--How Does the Secretary Award a Grant?
226.11 How does the Secretary evaluate an application?
226.12 What selection criteria does the Secretary use in evaluating
an application for a State Charter School Facilities Incentive
program grant?
226.13 What statutory funding priority does the Secretary use in
making a grant award?
226.14 What other funding priorities may the Secretary use in making
a grant award?
Subpart C--What Conditions Must Be Met by a Grantee?
226.21 How may charter schools use these funds?
226.22 May grantees use grant funds for administrative costs?
226.23 May charter schools use grant funds for administrative costs?
Authority: 20 U.S.C. 1221e-3; 7221d(b), unless otherwise noted.
Subpart A--General
Sec. 226.1 What is the State Charter School Facilities Incentive
program?
(a) The State Charter School Facilities Incentive program provides
grants to States to help charter schools pay for facilities.
(b) Grantees must use these grants to--
(1) Establish new per-pupil facilities aid programs for charter
schools;
(2) Enhance existing per-pupil facilities aid programs for charter
schools; or
(3) Administer programs described under paragraphs (b)(1) and (2)
of this section.
(Authority: 20 U.S.C. 7221d(b))
Sec. 226.2 Who is eligible to receive a grant?
States are eligible to receive grants under this program.
(Authority: 20 U.S.C. 7221(b))
Sec. 226.3 What regulations apply to the State Charter School
Facilities Incentive program?
The following regulations apply to the State Charter School
Facilities Incentive program:
(a) The Education Department General Administrative Regulations
(EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants and Agreements with
Institutions of Higher Education, Hospitals, and other Non-Profit
Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department
Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of
Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 81 (General Education Provisions Act--Enforcement).
(7) 34 CFR part 82 (New Restrictions on Lobbying).
(8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free
Workplace (Financial Assistance)).
(9) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement)).
(10) 34 CFR part 97 (Protection of Human Subjects).
(11) 34 CFR part 98 (Student Rights in Research, Experimental
Programs, and Testing).
(12) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 226.
(Authority: 20 U.S.C. 1221e-3; 7221d(b))
Sec. 226.4 What definitions apply to the State Charter School
Facilities Incentive program?
(a) Definitions in the statute. The following term used in this
part is defined in section 5210 of the Elementary and Secondary
Education Act of 1965, as amended (ESEA):
Charter school
(b) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR 77.1:
Applicant
Application
Award
Department
EDGAR
Facilities
Grant
Grantee
Project
Public
Secretary
(c) Other definition. The following definition also applies to this
part:
Construction means--
(1) Preparing drawings and specifications for school facilities
projects;
(2) Repairing, renovating, or altering school facilities;
(3) Extending school facilities as described in 34 CFR 222.172(b);
(4) Erecting or building school facilities; and
(5) Inspections or supervision related to school facilities.
(Authority: 20 U.S.C. 7221d(b); 7221i(1))
Subpart B--How Does the Secretary Award a Grant?
Sec. 226.11 How does the Secretary evaluate an application?
(a) The Secretary evaluates an application on the basis of the
criteria in Sec. 226.12 and the competitive preference priorities in
Sec. 226.13 and Sec. 226.14.
(b) The Secretary informs applicants of the maximum possible score
for each criterion and competitive preference priority in the
application package or in a notice published in the Federal Register.
(Authority: 20 U.S.C. 7221d(b))
Sec. 226.12 What selection criteria does the Secretary use in
evaluating an application for a State Charter School Facilities
Incentive program grant?
The selection criteria for this program are as follows:
(a) Need for facility funding. (1) The need for per-pupil charter
school facility funding in the State.
(2) The extent to which the proposal meets the need to fund charter
school facilities on a per-pupil basis.
(b) Quality of plan. (1) The likelihood that the proposed grant
project will result in the State either retaining a new per-pupil
facilities aid program or continuing to enhance such a program without
the total amount of assistance
[[Page 50261]]
(State and Federal) declining over a five-year period.
(2) The flexibility charter schools have in their use of facility
funds for the various authorized purposes.
(3) The quality of the plan for identifying charter schools and
determining their eligibility to receive funds.
(4) The per-pupil facilities aid formula's ability to target
resources to charter schools with the greatest need and the highest
proportions of students in poverty.
(5) For projects that plan to reserve funds for evaluation, the
quality of the applicant's plan to use grant funds for this purpose.
(6) For projects that plan to reserve funds for technical
assistance, dissemination, or personnel, the quality of the applicant's
plan to use grant funds for these purposes.
(c) The grant project team. (1) The qualifications, including
relevant training and experience, of the project manager and other
members of the grant project team, including employees not paid with
grant funds, consultants, and subcontractors.
(2) The adequacy and appropriateness of the applicant's staffing
plan for the grant project.
(d) The budget. (1) The extent to which the requested grant amount
and the project costs are reasonable in relation to the objectives,
design, and potential significance of the proposed grant project.
(2) The extent to which the costs are reasonable in relation to the
number of students served and to the anticipated results and benefits.
(3) The extent to which the non-Federal share exceeds the minimum
percentages (which are based on the percentages under section
5205(b)(2)(C) of the ESEA), particularly in the initial years of the
program.
(e) State experience. The experience of the State in addressing the
facility needs of charter schools through various means, including
providing per-pupil aid, access to State loan or bonding pools, and the
use of Qualified Zone Academy Bonds.
(Authority: 20 U.S.C. 7221d(b))
Sec. 226.13 What statutory funding priority does the Secretary use in
making a grant award?
The Secretary shall award additional points under a competitive
preference priority regarding:
(a) Periodic Review and Evaluation. The State provides for periodic
review and evaluation by the authorized public chartering agency of
each charter school at least once every five years unless required more
frequently by State law, to determine whether the charter school is
meeting the terms of the school's charter and is meeting or exceeding
the student academic performance requirements and goals for charter
schools as set forth under State law or the school's charter.
(b) Number of High-Quality Charter Schools. The State has
demonstrated progress in increasing the number of high-quality charter
schools that are held accountable in the terms of the schools' charters
for meeting clear and measurable objectives for the educational
progress of the students attending the schools, in the period prior to
the period for which the State applies for a grant under this
competition.
(c) One Authorized Public Chartering Agency Other than an LEA, or
an Appeals Process. The State--
(1) Provides for one authorized public chartering agency that is
not a local educational agency (LEA), such as a State chartering board,
for each individual or entity seeking to operate a charter school
pursuant to State law; or
(2) In the case of a State in which LEAs are the only authorized
public chartering agencies, allows for an appeals process for the
denial of an application for a charter school.
(d) High Degree of Autonomy. The State ensures that each charter
school has a high degree of autonomy over the charter school's budgets
and expenditures.
(Authority: 20 U.S.C. 7221b; 7221d(b))
Sec. 226.14 What other funding priorities may the Secretary use in
making a grant award?
(a) The Secretary may award points to an application under a
competitive preference priority regarding the capacity of charter
schools to offer public school choice in those communities with the
greatest need for this choice based on--
(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.
(b) The Secretary may award points to an application under a
competitive preference priority for applicants that have not previously
received a grant under the program.
(c) The Secretary may elect to consider the points awarded under
these priorities only for proposals that exhibit sufficient quality to
warrant funding under the selection criteria in Sec. 226.12 of this
part.
(Authority: 20 U.S.C. 7221d(b))
Subpart C--What Conditions Must Be Met by a Grantee?
Sec. 226.21 How may charter schools use these funds?
(a) Charter schools that receive grant funds through their State
must use the funds for facilities. Except as provided in paragraph (b)
of this section, allowable expenditures include:
(1) Rent.
(2) Purchase of building or land.
(3) Construction.
(4) Renovation of an existing school facility.
(5) Leasehold improvements.
(6) Debt service on a school facility.
(b) Charter schools may not use these grant funds for purchasing
land when they have no immediate plans to construct a building on that
land.
(Authority: 20 U.S.C. 7221d(b))
Sec. 226.22 May grantees use grant funds for administrative costs?
State grantees may use up to five percent of their grant award for
administrative expenses that include: indirect costs, evaluation,
technical assistance, dissemination, personnel costs, and any other
costs involved in administering the State's per-pupil facilities aid
program.
(Authority: 20 U.S.C. 7221d(b))
Sec. 226.23 May charter schools use grant funds for administrative
costs?
(a) Except as provided in paragraph (b) of this section, charter
school subgrantees may use grant funds for administrative costs that
are necessary and reasonable for the proper and efficient performance
and administration of this Federal grant. This use of funds, as well as
indirect costs and rates, must comply with EDGAR and the Office of
Management and Budget Circular A-87 (Cost Principles for State, Local,
and Indian Tribal Governments).
(b) Consistent with the requirements in 34 CFR 75.564(c)(2), any
charter school subgrantees that use grant funds for construction
activities may not be reimbursed for indirect costs for those
activities.
(Authority: 20 U.S.C. 1221e-3; 7221d(b))
[FR Doc. 05-17049 Filed 8-25-05; 8:45 am]
BILLING CODE 4000-01-P