July 1, 2004

Honorable Gail Gray

Director

Department of Public Health and Human Services

P.O. Box 4210

Helena, Montana 59604-4210

Dear Director Gray:

We have determined that your State's application for Federal Fiscal Year
(FFY) 2004 funds, under Part C of the Individuals with Disabilities
Education Act (Part C), can be approved. Therefore, I am enclosing your
State's Part C grant award.

The approval is based upon our receipt of required assurances for FFY
2004. This includes the assurance from the Department of Social and
Health Services that the Statewide system of early intervention services
required by Part C and its implementing regulations is in effect.

This year, a number of states have either established systems of
payments or are considering establishing or revising their systems of
payments. Under 34 CFR §303.173(a), each State's Part C application must
include the State's policies and procedures that identify: (1) how it
will pay for early intervention services (under 34 CFR §303.520(a)); (2)
any system of payments that the State chooses to establish (under 34 CFR
§303.521(a)); and (3) all funding sources (under 34 CFR §303.522).
Although a State is not required under Part C to access public and
private insurance available to a family, if a State requires parents
under Part C to access their public and/or private insurance, the State
must include this information in its Part C application as well as an
assurance, under 34 CFR §303.520(b)(3)(ii), that the inability of a
parent to pay will not result in the denial of any service under Part C.

States must ensure that all of the functions and early intervention
services under 34 CFR §303.521(b) are carried out at public expense
(i.e., no cost to the family). Additionally, under 34 CFR §303.521(c),
States that provide children with disabilities under age 3 with a free
appropriate public education (FAPE) under State law (i.e., birth-mandate
States) must ensure that no fees are charged for the FAPE services
provided to these children and their families. If a State has a system
of payments under 34 CFR §303.521(a), any parent fees collected (for
co-payments or other fees for services charged and received by the
State's Part C program) are "program income" under 34 CFR §80.25.
Program income is not included as part of total "State and local
expenditures" for purposes of a State's meeting the non-supplanting
requirements under Part C at 20 U.S.C. §1437(b)(5)(B) and 34 CFR
§303.124.

Section I.C. of the FFY 2004 application for Part C funds requested
updated information about each State's restricted indirect cost rate.
Our records indicate that you have a cost allocation plan that has been
approved by your cognizant agency and is effective for this Federal
Fiscal Year. Part III of your State's Part C Application indicates that
your agency will continue to apply the currently approved cost
allocation plan throughout the FFY 2004 grant year until a new
restricted indirect cost rate or cost allocation plan is negotiated and
approved by the State's cognizant Federal agency. Please forward to us
any revisions to your restricted indirect cost rate or cost allocation
plan once it is approved by your cognizant agency.

The enclosed grant award for FFY 2004 is made with the continued
understanding that this Office may, from time to time, require
clarification of information within your application and appendices, if
necessary. These inquiries are needed to allow us to appropriately carry
out our administrative responsibilities related to Part C.

Section 604 of the IDEA provides that "\[a\] State shall not be immune
under the eleventh amendment to the Constitution of the United States
from suit in Federal court for a violation of this Act." Therefore, by
accepting this grant a State is expressly agreeing to a waiver of
Eleventh Amendment immunity as a condition of IDEA funding.

We appreciate your ongoing commitment to the provision of quality early
intervention services to infants and toddlers with disabilities and
their families.

> Sincerely,

/s/Patricia J. Guard for

> Stephanie Smith Lee
>
> Director
>
> Office of Special Education Programs

Enclosure

cc: Judy LeRoux

Part C Coordinator