Thursday 

January 25, 2007 

Part III 

Department of 

Education 

34 CFR Part 76 

State-Administered Programs; Final Rule 


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3698 Federal Register / Vol. 72, No. 16 / Thursday January 25, 2007 / Rules and Regulations 

DEPARTMENT OF EDUCATION 

34 CFR Part 76 

RIN 1890–AA13 

State-Administered Programs 

AGENCY: Department of Education. 

ACTION: Final regulations. 

SUMMARY: The Secretary amends the 

regulations in 34 CFR part 76 governing 

State reporting requirements. These 

final regulations require States to submit 

their performance reports, financial 

reports, and any other required reports, 

in the manner prescribed by the 

Secretary, including through electronic 

submission, if the Secretary has 

obtained approval from the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act of 1995 

(PRA). Failure to submit such reports in 

the manner prescribed by the Secretary 

constitutes a failure, under section 454 

of the General Education Provisions Act, 

20 U.S.C. 1234c, to comply substantially 

with a requirement of law applicable to 

the funds made available under the 

program for which the reports are 

submitted. If the Secretary chooses to 

require submission of information 

electronically, the Secretary may 

establish a transition period during 

which a State would not be required to 

submit such information electronically 

in the format prescribed by the 

Secretary, if the State meets certain 

requirements. 

DATES: These regulations are effective 

February 26, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Patrick Sherrill, U.S. Department of 

Education, 400 Maryland Avenue, SW., 

room 6C103, Washington, DC 20202. 

Telephone: (202) 708–8196 or via 

Internet: pat.sherrill@ed.gov. 

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: On April 

27, 2006, the Secretary published a 

notice of proposed rulemaking (NPRM) 

in the Federal Register (71 FR 24824). 

In the preamble to the NPRM, the 

Secretary discussed on pages 24826 to 

24828 the major changes proposed to 

the current regulations. These changes 

are summarized as follows: 

• Under proposed § 76.720(c)(1), 

States would have to comply with the 

Secretary’s requirements concerning the 

manner in which reports are submitted 

to the Department. 

• Under proposed § 76.720(c)(2), 

failure by a State to submit reports in 

the manner prescribed by the Secretary 

would constitute a failure, under section 

454 of the General Education Provisions 

Act (20 U.S.C. 1234c), to comply 

substantially with a requirement of law 

applicable to the Department’s 

programs. 

• Under proposed § 76.720(c)(3), 

which applies to reports that the 

Secretary requires to be submitted 

electronically, the Secretary would have 

the discretion to establish a transition 

period of up to two years during which 

a State would not be required to submit 

information electronically in the format 

prescribed by the Secretary if the State 

submits to the Secretary (a) evidence 

satisfactory to the Secretary that the 

State is unable to comply, (b) the 

information requested in the report, 

through an alternative means deemed 

acceptable by the Secretary, and (c) a 

plan showing how the State would 

come into compliance with the data 

submission requirements specified in 

the data collection instrument. 

There are no differences between the 

NPRM and these final regulations. 

These regulations highlight that the 

Department may require, through the 

PRA clearance process, that States 

report certain information electronically 

and establish that the Department may 

take administrative action against a 

State for failure to submit reports in the 

manner prescribed by the Secretary. 

These regulations will facilitate the use 

of the Department’s electronic EDFacts 

data management system (EDFacts). 

As explained in the NPRM, States 

have been submitting data through the 

Education Data Exchange Network 

(EDEN) voluntarily for the past two 

years. EDEN has acted as the 

Department’s central repository and 

electronic data collection system for 

over 140 common data elements on 

student achievement, school 

characteristics, demographics, and 

program financial information. The 

Department is now in the process of 

increasing the EDEN capabilities to 

include, in addition to the Web-based 

interface that allows States to submit 

data electronically into EDEN, a 

capability for States, Department staff, 

and, eventually, the public, to query the 

database and independently analyze the 

data subject to all applicable privacy 

protections for disclosing statistical 

data. To signal the increased capabilities 

of the system, the Department is 

renaming EDEN and the expanded Webbased interface ‘‘EDFacts.’’ Accordingly, 

except as otherwise noted, we will 

describe the expanded system using the 

name ‘‘EDFacts’’ in this final 

rulemaking document. 

The Department has now obtained 

approval from OMB to require the 

electronic submission of data through 

EDFacts. The Department published 

both PRA notices for this data collection 

under the title ‘‘Annual Mandatory 

Collection of Elementary and Secondary 

Education Data for the Education Data 

Exchange Network.’’ Because we have 

changed the name of the Education Data 

Exchange Network to EDFacts, the title 

of the justification for OMB Control No. 

1875–0240 has been changed to 

‘‘Annual Mandatory Collection of 

Elementary and Secondary Education 

Data through EDFacts.’’ We also note 

that some of the language in the 

Supporting Statement for this collection 

has been changed from that which was 

originally posted in the Education 

Department Information Collection 

System (EDICS). The Department’s goal 

in requiring electronic submission of 

information, including data submitted 

through EDFacts, is to reduce Statereporting burden significantly and to 

streamline dozens of data collections 

currently required by the Department. 

Analysis of Comments 

In response to the Secretary’s 

invitation in the NPRM, approximately 

21 parties submitted comments on the 

proposed regulations and the 

Department’s plan to require States to 

submit data electronically through 

EDFacts beginning with data from the 

2006–07 school year. To the extent these 

comments related to specific elements 

of the EDFacts data collection request 

(1875–0240) we have addressed those 

comments as part of the PRA clearance 

process for EDFacts, and have not 

included responses to those comments 

in this document. For an analysis of 

those comments, you may download 

Attachment E ‘‘Paperwork Reduction 

Act Submission Supporting Statement— 

Annual Mandatory Collection of 

Elementary and Secondary Education 

Data through EDFacts: EDFacts 

Response to Public Comments’’ at the 

following Web site: http:// 

edicsweb.ed.gov/browse/ 

downldatt.cfm?pkg_serial_num=3017. 

An analysis of the comments relating 

to the proposed regulations follows. 

We group major issues according to 

subject. Generally, we do not address 

technical or minor changes, and 

suggested changes that we are not 

authorized to make under the law. 


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Federal Register / Vol. 72, No. 16 / Thursday January 25, 2007 / Rules and Regulations 3699 

Section 76.720 State Reporting 

Requirements Nature and Schedule of 

Reports Covered by § 76.720 

Comment: A few commenters asked 

about the reports covered by these 

regulations. Specifically, they asked 

what was meant by the phrase ‘‘other 

reports by the Secretary’’ in paragraph 

(a) of proposed § 76.720. One of the 

commenters asked the Department to 

provide a list of these proposed reports 

for review. A couple of commenters 

were concerned about which reports 

might be required ‘‘more frequently than 

annually’’. One commenter asked the 

Department to provide a ‘‘reporting 

schedule’’ for review. 

Discussion: We included the phrase 

‘‘other reports by the Secretary’’ in 

§ 76.720(a) to establish that the 

requirements described in § 76.720 

apply to all State reports that are now, 

and may in the future be, required by 

the Secretary and have been approved 

by OMB under the PRA, not just those 

reports that are specifically enumerated 

in the current regulations. The ability of 

the Secretary to require reporting more 

frequently than annually is not a 

proposed change; it can be found in 

current § 76.720(c). See also 34 CFR 

80.41(b)(3)(frequency of financial 

reporting). The schedule for submitting 

data to EDFacts is included in the 

clearance package for that data 

collection (1875–0240), includes 

proposed annual data submission dates 

for each of the data groups, and has 

been provided to the State data 

coordinators. 

Changes: None. 

Comment: A number of commenters 

requested clarification on what 

constitutes the ‘‘quality level’’ expected 

in the submission of data under 

proposed § 76.720(c)(1). 

Discussion: Section 76.720(c)(1) 

provides that States must submit reports 

at the quality level specified in the data 

collection instrument. Accordingly, the 

Department will specify in each data 

collection instrument the data quality 

standards that are applicable to the 

reports subject to the data collection 

instrument. Under the Department’s 

Information Quality Guidelines, the 

Department seeks to ensure that data it 

disseminates to the public are accurate, 

reliable, and useful. Thus, it is 

important for data submitted to the 

Department to be complete, timely, 

accurate, valid, and useful. 

For example, for data that would be 

submitted through EDFacts, the 

Department expects to establish data 

quality standards in collaboration with 

its State partners, so that the data will 

be helpful to the Department, its State 

partners, and the public. The 

Department will continue to work with 

States to provide them with detailed 

feedback that they can use to analyze 

the quality of the data they submit to the 

Department, and to establish mutually 

agreeable criteria that the Department 

can use to certify the data submitted 

through EDFacts. 

Changes: None. 

Potential Penalties Under § 76.720(c)(2) 

Comment: One commenter 

recommended that the Secretary not 

impose penalties under § 76.720(c)(2) 

for failure to comply with the reporting 

requirements of the proposed 

regulations; others supported the ability 

of the Secretary to impose penalties 

after a reasonable transition period. 

Another commenter recommended that 

enforcement under § 76.720(c)(2) 

depend on whether a State is making 

reasonable, good-faith efforts to comply 

with the requirements. Several other 

commenters asked for clarity on how 

the penalties would be determined, 

specifically asking about when a State 

would be considered out of compliance, 

how penalties would be calculated, and 

whether funds would be withheld from 

administrative or program allocations, 

or both. Finally, a commenter asked if 

States would be penalized under 

§ 76.720(c)(2) for failure of local 

educational agencies (LEAs) to report 

directly to the Office for Civil Rights 

(OCR) in the Department. 

Discussion: As explained in the 

preamble to the NPRM, failure of a 

recipient to comply with the 

Department’s reporting requirements, 

including submitting reports 

electronically, harms the Federal 

interest in establishing what the 

Department deems is an efficient and 

effective means of obtaining accurate, 

reliable, and valid information on the 

performance of the Department’s 

programs and the success of States in 

meeting their goals under such laws as 

the No Child Left Behind Act of 2001 

(Pub. L. 107–110). Thus, we determined 

that it was necessary to highlight, 

through these regulations, the 

importance of the Department’s 

reporting requirements. Moreover, we 

determined that, for the Department’s 

reporting requirements to be 

meaningful, it was essential for the 

Secretary to have the appropriate tools 

to enforce them. That being said, the 

Department will consider many factors 

in determining whether to impose 

appropriate sanctions, including 

whether a State is making reasonable, 

good-faith efforts to comply with the 

reporting requirements and, in the case 

of mandatory electronic reporting, 

whether a State has submitted a 

transition plan and whether that plan is 

sufficiently detailed to explain how the 

State would provide the requested data 

within the transition period. 

To be clear, the Department is not 

interested in penalizing States for 

minor, technical infractions but is 

instead focused on collaborating with 

States to strengthen the States’ own data 

systems and the use of data collected 

through those systems to improve 

education within their States. Part of the 

ability to use data effectively depends 

on the completeness of those data. 

Accordingly, the Department will work 

with States to establish reasonable 

criteria for what a complete submission 

entails. 

In addition, the Department plans to 

continue to work closely with States as 

partners in the identification, collection, 

and reporting of complete, accurate, 

timely, and valid education information, 

to minimize the need for the 

Department to take administrative 

action to compel compliance with these 

regulations. 

For example, with respect to EDFacts 

data, the Department currently requests 

each State to submit an individual State 

data submission plan to address the 

unique data submission challenges of 

each State data provider. Working 

together with States, the Department has 

provided tools to help States assess their 

specific challenges and to develop 

individualized State data submission 

plans and reporting schedules for 

EDFacts data. The Department also will 

adopt the suggestion of one commenter 

that the Department conduct site visits 

with individual States to determine 

their capacity to collect and report data, 

and to develop phase-in plans and 

agreements for each. In all cases, the 

Department is committed to providing 

the support that is needed to help 

individual States that are making 

reasonable, concerted, good-faith efforts 

to comply with the EDFacts data 

submission requirements. 

Furthermore, the Department 

anticipates that States will vary in their 

capacity to report data electronically in 

accordance with § 76.720. For that 

reason, under § 76.720(c)(3), States may 

report data through an alternative means 

for up to two years following the date 

the States otherwise would be required 

to submit the data electronically if they 

meet the requirements in paragraphs 

(c)(3)(i) through (c)(3)(iii) of § 76.720. 

These requirements include developing 

a plan for coming into compliance with 

the reporting requirements within two 

years. The Department will work 

directly with individual States to 

develop and implement those plans, 


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3700 Federal Register / Vol. 72, No. 16 / Thursday January 25, 2007 / Rules and Regulations 

and we anticipate they will be 

customized to address individual State 

capacities. The Department is also open 

to the possibility that some of these 

required data might be submitted by a 

State to a multi-State data repository, or 

‘‘public utility,’’ maintained by, and for, 

the States, provided that the data 

repository enters into agreements with 

the participating States and the 

Department to ensure that data from the 

repository are provided to EDFacts. 

Should the Department determine 

that administrative action is necessary, 

the Department would determine on a 

case-by-case basis whether and how 

sanctions would be imposed by 

considering factors such as the existence 

of an approved State data submission 

plan, the history of the State’s efforts to 

provide required data to the 

Department, and evidence of a State’s 

progress in improving its education data 

systems. For example, the Department 

may decide to commence action to 

withhold administrative funds from a 

State if the Department determines that 

the State was not making reasonable and 

good-faith efforts to implement a 

transition plan under § 76.720(c)(3)(iii) 

to submit reports electronically. 

Finally, under 34 CFR 76.500, States 

and their subgrantees are responsible for 

compliance with the civil rights statutes 

and regulations enforced by OCR, 

including the obligation to provide civil 

rights data when requested by OCR. As 

part of its data collection activities, OCR 

has been collecting data both from 

States, and directly from LEAs. The 

Department cannot specially alter or 

suspend the civil rights responsibilities 

of States or LEAs during the migration 

of the Civil Rights Data Collection 

(CRDC) into EDFacts. During the 

migration process, when data are 

requested from an LEA, the primary 

focus of OCR’s efforts will continue to 

be on the LEA’s obligation to submit the 

required data. Virtually all of the LEAs 

participating in the 2006 CRDC have 

notified the Department that they are 

planning to provide their data 

submissions electronically. However, 

LEAs submitting CRDC data to the 

Department will continue to have the 

option of electing other formats, 

including paper forms. 

Changes: None. 

Transition Period for Mandatory 

Electronic Submission Requirements 

Under § 76.720(c)(3) 

Comment: Six commenters expressed 

support for the two-year transition 

period described in § 76.720(c)(3). One 

commenter noted that a longer 

transition period would only serve to 

delay the presence of a fully populated 

data repository and would, therefore, 

result in the continued practice of 

duplicative data collections. Many other 

commenters questioned whether the 

two-year transition period was a 

sufficient amount of time for States to 

establish the data systems needed to 

supply the reliable and quality data that 

are being requested for the EDFacts data 

collection. Commenters suggested 

alternatives, ranging from two to five 

years, because of issues such as the need 

to obtain legislative approval within 

their States. 

Discussion: The Department 

appreciates that many States will find it 

challenging to make the needed changes 

to their data systems to be able to report 

their data to the Department 

electronically for any collection of data. 

The Department recognizes that any 

automated information system will 

require some significant work to modify 

it for the collection, storage, protection, 

and reporting of any data that were 

previously uncollected. For this reason, 

the Department has determined that it is 

appropriate for the Secretary to have the 

discretion to establish a transition 

period of up to two years during which 

a State would not be required to submit 

information electronically in the format 

prescribed by the Secretary, if the State 

meets certain requirements. Because the 

need for good data is so important, the 

Department believes that the two-year 

transition period is reasonable. 

The two-year transition period applies 

to the EDFacts data collection. Thus, if 

a State is not able to submit all of the 

required data electronically to EDFacts 

by the specified reporting deadline, the 

State must submit to the Secretary, in 

accordance with § 76.720(c)(3), evidence 

that the State cannot comply with the 

electronic submission reporting 

requirement, the information requested 

in the report through an alternative 

means acceptable to the Secretary, and 

a plan for submitting the reports in the 

required electronic manner no later than 

two years after the reporting deadline. 

We recognize that States may need 

guidance in developing their plans 

under § 76.520(c)(3)(iii) with respect to 

the EDFACTS data collection. To 

address that need, we included in our 

EDFACTS data collection submission to 

OMB proposed guidance to States on 

when the Department would expect 

States to be able to submit certain data 

elements electronically to EDFACTS. 

The guidance, for example, identifies 

those EDFACTS data groups that the 

Department believes all States should 

have the capability to submit 

electronically to EDFACTS for the 2006–

2007 school year. If a State cannot 

submit all of those data groups 

electronically for the 2006–2007 award 

year, the State would provide the 

Secretary with evidence about which 

data groups it could not submit 

electronically for the 2006–2007 award 

year and propose a transition plan. 

Under the transition plan, the State 

would submit those data groups that 

could be provided electronically to 

EDFACTS for the 2006–2007 school year 

and would provide all other required 

data elements to the Department 

through an alternative means in 

accordance with § 76.720(c)(3)(ii). The 

State would include in its transition 

plan information on when, within the 

two year transition period, it would 

submit the other data elements 

electronically through EDFACTS. We 

are providing as guidance information 

about when the Department would 

expect States to be able to provide data 

electronically through EDFACTS; States 

may need to structure their transition 

plans differently depending on their 

capacities. In all cases, however, we will 

work cooperatively with States to 

provide them support in their efforts to 

comply with the EDFACTS data 

collection requests. 

Changes: None. 

Comment: Most commenters cited 

scarce State resources as the reason the 

two-year transition period in § 76.720 

was inadequate. Several commenters 

stated that to comply with the proposed 

regulations they would need to 

restructure their current data systems 

and, thus, would require more financial 

and human resources. One commenter 

estimated that it would need 4 years and 

$840,000 to comply with the reporting 

requirements in the EDFACTS data 

collection. Many commenters stated that 

States would need more staff to prepare 

and report data to EDFACTS. Several 

commenters suggested that the Federal 

Government provide the funding for 

additional staff to lead the data 

collection and reporting effort, 

explaining that the work needed at least 

one full-time-equivalent position similar 

to the position funded by the National 

Center for Education Statistics to 

manage data for the National 

Assessment of Educational Progress. 

One commenter suggested that the 

responsibilities of such a position 

include submitting and maintaining the 

data submission plan, managing and 

submitting files, reviewing and 

commenting on future changes, and 

using EDFACTS for reporting to 

management. 

Discussion: Over the last two fiscal 

years, the Congress has appropriated 

nearly $50 million to assist States in 

developing State Longitudinal Data 

Systems. The Department is continuing 


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to explore ways to increase funding, and 

expand State access to these funds. 

Changes: None. 

Comment: One State recommended 

that the two-year transition period be 

understood as a minimum period of 

time during which States can obtain the 

first data set on any new variable. 

Another State noted that forcing States 

to report data before they have a 

complete data set could result in 

inaccurate data being reported. 

Discussion: These regulations address 

only the submission of data in the form 

and format required by the Secretary 

and not the process by which States 

obtain or collect data to be reported to 

the Department. Whether specific data 

are available and the cost of acquiring 

or collecting those data are matters that 

are best addressed in the PRA public 

comment and clearance process for each 

information collection package. That 

being noted, the Department’s goal 

continues to be to obtain accurate, 

reliable, and useful data from States, in 

order to monitor and evaluate the States’

performance and use of Department 

funds. 

Changes: None. 

General Comments 

Comment: Several commenters 

expressed concern that they do not 

currently collect some of the data 

requested through EDFACTS and that, 

therefore, it would be unfair to penalize 

them for not having the data or to 

require them to establish new data 

collection efforts. 

Discussion: As part of the public 

comment period required under the 

PRA, States have been given the 

opportunity to identify any problems 

they expect to have in supplying the 

data required under the EDFACTS data 

collection (1875–0240). The Department 

has invited comment multiple times on 

exactly which data elements are not 

available from the States. The 

Department has also invited States to 

provide this information as part of one 

of the two public comment periods 

under the PRA for the most recent 

request for collection of EDFACTS data, 

or as part of the ongoing work with the 

States to implement EDFACTS. As 

noted elsewhere in this section, every 

effort will be made in the EDFACTS 

collection to require only those data that 

are needed by the Department in order 

to monitor and evaluate a State’s 

performance in using funds awarded by 

the Department. 

Changes: None. 

Comment: A number of commenters 

expressed concern that the 

consolidated, mandatory collection of 

data through EDFACTS would not 

eliminate the numerous, redundant 

program collections currently required 

of States. One commenter suggested that 

the Department ought to provide a 

timeframe in which each data collection 

is to be eliminated. Several others 

suggested that, once data are available to 

the Department through EDFACTS, the 

Department take swift action to require 

program offices to cease collecting 

similar data though other means and set 

a clear schedule with specific dates for 

when each data collection is to be 

eliminated. If not, one commenter 

warned, participation in EDFACTS 

might not be worth the effort for States. 

Several commenters noted that there is 

no language in the regulations to make 

the use of EDFACTS mandatory for 

program offices within the Department, 

and that they are concerned that if this 

is not explicit within the regulations, 

program offices may continue to require 

their own reports. 

Discussion: The Department’s goal is 

to eliminate duplicative reporting and, 

accordingly, the Department is working 

to ensure that as many of its program 

offices as possible use EDFacts. In the 

future, if a program office sends forward 

a proposal to request data through a 

program-specific data collection, and 

those data are already being collected 

through EDFacts, the Secretary will, 

through the internal and PRA clearance 

processes, deny approval for such 

duplicate collections. However, if any 

duplicative data elements should slip 

through the clearance processes, States 

can alert the Secretary through the 

public comment period under the PRA, 

ensuring that redundant data collections 

are eliminated. 

Changes: None. 

Comment: There were several 

requests by commenters for the 

Department to explain the rationale for 

certain data elements and for a clear 

indication of what data elements are 

going to be eliminated now and in the 

future. Some States said that they do not 

collect or use some of the proposed data 

elements and that reporting those data 

will create extra burden. Some 

commenters said that States want a 

comprehensive data map or crosswalk 

for each and every data element that 

corresponds to the Federal law that 

authorizes its collection, the current 

Department collection forms that collect 

it, and the actual Federal use of the data, 

so that they can see that coordination 

exists between the efforts to collect data 

through EDFacts and the efforts of the 

Department’s program staff to collect 

data outside the EDFacts context. One 

commenter noted that program staff and 

EDFacts staff frequently send mixed 

messages about which data are required 

to be submitted. 

Discussion: The Department will 

continue to use the clearance process 

under the PRA to analyze the national 

costs and benefits of each data element 

it requires. Proposed data collections 

will face a rigorous internal clearance 

process at the Department before being 

added to an EDFacts collection—and 

then phased in, if necessary. The 

Department asks States to inform it of 

any and every Department program 

office message that may seem to be ‘‘at 

odds’’ with what has been written here, 

so that it can improve its 

communication with the public about 

data collection. To help prevent these 

mixed messages, the Department has 

convened a cross-program committee 

composed of many senior Department 

program managers to discuss shared 

data definitions and data usage and to 

ensure internal agency collaboration. 

Changes: None. 

Comment: One commenter asked if it 

could submit school and district data, 

and have the Department aggregate 

those data to the State level, rather than 

submitting all three levels of data. 

Discussion: EDFacts has the technical 

capacity to aggregate school data to the 

district level and district data to the 

State level. The Department has not 

done this yet because it is concerned 

that some data might be missed in the 

aggregation process. The Department 

will work with any State that agrees to 

certify that the school-level data that it 

submits through EDFacts is complete in 

all cells and that the aggregations of 

those cells produce complete data at the 

district and State levels. The 

Department is willing to make available 

the State data aggregation option and 

allow States to submit only school-level 

data. 

Changes: None. 

Section 76.722 Subgrantee Reporting 

Requirements 

Comment: None. 

Discussion: Current § 76.722 provides 

that ‘‘[a] State may require a subgrantee 

to furnish reports that the State needs to 

carry out its responsibilities under the 

program.’’ In the NPRM, we proposed to 

amend § 76.722 slightly in order to 

make that provision consistent with the 

language in proposed § 76.720, which 

requires States to submit reports ‘‘in a 

manner prescribed by the Secretary.’’

Thus, proposed § 76.722 provides that 

‘‘[a] State may require a subgrantee to 

submit reports in a manner and format 

that assists the State * * *.’’ Upon 

intradepartmental review of the 

language in proposed § 76.722, we 

thought it prudent to clarify that we do 


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3702 Federal Register / Vol. 72, No. 16 / Thursday January 25, 2007 / Rules and Regulations 

not intend for this language to grant to 

States any authority that they do not 

already have to collect information from 

LEAs to help States carry out their 

responsibilities under the Department’s 

programs. That is, a State may only 

require its LEAs to submit reports in a 

particular manner or format if that State 

has the requisite authority to do so 

under its State laws and regulations. In 

implementing proposed § 76.722, the 

Department expects that each State will 

take into account the capacity of their 

LEAs to submit reports in the manner 

and format determined appropriate by 

the State. 

Changes: None. 

Executive Order 12866 

We have reviewed these final 

regulations in accordance with 

Executive Order 12866. Under the terms 

of the order, the Secretary must 

determine whether this regulatory 

action is ‘‘significant’’ and therefore 

subject to the requirements of the 

Executive Order and subject to review 

by 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 set forth in the Executive 

order. The Department has assessed the 

potential costs and benefits of this 

regulatory action. 

The potential costs associated with 

the final regulations are those we have 

determined to be necessary for 

administering the requirements of the 

Department’s State-administered 

programs effectively and efficiently. 

In assessing the potential costs and 

benefits—both quantitative and 

qualitative—of these final regulations, 

we have determined that the benefits of 

the regulations justify the costs. 

We have also determined that this 

regulatory action does not unduly 

interfere with State, local, and tribal 

governments in the exercise of their 

governmental functions. 

Summary of Potential Costs and 

Benefits 

We summarized the potential costs 

and benefits of these final regulations in 

the preamble to the NPRM (71 FR 

24828). We include additional 

discussion of potential costs and 

benefits in the section of this preamble 

titled Analysis of Comments. 

Paperwork Reduction Act of 1995 

The paperwork burden in 

§ 76.720(c)(3)(iii) is approved under the 

PRA as part of the burden in the Annual 

Mandatory Collection of Elementary and 

Secondary Education Data for EDFacts 

(1875–0240). 

Intergovernmental Review 

These regulations affect Stateadministered programs of the 

Department that are subject to Executive 

Order 12372 and the regulations in 34 

CFR part 79. The objective of the 

Executive order is to foster an 

intergovernmental partnership and to 

strengthen federalism by relying on 

processes developed by State and local 

governments for coordination and 

review of proposed Federal financial 

assistance. 

In accordance with the order, we 

intend this document to provide early 

notification of the Department’s specific 

plans and actions for these programs. 

Assessment of Educational Impact 

In the NPRM we requested comments 

on whether the proposed regulations 

would require transmission of 

information that any other agency or 

authority of the United States gathers or 

makes available. 

Based on the response to the NPRM 

and on our review, we have determined 

that these final regulations do not 

require transmission of information that 

any other agency or authority of the 

United States gathers or makes 

available. 

Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (2 U.S.C. 1531–

1538) establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments, and on the 

private sector. These final regulations 

do not impose any Federal mandates on 

any State, local, or tribal governments, 

or the private sector, within the 

meaning of the Unfunded Mandates 

Reform Act of 1995. 

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. 

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 does not apply.) 

List of Subjects in 34 CFR Part 76 

Elementary and secondary education, 

Reporting and recordkeeping 

requirements. 

Dated: January 22, 2007. 

Margaret Spellings, 

Secretary of Education. 

■ For the reasons discussed in the 

preamble, the Secretary amends part 76 

of title 34 of the Code of Federal 

Regulations as follows: 

PART 76—STATE-ADMINISTERED 

PROGRAMS 

■ 1. The authority citation for part 76 is 

revised to read as follows: 

Authority: 20 U.S.C. 1221e–3 and 3474, 

unless otherwise noted. 

■ 2. Section 76.720 is revised to read as 

follows: 

§ 76.720 State reporting requirements. 

(a) This section applies to a State’s 

reports required under 34 CFR 80.40 

(Monitoring and reporting of program 

performance) and 34 CFR 80.41 

(Financial reporting), and other reports 

required by the Secretary and approved 

by the Office of Management and 

Budget (OMB) under the Paperwork 

Reduction Act of 1995, 44 U.S.C. 3501–

3520. 

(b) A State must submit these reports 

annually unless—

(1) The Secretary allows less frequent 

reporting; or 

(2) The Secretary requires a State to 

report more frequently than annually, 

including reporting under 34 CFR 80.12 

(Special grant or subgrant conditions for 

‘‘high-risk’’ grantees) or 34 CFR 80.20 

(Standards for financial management 

systems). 

(c)(1) A State must submit these 

reports in the manner prescribed by the 


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Federal Register / Vol. 72, No. 16 / Thursday January 25, 2007 / Rules and Regulations 3703 

Secretary, including submitting any of 

these reports electronically and at the 

quality level specified in the data 

collection instrument. 

(2) Failure by a State to submit reports 

in accordance with paragraph (c)(1) of 

this section constitutes a failure, under 

section 454 of the General Education 

Provisions Act, 20 U.S.C. 1234c, to 

comply substantially with a requirement 

of law applicable to the funds made 

available under that program. 

(3) For reports that the Secretary 

requires to be submitted in an electronic 

manner, the Secretary may establish a 

transition period of up to two years 

following the date the State otherwise 

would be required to report the data in 

the electronic manner, during which 

time a State will not be required to 

comply with that specific electronic 

submission requirement, if the State 

submits to the Secretary—

(i) Evidence satisfactory to the 

Secretary that the State will not be able 

to comply with the electronic 

submission requirement specified by the 

Secretary in the data collection 

instrument on the first date the State 

otherwise would be required to report 

the data electronically; 

(ii) Information requested in the 

report through an alternative means that 

is acceptable to the Secretary, such as 

through an alternative electronic means; 

and 

(iii) A plan for submitting the reports 

in the required electronic manner and at 

the level of quality specified in the data 

collection instrument no later than the 

date two years after the first date the 

State otherwise would be required to 

report the data in the electronic manner 

prescribed by the Secretary. 

(Authority: 20 U.S.C. 1221e–3, 1231a, and 

3474) 

■ 3. Section 76.722 is revised to read as 

follows: 

§ 76.722 Subgrantee reporting 

requirements. 

A State may require a subgrantee to 

submit reports in a manner and format 

that assists the State in complying with 

the requirements under 34 CFR 76.720 

and in carrying out other 

responsibilities under the program. 

(Authority: 20 U.S.C. 1221e–3, 1231a, and 

3474) 

[FR Doc. E7–1177 Filed 1–24–07; 8:45 am] 

BILLING CODE 4000–01–P 


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