31306 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Rules and Regulations 

DEPARTMENT OF EDUCATION 

34 CFR Part 300 

RIN 1820–AB77 

[Docket ID ED–2017–OSERS–0128] 

Assistance to States for the Education 

of Children With Disabilities; 

Preschool Grants for Children With 

Disabilities 

AGENCY: Office of Special Education and 

Rehabilitative Services, Department of 

Education. 

ACTION: Final rule; delay of compliance 

date. 

SUMMARY: The Department postpones by 

two years the date for States to comply 

with the ‘‘Equity in IDEA’’ or 

‘‘significant disproportionality’’ 

regulations, from July 1, 2018, to July 1, 

2020. The Department also postpones 

the date for including children ages 

three through five in the analysis of 

significant disproportionality, with 

respect to the identification of children 

as children with disabilities and as 

children with a particular impairment, 

from July 1, 2020, to July 1, 2022. 

DATES: As of June 29, 2018, the date of 

compliance for recipients of Federal 

financial assistance to which the 

regulations published at 81 FR 92376 

(December 19, 2016) apply is delayed. 

Recipients of Federal financial 

assistance to which the regulations 

published at 81 FR 92376 apply must 

now comply with those regulations by 

July 1, 2020, except that States are not 

required to include children ages three 

through five in the calculations under 

§ 300.647(b)(3)(i) and (ii) until July 1, 

2022. 

FOR FURTHER INFORMATION CONTACT: 

Mary Louise Dirrigl, U.S. Department of 

Education, 400 Maryland Avenue SW, 

Room 5156, Potomac Center Plaza, 

Washington, DC 20202–2600. 

Telephone: (202) 245–7324. 

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: On 

February 27, 2018, the Secretary 

published a notice of proposed 

rulemaking (NPRM) in the Federal 

Register (83 FR 8396) proposing to 

postpone by two years the date for 

States to comply with the ‘‘Equity in 

IDEA’’ or ‘‘significant 

disproportionality’’ regulations, 81 FR 

92376 (December 19, 2016) (2016 

significant disproportionality 

regulations), from July 1, 2018, to July 

1, 2020. The NPRM also proposed to 

postpone the date for including children 

ages three through five in the analysis 

of significant disproportionality, with 

respect to the identification of children 

as children with disabilities and as 

children with a particular impairment, 

from July 1, 2020, to July 1, 2022. 

There are no differences between the 

NPRM and these final regulations. 

Public Comment: In response to our 

invitation in the NPRM, 390 parties 

submitted comments on the proposed 

regulations. 

Analysis of Comments and Changes: 

An analysis of the comments follows. 

Current State Practice and Impacts on 

Children With Disabilities 

Comments: Many commenters 

opposed postponing the compliance 

date for the 2016 significant 

disproportionality regulations, stating in 

various ways that the status quo is 

unacceptable. A few of these 

commenters argued that States failed to 

identify significant disproportionality in 

the identification, placement, and 

discipline of children with disabilities, 

despite the fact that, in the commenters’ 

view, they should. The commenters 

argue that, in their view, States’ failure 

to identify or remedy significant 

disproportionality under IDEA has been 

a known civil rights problem for many 

years, that this failure has received 

sufficient study, and that the 

Department should not delay any 

further in addressing the issue. 

Other commenters elaborated. Some 

stated that improperly identifying, 

placing, or disciplining children causes 

them harm by segregating them and 

depriving them of the services they need 

to receive a free appropriate public 

education (FAPE) in the least restrictive 

environment. Some stated that 

significant disproportionality arises 

from discrimination or, according to one 

commenter, improper or ineffective 

State policies. Other commenters stated 

that improper discipline can place 

children in the ‘‘school-to-prison 

pipeline.’’ Some of these commenters 

argued that the status quo had high, 

long-term social and economic costs to 

children with disabilities and to society. 

These commenters opposed postponing 

the compliance date so that the harm to 

children with disabilities may be 

addressed as quickly as possible. 

Still others elaborated further, some 

sharing personal experiences and 

observations of the improper 

identification, placement, or discipline 

of children of color with disabilities and 

others providing lengthy, detailed, and 

scholarly discussions of significant 

disproportionality and of interventions 

proven to be successful in, for example, 

addressing disciplinary issues. These 

commenters too opposed postponing the 

compliance date so that the harm to 

children with disabilities may be 

addressed as quickly as possible. 

Discussion: The Department does not 

agree with the commenters that the 

causes of, and remedies for, significant 

disproportionality based on race and 

ethnicity in the identification, 

placement, and discipline of children 

with disabilities in LEAs across the 

country have received sufficient study. 

The Department does agree with those 

commenters who asserted that the status 

quo requires further scrutiny and study 

to, among other things, review the 

conflicting research regarding 

significant disproportionality and the 

over or under identification of children 

in special education. The Department 

also believes that the racial disparities 

in the identification, placement, or 

discipline of children with disabilities 

are not necessarily evidence of, or 

primarily caused by, discrimination, as 

some research indicates. See, e.g., Paul 

L. Morgan, et al, ‘‘Are Minority Children 

Disproportionately Represented in Early 

Intervention and Early Childhood 

Special Education?’’, 41 Educational 

Researcher 339 (2012) (that higher 

minority identification and placement 

rates reflect higher minority need, not 

racism); John Paul Wright, et al, ‘‘Prior 

problem behavior accounts for the racial 

gap in suspensions,’’ 42 Journal of 

Criminal Justice 257 (2014) (racial gap 

in suspensions is not due to racism). 

The over-representation of one racial 

or ethnic group that rises to the level of 

significant disproportionality may occur 

for a variety of other reasons. These 

include systemic challenges that State 

educational agencies (SEAs) and local 

educational agencies (LEAs) face in 

meeting the capacity and training needs 

of teachers and staff in properly 

identifying, placing, or disciplining 

children with disabilities. 

The reasons also include, as we stated 

in the 2016 significant 

disproportionality regulations, 

appropriate identification where there is 

higher prevalence of a disability in a 

particular racial or ethnic group, as well 

as correlatives of poverty and the 

presence of specialized schools, 

hospitals, or community services that 

may draw large numbers of children 

with disabilities and their families to an 

LEA. 81 FR 92380–92381, 92384. 

Further, courts have repeatedly noted 

that overrepresentation is not 

necessarily due to discrimination. The 

Supreme Court has noted that the fact 

that a group’s ‘‘representation’’ is not in 

‘‘proportion’’ to its share of the ‘‘local 


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population’’ is not proof of 

discrimination. See Richmond v. J.A. 

Croson Co., 488 U.S. 469, 507 (1989). 

Lower courts have similarly concluded 

that ‘‘disparity does not, by itself, 

constitute discrimination,’’ see Belk v. 

Charlotte-Mecklenburg Board of 

Education, 269 F.3d 305, 332 (4th Cir. 

2001) (en banc), either in discipline, see 

id.; see also People Who Care v. 

Rockford Board of Education, 111 F.3d 

538, 538 (7th Cir. 1997), or in special 

education, see id. at 538. In short, the 

presence of significant 

disproportionality is not necessarily an 

indication of underlying racial or ethnic 

discrimination. 

As explained in the discussion of 

comments that follow, the Department 

is not certain that the standard 

methodology in the 2016 significant 

disproportionality regulations is the best 

method for States to identify significant 

disproportionality in LEAs across the 

country. Postponing the compliance 

date will give us the opportunity to 

thoughtfully and soundly evaluate the 

regulations and issues raised in this 

rulemaking to best ensure that all 

children with disabilities are 

appropriately identified, placed, and 

disciplined, and that all children get the 

services they need and receive FAPE in 

the least restrictive environment. To this 

end, the Department will explore how to 

best implement the statute in a legally 

viable manner that addresses overidentification, without incentivizing 

under-identification. 

We disagree, in sum, with 

commenters who assumed or explicitly 

stated that the standard methodology in 

the 2016 significant disproportionality 

regulations is the appropriate 

mechanism to address problems in the 

status quo. The delay will also give 

States the opportunity to examine this 

issue through their own policies and 

procedures. 

Changes: None. 

Comments: A number of commenters 

asserted that delaying the compliance 

date and allowing the status quo to 

continue for (at least) two more years is, 

variously, morally wrong, the wrong 

message to send to children with 

disabilities and their families, 

inconsistent with the purpose of IDEA 

to reduce disproportionality, 

inconsistent with congressional intent, 

and a failure to champion the rights of 

children with disabilities. 

Discussion: We disagree. Like the 

comments just discussed, these 

comments also assume, or state outright, 

that the standard methodology is the 

appropriate method for States to 

identify significant disproportionality. 

The Department is not certain that this 

is the case. It would be wrong and 

inconsistent with IDEA to require a 

system that potentially denies services 

based on a child’s ethnic or racial 

status/group. We are concerned the 

2016 significant disproportionality 

regulations could result in de facto 

quotas, which in turn could result in a 

denial of services based on a child’s 

ethnic or racial status/group. The 

Secretary is concerned that the 

regulations will create an environment 

where children in need of special 

education and related services do not 

receive those services because of the 

color of their skin. 

The risk ratio approach is not 

required by section 618(d) of the statute, 

which does not require any particular 

methodology. We would like to explore 

how best to implement the statute with 

additional flexibilities and/or 

protections. As explained in the 

discussion of comments that follows, 

postponing the compliance date will 

give us the opportunity to further 

evaluate the regulations and issues 

raised in this rulemaking. 

Changes: None. 

Quotas 

Comments: Some commenters stated 

that the compliance date should be 

postponed and that the 2016 significant 

disproportionality regulations should, 

ultimately, be repealed. These 

commenters expressed concern that the 

standard methodology establishes, or 

will cause LEAs to establish, racial or 

ethnic quotas for the number of children 

who may be identified as children with 

disabilities or children with a particular 

disability, placed in a given placement, 

or disciplined. 

One commenter argued that the risk of 

quotas justified a temporary 

postponement, even assuming the 

standard methodology makes sense in 

the long run. The commenter argued 

that due to disadvantages they face, 

disproportionate numbers of AfricanAmerican children need special 

education and related services, but these 

disparities may sufficiently diminish in 

the future and African-Americans will 

no longer risk being denied access to 

special education and related services 

due to a quota. 

Some commenters stated that LEAs 

would have an incentive to make 

decisions about identifying, placing, 

and disciplining children with 

disabilities to satisfy a quota, not on the 

basis of each child’s individual needs, 

and thus contrary to IDEA’s 

fundamental approach for providing 

each child with FAPE. Other 

commenters, similarly, found that the 

incentive for quotas are built into the 

risk ratio itself because States have to 

make determinations of significant 

disproportionality by limiting the 

number or percentage of children of a 

certain race or ethnicity identified, 

placed, or disciplined in a certain way. 

A few other commenters argued that 

the text of 20 U.S.C. 1418(d)(2)(B) 

mandates a focus on disproportionate 

over-identification of a minority group 

versus the correct rate in determining 

the existence of disproportionality, 

rather than overrepresentation 

compared to the population, as the 

standard methodology does. They 

argued that its use of overrepresentation 

compared to the population as the 

benchmark for disproportionality 

creates serious constitutional problems 

that should be avoided. Others similarly 

argued that the focus should be on 

‘‘differential treatment’’ of minorities, 

not higher identification rates that 

merely reflect appropriate 

identification. 

A commenter stated that racial quotas 

and preferences, express or implied, are 

impermissible under the laws of a 

number of States that forbid racial 

preferences, even when they might be 

allowed under Federal law. Therefore, 

the commenter argued, the Department 

ought to postpone the compliance date 

in order to address the implications for 

using the standard methodology in 

those States. 

Still a few others noted that 

establishing racial or ethnic quotas 

could expose States, LEAs, and their 

officials to legal liability. 

Most commenters disagreed, stating 

that quotas are not the goal of the rule, 

which instead was to create a more 

equitable playing field for all children. 

Some of these commenters elaborated 

that the Department and States could 

mitigate the risk of quotas through close 

monitoring of States for compliance 

with IDEA. Another commenter noted 

that quotas would be more likely if the 

regulations mandated a specific risk 

ratio threshold, which they do not. 

One commenter stated that the 

significant disproportionality provision 

has been part of the law for 15 years, yet 

there is no evidence of any 

misunderstanding of the statute or that 

there has been insufficient time for 

issues to arise and be resolved. 

Two commenters argued that 

significant disproportionality is not the 

only provision in IDEA that could 

incentivize quotas and that delaying the 

compliance date will not reduce these 

other incentives for quotas. 

One commenter suggested several 

alternatives to delaying the compliance 

date including, that the Department not 

regulate at all, require compliance with 


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the 2016 significant disproportionality 

regulations until the Department 

develops a new regulation to supersede 

it, and to provide more technical 

assistance. This commenter stated that 

adoption of one of these alternatives 

would allow the Department to evaluate 

whether quotas are being used and how 

to prevent their use. 

Another commenter argued that even 

if the substance of the 2016 significant 

disproportionality regulations is sound, 

the regulations should be postponed 

because the definition of 

disproportionality amounted to a racial 

classification, which constitutionally 

cannot be imposed by an agency until 

after it makes specific evidentiary 

findings of ‘‘widespread 

discrimination’’ of the sort that did not 

accompany the 2016 significant 

disproportionality regulations. 

Discussion: The Secretary believes 

that education should fail no child 

because of the color of his or her skin. 

No child should be misidentified as a 

child with (or without) a disability, 

placed in a more restrictive setting, or 

improperly disciplined because of the 

color of his or her skin or his or her 

ethnic background. These are precisely 

the risks that the Department believes 

the standard methodology may pose 

and, therefore, we believe it is necessary 

to evaluate further the issues raised in 

this rulemaking. 

Court rulings make clear that a 

regulatory requirement can create an 

illegal incentive for de facto quotas or 

racial preferences even when that is not 

the intent of the regulation, and even 

when the regulation purports to prohibit 

quotas. For example, financial 

‘‘pressure’’ or ‘‘incentive to meet’’ racial 

‘‘numerical goals’’ can violate the 

Constitution, even when accompanied 

by a stated command not to 

discriminate. Lutheran Church v. FCC, 

141 F.3d 344, 352 (DC Cir. 1998). 

Similar principles obtain with respect to 

discipline and placement in the 

education context. See People Who Care 

v. Rockford Board of Education, 111 

F.3d 528, 538 (7th Cir. 1997). 

The Department is concerned that the 

2016 significant disproportionality 

regulations may create an incentive for 

LEAs to establish de facto quotas in 

identification, placement, and 

discipline—or otherwise create a 

chilling effect on such identification—to 

avoid being identified with significant 

disproportionality and having to reserve 

15 percent of their IDEA Part B subgrant 

to provide comprehensive coordinated 

early intervening services (CEIS). If, as 

one commenter asserts, there are other 

provisions in IDEA that incentivize 

quotas, those are not the subject of this 

rulemaking exercise. 

The Department attempted to address 

the concern about quotas in the 2016 

significant disproportionality 

regulations by noting that quotas were 

prohibited and including specific 

language in the 2016 significant 

disproportionality regulations to note 

that nothing in the rule abrogated the 

right to FAPE in the least restrictive 

environment. The discussion in the 

2016 significant disproportionality 

regulation disclaiming an intent to 

establish quotas is insufficient 

protection against LEAs creating de 

facto quotas because, regardless of the 

disclaimer, the regulations themselves 

may, in fact, incentivize quotas. In light 

of this and commenters’ ongoing 

concerns about this issue, further 

evaluation is needed. 

We agree with commenters that the 

2016 significant disproportionality 

regulations may create an incentive for 

LEAs to establish de facto quotas for the 

identification, placement, and 

discipline of children with disabilities 

and to artificially reduce the number of 

children identified, placed outside of 

the regular classroom, and disciplined 

to avoid being identified with 

significant disproportionality and being 

required to reserve 15 percent of their 

IDEA Part B subgrant to provide 

comprehensive CEIS. We are delaying 

the compliance date to evaluate our 

regulatory approach to ensure that it 

implements the statute in a manner that 

does not incentivize quotas. 

Put somewhat differently, if to stay 

under a State-mandated risk ratio 

threshold, LEAs are not properly 

identifying, placing, or disciplining 

children, then LEAs are not providing 

special education and related services 

based on the needs of each individual 

child as IDEA requires. Instead, the 

individualized education program, 

developed and revised in accordance 

with IDEA requirements, as necessary, 

to meet the unique and specific needs 

of each child, is the mechanism to 

ensure each child receives FAPE. 

However, creating an environment 

where LEAs and schools may engage in 

practices designed to artificially avoid 

exceeding the State-established risk 

ratio threshold for identification, 

placement, and discipline over meeting 

each individual child’s needs, could 

undermine IDEA’s focus on the 

individual needs of each child and, in 

turn, individualized decision-making. 

We believe the issue of incentivizing 

quotas, and potentially undermining the 

focus on individualized educational 

determinations, is an important issue to 

examine further before requiring 

compliance with the 2016 significant 

disproportionality regulations. 

Some commenters noted that 

compliance with numerical thresholds 

can have unintended consequences and 

have, in some instances, resulted in the 

denial of FAPE to children with 

disabilities. For example, as some 

commenters also noted, in the State of 

Texas, the SEA’s Performance-Based 

Monitoring and Analysis system 

measured the percentage of children 

identified as children with disabilities 

and receiving special education and 

related services under IDEA against a 

standard identification rate of 8.5 

percent. Although exceeding 8.5 percent 

was not prohibited, because LEAs were 

measured against a numerical standard 

that would determine the level of 

monitoring the LEA would receive, 

LEAs around the State reduced the 

number of children they identified as 

children with disabilities under IDEA to 

no more than 8.5 percent of their 

student populations, thereby potentially 

depriving many children of the special 

education and related services to which 

they were entitled under IDEA. 

Here, under the standard 

methodology, exceeding the risk ratio 

threshold may result in an LEA being 

identified with significant 

disproportionality, which would result 

in the LEA being required under IDEA 

section 618(d)(2) to reserve 15 percent 

of its IDEA Part B (section 611 and 

section 619) funds for comprehensive 

CEIS. We want to evaluate whether the 

numerical thresholds in the 2016 

significant disproportionality 

regulations may incentivize quotas or 

lead LEAs to artificially reduce the 

number of children identified as 

children with disabilities under the 

IDEA. While Texas has eliminated the 

8.5 percent indicator, it is a clear 

example of what can happen when 

schools are required to meet numerical 

thresholds in conjunction with serving 

children with disabilities. 

Even if the regulations would not lead 

to any rigid racial quotas, postponement 

would still be appropriate. Risk ratios 

are determined by comparing the risk of 

a particular outcome for children in one 

racial or ethnic group to the risk of that 

outcome for children in all other racial 

and ethnic groups. This renders risk 

ratios racial classifications subject to 

constitutional scrutiny. See, e.g., Walker 

v. City of Mesquite, 169 F.3d 973 (5th 

Cir. 1999). 

The Federal government cannot 

impose or incentivize such racial 

classifications until after it makes 

findings of widespread discrimination 

necessitating their use. See Shaw v. 

Hunt, 517 U.S. 899, 908 n.4 (1996); 


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1We would like to explore how best to 

implement the statute with additional flexibilities 

and/or protections. Even if, upon additional review, 

the Department were to determine that a risk ratio 

methodology is permissible, it could only be 

implemented after making a finding to that effect 

and if rigorous legal safeguards and protections are 

guaranteed. 

Middleton v. City of Flint, 92 F.3d 396, 

405 (6th Cir. 1996). The Department did 

not make any such findings in the 

Federal Register notice accompanying 

its 2016 significant disproportionality 

regulations. See 81 FR at 92381, 92384. 

So even if one assumes that the text and 

substance of the regulations are sound, 

and States should ultimately be required 

to comply with them, the procedural 

predicate for requiring such compliance 

is not yet present, because their basis 

was not adequately articulated. 

We disagree with one commenter’s 

assertion that the nearly 15 years of 

implementation of the most recent 

amendments to the IDEA makes it less 

likely that the 2016 significant 

disproportionality regulations could 

result in the use of quotas. Prior to the 

2016 significant disproportionality 

regulations, as many other commenters 

note, while many States used versions 

of the risk ratio, States had varying 

methodologies for identifying 

significant disproportionality, and the 

majority of States would be 

implementing methodologies consistent 

with the 2016 significant 

disproportionality regulations for the 

first time. 

Regarding the commenters’ suggested 

alternatives—including close 

monitoring of States for compliance 

with IDEA, mandating a specific risk 

ratio threshold, and establishing an 

appropriate identification rate—some 

are not feasible. In adopting the 2016 

significant disproportionality 

regulations, we considered specifying 

risk ratio thresholds and identification 

rates but could not arrive at a nonarbitrary way to do so. That has not 

changed.1 As to monitoring, we are not 

certain that compliance-driven 

monitoring will, by itself, effectively 

address the factors contributing to 

significant disproportionality or enable 

the Department to best support States to 

improve their systems. Because 

monitoring may not be able to resolve 

applicable issues, we will evaluate the 

question during the delay as part of our 

review of the 2016 significant 

disproportionality regulations. 

However, as a matter of general practice 

and in keeping with the Department’s 

commitment to continuous 

improvement, we are looking at all of 

our processes, including monitoring, to 

ensure they are effectively leveraged to 

support States in efforts to ensure that 

all children with disabilities receive 

appropriate special education and 

related services. 

The Secretary is reluctant to 

implement a methodology that may 

result in encouraging quotas or 

significantly reducing the number of 

children with disabilities identified, 

placed, and disciplined, and cause more 

of the very same effects upon children 

in States around the country. 

Instead, the Department will delay the 

compliance date for two years while we 

evaluate what the comments make clear 

is a complex question. 

Changes: None. 

Fairness to States—Work Already Done 

Comment: A number of commenters 

argued that the Department should not 

postpone the compliance date as a 

matter of fairness. For States already 

close to full implementation of the 

regulations—and a few commenters 

stated this was many, if not all, States— 

a postponement so close to the original 

compliance date would disregard their 

compliance efforts to date, disregard the 

costs of these efforts to date, reward 

States that have not been so diligent, 

and potentially cause confusion. Some 

of these commenters, therefore, 

suggested that if the Department were to 

postpone the compliance date, States 

that choose to do so should be permitted 

to implement the 2016 significant 

disproportionality regulations for school 

year (SY) 2018–19, as originally 

planned. 

Other commenters disagreed, noting 

that some States need additional time to 

implement or study the standard 

methodology and comprehensive CEIS. 

Still others noted that the Department 

should provide TA to States that need 

it and that some States are already 

reducing significant disproportionality 

by implementing multi-tiered systems of 

support, though neither of these are 

particularly affected by delaying the 

compliance date. 

Discussion: We recognize the time, 

effort, and resources States have already 

committed to implementing the 

regulations. Delaying the compliance 

date does not disregard this important 

work. The NPRM proposing the delay 

did not propose to preclude States from 

continuing their efforts and using the 

standard methodology, or any other 

methodology for that matter, during the 

two-year delay. States may implement 

the standard methodology or may use 

any methodology of their choosing to 

collect and examine data to identify 

significant disproportionality in their 

LEAs until the Department evaluates the 

regulations and issues raised in this 

rulemaking. Note, some States have 

communicated to the Department that 

they need additional time to properly 

implement the 2016 significant 

disproportionality regulations, and this 

delay will provide that time to those 

States as well as allow the Department 

to evaluate these important issues 

further. 

The delay of the compliance date does 

not, of course, affect a State’s annual 

obligation under IDEA section 618(d)(1) 

to collect and examine data to 

determine whether significant 

disproportionality based on race or 

ethnicity is occurring in the State and 

LEAs of the State with respect to the 

identification, placement and discipline 

of children with disabilities. In 

addition, the State must ensure that if 

an LEA is identified with significant 

disproportionality, it implements the 

remedies in IDEA section 618(d)(2), 

which includes review and, if 

appropriate, revision of policies, 

procedures, and practices; publicly 

reporting on any revisions; and 

reserving 15 percent of IDEA Part B 

funds to provide comprehensive CEIS. 

But to determine whether significant 

disproportionality exists in its LEAs in 

SY 2018–2019 and SY 2019–2020, 

during the period of this delay, a State 

may use the methodology it had in place 

before the Department published the 

2016 significant disproportionality 

regulations, or any other methodology 

for collecting and examining data to 

identify significant disproportionality 

that the State deems appropriate. The 

Department will work with States to 

provide technical assistance where it is 

needed. 

Changes: None. 

Limitations in the Standard 

Methodology 

Comment: A number of commenters 

argued that the Department should 

delay implementation of the 2016 

significant disproportionality 

regulations because of limitations in the 

standard methodology itself: Given the 

number of categories of analysis, there 

is likely to be some kind of significant 

disproportionality in LEAs with large 

populations; risk ratios and alternate 

risk ratios are less meaningful measures 

in LEAs with small or homogenous 

populations; and there are often data 

quality and data availability issues. 

By contrast, a number of other 

commenters argued that the Department 

should not delay implementation of the 

regulations because the standard 

methodology works well—providing 

States with flexibility to address their 

individual student populations—or well 

enough that any limitations in the 


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methodology may be addressed through 

implementation. 

Discussion: We recognize the merits 

of both positions. Given our concern 

about quotas reducing the number of 

children identified with disabilities and 

depriving them of needed special 

education and related services, we 

believe it is more prudent to delay the 

compliance date and address that 

concern through a review of the 

standard methodology before States are 

required to implement the regulations 

rather than during implementation. 

As to the other possible shortcomings 

the commenters pointed out, these are 

issues we fully anticipate will be 

addressed during our review of the 

standard methodology. 

Changes: None. 

Limitations Not Directly Related to the 

Standard Methodology 

Comment: A number of commenters 

argued that the Department should 

delay the compliance date of the 2016 

significant disproportionality 

regulations for reasons mostly unrelated 

to the standard methodology: That the 

causes of significant disproportionality, 

such as a lack of access to adequate 

healthcare and other correlatives of 

poverty, are larger societal issues 

outside of the control of schools and 

that research is unclear whether the 

problem of significant 

disproportionality is over-identification 

or under-identification of children with 

disabilities. Some of these commenters 

argued that Congress is better suited to 

address all these issues, while others 

argued that the schools should be given 

the opportunity afforded by postponing 

the compliance date to attempt to 

address the causes of significant 

disproportionality. 

A few commenters drew the opposite 

conclusion from similar observations. 

They asserted that the standard 

methodology should be left to go into 

effect in July 2018 and schools and 

governments can work together to 

address the broad issues surrounding 

the issue of, and the root causes of, 

significant disproportionality. One 

commenter advocated that 

disproportionality should be measured 

as both over-identification and underidentification in each category of 

identification for special education and 

related services. 

Still other commenters supported a 

delay and suggested repeal of the 2016 

significant disproportionality 

regulations for financial reasons: LEAs 

identified with significant 

disproportionality must reserve 15 

percent of their IDEA Part B funds to 

implement comprehensive CEIS, which 

could shift funding from children with 

disabilities and increase State 

maintenance of fiscal support 

requirements. One commenter noted 

that significant disproportionality 

should be addressed using a different 

source of funding than IDEA. Another 

noted that the reservation of funds 

could negatively affect LEAs that 

themselves do not have significant 

disproportionality but are located 

within, or are members of, Educational 

Service Agencies that are identified 

with significant disproportionality. One 

commenter noted that the reservation of 

15 percent of funding was excessive in 

an instance where a change to policies, 

procedures, and practices would result 

in eliminating significant 

disproportionality within their LEA, 

and another suggested the Department 

allow States additional exemptions to 

limit LEAs from being required to 

reserve 15 percent of their funding if the 

LEAs met certain criteria. 

Discussion: Though issues concerning 

comprehensive CEIS arise from 

statutory requirements and not the 2016 

significant disproportionality 

regulations, these other observations 

further demonstrate the complexity of 

the issues presented by the 2016 

significant disproportionality 

regulations. We anticipate these will be 

included in our broader evaluation of 

the regulations going forward. Changes 

beyond a delay in the compliance date 

may require a statutory or regulatory 

change. Commenters made these and 

similar arguments and observations in 

response to the March 2, 2016, NPRM 

that proposed the significant 

disproportionality regulations (81 FR 

10968). 

As we stated in the preamble to the 

2016 significant disproportionality 

regulations: Racial and ethnic 

disparities in the identification, 

placement, and discipline of children 

with disabilities can have a wide range 

of causes, including systemic issues 

well beyond the typical purview of most 

LEAs (81 FR 92383–92384, causes of 

racial and ethnic disparity that originate 

outside of school); the Department has 

an obligation to implement and enforce 

the requirements of IDEA as they exist 

today, and we will work with Congress 

on any potential changes to IDEA, 

including to section 618(d) (81 FR 

92380, the Department should await 

congressional action); we understand 

that overrepresentation of one racial or 

ethnic group that rises to the level of 

significant disproportionality may occur 

for a variety of reasons, including overidentification of that racial or ethnic 

group, under-identification of another 

racial or ethnic group or groups, or 

appropriate identification with higher 

prevalence of a disability in a particular 

racial or ethnic group (81 FR 92380– 

92381, under-identification versus overidentification); it is quite possible for 

children with disabilities from a 

particular racial or ethnic subgroup to 

be identified, disciplined, or placed in 

restrictive settings at rates markedly 

higher than their peers in other LEAs 

within the State (81 FR 92399–92405, 

exemptions to LEAs, racially 

homogenous LEAs and those with small 

populations); the Department reads the 

term ‘‘placement’’ in the introductory 

paragraph of section 618(d)(2) to 

include disciplinary actions that are 

also removals of the child from his or 

her current placement for varying 

lengths of time, including removals that 

may constitute a change in placement 

under certain circumstances (81 FR 

92442–92443, authority to use 

discipline as a category of analysis); 

regardless of IDEA funding levels, States 

must comply with all IDEA 

requirements, including the 

requirements related to significant 

disproportionality (81 FR 92446–92448, 

funding IDEA and comprehensive 

CEIS); an LEA identified with 

significant disproportionality will not 

be able to take advantage of the LEA 

MOE adjustment that would otherwise 

be available under § 300.205 because of 

the way that the MOE adjustment 

provision and the authority to use Part 

B funds for CEIS are interconnected (81 

FR 92451–92452, implications of 

comprehensive CEIS for LEA 

maintenance of effort). These 

observations further demonstrate the 

complexity of the issues presented by 

the 2016 significant disproportionality 

regulations. We will address these 

issues as appropriate in our evaluation. 

Changes: None. 

Limiting Comments 

Comment: Pointing to the statement 

in the NPRM that ‘‘[we] will not 

consider comments on the text or 

substance of the final regulations’’ (83 

FR 8396), a small number of 

commenters stated that the Department 

has improperly limited the comments it 

will consider and that it is not seeking 

comments with an open mind. As 

evidence, one commenter cited a 

statement by a Department 

spokesperson that ‘‘ED is looking 

closely at this rule and has determined 

that, while this review takes place, it is 

prudent to delay implementation by two 

years.’’ 

Discussion: In inviting comment on 

the NPRM, we stated: 

We invite you to submit comments on this 

notice of proposed rulemaking. We will 


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consider comments on proposed compliance 

dates only and will not consider comments 

on the text or substance of the final 

regulations. (83 FR 8396.) 

We did not improperly limit 

comments. Rather, we asked the public 

to speak to the question of whether the 

Department should postpone the 

compliance date of the 2016 significant 

disproportionality regulations, rather 

than to discuss, without reference to the 

delay, what the text or substance of any 

new regulations should be. 

Indeed, commenters appear to have 

understood this and commented on the 

proposed delay and the substance of the 

2016 significant disproportionality 

regulations in connection with the 

delay. 

The Department received 

approximately 25 percent more 

comments on the NPRM proposing 

postponement of the compliance date 

(390 parties) than it did in response to 

its invitation to comment on the 

significant disproportionality 

regulations in 2016 (316 parties). We 

received comments not only on the 

proposed delay of the compliance date 

but also on the substance of the 2016 

significant disproportionality 

regulations themselves, the adequacy (or 

inadequacy) of our rulemaking process 

under the Administrative Procedure Act 

(APA), the regulatory impact analysis, 

the cost benefit analysis, and the 

statement of alternatives considered. 

Commenters recognized that the NPRM 

invited comments on the merits of the 

2016 significant disproportionality 

regulations, with several going so far as 

to criticize the Department for inviting 

comments on issues that had already 

been covered in 2016. 

The full statement made by a 

Department spokesperson indicates no 

more than the proposal reflected in the 

NPRM itself that a delay of two years 

would be prudent and does not connote 

a lack of reasonable consideration of the 

public’s perspectives: 

Through the regulatory review process, 

we’ve heard from states, school districts, 

superintendents and other stakeholders on a 

wide range of issues, including the 

significant disproportionality rule. Because 

of the concerns raised, the department is 

looking closely at this rule and has 

determined that while this review takes 

place, it is prudent to delay implementation 

for two years. 

Consistent with the APA, the 

Department properly sought public 

comment on the proposal to delay the 

compliance date for the 2016 significant 

disproportionality regulations. We 

reviewed and considered those 

comments and, in this document, we are 

responding in detail to all of the 

comments we received. 

Changes: None. 

Comments: A few commenters 

expressed concern that one of the 

commenters cited in the NPRM who 

submitted comments in response to the 

Department’s 2017 regulatory reform 

notice that were critical of the 2016 

significant disproportionality 

regulations is now employed by the 

Department. 

One of these commenters was 

concerned that the Department did not 

timely respond to a Freedom of 

Information Act (FOIA) request seeking 

the public comments on significant 

disproportionality that the Department 

relied upon in the NPRM. This 

commenter, therefore, suggested that the 

Department should seek a second round 

of comments after clarifying that it will 

consider comments on the text and 

substance of the 2016 significant 

disproportionality regulations. 

Discussion: There is no prohibition 

against any individual submitting 

comments on a Department rulemaking 

and then subsequently accepting 

employment at the Department. In 

addition, other commenters expressed 

similar concerns regarding the 

regulations and the Department took all 

of these into account in its analysis. 

With respect to the FOIA request, the 

comments that informed the NPRM are 

a matter of public record, as are all of 

the comments we received in response 

to the Department-wide regulatory 

review. Given the availability of those 

comments, we do not agree with the 

commenter that the nature of the 

Department’s response to a FOIA 

request requires that we establish a 

second comment period. 

Changes: None. 

Justification Under APA 

Comment: Many commenters asserted 

that the Department did not adequately 

justify delaying the compliance date 

because there has been no change in 

circumstances since the publication of 

the 2016 significant disproportionality 

regulations. These commenters point 

out that the Department’s only stated 

justifications for the delay are topics 

that were already subject to notice and 

comment and addressed in the 2016 

significant disproportionality 

regulations. These topics included 

discussions of the Department’s 

statutory authority, the examination of 

group outcomes through statistical 

measures rather than the individual 

needs of each child, incentives for racial 

quotas, lack of clear guidance on 

‘‘reasonableness,’’ and alignment with 

State Performance Plan indicators. 

Discussion: The Department agrees 

that it discussed these topics in the 2016 

significant disproportionality 

regulations but disagrees that this 

precludes the Department from reevaluating the 2016 significant 

disproportionality regulations and the 

reasoning and evidence supporting 

them. The APA does not bind an agency 

to its earlier policy determinations, even 

in the absence of changed facts and 

circumstances, provided that the agency 

discloses what it is doing and why, 

which we have done here. 

Even though the Department 

addressed the issue of quotas in the 

2016 significant disproportionality 

regulations, the Department is 

concerned that it did not give sufficient 

weight to incentives for, and 

consequences of, express or implied 

racial quotas. The Department’s 

response was, essentially, to prohibit 

the use or implementation of quotas, 

while maintaining a regulatory 

framework that nonetheless requires 

establishing numerical thresholds. As 

indicated, such a system may result in 

de facto quotas that have significant 

effects on the proper identification, 

placement, and discipline of children 

with disabilities. As some commenters 

noted, in response to a numerical 

threshold point in the State’s 

Performance-Based Monitoring and 

Analysis System, many LEAs in Texas 

reduced the number of children 

identified as children with a disability 

under the IDEA. We believe the issue of 

incentives for, and consequences of, 

express or implied racial quotas 

warrants further examination prior to 

requiring compliance with the standard 

methodology. The Department believes 

it is important to postpone the 

compliance date of the 2016 significant 

disproportionality regulations now so 

that it may weigh the risk of denying 

FAPE to many children with a disability 

due to the potential use of quotas 

against the benefits of implementing the 

standard methodology. 

Changes: None. 

Comment: One commenter argued 

that a two-year delay will not add any 

additional insights into the proposed 

methods for reducing disproportionality 

beyond what has been found by 

previous Federal task forces, 

researchers, government agencies, and 

other experts. 

Discussion: The Department 

disagrees. Even since publication of the 

2016 significant disproportionality 

regulations, there has been further 

research that demonstrates the 

complexity of the issues presented by 

the 2016 significant disproportionality 

regulations. See, Paul Morgan, et al., 


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‘‘Are Black Children Disproportionately 

Overrepresented in Special Education? 

A Best-Evidence Synthesis’’ 83 

Exceptional Children (2017) and 

research cited therein. The Department 

will use the time provided by 

postponing the compliance date to 

examine the issues raised in this 

rulemaking. 

Changes: None. 

Comment: A few commenters 

suggested that Executive Order 13777 

was not a proper basis for delaying the 

compliance date. The order, these 

commenters argued, was designed to 

reduce regulatory burden, but the NPRM 

does not mention burden as a 

justification for delaying the compliance 

date. One commenter argued the 

Department proposed a delay of these 

regulations to meet a quota imposed by 

Executive Order 13777 to satisfy the 

regulatory reform agenda. 

Discussion: The Department 

disagrees. The commenters have 

described the scope of Executive Order 

13777 too narrowly. Under that order, 

the Department created a regulatory 

reform task force that reviewed and 

solicited public comment on all of the 

Department’s regulations and sought to 

identify regulations that: (i) Eliminate 

jobs, or inhibit job creation; (ii) are 

outdated, unnecessary, or ineffective; 

(iii) impose costs that exceed benefits; 

(iv) create a serious inconsistency or 

otherwise interfere with regulatory 

reform initiatives and policies; (v) are 

inconsistent with the requirements of 

section 515 of the Treasury and General 

Government Appropriations Act, 2001 

(44 U.S.C. 3516 note), or the guidance 

issued pursuant to that provision, in 

particular those regulations that rely in 

whole or in part on data, information, or 

methods that are not publicly available 

or that are insufficiently transparent to 

meet the standard for reproducibility; or 

(vi) derive from or implement Executive 

Orders or other Presidential directives 

that have been subsequently rescinded 

or substantially modified. 

As we have explained, the Secretary 

is concerned that the 2016 significant 

disproportionality regulations, 

potentially creates an express or implied 

incentive for LEAs to set quotas, may 

ultimately, and improperly, reduce the 

number of children identified as 

children with disabilities, properly 

placed, or disciplined. Therefore, in 

connection with our regulatory review 

under Executive Order 13777, we 

proposed and are now adopting a delay 

of the compliance date for the 2016 

significant disproportionality 

regulations. The delay effected by this 

rule is justified on the basis of the 

policy rationales advanced, irrespective 

of Executive Order 13777. 

Changes: None. 

Comment: Two commenters argued 

that the Department did not provide a 

reasoned basis for delaying the 

compliance date of the regulations and 

that the NPRM did not provide the 

public the transparency required by the 

APA. 

Discussion: The Department 

disagrees. We have stated the reasons 

for proposing and delaying the 

compliance date in the NPRM and at 

length here. The Department has 

complied with the APA and provided 

the public ample opportunity to 

meaningfully comment on the proposal 

to delay the compliance dates to July 1, 

2020, and July 1, 2022, respectively. 

Changes: None. 

Availability of Judicial Remedies 

Comment: One commenter argued the 

timing of the NPRM’s publication 

recklessly or intentionally is so late that 

it prevents affected parties from having 

enough time to seek and obtain judicial 

review prior to the rule’s effective date. 

Discussion: The Department 

disagrees. The timing of the NPRM was 

not an attempt to prevent parties from 

obtaining judicial review. The 

development of proposed rules is an 

involved process that takes time to 

complete. IDEA requires the Department 

to provide the public with a 75-day 

comment period when regulating under 

Part B or Part C. (IDEA section 607(c); 

20 U.S.C. 1406(c).) The Department has 

been working diligently to propose this 

delay; review, consider and respond to 

public comment; and publish a final 

rule. Nothing the Department has done 

prevents an aggrieved party from 

seeking judicial review after this 

document is published. 

The Department notes that, in any 

event, States may, and many States have 

commented that they intend to, 

implement the standard methodology in 

the 2016 significant disproportionality 

regulations even if the Department 

delays these regulations. States that 

choose not to implement the standard 

methodology may use any methodology 

of their choosing to collect and examine 

data to identify significant 

disproportionality in their LEAs until 

the Department evaluates the 

regulations and issues raised in this 

rulemaking, to best ensure that all 

children with disabilities are 

appropriately identified, placed, and 

disciplined, and that all children get the 

services they need and receive FAPE in 

the least restrictive environment. 

Changes: None. 

Comprehensive CEIS 

Comment: Several commenters, both 

supportive of and opposed to 

postponing the compliance date, argued 

that the Department should maintain 

the expanded authorized use of funds 

for comprehensive CEIS under 

§ 300.646(d)(2), whether or not it 

postpones the compliance date. 

Specifically, the commenters argued 

that States in either case should still be 

permitted to allow LEAs to use funds 

reserved for comprehensive CEIS to 

serve children from age three through 

grade 12, with and without disabilities. 

This, the commenters argued, is a 

reasonable reading of the statute and a 

reasonable remedy for significant 

disproportionality. 

Some commenters argued that the 

Department did not have authority 

under IDEA to expand the authorized 

use of funds for comprehensive CEIS 

and that the Department should rescind 

this provision of the regulation. Others 

disagreed, stating that the Department 

has the authority to expand the use of 

funds for children three to five years old 

and children with disabilities and that 

the children most affected by significant 

disproportionality should have access to 

services provided through 

comprehensive CEIS. 

Discussion: The Department 

understands all of the commenters’ 

concerns surrounding comprehensive 

CEIS, but the NPRM proposing the delay 

in the compliance date proposed no 

changes to the regulations governing 

comprehensive CEIS. The delay will 

give the Department the opportunity to 

review these issues in detail. Until the 

Department acts to change the 

regulations, however, LEAs may choose, 

consistent with the 2016 significant 

disproportionality regulations, to use 

IDEA Part B funds reserved for 

comprehensive CEIS to serve children 

ages three through grade 12, with and 

without disabilities, upon a 

determination of significant 

disproportionality, whether or not a 

State implements the standard 

methodology in the 2016 significant 

disproportionality regulations. 

Changes: None. 

Remedies for Significant 

Disproportionality in Discipline 

Comment: Some commenters argued 

the Department did not have the 

authority under IDEA to include 

discipline as a type of 

disproportionality triggering action 

under 20 U.S.C. 1418(d)(2). Other 

commenters disagreed and noted that 

disciplinary actions can be considered a 

change in placement, and therefore, it is 


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appropriate to include discipline in the 

standard methodology. 

Discussion: We appreciate the 

comments. When Congress added 

discipline to IDEA section 618(d)(1) (20 

U.S.C. 1418(d)(1)), it made no 

corresponding change to IDEA section 

618(d)(2) (20 U.S.C. 1418(d)(2)), which 

created an ambiguity because IDEA 

section 618(d)(2) does not explicitly 

state that the remedies in IDEA section 

618(d)(2) apply to removals from 

placement that are the result of 

disciplinary actions. 

The NPRM proposing the delay in the 

compliance date proposed no changes to 

the treatment of discipline under the 

2016 significant disproportionality 

regulations. Until the Department 

evaluates the regulations and issues 

raised in this rulemaking, discipline 

remains a category of analysis for 

determining significant 

disproportionality, and the reservation 

of funds for comprehensive CEIS and 

the other statutory remedies apply upon 

a State’s finding of significant 

disproportionality. The delay will give 

the Department the opportunity to 

review these issues in detail. 

Changes: None. 

Children Ages Three Through Five 

Comment: A few commenters, while 

opposed to delaying the compliance 

date for school-aged children, did 

support delaying the compliance date 

for including data for children ages 

three through five years old due to 

issues with data quality and availability 

for this age range. 

Other commenters argued the 

Department did not provide any 

justification for delaying the compliance 

date to include data for children ages 

three through five, and one commenter 

argued that this delay would affect the 

collection of discipline data for this age 

range. 

Discussion: We disagree that we did 

not provide a justification for a delay in 

the compliance date for children ages 

three through five in the analysis of 

significant disproportionality, with 

respect to the identification of children 

as children with disabilities and as 

children with a particular impairment. 

We cited concerns about the potential 

effects of implementing the standard 

methodology for all age ranges, and we 

further agree with the commenters who 

cited concerns about data quality and 

missing data. We disagree with the 

commenter who argued the delay would 

affect existing discipline data 

collections; the delay does not affect any 

existing data collections. We therefore 

postpone the date for States to include 

children ages three through five years in 

their significant disproportionality 

analysis with respect to the 

identification of children as children 

with disabilities and as children with a 

particular impairment until July 1, 2022. 

Changes: None. 

Non-Compliance 

Comment: One commenter argued the 

proposed rule seeks to delay compliance 

without explaining how the Department 

intends to ensure States and LEAs 

comply with IDEA in the meantime, and 

that the delay means that the 

Department has decided to ignore 

widespread noncompliance, an 

assertion made by a number of other 

commenters. 

Discussion: We disagree. As we 

explained earlier, the delay of the 

compliance date does not change the 

State’s annual obligation under IDEA 

section 618(d)(1) to collect and examine 

data to determine whether significant 

disproportionality is occurring in the 

State and LEAs of the State with respect 

to the identification, placement, and 

discipline of children with disabilities. 

In addition, the State must ensure that 

if an LEA is identified with significant 

disproportionality, it implements the 

remedies in IDEA section 618(d)(2). 

Notwithstanding the delay, States must 

continue to make these annual 

determinations. To do so, they may use 

the methodology they had in place 

before the Department adopted the 2016 

significant disproportionality 

regulations, the standard methodology 

in the 2016 significant 

disproportionality regulations, or any 

other methodology for collecting and 

examining data that the State, in its 

discretion, deems appropriate. As part 

of the IDEA Part B LEA Maintenance of 

Effort (MOE) Reduction and CEIS data 

collection, States will continue to report 

to the Department and the public 

whether each LEA was identified with 

significant disproportionality and the 

category or categories of analysis under 

which the LEA was identified. The 

Department will continue its monitoring 

activities under IDEA. As such, the 

Department is not ignoring widespread 

non-compliance with IDEA, but instead 

attempting to ensure compliance with 

IDEA’s requirements. 

Changes: None. 

Data 

Comment: One commenter argued 

that delaying the compliance date will 

deny the public the opportunity to 

receive information to which they are 

entitled under IDEA regarding the 

identity of LEAs found by States to have 

significantly disproportionality and how 

each LEA addressed significant 

disproportionality. Another commenter 

argued OSERS is responsible for 

gathering IDEA section 618(d) data on 

local special education disparities from 

State to State. The commenter further 

argued that OSEP should provide an 

LEA-level restricted-use data set for 

researchers only instead of only national 

and State level data. A number of 

commenters argued that delaying the 

compliance date deprives the public of 

the most-up-to-date information on 

significant disproportionality. 

Discussion: We disagree. The 

Department is not required under IDEA 

section 618 to collect data that States 

use to identify LEAs with significant 

disproportionality, such as risk ratios 

calculated as part of a review for 

significant disproportionality. In fact, 

collection of that data would be a 

significant and expensive undertaking, 

both for the States and the Department. 

While States report as part of the IDEA 

Part B LEA Maintenance of Effort (MOE) 

Reduction and CEIS data collection, 

whether each LEA was identified with 

significant disproportionality and the 

category or categories of analysis under 

which the LEA was identified, the 

Department is not required to provide 

the identity of LEAs identified with 

significant disproportionality. 

Changes: None. 

Cost-Benefit Analysis 

Comment: One commenter stated that 

the Department did not include the 

correct number of States in the Analysis 

of Costs and Benefits. The commenter 

noted the Department calculated the 

cost for 55 States and believed this was 

an error. Other commenters noted the 

Department underestimated the number 

of States that will be ready to implement 

the regulations on July 1, 2018. 

Several commenters noted that State 

and local agencies have already 

expended resources to prepare to 

comply with the regulations on July 1, 

2018, and that these sunk costs should 

be included in the analysis of costs, 

benefits, and transfers. Those 

commenters also argued that the 

Department needs to account for the 

costs associated with the resources 

States will have to expend to help LEAs 

and parents understand the delay and 

the subsequent confusion caused by the 

delay. 

Discussion: Under IDEA section 

602(31), the term ’’State’’ means each of 

the 50 States, the District of Columbia, 

the Commonwealth of Puerto Rico, and 

each of the outlying areas. Therefore, 

the Department calculated the costs 

associated with this regulation for the 

50 States, the District of Columbia, 

Puerto Rico, Guam, American Samoa, 


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and the Virgin Islands, or 55 ’’States’’ as 

defined under IDEA. We address the 

balance of comments on the cost-benefit 

analysis in the Discussion of Costs, 

Benefits, and Transfers in the costbenefit section of this document. 

Changes: None. 

Alternatives Considered and 

Significance Under E.O. 12866 

Comments: One commenter argued 

the regulatory impact analysis in the 

NPRM was insufficient because the 

Department did not include alternatives 

such as not regulating; providing more 

technical assistance and guidance to 

States to avoid negative outcomes; 

evaluating the impact of the standard 

methodology; or publicizing compliance 

reviews under Title VI of the Civil 

Rights Act. Another commenter 

acknowledged the Department 

considered alternatives even though 

they disagreed with delaying the 

compliance date of the regulation. The 

same commenter argued the regulation 

was not a significant regulatory action. 

Discussion: We recognize that 

commenters had concern about the 

breadth of regulatory alternatives 

discussed in the NPRM and therefore 

have addressed additional alternatives 

in the regulatory impact analysis of this 

final rule. As for the significance of the 

regulations, we disagree that postponing 

the compliance date is not significant 

under the Executive Order 12866. We 

determined that it is significant because 

it raises novel legal or policy issues 

arising out of legal mandates. While the 

Department initially made that 

determination, it did so subject to the 

approval of the Office of Information 

and Regulatory Affairs (OIRA) in the 

Office of Management and Budget 

(OMB). We note as well that the 

proposal and adoption of the 2016 

significant disproportionality 

regulations were also significant 

regulatory actions. 

Changes: None. 

Executive Orders 12866, 13563, and 

13771 

Regulatory Impact Analysis 

Under Executive Order 12866, 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 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 regulatory action is a significant 

regulatory action subject to review by 

OMB under section 3(f) of 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 

upon a reasoned determination that 

their benefits justify their costs 

(recognizing that some benefits and 

costs are difficult to quantify); 

(2) Tailor their 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 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including providing 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 regulations 

only upon a reasoned determination 

that their benefits justify their costs. 

Complying with the standard 

methodology imposes costs on regulated 

entities and, absent a clear 

understanding of the unintended 

consequences of the standard 

methodology, we believe it is 

appropriate to delay implementation of 

the 2016 significant disproportionality 

regulations. We believe that further 

review of the regulations is necessary to 

ensure that net benefits are maximized 

in the long-term and, as noted elsewhere 

in this notice, we believe that two years 

provides sufficient time for such review. 

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 would not unduly 

interfere with State, local, and tribal 

governments in the exercise of their 

governmental functions. 

In this Regulatory Impact Analysis we 

discuss the need for regulatory action, 

alternatives considered, the potential 

costs and benefits, net budget impacts, 

assumptions, limitations, and data 

sources. 

Need for These Regulations 

As explained in the preamble, this 

regulatory action will delay the 

compliance date of the 2016 significant 

disproportionality regulations. We are 

concerned that those regulations may 

not meet their fundamental purpose, 

namely to ensure the proper 

identification of LEAs with significant 

disproportionality among children with 

disabilities. This delay will give the 

Department, the States, and the public 

additional time to evaluate the 

questions involved and determine how 

best to serve children with disabilities 

without increasing the risk that children 

with disabilities are denied FAPE. 

Alternatives Considered 

Without the delay of the July 1, 2018, 

compliance date, States and LEAs 

would be required to implement the 

2016 significant disproportionality 

regulations. In addition to the 

alternatives discussed in the NPRM, the 

Department reviewed and considered 

various alternatives to the proposed rule 

submitted by commenters in response to 

the NPRM. 

The Department considered 

comments requesting that the 

Department withdraw the NPRM and 


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2The Department has included a copy of all 

calculation spreadsheets supporting this analysis in 

the docket folder for this notice. 

require States to comply with the 

standard methodology and modified 

remedies on July 1, 2018. We are 

declining this suggestion because, as 

stated throughout this document, we are 

concerned, among other reasons, about 

the potential unintended consequences 

of implementing the 2016 significant 

disproportionality regulations and the 

potential denial of FAPE to children 

with disabilities. 

Other commenters noted the 

Department could take several steps to 

prevent unintended consequences 

without delaying the compliance date. 

For example, one commenter suggested 

the Department study whether quotas 

are being used and prevent their use. 

Other commenters suggested the 

Department could simply increase 

monitoring and enforcement of States 

and LEAs to prevent racial quotas or 

other unintended consequences. 

Another commenter suggested 

evaluating the impact of the standard 

methodology. Another commenter 

suggested the Department could provide 

additional technical assistance to 

prevent concerning outcomes. The same 

commenter suggested the Department 

initiate and publicize compliance 

reviews under Title VI of the Civil 

Rights Act to ensure States and LEAs do 

not adopt numerical quotas based on 

race. Knowing if these measures would 

be effective requires careful review, 

which we will do during this delay. 

As stated in the NPRM, the 

Department considered delaying the 

compliance date for one, two, and three 

years. Several commenters argued the 

justification provided for the number of 

years considered was insufficient. The 

Department welcomes the opportunity 

to clarify its justification. We believe 

that a one-year delay would not provide 

the Department sufficient time to 

examine the potential unintended 

consequences of the standard 

methodology; especially since it will 

take time for States to implement and 

the Department to review the impact of 

States that decide to implement the 

standard methodology. The Department 

believes that a three-year delay would 

postpone compliance for longer than 

necessary to complete the additional 

evaluation we plan to undertake. 

Therefore, the Department determined a 

two-year delay would provide sufficient 

time to review all the complex issues 

raised and discussed throughout this 

document, including looking more 

closely at the alternatives the 

commenters offered above, and 

determine how better to serve children 

with disabilities. 

Discussion of Costs, Benefits and 

Transfers 

The Department has analyzed the 

costs and benefits of this final rule. Due 

to uncertainty about the number of 

States that will exercise the flexibility to 

delay implementation of the standard 

methodology, the number of LEAs that 

would be identified with significant 

disproportionality in any year, and the 

probable effects of any delay in 

implementation on services for children 

with disabilities, we cannot evaluate the 

costs and benefits of this regulation with 

absolute precision. In the NPRM, the 

Department estimated that these 

regulations would result in a cost 

savings of $10.9 to $11.5 million over 

ten years. 

However, a number of commenters 

raised concerns about our analysis, 

particularly noting the lack of a 

discussion of costs associated with these 

regulations and our estimation of the 

number of States that would exercise 

the flexibility to delay implementation 

under this regulation. The Department 

has reviewed these comments and has 

revised some assumptions in response 

to the information we received. 

We discuss specific public comments, 

where relevant, in the appropriate 

sections below. As a result of the 

changes discussed below, the 

Department now estimates this delay 

will result in a net cost savings of 

between $7.4 and $7.8 million over a 

ten-year period, with a reduction in 

associated transfers of between $41.5 

and $43.8 million.2

Costs 

A number of commenters noted that 

our regulatory impact analysis in the 

NPRM did not include a discussion of 

costs, generally, while others 

specifically raised concerns regarding 

the likely effects of delayed 

implementation on the appropriate 

identification, placement, and 

discipline of children with disabilities, 

specifically arguing that a delay would 

likely result in improper identification, 

more restrictive placements, and more 

exclusionary discipline practices, all 

leading to higher school failures, drop 

outs, juvenile justice referrals or 

involvement, and lower quality longterm outcomes. 

One commenter noted that, in the 

2016 significant disproportionality 

regulations, the Department estimated 

that the benefits of the rule outweighed 

the estimated costs of $50.1 to $60.5 

million. Therefore, the commenter 

argued, the costs of delay (a deferral of 

the benefits identified in the 2016 

significant disproportionality 

regulations) must outweigh the benefits 

(reduced costs). 

In response to those commenters, we 

provide the following additional 

analysis. We believe that many of the 

commenters misunderstood the 

potential effects of this delay. In a 

number of cases, it was apparent that 

commenters believed a delay in the 

compliance date would exempt States 

from making annual determinations 

regarding significant disproportionality 

and requiring LEAs identified with 

significant disproportionality from 

reserving 15 percent of their IDEA Part 

B funds for comprehensive CEIS. That is 

incorrect. 

With this delay, States are still 

required to comply with the statutory 

requirements of IDEA, including an 

annual review for significant 

disproportionality. The delay in the 

compliance date only delays the date by 

which States would be required to 

implement the standard methodology. 

Further, States are still required to 

ensure that all children with disabilities 

are appropriately identified and receive 

a free appropriate public education in 

the least restrictive environment. To 

that end, we do not believe it is 

reasonable to assume that the full scope 

of ‘‘costs’’ identified by commenters 

will result from this regulatory action. 

Indeed, in the 2016 significant 

disproportionality regulations, the 

Department identified five sources of 

benefits from the significant 

disproportionality regulations: (1) 

Greater transparency; (2) increased role 

for the State Advisory Panels; (3) 

reduction in the use of inappropriate 

policies, practices, and procedures; (4) 

increased comparability of data across 

States; and (5) expansion of activities 

allowable under comprehensive CEIS. 

As many commenters noted, several of 

these benefits have already started to 

accrue. 

States have worked diligently since 

the publication of the 2016 significant 

disproportionality regulations to meet 

the original July 1, 2018, compliance 

date. As part of those efforts, they have 

involved a wide range of stakeholders, 

including their State Advisory Panels, to 

explore the issue of significant 

disproportionality and their current 

practices. Those efforts have greatly 

increased the transparency around State 

determinations and dramatically 

expanded the involvement of a diverse 

range of stakeholders, including State 

Advisory Panels and groups that had 

not historically been involved in special 

education issues. 


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Further, nothing in this final rule 

would prohibit States and LEAs from 

using funds for comprehensive CEIS to 

serve children ages three through five 

and children with disabilities. As such, 

the only benefits we believe could be 

reasonably argued to be delayed as a 

result of this regulatory action would be 

the reduction in the use of inappropriate 

policies, practices, and procedures, and 

the increased comparability of data 

across States. 

We recognize that several commenters 

noted that they would use the delay to 

provide additional technical assistance 

to their LEAs to proactively resolve 

issues before they were identified under 

the standard methodology. As such, 

while some inappropriate policies, 

practices, and procedures may not be 

revised as a result of fewer LEAs being 

identified with significant 

disproportionality during the period of 

the delay, we believe that the increased 

focus on these issues since the 

publication of the 2016 significant 

disproportionality regulations and State 

technical assistance efforts in the 

interim may actually minimize the 

effects thereof. As in the 2016 

significant disproportionality 

regulations, we are unable to 

meaningfully quantify the economic 

impacts of these costs. 

Several commenters argued that the 

delay in compliance date would result 

in confusion in the field and would 

require States to expend resources to 

clarify the regulatory environment for 

their LEAs and parents. While we 

recognize that a change in State plans 

for implementation will need to be 

communicated with LEAs and parents, 

we do not believe that such efforts 

would be exceptionally time-consuming 

given that most States that opt to delay 

implementation of the standard 

methodology will likely continue 

ongoing efforts to evaluate significant 

disproportionality. 

Nonetheless, we have revised our 

estimates to include the efforts of one 

management analyst for 160 hours for 

each State that opts to delay their 

compliance with the 2016 significant 

disproportionality regulations. As 

discussed below, we estimate there will 

be 35 States in this group. We believe 

that this amount of time would be far 

more than sufficient to address any and 

all concerns and confusion on the part 

of LEAs and parents regarding any delay 

and likely represents an overestimate of 

the actual burdens faced by such States. 

The Department estimates that this will 

result in a cost of approximately 

$249,980. 

Benefits 

In the NPRM, the Department’s 

estimated cost savings were based 

largely on an assumption of the number 

of States that would implement the 

standard methodology on July 1, 2018, 

the number that would implement on 

July 1, 2019, and the number that would 

implement on July 1, 2020. A number of 

commenters raised concerns with our 

estimates because, they argued, the 

estimates did not appropriately capture 

costs already borne by States to 

implement the standard methodology, 

regardless of whether they delay 

implementation. However, it is clear to 

the Department that these costs are 

properly considered sunk investments, 

that is, expenditures already incurred by 

entities that cannot be recovered in any 

case. Regardless of whether the 

Department delayed the required 

compliance date, States would be 

unable to recover those expenses, and 

therefore it would not be appropriate to 

assign their value as either a cost or 

benefit of this action. 

However, we do note that nothing in 

this regulatory action invalidates the 

work already performed by States. 

States that are prepared to implement 

the standard methodology on July 1, 

2018, remain able to do so, and those 

that delay implementation until a later 

date would not necessarily be required 

to recreate the work already completed. 

Nonetheless, the Department has made 

related adjustments to its cost estimates. 

Specifically, while sunk investments 

are not appropriately considered as a 

‘‘cost’’ of any regulatory action, we 

recognize that our initial estimates did 

assume that States delaying compliance 

until 2019 or 2020 would also delay all 

of their start-up activities as well. To the 

extent that these States, or a subset of 

them, have already completed some of 

these activities, we should not have 

calculated a cost savings based on 

delaying those activities for one or two 

years. While we cannot determine with 

absolute precision how many of these 

activities have already been completed 

by States given the information 

provided by the public, we will assume 

that approximately 50 percent of startup activities for all States delaying 

implementation until 2019 or 2020 have 

already occurred, and therefore will not 

calculate any cost savings associated 

with their delay. In addition, several 

commenters stated that the 

Department’s estimates regarding the 

number of States that would implement 

the standard methodology in each year 

inappropriately inflated the calculated 

savings by estimating more States would 

delay implementation than was 

reasonable. Further, information 

received by the agency outside of this 

regulatory action, as well as other 

publicly available information, indicate 

that more than the 10 States initially 

estimated by the Department are likely 

to implement the standard methodology 

on July 1, 2018. 

Given this information, the 

Department has revised its estimated 

number of States implementing the 

standard methodology in each year. 

While the public comment raised this 

issue, it did not provide information on 

how many States, or which specific 

States, will implement the standard 

methodology on any given timeline. 

Given that we do not otherwise have 

data with regard to this matter, we 

cannot estimate these numbers with 

absolute precision. While we believe it 

is likely that a significant subset of 

States will choose to delay 

implementation of the standard 

methodology given the new flexibility 

under this rule, our revised estimates 

assume that 20 States will implement 

the 2016 significant disproportionality 

regulations on July 1, 2018. We further 

assume 10 States will implement the 

standard methodology on July 1, 2019, 

with the remainder doing so on July 1, 

2020, if the standard methodology is 

required by law then. 

To the extent that more than 35 States 

take advantage of this new flexibility, 

these assumptions will result in an 

underestimate of actual cost savings of 

this final rule. For an analysis of the 

likely effect on the estimated cost 

savings of fewer States implementing 

the standard methodology on July 1, 

2018, see the Sensitivity Analysis 

section of this document. In line with 

these revised estimates, we also estimate 

that 150 additional LEAs will be 

identified with significant 

disproportionality in Year 1, 220 in Year 

2, and 400 in Year 3. Note that these 

assumptions are based on the number of 

States implementing the standard 

methodology in each year. At this time, 

the Department has received no 

information that would lead it to adjust 

its original estimated number of LEAs 

that would be identified in each year 

outside of a revision of the number of 

States. 

Given the revised assumptions noted 

above, the Department now estimates 

that the rule will result in $7.6 to $8.0 

million in gross cost savings (benefits) 

over ten years. 

Transfers 

As noted in the NPRM, the 

Department’s calculation of total 

transfers under the rule is based on the 

number of LEAs newly identified as 


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3The number of States implementing the 

standard methodology in July 1, 2019 is a function 

of the other two assumptions, and therefore does 

not need a separate range of assumptions. 

having significant disproportionality in 

each year and then multiplying that 

total by 15 percent of the average LEA 

allocation. To improve comparability of 

estimates and provide greater 

transparency for the public, the 

Department has not updated baseline 

assumptions regarding the average 

required reservation per LEA for 

comprehensive CEIS. Given the 

revisions to our estimates discussed 

above, the Department now estimates 

that this rule will result in a net 

reduction in transfers of between $41.5 

and $43.8 million over a ten-year 

period. 

Sensitivity Analysis 

The Department’s estimated costs and 

benefits of this final rule are driven 

largely by the estimated number of 

States that choose to implement the 

standard methodology in each year. As 

such, we have conducted an analysis to 

demonstrate the sensitivity of our 

estimates to these assumptions. In the 

table below, we note the estimated net 

cost savings, calculated at a 7 percent 

discount rate, for eight different 

scenarios. The scenarios are 

combinations of what we believe to be 

extreme upper and lower bound 

estimates of (1) the number of States 

implementing the standard 

methodology on July 1, 2018, and (2) the 

number of States delaying 

implementation for the full two years 

(until July 1, 2020).3

In addition to these extreme upper 

and lower bounds, we also provide 

estimates using the primary 

assumptions of the estimates described 

above. For the number of States 

implementing the standard 

methodology on July 1, 2018, we use an 

upper bound of 40 States and a lower 

bound of 15. For purposes of the 

number of States delaying 

implementation for the full two years, 

we use an upper bound which assumes 

all States not implementing on July 1, 

2018 will delay the full two years and 

a lower bound which assumes that no 

States will opt to delay the full two 

years, but will only delay for a single 

year—until July 1, 2019. 

TABLE 1—IMPACT ON ESTIMATED COSTS AT SEVEN PERCENT DISCOUNT RATE OF VARIED ASSUMPTIONS

Number of States delaying for 2 years 

Upper bound Primary estimate Lower bound 

Number of States implementing standard methodology on July 1, 2018: 

Upper Bound ...................................................................................................... ($3,688,937) † ($2,074,891) 

Primary estimate ................................................................................................. (8,391,391) (7,361,007) (4,716,579) 

Lower Bound ...................................................................................................... (9,729,101) (8,115,057) (5,470,627) 

† No estimate is provided as a combination of the upper bound estimate of the number of States implementing the standard methodology on 

July 1, 2018 (40), and the primary estimate of the number delaying until July 1, 2020 (25) is not possible. 

As a result of these analyses, the 

Department believes it is reasonable to 

assume that, even when factoring in the 

potential unquantified costs of this 

action, this final rule represents a 

deregulatory action with net cost 

savings to regulated entities. We will 

further evaluate the analyses and 

assumptions upon which the costbenefit calculations are made along with 

the regulations and issues raised in this 

rulemaking, to best ensure that all 

children with disabilities are 

appropriately identified, placed, and 

disciplined, and that all children get the 

services they need and receive FAPE in 

the least restrictive environment. 

Executive Order 13771 

This final rule is considered an E.O. 

13771 deregulatory action. Consistent 

with Executive Order 13771 (82 FR 

9339, February 3, 2017), we have 

estimated that this proposed regulatory 

action will not impose any net 

additional costs. 

Regulatory Flexibility Act Certification 

The Secretary certifies that these 

regulations would not have a significant 

economic impact on a substantial 

number of small entities. 

The U.S. Small Business 

Administration (SBA) Size Standards 

define ‘‘small entities’’ as for-profit or 

nonprofit institutions with total annual 

revenue below $7,000,000 or, if they are 

institutions controlled by small 

governmental jurisdictions (that are 

comprised of cities, counties, towns, 

townships, villages, LEAs, or special 

districts), with a population of less than 

50,000. These regulations would affect 

all LEAs, including the estimated 17,371 

LEAs that meet the definition of small 

entities. However, we have determined 

that the regulations would not have a 

significant economic impact on these 

small entities. As stated earlier, this 

regulatory action imposes no new net 

costs. 

Paperwork Reduction Act of 1995 

This regulatory action does not 

contain any information collection 

requirements. 

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 the Department’s 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 to 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 this Department 

published in the Federal Register, in 

text or Adobe 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 


sradovich on DSK3GMQ082PROD with RULES4
31318 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Rules and Regulations 

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. 

List of Subjects in 34 CFR Part 300 

Administrative practice and 

procedure, Education of individuals 

with disabilities, Elementary and 

secondary education, Equal educational 

opportunity, Grant programs— 

education, Privacy, Private schools, 

Reporting and recordkeeping 

requirements. 

Accordingly, the date of compliance 

for recipients of Federal financial 

assistance to which the regulations 

published at 81 FR 92376 (December 19, 

2016) apply is delayed. Recipients of 

Federal financial assistance to which 

the regulations published at 81 FR 

92376 apply must now comply with 

those regulations by July 1, 2020, except 

that States are not required to include 

children ages three through five in the 

calculations under § 300.647(b)(3)(i) and 

(ii) until July 1, 2022. 

Dated: June 28, 2018. 

Johnny W. Collett, 

Assistant Secretary for Special Education and 

Rehabilitative Services. 

[FR Doc. 2018–14374 Filed 6–29–18; 4:15 pm] 

BILLING CODE 4000–01–P 


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