Document headings vary by document type but may contain
                    the following: the agency or agencies that issued and signed a document
the number of the CFR title and the number of each part
                      the document amends, proposes to amend, or is directly
                      related to
the agency docket number / agency internal file number
the RIN which identifies each regulatory action listed in
                      the Unified Agenda of Federal Regulatory and Deregulatory
                      Actions See the
                    Document Drafting Handbook
                    for more details.
 Department of Health and Human Services Administration for Children and Families 45 CFR Part 1304
RIN 0970-AD09
 AGENCY: Office of Head Start (OHS), Administration for Children and Families (ACF), Department of Health and Human Services (HHS).
 ACTION: Final rule; delay of implementation date.
 SUMMARY: This final rule describes how the Office of Head Start officially delays the date for programs to meet the new competitive threshold for the Instructional Support domain of the Classroom Assessment Scoring System (CLASS®) used to determine whether a Head Start agency will be subject to an open competition under the Designation Renewal System (DRS). The implementation date in the Head Start Program Performance Standards that raises the CLASS® Instructional Support competitive threshold from 2.3 to 2.5 was August 1, 2025. This final rule officially delays this implementation date to August 1, 2027.
 DATES:  *Effective date:*
                         This final rule is effective on November 6, 2024. *Implementation date:*
                         The implementation date for the increased CLASS® Instructional Support competitive threshold of 2.5 as described in 45 CFR 1304.11(c)(1)(iii) is delayed until August 1, 2027.
 FOR FURTHER INFORMATION CONTACT: Jessica Bialecki, Office of Head Start, 202-240-3901 or 
                        *Jessica.Bialecki@acf.hhs.gov.*


SUPPLEMENTARY INFORMATION: Table of Contents I. Table of Abbreviations II. Executive Summary III. Background and Purpose A. Background and History B. Authority C. Basis and Purpose of Regulatory Action IV. Discussion of Elements of the Final Rule V. Waiver of Notice and Comment Process VI. Regulatory Process Matters VII. Regulatory Impact Analysis I. Table of Abbreviations ACF—Administration for Children and Families CLASS®—Classroom Assessment Scoring System DRS—Designation Renewal System HHS—U.S. Department of Health and Human Services HSPPS—Head Start Program Performance Standards OHS—Office of Head Start II. Executive Summary This final rule describes how the Office of Head Start (OHS) officially delays the date for programs to meet the new competitive threshold for the Instructional Support domain of the Classroom Assessment Scoring System (CLASS®) used to determine whether a Head Start agency will be subject to an open competition under the Designation Renewal System (DRS). The implementation date in the Head Start Program Performance Standards (HSPPS) that raises the CLASS® Instructional Support competitive threshold from 2.3 to 2.5 was August 1, 2025. This final rule officially delays 
                    ( print page 87978)
                    this implementation date to August 1, 2027. The 2.3 competitive threshold that was established through regulation in 2020 has not yet been fully implemented due to a pause in CLASS® observations during the COVID-19 pandemic. Therefore, the fiscal year 2024 (FY24) OHS monitoring cycle (2023-2024 program year) was the first time the 2.3 competitive threshold is fully implemented. The graduated approach established by the 2020 rule was put in place to allow sufficient time for grant recipients to make necessary quality improvements. However, the unexpected pause in CLASS® observations due to the pandemic shortened the 5-year implementation time frame to less than 2 years. This decision to delay the Instructional Support competitive threshold increase is also based on OHS' anticipated timeline for adopting an updated CLASS® tool—CLASS® 2nd Edition—and the associated training, technical assistance, and certification procedures required for both OHS and Head Start programs to implement this revised tool. III. Background and Purpose A. Background and History OHS provides grant awards to local public and private non-profit and for-profit agencies to provide comprehensive education and child development services to economically disadvantaged children, birth to age five, and their families, to help young children develop the skills they need to be successful in school. The HSPPS define requirements grant recipients must meet to operate high quality Head Start programs. The HSPPS also provide a structure for OHS to monitor and enforce quality standards. One of these requirements is that programs meet or exceed a threshold score on each of three domains measured by the CLASS®. The CLASS® is an observation instrument that assesses the quality of teacher-child interactions in center-based preschool classrooms. The three domains of the CLASS® include: Emotional Support, Classroom Organization, and Instructional Support. A grant recipient is subject to an open competition if their average score across all classrooms observed is below the competitive threshold on any of these three domains. In 2020, OHS published a final rule establishing an increased competitive threshold of 2.3 for the Instructional Support domain through July 31, 2025. However, this threshold is being fully implemented for the first time during the FY24 monitoring cycle, due to delays caused by the COVID-19 pandemic. As described in 45 CFR 1304.11(c)(1)(iii), the competitive threshold for this domain would have further increased to 2.5 on August 1, 2025. This timeline was initially developed prior to the COVID-19 pandemic, to allow programs more time to ramp up the Instructional Support threshold for accountability. This notification officially extends the implementation deadline for the increased Instructional Support competitive threshold of 2.5 to August 1, 2027. Accordingly, the lower competitive threshold of 2.3 will be in place for CLASS® observations collected as part of monitoring reviews that occur through July 31, 2027. The HSPPS requires that programs are observed using the CLASS® as part of the Head Start DRS (outlined in § 1304.11), and programs are required to meet specific thresholds for non-competitive grant renewal. While individual classrooms are observed and scored, OHS averages scores across all classrooms observed for a given program and calculates a program-level average score, which is used for competition determination. Through at least the fiscal year 2025 (FY25) monitoring cycle, OHS is using the 2008 version of the CLASS®, which consists of three domains: Emotional Support, Classroom Organization, and Instructional Support. The current thresholds for competition are 5, 5, and 2.3, respectively. Since OHS did not conduct CLASS® reviews for two years due to the COVID-19 pandemic, the 2020 final rule that established the new Instructional Support threshold of 2.3 was implemented for the first time in FY24. This final rule provides an extended timeframe for increasing the Instructional Support competitive threshold and gives OHS sufficient time to fully implement the 2.3 threshold before it increases to 2.5. Further, in 2022, Teachstone, the company that owns the CLASS® tool, published CLASS® 2nd Edition. The second edition of the CLASS® tool is described as a more inclusive and equitable approach to observing adult-child interactions in the classroom. As a result, several, but not all, Head Start programs are opting to re-train program staff members on CLASS® 2nd Edition for their own professional development and classroom quality tracking purposes. This process requires additional time, as well as training and technical assistance support materials, to take the new certification test. However, for OHS to shift its entire oversight and technical assistance systems to CLASS® 2nd Edition, there needs to be a substantial scale-up of the training and certification processes that Teachstone and the Head Start technical assistance network provide. A number of these training supports have not yet been available at the capacity needed for a universal shift by OHS and the Head Start community to the updated measure. OHS understands the urgency with which its oversight system must adapt to CLASS® 2nd Edition. However, due to lack of adequate supports in place to train the entire Head Start system of observers and trainers, it will not be possible for OHS to transition to CLASS® 2nd Edition prior to the date originally set by the 2020 final rule for the increase in the Instructional Support competitive threshold (August 1, 2025). B. Authority We publish this final rule under the authority granted to the Secretary of Health and Human Services by section 641 (42 U.S.C. 9836) as amended by the Improving Head Start for School Readiness Act of 2007 (Pub. L. 110-134). Under this section, the Secretary is required to develop a system for designation renewal Specifically, the Act requires the Secretary to “. . . modify, as necessary, program performance standards by regulation applicable to Head Start agencies and programs . . .” [1]
                    
                     This rule meets the statutory requirements Congress put forth in its 2007 bipartisan reauthorization of the Head Start and addresses Congress's mandate that called for the Secretary to review and revise the performance standards. The Secretary has determined that the modifications to performance standards contained in this regulation are appropriate and needed to effectuate the goals of the performance standards and the purposes of the Act. C. Basis and Purpose of Regulatory Action In this final rule, OHS extends the timeline for the increased competitive threshold of 2.5 to August 1, 2027, to give programs more time to adjust to the Instructional Support competitive threshold of 2.3 that is being implemented for the first time in FY24, provide additional time to acclimate to the CLASS® 2nd Edition measure, and to strengthen ongoing technical assistance for program staff on the updated CLASS® measure. This extended timeframe gives OHS additional time to consider the implications of adopting CLASS® 2nd Edition universally and determine the most appropriate plan for this change, and to ensure that grant recipients have sufficient notice to adjust to and adopt 
                    ( print page 87979)
                    this revised tool. Grant recipients will be provided ample notice from OHS before it begins using CLASS® 2nd Edition for monitoring purposes. Switching Head Start monitoring and technical assistance to use CLASS® 2nd Edition should not be implemented in the same year as the change in the competitive threshold for Instructional Support. This will place undue burden on programs and the Head Start monitoring and technical assistance system. Extending the implementation date for the increased competitive threshold for the Instructional Support domain also allows OHS to prepare relevant program staff and members of the Head Start Training and Technical Assistance (TTA) network to be responsive to program needs for TTA as they make the transition to CLASS® 2nd Edition. Re-training the entire Head Start TTA network on CLASS 2nd Edition requires a multiple-day, in-person or online training and a certification test where staff must score within a specific range to pass. OHS anticipates needing the time that this extension allows to ensure its network of observers and trainers are certified on CLASS® 2nd Edition. ACF recognizes that some Head Start programs are already starting to re-train their staff and several members of the TTA network have done so as well. At the same time, programs are learning and understanding what the new CLASS® 2nd Edition scores mean and how to interpret them, and the TTA network is learning how to provide follow-up TTA to support programs once they receive their new scores. The longer implementation window for the increased Instructional Support threshold allows programs and OHS to adjust programming, policies, and procedures to be responsive to this changing landscape. IV. Discussion of Elements of the Final Rule Section 1304.11 Basis for Determining Whether a Head Start Agency Will Be Subject to an Open Competition ACF is changing the implementation date for the instructional support competitive threshold domain increase to 2.5 from August 1, 2025, to August 1, 2027. V. Waiver of Notice and Comment Process When engaging in rulemaking, HHS will ordinarily publish a notice of proposed rulemaking in the 
                    **Federal Register**
                     to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA).[2]
                    
                     However, we can waive this notice and comment procedure if we find, for good cause, that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and incorporate a statement of the finding and the reasons therefore in the notice. HHS finds good cause to waive public comment under section 553(b) of the APA because it is unnecessary and contrary to the public interest to provide for public comment in this instance. The existing CLASS® competitive thresholds for Head Start programs continue to be in effect for competition determinations. As such, the delayed implementation date poses no harm or burden to programs or the public. A period for public comment would have only extended programs' concerns about meeting the new threshold by the previous implementation date of August 1, 2025. VI. Regulatory Process Matters We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 13132, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all benefits, costs, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Section 3(f) of Executive Order 12866, as amended by Executive Order 14094, defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $200 million or more, or adversely affecting in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities; (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in Executive Order 12866, as specifically authorized in a timely manner by the Administrator of the Office of Information and Regulatory Affairs in each case. The Regulatory Impact Analysis (RIA) for this final rule does not identify economic impacts that exceed the threshold for significance under Section 3(f)(1) of Executive Order 12866. Congressional Review Act Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act or CRA) allows Congress to review “major” rules issued by Federal agencies before the rules take effect, see 5 U.S.C. 801(a). The CRA defines a major rule as one that has resulted, or is likely to result, in (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, or innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets, 
                    *see*5 U.S.C. 804(2). This action is not a major rule because it will not have an annual effect on the economy of $100 million or more. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), see 5 U.S.C. 605(b) as amended by the Small Business Regulatory Enforcement Fairness Act, requires federal agencies to determine, to the extent feasible, a rule's impact on small entities, explore regulatory options for reducing any significant impact on a substantial number of such entities, and explain their regulatory approach. The term “small entities,” as defined in the RFA, comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. Under this definition, some Head Start grant recipients may be small entities. We consider a rule to have a significant impact on a substantial number of small entities if it has at least a three percent impact on revenue on at least five percent of small entities. However, the Secretary certifies, under 5 U.S.C. 605(b), as enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not have a significant impact on a substantial number of small entities. This final rule simply delays the date by which the threshold will increase for the CLASS® Instructional Support domain that would trigger competition for a Head Start grant 
                    ( print page 87980)
                    recipient. We do not expect increased costs for recipients due to this delayed implementation date; therefore, we do not expect there to be a significant impact on a substantial number of small entities. Unfunded Mandates Reform Act of 1995 The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $183 million, using the most current (2023) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in expenditures that meet or exceed this amount. Head Start grant recipients receive over $12 billion annually in Federal funding to implement the requirements of the program, including changes as a result of this final rule. Federalism Assessment Executive Order 13132 Executive Order 13132 requires Federal agencies to consult with State and local government officials if they develop regulatory policies with federalism implications. Federalism is rooted in the belief that issues that are not national in scope or significance are most appropriately addressed by the level of government close to the people. This final rule will not have substantial direct impact on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this action does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. Treasury and General Government Appropriations Act of 1999 Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a policy or regulation may negatively affect family well-being. If the agency determines a policy or regulation negatively affects family well-being, then the agency must prepare an impact assessment addressing seven criteria specified in the law. ACF believes it is not necessary to prepare a family policymaking assessment, see Public Law 105-277, because the action it takes in this final rule will not have any impact on the autonomy or integrity of the family as an institution. Paperwork Reduction Act of 1995 The Paperwork Reduction Act (PRA) of 1995, 44 U.S.C. 3501 
                    *et seq.,*
                     minimizes government-imposed burden on the public. In keeping with the notion that government information is a valuable asset, it also is intended to improve the practical utility, quality, and clarity of information collected, maintained, and disclosed. The PRA requires that agencies obtain Office of Management and Budget (OMB) approval, which includes issuing an OMB number and expiration date, before requesting most types of information from the public. Regulations at 5 CFR part 1320 implemented the provisions of the PRA and §  1320.3 of this part defines a “collection of information,” “information,” and “burden.” PRA defines “information” as any statement or estimate of fact or opinion, regardless of form or format, whether numerical, graphic, or narrative form, and whether oral or maintained on paper, electronic, or other media (5 CFR 1320.3(h)). This includes requests for information to be sent to the government, such as forms, written reports and surveys, recordkeeping requirements, and third-party or public disclosures (5 CFR 1320.3(c)). “Burden” means the total time, effort, or financial resources expended by persons to collect, maintain, or disclose information. This action does not include any new information collection requirements or changes to existing information collection requirements. VII. Regulatory Impact Analysis Need for Regulatory Action As summarized previously, the 2.3 competitive threshold for the CLASS® Instructional Support domain that was established through regulation in 2020 has not yet been fully implemented due to a pause in CLASS® observations through OHS monitoring during the COVID-19 pandemic. Therefore, the FY24 OHS monitoring cycle (2023-2024 program year) was the first year in which the 2.3 competitive threshold was fully implemented with grant recipients. The graduated approach established by the 2020 final rule was put in place to allow sufficient time for grant recipients to make necessary quality improvement in the Instructional Support domain (a domain in which early childhood programs nationally tend to score lower, relative to other domains of the CLASS®). Increasing the competitive threshold to 2.5 in August 2025 does not allow sufficient time for the phase in approach envisioned in the 2020 final rule. In addition, OHS currently uses the 2008 version of the CLASS®. But in 2022, the developer of the CLASS® tool released an updated version called CLASS® 2nd Edition. This updated version is marketed as a more equitable and inclusive measure of teacher-child interactions in classroom settings. As a result, many Head Start programs are already re-training staff members on CLASS® 2nd Edition; this process requires additional technical assistance and training support materials, multi-day training workshops, and additional time to take the new certification test, as well as significant costs. A number of these supports have not yet been available at the capacity or scale needed for a universal shift by OHS's monitoring system to the updated version of the tool. In addition, it will take time to ensure all OHS reviewers are certified in the new edition, and to revise OHS monitoring processes, materials, and training to reflect CLASS® 2nd Edition. Accordingly, OHS has not yet adopted this new version of the tool for federal monitoring purposes and is continuing to use the 2008 version of CLASS® through at least the FY25 monitoring cycle. However, we do intend to transition to CLASS® 2nd Edition in the future, and we want to provide programs with an adequate adjustment period with the new tool before making another system-wide change by increasing the competitive threshold for Instructional Support. Cost Savings Analysis There are approximately 1,900 grants in Head Start. Absent this final rule, the competitive threshold for the CLASS® Instructional Support threshold will increase from a 2.3 to a 2.5 on August 1, 2025. During the 2025-2026 program year, we estimate that approximately 280 grants will receive a CLASS® review from OHS. During the 2026-2027 program year, we estimate that approximately 400 grants will a receive a CLASS® review from OHS. Based on OHS monitoring data from CLASS® reviews conducted during the 2023-2024 program year, we estimate that approximately seven percent of grants reviewed in a given year would receive a score below 2.3 on CLASS® Instructional Support and approximately 13 percent would receive a score below 2.5. If we apply these percentages to the expected number of 
                    ( print page 87981)
                    CLASS® reviews to be conducted in the 2025-2026 and 2026-2027 program years, we observe the following approximate numbers of grants that would be triggered to compete under DRS due to their CLASS® Instructional Support score, either in the presence or absence of this final rule. Program year
Grants to compete absent
                             final rule 
                             (instructional support 
                             threshold = 2.5)
Grants to compete with
                             final rule 
                             (instructional support 
                             threshold = 2.3)2025-2026 (280 grants)
36
202026-2027 (400 grants)
52
28Total
88
48
 In other words, with this final rule, approximately 40 total fewer grants would be designated to compete due to their CLASS® Instructional Support scores received as a part of OHS monitoring during the 2025-2026 and 2026-2027 program years. The cost for competition associated with completing a competitive application is estimated at $3,538 per applicant. This assumption includes 60 hours per competitive application at a cost of approximately $58.96 per hour in staff time (we multiply an hourly wage of approximately $29.48 by two to account for fringe benefits). Applications would likely be completed by a combination of the Head Start assistant director and other managers in an early childhood program (
                    *i.e.,*
                     child development manager or family and community partnership manager). We base the average hourly wage for these positions on the U.S. Bureau of Labor Statistics Job Code 11-9031. We then multiply $3,538 per applicant by 80 to account for the 40 incumbent grant recipients applying for funds as well as 40 nonincumbent applicants for those service areas. This results in a baseline estimated cost of $283,040 for these 40 grant recipients to complete competitive applications if they did in fact have to compete, as well as 40 additional applicants. With this final rule, these baseline costs would not apply and are therefore cost savings in this analysis. With this final rule, those 40 grant recipients that would have been triggered to compete due to receiving a CLASS® Instructional Support score below 2.5 (but not below 2.3) would instead need to complete an noncompetitive grant application for a continuing annual award. We assume it takes approximately 33 hours of staff time to complete a noncompetitive application. Using the same assumptions as above for hourly wage, we estimate that it costs approximately $1,946 per grant to complete a noncompetitive application. We multiply this by 40 grants, which results in a total cost of approximately $77,840 for these grant recipients to complete a noncompetitive continuation application. Taking this cost into account, the total cost savings associated with this final rule is approximately $205,200. This includes cost savings to those entities that are not existing Head Start recipients as there would be no funding opportunity to which they would submit a competitive application. A qualitative opportunity cost for this new rule is fewer opportunities for entities that are not existing Head Start grant recipients to be able to compete and potentially grow as an early childhood provider in their community, for the 40 communities where grants were not designated for competition due to potentially low CLASS® Instructional Support scores. There is also a potential qualitative cost of children continuing to be served by grant recipients who may be providing lower-quality classroom learning environments that would have led to competition. However, for all the reasons summarized in the preamble of this final rule, ACF believes there is an added benefit of existing grant recipients not experiencing undue stress and potential increased financial burden associated with the competitive threshold increasing from 2.3 to 2.5 in August 2025. Additionally, these grant recipients will be able to continue to access and receive support through OHS's extensive TTA system, to facilitate continued quality improvement in classroom quality care and service provision for children and families. This RIA analyzes a 2-year time horizon covering FY 2026 and FY 2027. Overall, ACF does not believe there will be a significant economic impact from this regulatory action since this final rule only delays the implementation date by two years for the CLASS® Instructional Support competitive threshold. Jeff Hild, Principal Deputy Assistant Secretary of the Administration for Children and Families, performing the delegable duties of the Assistant Secretary, approved this document on October 8, 2024. List of Subjects in 45 CFR Part 1304 Early learning and development
Education
Education of disadvantaged
Grant programs-social programs
 Dated: October 28, 2024. Xavier Becerra, Secretary,  Department of Health and Human Services.
 For the reasons set forth in the preamble, the ACF amends 45 CFR part 1304 as follows: PART 1304—FEDERAL ADMINISTRATIVE PROCEDURES
 1.The authority citation for part 1304 continues to read as follows: Authority:
                        42 U.S.C. 9801 
                            *et seq.* Subpart B—Designation Renewal
 2.Amend § 1304.11 by revising paragraph (c)(1)(iii) to read as follows: § 1304.11
  
 (c) * * * (1) * * * (iii) For the Instructional Support domain, the competitive threshold is 2.3 through July 31, 2027, and 2.5 on and after August 1, 2027.


# Footnotes

1.
    
                         See section 641A(a)(1) and (2) of the Act. Back to Citation
 2.
    
                         5 U.S.C. 553(b). Back to Citation


[FR Doc. 2024-25440 Filed 11-5-24; 8:45 am] BILLING CODE 4184-40-P