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[Federal Register Volume 77, Number 183 (Thursday, September 20, 2012)]
[Rules and Regulations]
[Pages 58301-58309]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23259]

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DEPARTMENT OF EDUCATION

34 CFR Chapter II

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Subtitle A, Subchapter A

[Docket ID ED-2012-OESE-0012; CFDA Number 84.412A]
RIN 1810-AB15

Final Requirements--Race to the Top--Early Learning Challenge; 
Phase 2

AGENCY:  Department of Education and Department of Health and Human 
Services.

ACTION: Final requirements.

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SUMMARY: The Secretary of Education and the Secretary of Health and 
Human Services (hereafter ``the Secretaries'') announce requirements 
for Phase 2 of the Race to the Top--Early Learning Challenge (RTT-ELC) 
program. In Phase 2, we will make awards to certain States that applied 
for, but did not receive, funding under the RTT-ELC competition held in 
fiscal year (FY) 2011 (FY 2011 RTT-ELC competition). Specifically, we 
will consider eligible the five highest scoring applicants that did not 
receive funding in the FY 2011 RTT-ELC competition, each of which 
received approximately 75 percent or more of the available points under 
the

[[Page 58302]]

competition. We take this action to fund down the slate of the FY 2011 
RTT-ELC competition and to establish the information and assurances 
that the five eligible applicants will need to provide in order to 
receive funding under Phase 2 of the RTT-ELC program.

DATES: Effective Date: These requirements are effective October 22, 
2012.

FOR FURTHER INFORMATION CONTACT: Deborah Spitz, U.S. Department of 
Education, 400 Maryland Avenue SW., room 3E230, Washington, DC 20202-
6200. Telephone: (202) 260-3793 or by email: 
RTT.Early.Learning.Challenge@ed.gov.
    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:

Executive Summary

    Purpose of This Regulatory Action: The U.S. Departments of 
Education and Health and Human Services (hereafter ``the Departments'') 
will implement Phase 2 of the RTT-ELC program by funding down the slate 
from the FY 2011 RTT-ELC competition. Specifically, the Departments 
will make awards available to the next five highest scoring applicants 
that did not receive funding under the FY 2011 RTT-ELC competition. 
Because the amount of available funds in FY 2012 is limited, this 
action establishes specific requirements that the five eligible 
applicants must meet in order to receive up to 50 percent of the funds 
they requested in their FY 2011 RTT-ELC applications.
    Summary of the Major Provisions of This Regulatory Action: In this 
document, we establish a limited number of application requirements, 
assurances, and budget requirements that the five eligible applicants 
must meet in order to receive funds under Phase 2 of the RTT-ELC 
program.
    The Application Requirements, which can be found in section III of 
the Final Requirements section, require each eligible applicant to: (1) 
Describe how it would implement the activities proposed in Core Area B 
(selection criteria one through five) of its FY 2011 RTT-ELC 
application; (2) describe how it would implement the activities 
proposed in Competitive Preference Priority 2 of its FY 2011 RTT-ELC 
application; and (3) from two or more of the three Focused Investment 
Areas (C, D, and E) in its FY 2011 RTT-ELC application, select 
activities proposed in response to one or more selection criteria. The 
Application Requirements section further explains how applicants may 
make adjustments to the scope of the activities they proposed in their 
FY 2011 RTT-ELC applications to ensure that the activities can be 
carried out successfully with the amount of funds available in Phase 2 
of the RTT-ELC program.
    The Application Assurances, which can be found in section IV of the 
Final Requirements section, include a set of assurances for eligible 
applicants to include in their applications for Phase 2 RTT-ELC awards. 
These assurances relate to commitments made in the FY 2011 RTT-ELC 
applications. For example, in order to receive a Phase 2 RTT-ELC award, 
an eligible applicant must update the information in tables 1-13 in 
section (A)(1) of its FY 2011 RTT-ELC application, which described 
State funding, programs, and policies that supported early learning at 
the time the FY 2011 application was submitted. Each eligible applicant 
must maintain the commitments made in section (A)(1) in a manner 
consistent with the updated tables. Each eligible applicant must also 
maintain commitments to engage in the partnerships described in its FY 
2011 RTT-ELC application in a manner consistent with the updated 
tables. These commitments are critical to building strong State systems 
of early learning and development. This requirement is important 
because the strength of these commitments influenced how reviewers 
scored the FY 2011 RTT-ELC applications during the FY 2011 peer review 
process.
    The Budget Requirements, which can be found in section V of the 
Final Requirements section, require that an eligible applicant complete 
a revised budget and narrative that includes an explanation of why the 
eligible applicant has selected the activities it proposes to carry out 
(as described under ``Application Requirements'') and why those 
activities would have the greatest impact on advancing its high-quality 
plan for early learning.
    Costs and Benefits: We have determined that these requirements will 
not impose significant additional costs to States, the eligible 
applicants under the RTT-ELC program, or the Federal Government and 
that the potential benefits will exceed the costs. The Departments 
believe States will incur minimal costs in developing plans and budgets 
for implementing selected activities from their FY 2011 RTT-ELC 
proposals because such planning will entail only revisions to existing 
plans and budgets already developed as part of the FY 2011 RTT-ELC 
application process.
    Purpose of Program: The purpose of the RTT-ELC program is to 
improve the quality of early learning and development and close the 
achievement gap for children with high needs. This program focuses on 
improving early learning and development for young children by 
supporting States' efforts to increase the number and percentage of 
low-income and disadvantaged children, in each age group of infants, 
toddlers, and preschoolers, who are enrolled in high-quality early 
learning and development programs; and to design and implement an 
integrated system of high-quality early learning and development 
programs and services.

    Program Authority: Sections 14005 and 14006, Division A, of the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), as 
amended by section 1832(b) of Division B of Pub. L. 112-10, the 
Department of Defense and Full-Year Continuing Appropriations Act, 
2011, and the Department of Education Appropriations Act, 2012 
(Title III of Division F of Pub. L. 112-74, the Consolidated 
Appropriations Act, 2012) (hereafter ``the Department of Education 
Appropriations Act, 2012'').

    We published a notice of proposed requirements (NPR) for this 
program in the Federal Register on June 20, 2012 (77 FR 36958). The NPR 
contained background information and our reasons for proposing the 
particular requirements and assurances for Phase 2 of the RTT-ELC 
program.
    There are two significant differences between the requirements 
proposed in the NPR and these final requirements. First, in this 
notice, the Departments have clarified that applicants may make 
reductions and adjustments in the activities in Core Area A(3)(a)(1), 
Core Area B, and Competitive Preference Priority 2 based on the 50 
percent reduction in available Federal funding for Phase 2 of the RTT-
ELC program. Second, the Departments are requiring applicants to 
explain any significant changes to the information provided in section 
(A)(1) that have occurred since submission of their FY 2011 
applications, including updates to the information provided in tables 
1-13 in section (A)(1) of their FY 2011 applications. These changes are 
described in greater detail below in the Analysis of Comments and 
Changes section.
    Public Comment: In response to our invitation in the NPR, twelve 
parties submitted comments on the proposed requirements. In the 
following section, we summarize and provide responses to the comments 
we received. We group major issues addressed in these comments 
according to subject.

[[Page 58303]]

Generally, we do not address technical and other minor changes.
    Analysis of Comments and Changes: An analysis of the comments and 
any changes in the requirements since publication of the NPR follows.

Eligibility and Allocation of Funds

    Comment: One commenter questioned why only the five States named in 
the NPR are eligible to apply and asked whether other States might 
receive funds if the five eligible States do not apply.
    Discussion: The NPR included a discussion of the reasons for 
limiting eligibility to the five States named in the NPR. When the 
Departments made FY 2011 RTT-ELC awards, we did not have sufficient 
funding to award grants to all high-quality applications. The 
Department of Education Appropriations Act, 2012 authorizes the 
Departments to make awards on the basis of previously submitted 
applications. In light of the fact that the amount of funds available 
in FY 2012 is inadequate to conduct a meaningful new competition, we 
have chosen to use the available FY 2012 funds to make awards to the 
next five highest scoring applications, each of which received 
approximately 75 percent or more of the available points under the 
competition. The Secretaries believe that supporting high-scoring 
applicants that did not receive funding under the FY 2011 RTT-ELC 
competition with FY 2012 funding will help build on the momentum from 
the FY 2011 RTT-ELC competition. Because we are funding down the FY 
2011 slate and only limited funds are available, we are not opening 
eligibility to all non-funded applicants. If any of the five eligible 
applicants do not apply for funds, those funds that remain unawarded 
would be used to support grants made under the FY 2012 Race to the Top 
District competition. We would not make any remaining FY 2012 funds 
available to other unfunded applicants from the FY 2011 RTT-ELC 
competition.
    Changes: None.
    Comment: Two commenters recommended that the Departments establish 
a protocol to ensure that if any funds are not awarded to the eligible 
applicants, they can be recommitted to the other applicants. The 
commenters stated that all of the $133 million available for RTT-ELC in 
FY 2012 should be used for ``Early Learning Challenge purposes.''
    Discussion: As described previously, the Departments decided that 
if any of the five eligible applicants do not apply for funds, the 
funds will be used for awards in the FY 2012 Race to the Top District 
competition, which may support district-level reforms in early 
learning. Funds that are not awarded through RTT-ELC Phase 2 will not 
be made available to other unfunded applicants from the FY 2011 
competition.
    Change: None.

Modification of Activities

    Comment: Three commenters requested clarification about the 
proposed requirement that Phase 2 RTT-ELC funds not be used for new 
activities and sought clarification of the difference between new 
activities, new strategies, new tactics, and new goals. The commenters 
also suggested that reasonable modifications to proposed activities 
should be allowed due to activities that have occurred since States 
submitted their FY 2011 applications.
    Discussion: Applicants must select key activities from their FY 
2011 applications. Due to the 50 percent reduction in funding available 
under Phase 2 RTT-ELC, a State may adjust the scope of budget, 
timelines, or performance measures for those selected activities. In so 
doing, a State may, in fact, modify some strategies or tactics to 
complete an activity from its FY 2011 application in order to 
accomplish the goal specified in that application.
    A State is not permitted, however, to use Phase 2 RTT-ELC funds for 
activities that were not included in its FY 2011 application because 
the applications of the five eligible States were reviewed, scored, and 
ranked through the Departments' FY 2011 RTT-ELC peer review process. It 
would therefore be inappropriate to allow applicants to introduce new 
activities in place of those activities that were proposed in their FY 
2011 applications.
    The Departments will provide technical assistance to applicants on 
what constitutes a ``new activity'' rather than an adjustment to the 
scope of an activity included in a State's FY 2011 RTT-ELC application. 
For example, creating an entirely new project to address one of the 
selection criteria would be a new activity, while a change in the 
number of regions served or subgrants awarded would be an allowable 
adjustment. The adjustments may not significantly diminish the 
program's ability to improve access to high-quality early learning 
programs for children with high needs. In addition, when the scope of 
work is adjusted by targeting specific regions in a State, the 
activities must be consistent across those regions. In making these 
adjustments, the Departments strongly encourage eligible applicants to 
consider how to use other appropriate Federal, State, private, and 
local resources in order to maximize the impact of the investment of 
RTT-ELC funds. If we determine that a State's Phase 2 application 
proposes activities that were not included in its FY 2011 application, 
those activities will not be funded, and we will work with the State to 
make the necessary adjustments.
    Changes: None.
    Comment: One commenter asked for clarification of whether 
reductions and adjustments in scope, budget, timelines, and performance 
targets are permitted for Core Area A(3)(a)(1), Core Area B, and 
Competitive Preference Priority 2.
    Discussion: The intention of the Departments is that applicants 
carry out the activities described in Core Area A(3)(a)(1), Core Area 
B, and Competitive Preference Priority 2. However, in light of the 
reduced funding levels, applicants may modify these activities with 
adjustments to their scopes, budgets, timelines, and performance 
measures.
    Changes: The Departments have clarified this in the Application 
Requirements section of this document. Applicants may make adjustments 
in scopes, budgets, timelines and performance targets for activities in 
Core Area A(3)(a)(1), Core Area B, and Competitive Preference Priority 
2.

Required Core and Focused Investment Areas

    Comment: One commenter suggested that it might be preferable to 
allow applicants to focus only on one of the Focused Investment Areas 
rather than two or more.
    Discussion: The Departments understand the request to narrow the 
focus areas since less funding will be available for each applicant but 
believe that eligible applicants will be able to implement important 
activities in at least two Focused Investment Areas. This program is 
designed to take a comprehensive approach to improving State systems of 
early learning, and all three Focused Investment Areas are important to 
the success of that approach. We are not revising the requirement as 
suggested by the commenter because the option to select two of the 
three Investment Areas provides applicants with the flexibility to 
select those activities that they can effectively carry out with 
reduced funds, while at the same time maintaining the comprehensive 
nature of the program. Applicants will have flexibility within the 
Focused Investment Areas they select as to which selection criteria 
they want to implement. Furthermore, eligible applicants will have 
flexibility

[[Page 58304]]

regarding the amount of funds they choose to allocate to each Focused 
Investment Area. Applicants must explain in their applications the 
Focused Investment Areas and the selection criteria they have chosen to 
implement and how the reduced funding amount will affect their 
implementation. In addition, the Departments strongly encourage 
eligible applicants to leverage other appropriate Federal, State, 
private, and local resources to support their selected activities.
    Changes: We have revised paragraph (a) of the Budget Requirements 
section to reflect that the dedication of other sources of funding is 
an example of adjustments that would be described in the budget 
narrative.
    Comment: One commenter suggested that all applicants be required to 
address Focused Investment Area D: ``A Great Early Childhood Education 
Workforce.''
    Discussion: While workforce development is extremely important in 
building a high-quality State early learning system, the Departments 
chose not to require Focused Investment Area D for several reasons. 
First, the FY 2011 application did not give Area D a higher priority 
over Areas C and E, because the Departments believe that all three 
areas are important. Second, workforce issues are addressed under Core 
Area B. In fact, one of the reasons we are requiring applicants to 
address all of the selection criteria under Core Area B is that this 
section includes all the elements of a comprehensive early learning 
system, from standards, to workforce credentials, to parent engagement.
    Changes: None.
    Comment: One commenter stated that selection criterion B(4), which 
promotes access to high-quality early learning and development programs 
for children with high needs, should receive a high level of 
recognition and support in this competition.
    Discussion: The Departments agree with the commenter that access to 
high-quality programs for children with high needs is of critical 
importance. To that end, both the FY 2011 RTT-ELC application and the 
NPR emphasized improving early learning and development programs for 
children with high needs. Specifically, the NPR proposed that eligible 
applicants be required to address all of the selection criteria in Core 
Area B, which includes B(4), ``Promoting access to high-quality early 
learning and development programs for children with high needs.'' We 
retain that language in these final requirements and will provide 
eligible applicants with technical assistance that emphasizes the 
importance of all criteria within Core Area B.
    Changes: None.

Maintenance of State Commitments

    Comment: Two commenters requested some flexibility in the proposed 
assurance that States maintain all of the commitments described in 
section (A)(1). The commenters expressed concern that holding States to 
section (A)(1) commitments could result in funds being reduced in other 
high-need areas, and requested clarification of the budgetary 
requirements of grantees with respect to this section.
    Discussion: Applicants were judged in the FY 2011 competition based 
on the commitments described in those applications, and we strongly 
encourage States to maintain those commitments. At the same time, we 
understand that this is a challenging time for many States due to 
budget reductions. For that reason, we have chosen to maintain 
Assurance (b) but have specified that the State will maintain, in a 
manner consistent with any updates to tables 1-13 in section A(1), its 
commitment to and investment in high-quality, accessible early learning 
and development programs and services for children with high needs, as 
described in section (A)(1) of its FY 2011 RTT-ELC application. We have 
added language requiring each applicant to explain any significant 
changes in section (A)(1) that may have occurred since its submission 
of the FY 2011 application.
    Changes: The Departments have added language to the Application 
Assurances section that requires each applicant to explain any 
significant changes to section (A)(1) that may have occurred since the 
submission of its FY 2011 application, and to provide updates to tables 
1-13 in section (A)(1).
    Comment: Three commenters inquired whether the tables in section 
(A)(1) of the FY 2011 application would need to be resubmitted in the 
Phase 2 application.
    Discussion: The NPR was silent on whether the tables in section 
(A)(1) would need to be resubmitted in the Phase 2 RTT-ELC application. 
However, in order to ensure we have comprehensive, accurate, and 
current information, and provide additional flexibility on Assurance 
(b), the Departments will need to know which parts of the tables in 
section (A)(1) have changed. Therefore, the Departments are requiring 
that States update and resubmit tables 1-5 in their Phase 2 
applications. Also, if the State has made any significant changes to 
the commitments, financial investments, numbers of children 
participating, legislation, policies, practices, or other key areas of 
the program described in section (A)(1) of its FY 2011 application, it 
must submit an explanation of those changes, including updates to 
tables 6-13 from section (A)(1).
    Changes: The Departments have added language to the Application 
Assurances section that requires applicants to submit an explanation of 
any significant changes to section (A)(1) that have occurred in the 
commitments, financial investments, numbers of children participating, 
legislation, policies, practices, or other key areas since their 
submission of the FY 2011 application, including resubmission of tables 
1-5 and, as needed, updating tables 6-13.

Additional Selection Criteria and Priorities

    Comment: Several commenters proposed adding or changing the 
selection criteria and priorities from the FY 2011 application. One 
commenter proposed adding a competitive preference priority for 
expanding programs to disadvantaged communities, including rural and 
isolated areas. One commenter proposed a new invitational priority for 
mandatory full-day kindergarten. One commenter proposed a selection 
criterion that focuses on the strength of a State's kindergarten 
readiness assessment as an alternative for States that do not have a 
kindergarten entry assessment. One commenter proposed that a selection 
criterion be added that would allow States to demonstrate the effect of 
reforms made during the year between the FY 2011 competition and Phase 
2 RTT-ELC and that would score States on the progress made. One 
commenter recommended that we change the licensing and inspection 
requirement in Competitive Preference Priority 2 so that instead of 
awarding points to States that implement licensing and inspection 
systems that cover all programs that regularly care for two or more 
unrelated children for a fee in a provider setting, it would instead 
state a broader goal of implementing a coordinated system of licensing 
and Tiered Quality Rating and Improvement System (TQRIS) tiers, 
supported by monitoring and inspection.
    Discussion: These recommendations would impose new priorities or 
selection criteria that were not included in the FY 2011 application. 
The Department of Education Appropriations Act, 2012 specifically 
authorizes the Departments to make awards on the basis of previously 
submitted applications. This is the

[[Page 58305]]

approach we have taken because the funding available in FY 2012 is 
inadequate to conduct a meaningful new competition. Because we are 
making awards on the basis of previously submitted applications, we 
will not be making changes to any of the priorities or selection 
criteria from the FY 2011 application.
    Changes: None
    Comment: Several commenters recommended new program requirements 
for Phase 2 RTT-ELC grantees. One commenter recommended that we require 
the five eligible applicants to serve more young children than the 
current baseline by revising assurance (b) to add ``and increasing the 
numbers of high-need children served by local programs in the State 
during the grant period.'' One commenter recommended that the 
Departments add an assurance requiring that no less than one-third of 
the grant funds be provided as subgrants to local programs to improve 
services and serve children with high needs. One commenter proposed a 
new requirement that applicants demonstrate significant LEA involvement 
in developing their applications.
    Discussion: These recommendations would impose new program 
requirements on the eligible applicants that were not included in the 
FY 2011 application. For the reasons stated previously, the Departments 
are not changing any of the program requirements from the FY 2011 
application.
    Changes: None.
    Comment: Two commenters recommended that if the Departments were to 
impose a maintenance-of-effort requirement for these grants, they 
should use language modeled on past maintenance-of-effort requirements 
that have appropriate waiver provisions.
    Discussion: This program does not have a maintenance-of-effort 
requirement, and the Departments have not chosen to propose one. While 
there is no maintenance-of-effort requirement, funds awarded in Phase 2 
RTT-ELC must be used to supplement, not supplant, any Federal State, or 
local funds for activities such as increasing access to and improving 
the quality of Early Learning and Development Programs.
    Change: None.

Supplement, Not Supplant

    Comment: One commenter requested that language on the supplement-
not-supplant requirement from the Executive Summary of the FY 2011 RTT-
ELC NIA be added to the Phase 2 RTT-ELC NIA for FY 2012.
    Discussion: The Program Requirements in the RTT-ELC NIA for FY 2011 
stated that funds made available under an RTT-ELC grant must be used to 
supplement, not supplant, any Federal, State, or local funds that in 
the absence of the funds awarded under this grant, would be available 
for increasing access to and improving the quality of Early Learning 
and Development Programs. This requirement applies to all Phase 2 RTT-
ELC awards. The Departments have included language about the RTT-ELC 
supplement-not-supplant requirement in the Phase 2 NIA and will include 
it in technical assistance provided to applicants.
    Changes: None.

Grant Period

    Comment: Two commenters requested clarification on the duration and 
flexibility of the grant period.
    Discussion: Since the NPR stated that all requirements not 
otherwise specified were to be consistent with the FY 2011 application, 
the grant period will be up to four years.
    Changes: None.

Contracts and Subgrants

    Comment: One commenter requested clarification on whether 
contracting and subgranting would be allowable under these awards.
    Discussion: The awarding of contracts has always been allowable 
under RTT-ELC. Initially, States were not permitted to subgrant funds 
under this program. However, the Department of Education Appropriations 
Act, 2012 specifically provided that a State may make subgrants to 
public or private agencies and organizations under the RTT-ELC program. 
Thus, contracting and subgranting are allowable uses of Phase 2 RTT-ELC 
funds. The Lead State Agency and Participating State Agencies may, 
consistent with the State's approved plan, distribute funds to 
localities and other entities through memoranda of understanding, 
interagency agreements, contracts, other mechanisms authorized by State 
procurement laws, or subgrants. As always, a State's laws and 
procedures govern subawards. Public Law 112-74 does not require 
grantees to make subgrants; it simply provides grantees with this 
additional mechanism for distributing RTT-ELC funds, so long as 
awarding subgrants is consistent with State law and does not result in 
a change of the scope or objectives of the grant.
    Changes: None.

Supporting Documentation

    Comment: Three commenters inquired whether letters of support 
included in the FY 2011 application would need to be resubmitted.
    Discussion: Applicants do not need to resubmit letters of support.
    Changes: None.

General Comments

    Comment: One commenter stated that Focused Investment Area D should 
comprehensively address the workforce pipeline and a system of supports 
for the early education workforce, including appropriate compensation, 
workforce recruitment, preparation, professional development (including 
facilitating the pursuit of further credits, degrees, and coursework), 
mentoring, and other technical assistance. The commenter also stated 
that Focused Investment Area D should foster the retention of 
educators, administrators, and education support professionals who 
possess postsecondary credentials in, and a deep understanding of, 
child development and specialized training in early childhood 
education. The commenter further suggested that the program include 
sufficient resources to allow teachers and instructional assistants to 
obtain the requisite credentials without compromising quality of 
education and without increasing costs for families. Finally, the 
commenter suggested that this criterion encourage the maintenance of a 
strong core licensing and monitoring system that ensures the health and 
safety of children in all child care settings.
    Discussion: As previously stated, the Department of Education 
Appropriations Act, 2012 specifically authorizes the Departments to 
make awards on the basis of previously submitted applications, and this 
is the approach provided for in these final requirements. As such, the 
Departments are not changing any of the program requirements, 
priorities, or selection criteria from the FY 2011 RTT-ELC application. 
However, the Departments note that the proposals described by this 
commenter are generally consistent with the requirements and 
definitions provided in Focused Investment Area D of the FY 2011 
application. For example, the FY 2011 application included criteria 
that supported the establishment of a statewide system of credentials 
and degrees aligned with a Workforce Knowledge and Competency 
Framework, alignment of professional development opportunities with 
that Framework, increasing access for educators to effective 
professional development, and policies and

[[Page 58306]]

incentives to improve retention and career advancement. Core Area B 
addresses the importance of a high-quality plan for rating and 
monitoring early learning programs participating in the TQRIS.
    Changes: None.

Final Requirements

    The Secretary announces the following requirements for Phase 2 of 
the RTT-ELC program. Except where otherwise indicated in these final 
requirements, the applicable final requirements and definitions of key 
terms from the notice inviting applications, published in the Federal 
Register on August 26, 2011 (76 FR 53564), apply to the Phase 2 RTT-ELC 
application process.
    I. Award Process: To receive a Phase 2 RTT-ELC award, an eligible 
applicant must submit--
    (a) An application, consistent with its FY 2011 RTT-ELC 
application, that--
    (1) Meets the application requirements described in the Application 
Requirements section; and
    (2) Provides the assurances described in the Application Assurances 
section; and
    (b) For review and approval by both Departments, a detailed plan 
and budget describing the activities selected from its FY 2011 RTT-ELC 
application that would be implemented with Phase 2 RTT-ELC funding, in 
accordance with the Budget Requirements section.

    Note:  We encourage eligible applicants to partner with each 
other and currently funded RTT-ELC grantees in carrying out specific 
activities (such as validation of a State's TQRIS, implementation of 
longitudinal data systems, or development of a kindergarten entry 
assessment). Each eligible applicant may apply for Phase 2 RTT-ELC 
awards individually or as a member of a consortium (with other 
eligible applicants) under 34 CFR 75.127-129. A consortium can be 
formed only with other eligible applicants and requires a single 
application. A partnership can be described in the application of an 
individual State or a consortium and can include eligible applicants 
as well as currently-funded grantees. In any event, an eligible 
applicant must propose activities for Phase 2 of the RTT-ELC program 
that are consistent with its FY 2011 RTT-ELC application.

    II. Eligibility Requirements: Eligible applicants for Phase 2 RTT-
ELC awards are those States that applied for funding under the FY 2011 
RTT-ELC competition and received approximately 75 percent or more of 
the available points but that did not receive grant awards under that 
competition. Therefore, only the States of Colorado, Illinois, New 
Mexico, Oregon, and Wisconsin are eligible to apply for Phase 2 RTT-ELC 
awards.
    III. Application Requirements: Eligible applicants must meet the 
following requirements to receive Phase 2 RTT-ELC awards:
    (a) Each eligible applicant must describe how it would implement an 
organizational structure for managing the Phase 2 RTT-ELC grant that is 
consistent with the activities and commitments described in response to 
selection criterion A(3)(a)(1) \1\ of its FY 2011 RTT-ELC application, 
and describe how it would implement the activities described in 
response to Core Area B (selection criteria one through five) of its FY 
2011 RTT-ELC application using a Phase 2 RTT-ELC award. The FY 2011 
RTT-ELC Core Area B criteria promote broad participation in the State's 
TQRIS across a range of programs, active and continuous program quality 
improvement, and the publication of program ratings so that families 
can make informed decisions about which programs can best serve the 
needs of their children. Specifically, in Core Area B of its FY 2011 
RTT-ELC application, each applicant had to demonstrate that it had 
developed and adopted, or had a high-quality plan to develop and adopt, 
a TQRIS. In addition, each eligible applicant must also implement the 
activities it proposed under Competitive Preference Priority 2, 
including all early learning and development programs in the TQRIS.
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    \1\ The selection criteria from the FY 2011 RTT-ELC application 
can be found in the Notice inviting applications for the FY 2011 
RTT-ELC competition, published in the Federal Register on August 26, 
2011 (76 FR 53564) and at http://www2.ed.gov/programs/racetothetop-earlylearningchallenge/2011-412.doc (pp. 26-74).
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    (b) In addition to addressing the requirements in paragraph (a) of 
this section, each eligible applicant must select and describe how it 
will implement activities that it identified in its FY 2011 RTT-ELC 
application in response to Focused Investment Areas C, D, or E. The 
eligible applicant must select activities from two or more of the three 
Focused Investment Areas C, D, and E, and the activities must be 
responsive to one or more of the selection criteria under the Focused 
Investment Areas chosen by the applicant. (Eligible applicants may 
implement additional activities proposed under more than one selection 
criterion within each Focused Investment Area.) In determining which 
selection criteria to address given the amount of available funds under 
Phase 2 of the RTT-ELC program, each eligible applicant must give 
consideration to those activities that will have the greatest impact on 
improving access to high-quality early learning programs for children 
with high needs.

    Note: In light of the reduced funding available, applicants may 
make adjustments in the scope of services provided to meet selection 
criteria in Core Area A(3)(a)(1), Core Area B, Competitive 
Preference Priority 2, and Focused Investment Areas C, D, and E. For 
example, an applicant may propose to serve fewer programs or regions 
of the State than it proposed to serve in its FY 2011 RTT-ELC 
application. The eligible applicant must provide a detailed 
explanation of its rationale for such adjustments and also must 
amend its targets in tables B(2)(c) and B(4)(c)(1-2) of the FY 2011 
RTT-ELC application, as needed. The adjustments may not diminish the 
program's impact on improving access to high-quality early learning 
programs for children with high needs. In addition, if the scope of 
work is adjusted by targeting specific regions in the State, the 
activities must be consistent across regions. In making these 
adjustments, the Departments strongly encourage eligible applicants 
to consider how to use other appropriate Federal, State, private, 
and local resources to support their selected activities.

    (c) In addition, each eligible applicant may implement the 
activities it proposed in response to the Invitational Priorities from 
its FY 2011 RTT-ELC application. Eligible applicants that wrote to 
Invitational Priority 2 are encouraged to enter into public-private 
partnerships to the extent that doing so would augment total funds 
available for carrying out the activities described in their FY 2011 
RTT-ELC applications.

    Note: We encourage grantees to enter into consortia, where 
relevant, in order to maximize the use of available funds. Please 
refer to section (V)(b).

    (d) The Departments will use Phase 2 RTT-ELC funding to support 
only those activities included in an eligible applicant's FY 2011 RTT-
ELC application. Therefore, an eligible applicant must not include new 
activities in its Phase 2 RTT-ELC application.
    (e) Each Phase 2 RTT-ELC application must include current 
signatures by the eligible applicant's Governor or an authorized 
representative signing on behalf of the Governor; an authorized 
representative from the eligible applicant's Lead Agency; and an 
authorized representative from each Participating State Agency.
    (f) Each Phase 2 RTT-ELC application must include a newly-signed 
Memorandum of Understanding and a preliminary scope of work for each 
Participating State Agency.
    IV. Application Assurances: Each eligible applicant must include in 
its Phase 2 RTT-ELC application the following assurances from its 
Governor

[[Page 58307]]

or authorized representative of the Governor of its State:
    (a) While the State may make appropriate adjustments to the scope, 
budget, timelines, and performance targets, consistent with the reduced 
amount of funding that is available under the Phase 2 RTT-ELC award 
process, the State will maintain consistency with the absolute priority 
and meet all program and eligibility requirements of the FY 2011 RTT-
ELC competition.
    (b) The State must update tables 1-5 from section (A)(1) of its FY 
2011 application. In addition, if the State has made any significant 
changes to the commitments, financial investments, numbers of children 
served, legislation, policies, practices, or other key areas of the 
program described in section (A)(1) of its FY 2011 application, it must 
submit an explanation of those changes, including updates to tables 6-
13 from section (A)(1) as needed.
    The State will maintain, in a manner consistent with its updates to 
tables 1-13, its commitment to and investment in high-quality, 
accessible early learning and development programs and services for 
children with high needs, as described in section (A)(1) of its FY 2011 
RTT-ELC application.
    (c) Subject to adjustments due to the reduced amount of funding 
available under the Phase 2 RTT-ELC award process, the State will 
maintain its plan to establish strong participation and commitment by 
Participating State Agencies and other early learning and development 
stakeholders as described in Section A(3) of its FY 2011 RTT-ELC 
application.
    (d) The State will maintain its commitment to integrating and 
aligning resources and policies across Participating State Agencies as 
described in Section A(3) of its FY 2011 RTT-ELC application.
    (e) The State will comply with all of the accountability, 
transparency, and reporting requirements that applied to the FY 2011 
RTT-ELC competition. (See the notice inviting applications for the FY 
2011 RTT-ELC competition, published in the Federal Register on August 
26, 2011 (76 FR 53564).)
    (f) The State will comply with the requirements of any evaluation 
of the RTT-ELC program, or of specific activities it proposes to pursue 
as part of the program, conducted and supported by the Departments.
    V. Budget Requirements: An eligible applicant may apply for up to 
50 percent of the funds it requested in its FY 2011 RTT-ELC 
application. The following budget requirements apply to the Phase 2 
RTT-ELC award process:
    (a) Budget Narrative. Each eligible applicant must submit a 
detailed narrative and budget, using the format and instructions 
provided in the FY 2011 RTT-ELC application package, which describes 
the activities it has selected from its FY 2011 RTT-ELC application 
that it proposes to implement with a Phase 2 RTT-ELC award. This 
detailed narrative must include an explanation of why the eligible 
applicant has selected these activities and why the eligible applicant 
believes they will have the greatest impact on advancing its high-
quality plan for early learning. The narrative must also explain where 
the applicant has made adjustments (such as, a reduction in the number 
of participating programs or areas of the State served, or the 
dedication of additional Federal, State, local, or private funds to 
support the plan) to ensure that the activities can be carried out 
successfully with the amount of funds available. In reviewing the 
narrative, we may request that the applicant submit revisions to 
address concerns related to feasibility or the strategic use of funds. 
(See the notice inviting applications for the FY 2011 RTT-ELC 
competition, published in the Federal Register on August 26, 2011 (76 
FR 53564).)
    (b) Applying as a Consortium. As discussed previously, we encourage 
eligible applicants to form consortia with each other or partner with 
currently funded FY 2011 RTT-ELC grantees in carrying out specific 
activities (such as validation of a State's TQRIS, implementation of 
longitudinal data systems, or development of a kindergarten entry 
assessment). Eligible applicants may apply individually or as members 
of a consortium (with other eligible applicants) under 34 CFR 75.127-
129. A consortium can be formed only with other eligible applicants and 
requires a single application. A partnership can be described in the 
application of an individual State or a consortium and can include 
eligible applicants as well as currently-funded grantees. Each eligible 
applicant must propose activities consistent with its FY 2011 RTT-ELC 
application. Therefore, each eligible applicant that chooses to apply 
as a member of a consortium or to partner with a current RTT-ELC 
grantee in carrying out project activities must include in its revised 
budget narrative an explanation of how the activities to be undertaken 
by the consortium or partnership are consistent with the applicant's FY 
2011 RTT-ELC application and how the consortium or partnership will 
help the applicant implement its selected activities. It is important 
to note that an applicant may propose some activities that it would 
execute alone and others that it would execute as part of a consortium.
    (c) Available Funds. The maximum amounts of funding for which each 
eligible applicant may apply are shown in the following table. The 
amounts in this table are based on the requirement that each eligible 
applicant may apply for up to half of the amount it requested in its FY 
2011 RTT-ELC application.

------------------------------------------------------------------------
                          State                           Maximum amount
------------------------------------------------------------------------
Colorado................................................     $29,925,888
Illinois................................................      34,798,696
New Mexico..............................................      25,000,000
Oregon..................................................      20,508,902
Wisconsin...............................................      22,701,389
------------------------------------------------------------------------

    Note: This notice does not solicit applications. In any year in 
which we choose to use one or more of these requirements, we invite 
applications through a notice in the Federal Register.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretaries 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 local 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 will have an annual effect on the economy of 
more than $100 million because the amount of government transfers 
through the Phase 2 RTT-ELC award process exceeds that amount. 
Therefore, this action is ``economically significant'' and subject to 
review by OMB review under

[[Page 58308]]

section 3(f)(1) of Executive Order 12866. Notwithstanding this 
determination, we have assessed the potential costs and benefits--both 
quantitative and qualitative--of this regulatory action and have 
determined that the benefits will justify the costs.
    The Departments have also reviewed these requirements 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 on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its 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 the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including 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 requirements only on a reasoned determination 
that their benefits justify their costs. In choosing among alternative 
regulatory approaches, we selected those approaches that maximize net 
benefits. Based on the analysis that follows, the Departments believe 
these requirements are consistent with the principles in Executive 
Order 13563.
    We have also determined that this regulatory action will 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, the potential costs and benefits, net budget 
impacts, assumptions, limitations, and data sources, as well as 
regulatory alternatives we considered.

Need for Federal Regulatory Action

    These requirements are needed to implement the Phase 2 RTT-ELC 
award process in the manner that the Departments believe will best 
enable the program to achieve its objectives--to create the conditions 
for effective reform in early learning systems in States that had high-
scoring applications in the FY 2011 RTT-ELC competition but that did 
not receive funding in that competition, so that they can implement key 
elements of their comprehensive reform proposals submitted as part of 
their FY 2011 RTT-ELC competition applications.

Potential Costs and Benefits

    Under Executive Order 12866, we have assessed the potential costs 
and benefits of this regulatory action and have determined that these 
requirements will not impose significant additional costs to State 
applicants or the Federal Government. Most of the requirements 
contained in this notice involve re-affirming State commitments and 
plans already completed as part of the FY 2011 RTT-ELC competition or 
other Federal education programs. Similarly, other requirements, in 
particular those related to maintaining conditions for reform required 
under the FY 2011 RTT-ELC competition, require continuation of existing 
commitments and investments rather than the imposition of additional 
burdens and costs. The Departments believe those States that are 
eligible for Phase 2 awards will incur minimal costs in developing 
plans and budgets for implementing selected activities from their FY 
2011 RTT-ELC competition proposals, because in most cases such planning 
will entail only revisions to existing plans and budgets already 
developed as part of the FY 2011 RTT-ELC application process and not 
the development and implementation of entirely new plans and budgets. 
In all cases, the Departments believe that the benefits resulting from 
the requirements for the Phase 2 RTT-ELC award process will exceed 
their costs.

Regulatory Alternatives Considered

    An alternative to promulgation of these requirements would have 
been to use FY 2012 Race to the Top funds to make awards to the one or 
two highest scoring unfunded applications from the FY 2011 RTT-ELC 
competition and to use the remaining funds for the Race to the Top 
District competition to be held in FY 2012. We concluded that 
approximately $400 million in available FY 2012 funds is necessary to 
support a meaningful district-level competition.
    Moreover, the Departments believe that simply funding the one or 
two highest scoring applicants that were not selected in the FY 2011 
RTT-ELC competition would result in a missed opportunity to reward the 
efforts of other high-scoring applicants from that competition and to 
enable them to make meaningful progress on key elements of their State 
early learning plans.

Accounting Statement

    As required by OMB Circular A-4 (available at www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in the 
following table we have prepared an accounting statement showing the 
classification of the expenditures associated with the provisions of 
this regulatory action. This table provides our best estimate of the 
Federal payments to be made to States under this program as a result of 
this regulatory action. Expenditures are classified as transfers to 
States.

      Accounting Statement Classification of Estimated Expenditures
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $132,934,875.
From Whom To Whom?                          Federal Government to
                                             States.
------------------------------------------------------------------------

    The Phase 2 RTT-ELC award process will provide approximately $133 
million in competitive grants to eligible applicants (those five 
applicants that did not receive funding in the FY 2011 RTT-ELC 
competition, but which received approximately 75 percent or more of the 
available points under the competition).

Waiver of Congressional Review Act

    These requirements have been determined to be a major rule for 
purposes of the Congressional Review Act (CRA) (5 U.S.C. 801, et seq.). 
Generally, under the CRA, a major rule takes effect 60 days after the 
date on which the rule is published in the Federal Register. Section 
808(2) of the CRA, however, provides that any rule which an agency for 
good cause finds (and incorporates the finding and a brief statement of 
reasons therefore in the rule issued) that notice and public

[[Page 58309]]

procedure thereon are impracticable, unnecessary, or contrary to the 
public interest, shall take effect at such time as the Federal agency 
promulgating the rule determines.
    These final requirements are needed to implement the Phase 2 RTT-
ELC program, authorized under Sections 14005 and 14006, Division A, of 
the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), as 
amended by section 1832(b) of Division B of Public Law 112-10, the 
Department of Defense and Full-Year Continuing Appropriations Act, 
2011, and the Department of Education Appropriations Act, 2012, which 
was signed into law on December 23, 2011. The Department must award 
funds under this authority to qualified applicants by December 31, 
2012, or the funds will lapse. Even on an expedited timeline, it is 
impracticable for the Department to adhere to a 60-day delayed 
effective date for the final requirements and make grant awards to 
qualified applicants by the December 31, 2012 deadline. When the 60-day 
delayed effective date is added to the time the Department will need to 
receive applications (approximately 45 days), review the applications 
(approximately 21 days), and finally approve applications 
(approximately 28 days), the Department will not be able to award funds 
authorized under the Department of Education Appropriations Act, 2012 
to applicants by December 31, 2012. The Department has therefore 
determined that, pursuant to section 808(2) of the CRA, the 60-day 
delay in the effective date generally required for congressional review 
is impracticable, contrary to the public interest, and waived for good 
cause.

Paperwork Reduction Act of 1995

    These final requirements contain information collection 
requirements. However, because the eligible applicants for Phase 2 RTT-
ELC awards are fewer than 10, these collections are not subject to 
approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3502(3)(A)(i)).
    Intergovernmental Review: This program is subject to Executive 
Order 12372 and the regulations in 34 CFR part 79. One of the 
objectives of the Executive order is to foster an intergovernmental 
partnership and a strengthened federalism. The Executive order relies 
on processes developed by State and local governments for coordination 
and review of proposed Federal financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.
    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. Free 
Internet access to the official edition of the Federal Register is 
available 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 
these Departments 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 these Departments published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by these Departments.

    Dated: September 17, 2012.
Deborah S. Delisle,
Assistant Secretary for Elementary and Secondary Education, U.S. 
Department of Education.
George Sheldon,
Acting Assistant Secretary for Children and Families, U.S. Department 
of Health and Human Services.
[FR Doc. 2012-23259 Filed 9-19-12; 8:45 am]
BILLING CODE 4000-01-P
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