[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Notices]
[Pages 37837-37872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17906]


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DEPARTMENT OF EDUCATION

[Docket ID ED-2009-OESE-0007]
RIN 1810-AB04


State Fiscal Stabilization Fund Program

Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.394 
(Education Stabilization Fund) and 84.397 (Government Services 
Fund).

AGENCY: Department of Education.

ACTION: Notice of proposed requirements, definitions, and approval 
criteria.

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SUMMARY: The Secretary of Education (Secretary) proposes requirements, 
definitions, and approval criteria for the State Fiscal Stabilization 
Fund (Stabilization) program. The Secretary may use one or more of 
these requirements, definitions, and approval criteria in awarding 
funds under this program in fiscal year (FY) 2010. The requirements, 
definitions, and approval criteria proposed in this notice are based on 
the assurances regarding education reform that grantees are required to 
provide in exchange for receiving funds under the Stabilization 
program. We take this action to specify the data and information that 
grantees must collect and report with respect to those assurances and 
to help ensure grantees' ability to collect and report the required 
data and information.

DATES: We must receive your comments on or before August 28, 2009.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by e-mail. Please submit your comments only 
one time in order to ensure that we do not receive duplicate copies. In 
addition, please include the Docket ID and the term ``State Fiscal 
Stabilization Fund'' at the top of your comments.
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov to submit your comments electronically. Information 
on using Regulations.gov, including instructions for accessing agency 
documents, submitting comments, and viewing the docket, is available on 
the site under ``How To Use This Site.''
    <bullet> Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about these proposed requirements, 
definitions, and approval criteria, address them to Office of 
Elementary and Secondary Education (Attention: State Fiscal 
Stabilization Fund Comments), U.S. Department of Education, 400 
Maryland Avenue, SW., Room 3E108, Washington, DC 20202-6200.
    <bullet> Privacy Note: The Department's policy for comments 
received from members of the public (including those comments submitted 
by mail, commercial delivery, or hand delivery) is to make these 
submissions available for public viewing in their entirety on the 
Federal eRulemaking Portal at http://www.regulations.gov. Therefore, 
commenters should be careful to include in their comments only 
information that they wish to make publicly available on the Internet.

FOR FURTHER INFORMATION CONTACT: James Butler. Telephone: (202) 260-
2274 or by e-mail: <a href="/cdn-cgi/l/email-protection#45352d24362077262a2828202b31360520216b222a33"><span class="__cf_email__" data-cfemail="9bebf3fae8fea9f8f4f6f6fef5efe8dbfeffb5fcf4ed">[email protected]</span></a>.
    If you use a telecommunications device for the deaf (TDD), call the 
Federal Relay Service (FRS), toll free, at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:
    Invitation to Comment: We invite you to submit comments regarding 
this notice. To ensure that your comments have maximum effect in 
developing the notice of final requirements, definitions, and approval 
criteria, we urge you to identify clearly the specific proposed 
requirements, definitions, and approval criteria that each comment 
addresses.
    We invite you also to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
requirements, definitions, and approval criteria. Please let us know of 
any further ways we could reduce potential costs or increase potential 
benefits while preserving the effective and efficient administration of 
this program.
    During and after the comment period, you may inspect all public 
comments about this notice by accessing Regulations.gov. You may also 
inspect the public comments in person in Room 3E108, 400 Maryland 
Avenue, SW., Washington, DC, between the hours of 8:30 a.m. and 4:00 
p.m., Washington, DC, time, Monday through Friday of each week except 
Federal holidays.
    Assistance to Individuals with Disabilities in Reviewing the 
Rulemaking Record: On request we will provide an appropriate 
accommodation or auxiliary aid to an individual with a disability who 
needs assistance to review the comments or other documents in the 
public rulemaking record for this notice. If you want to schedule an 
appointment for this type of accommodation or auxiliary aid, please 
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Purpose of Program: The State Fiscal Stabilization Fund program 
provides approximately $48.6 billion in formula grants to States to 
help stabilize State and local budgets in order to minimize and avoid 
reductions in education and other essential services, in exchange for a 
State's commitment to advance essential education reform in key areas.
    Program Authority: American Recovery and Reinvestment Act of 2009, 
Division A, Title XIV--State Fiscal Stabilization Fund, Public Law 111-
5.

Proposed Requirements

    Note:  The proposed requirements are listed following the 
background for this section.

    Background: Section 14005(d) of Division A of the American Recovery 
and Reinvestment Act of 2009 (ARRA) requires a State receiving funds 
under the Stabilization program to provide assurances in four key areas 
of education reform: (a) Achieving equity in teacher distribution, (b) 
improving collection and use of data, (c) standards and assessments, 
and (d) supporting struggling schools. For each area of reform, the 
ARRA prescribes specific action(s) that the State must assure that it 
will implement. In addition, section 14005(a) of the ARRA requires a 
State that receives funds under the Stabilization program to submit an 
application to the Department containing such information as the 
Secretary may reasonably require. In this notice, we propose specific 
data and information requirements (the assurance indicators and 
descriptors) that a State receiving funds under the Stabilization 
program must meet with respect to the statutory assurances. We also 
propose specific requirements for a plan that a State must submit (the 
State plan), as part of its application for the second phase \1\ of 
funding under the Stabilization program, describing its ability to 
collect and report the required

[[Page 37838]]

data and other information. Together, these two sets of proposed 
requirements aim to provide transparency on the extent to which a State 
is implementing the actions for which it has provided assurance. 
Increased access to and focus on this information will better enable 
States and other stakeholders to identify strengths and weaknesses in 
education systems and determine where concentrated reform effort is 
warranted. We also intend to use the data and information that States 
collect and report in assessing whether a State is qualified to 
participate in and receive funds under other reform-oriented programs 
administered by the Department.
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    \1\ The Department is awarding Stabilization program funds in 
two phases. In the first phase, the Department is awarding 67 
percent of a State's Education Stabilization Fund allocation, unless 
the State can demonstrate that additional funds are required to 
restore fiscal year 2009 State support for education, in which case 
the Department will award the State up to 90 percent of that 
allocation. In addition, the Department will award 100 percent of 
each State's Government Services Fund allocation in Phase I. The 
Department will award the remainder of a State's Education 
Stabilization Fund allocation in the second phase. A table listing 
the allocations to States under the Stabilization program is 
available at: http://www.ed.gov/programs/statestabilization/funding.html.
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    As discussed elsewhere in this notice, a proposed assurance 
indicator or descriptor may relate to data or other information that 
States currently collect and report to the Department, or to data or 
other information for which the Department is itself the source. In 
those cases, we do not propose any new data or information collection 
requirements for a State; rather, the Department will provide the State 
with the relevant data or other information that the State would be 
required to confirm and make publicly available. (In confirming the 
data or information, the State would not be required to perform any 
additional analysis or verification.) In the other cases, the proposed 
requirement would constitute new data or information collection and 
reporting responsibilities for the State, to the extent the State does 
not currently collect and report such data or information for other 
purposes.
    Following is a description of the proposed indicators and 
descriptors in each education reform area and the proposed State plan 
requirements. The Department recognizes that requests for data and 
information should reflect an integrated and coordinated approach among 
the various programs supported with ARRA funds, particularly the 
Stabilization, Race to the Top, School Improvement Grants, and 
Statewide Longitudinal Data Systems programs. Accordingly, the 
Department will continue to evaluate the proposed requirements for this 
program in context with those other programs.

Achieving Equity in Teacher Distribution

    Regarding education reform area (a) (achieving equity in teacher 
distribution), section 14005(d)(2) of the ARRA requires a State 
receiving funds under the Stabilization program to assure that it will 
take actions to improve teacher effectiveness and comply with section 
1111(b)(8)(C) of the Elementary and Secondary Education Act of 1965, as 
amended (ESEA) (20 U.S.C. 6311), in order to address inequities in the 
distribution of highly qualified teachers between high- and low-poverty 
schools and to ensure that low-income and minority children are not 
taught at higher rates than other children by inexperienced, 
unqualified, or out-of-field teachers. In order to provide indicators 
of the extent to which a State is taking such actions, we propose to 
require that the State provide data and other information on student 
access to highly qualified teachers in high- and low-poverty schools, 
on how teacher and principal performance is evaluated, and on the 
distribution of performance evaluation ratings or levels among teachers 
and principals.
    With respect to student access to highly qualified teachers in 
high- and low-poverty schools, States are currently required to collect 
and report data to the Department, through the EDFacts system, on the 
extent to which core academic courses in such schools are taught by 
highly qualified teachers. Because such data are currently available, 
we do not propose to require any new data or information collection by 
a State in this area; rather, the Department would provide the State 
with the data it most recently submitted, which the State would be 
required to confirm and make publicly available.
    With respect to evaluation of teacher performance, we propose to 
require that a State provide descriptive information on the teacher 
performance evaluation systems used in local educational agencies 
(LEAs) in the State, including an indication of whether any official 
systems used to evaluate teacher performance include student 
achievement outcomes as an evaluation criterion. With respect to 
teacher performance ratings or levels, we propose to require that a 
State provide data on the distribution of performance ratings or levels 
in its LEAs as well as an indication of whether such ratings or levels 
are available to the public by school for each LEA. When properly 
developed and implemented, local evaluation systems perform a principal 
role in measuring teacher effectiveness. We also believe that student 
achievement outcomes are a central factor in evaluation systems that 
yield fair and reliable assessments of teacher performance. The data 
and information on teacher performance ratings or levels, together with 
the descriptive information on teacher performance evaluation systems, 
will provide greater transparency on the design and usage of teacher 
evaluation systems and will serve as an important indicator of the 
extent to which effective teachers are equitably distributed within 
LEAs and States.\2\ Moreover, this information will help States and 
other stakeholders correct inequities in the distribution of effective 
teachers as well as shortcomings in the design and usage of teacher 
performance evaluation systems.
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    \2\ We note that descriptions of the teacher performance 
evaluation systems used in LEAs also provide necessary context for 
data on teacher performance ratings or levels. When viewed in 
isolation, data on teacher performance ratings or levels are open to 
interpretation and may ultimately not be meaningful.
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    Regarding evaluation of principal performance, we propose 
requirements similar to those proposed for evaluation of teacher 
performance, except that we do not propose to require a State to 
indicate whether principal performance ratings or levels are available 
to the public by school in each LEA, as such information may be 
personally identifiable. Although the ARRA does not explicitly mention 
principals with respect to the assurance in this reform area, we 
believe that effective school administration is a key factor in 
effective teaching and learning. Studies show that school leadership is 
a major contributing factor to what students learn at school. Studies 
also show that strong teachers are more likely to teach in schools with 
strong principals.\3\ Information on principal performance will provide 
another useful snapshot of the steps being taken to ensure that 
effective school personnel are distributed equitably within LEAs and 
States.
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    \3\ See Leithwood, K., Louis, K. S., Anderson, S., and 
Walhstrom, K., (2004). How leadership influences student learning. 
Minneapolis, MN: University of Minnesota.
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    In order to meet the proposed requirements to describe the teacher 
and principal performance evaluation systems used in LEAs in the State, 
a State would not be required itself to develop such descriptions; it 
would be sufficient for the State to maintain a Web site that contains 
electronic links to descriptions developed by its LEAs.\4\ On such a 
Web site, the State could also include, by LEA, the data and 
information the State collects in order to meet the other proposed 
requirements that relate to evaluation of teacher and principal 
performance (i.e., the requirements to indicate whether official 
teacher and principal evaluations systems include student achievement 
outcomes as an evaluation criterion, to provide the number and 
percentage of teachers and principals rated at each performance rating 
or level

[[Page 37839]]

in official evaluation systems, and to indicate whether the number and 
percentage of teachers rated at each performance rating or level in 
official evaluations systems are publicly available for each school). 
In such a case, however, the State would be responsible for ensuring, 
through appropriate guidance or technical assistance, that the 
descriptions of teacher and principal performance evaluation systems 
maintained by LEAs contain the required information and are provided in 
an easily understandable format.
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    \4\ If, however, the State requires the use of specific teacher 
and principal evaluation systems by its LEAs, it could directly 
provide descriptions of those systems in lieu of individual system 
descriptions by its LEAs.
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    To view a summary of the proposed requirements in this education 
reform area, please visit: http://www.ed.gov/programs/statestabilization/applicant.html.

Improving Collection and Use of Data

    Regarding education reform area (b) (improving collection and use 
of data), section 14005(d)(3) of the ARRA requires a State receiving 
funds under the Stabilization program to provide an assurance that it 
will establish a statewide longitudinal data system that includes the 
elements described in section 6401(e)(2)(D) of the America COMPETES Act 
(20 U.S.C. 9871). To provide indicators of the extent to which a State 
is meeting that requirement, we propose that the State provide 
information on the elements of its statewide longitudinal data system 
and on whether the State provides teachers with data on student 
performance that include estimates of individual teacher impact on 
student achievement in a manner that is timely and informs instruction.
    With respect to the elements of statewide longitudinal data 
systems, we propose to require, consistent with the ARRA, that a State 
indicate whether its data system contains each of the 12 elements 
described in section 6401(e)(2)(D) of the America COMPETES Act \5\. For 
pre-school through postsecondary education, these elements include: (1) 
A unique statewide student identifier that does not permit a student to 
be individually identified by users of the system; (2) student-level 
enrollment, demographic, and program participation information; (3) 
student-level information about the points at which students exit, 
transfer in, transfer out, drop out, or complete P-16 education 
programs; (4) the capacity to communicate with higher education data 
systems; and (5) an audit system assessing data quality, validity, and 
reliability. For preschool through grade 12 education, these elements 
include: (6) yearly State assessment records of individual students; 
(7) information on students not tested, by grade and subject; (8) a 
teacher identifier system with the ability to match teachers to 
students; (9) student-level transcript information, including on 
courses completed and grades earned; and (10) student-level college 
readiness test scores. Finally, for postsecondary education, the 
elements include: (11) information regarding the extent to which 
students transition successfully from secondary school to postsecondary 
education, including whether students enroll in remedial coursework; 
and (12) other information determined necessary to address alignment 
and adequate preparation for success in postsecondary education. These 
elements constitute the minimum requirements of a modern statewide 
longitudinal data system. To measure the progress of students and 
schools effectively and efficiently, it is imperative that the State's 
data system contains these elements.
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    \5\ The Department is developing guidance to assist States in 
developing and implementing statewide longitudinal data systems that 
are consistent with the provisions of the America COMPETES Act and 
that comply with applicable student privacy requirements, including 
applicable requirements of the Family Educational Rights and Privacy 
Act. We expect to issue preliminary guidance in this area in the 
near future. During the time this guidance is being developed, we 
expect that States will continue to work toward fully developing and 
implementing statewide longitudinal data systems.
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    With respect to teachers' receipt of data on student performance 
that include estimates of individual teacher impact on student 
achievement, we propose to require a State to indicate whether it 
provides such data to teachers in grades in which the State administers 
reading/language arts and mathematics assessments. We believe that 
teachers' receipt of these data should be a natural product of a 
statewide longitudinal data system that includes elements (1), (6), and 
(8) referenced in the preceding paragraph. Moreover, we believe that 
this is a key example of how reliable, high-quality data from the 
State's system can drive education reform in general and improvements 
in the classroom in particular.
    To view a summary of the proposed requirements in this education 
reform area, please visit: http://www.ed.gov/programs/statestabilization/applicant.html.

Standards and Assessments

    Regarding education reform area (c) (standards and assessments), 
section 14005(d)(4) of the ARRA requires a State receiving funds under 
the Stabilization program to assure that it will: (A) Enhance the 
quality of the academic assessments it administers pursuant to section 
1111(b)(3) of the ESEA (20 U.S.C. 6311) through activities such as 
those described in section 6112(a) of the ESEA (20 U.S.C. 7301a); (B) 
comply with the requirements of paragraphs (3)(C)(ix) and (6) of 
section 1111(b) of the ESEA (20 U.S.C. 6311) and section 612(a)(16) of 
the Individuals with Disabilities Education Act (20 U.S.C. 1412) 
related to the inclusion of children with disabilities and limited 
English proficient students in State assessments, the development of 
valid and reliable assessments for those students, and the provision of 
accommodations that enable their participation in State assessments; 
and (C) take steps to improve State academic content standards and 
student academic achievement standards for secondary schools consistent 
with section 6401(e)(1)(A)(ii) of the America COMPETES Act (20 U.S.C. 
9871). To provide indicators of the extent to which a State is taking 
these actions, we propose that the State provide data and other 
information in the following areas:
    <bullet> Whether students are provided high-quality State 
assessments.
    <bullet> Whether the State is engaged in activities to enhance its 
assessments (with respect to paragraph (A) of the statutory assurance).
    <bullet> Whether students with disabilities and limited English 
proficient students are included in State assessment systems (with 
respect to paragraph (B) of the statutory assurance).
    <bullet> Whether the State makes available information regarding 
student academic performance compared to student academic performance 
in other States.
    <bullet> The extent to which students graduate from high school in 
four years with a regular high school diploma and continue on to pursue 
a college education or technical training (with respect to paragraph 
(C) of the statutory assurance).
    As States prepare to significantly improve the rigor and 
effectiveness of their standards and assessment systems, we believe 
this information will, in general, provide stakeholders with vital 
transparency on the current status of those systems and on the efforts 
to improve them that are currently underway.
    For two of the areas described above, namely, whether students are 
provided high-quality State assessments and whether students with 
disabilities and limited English proficient students are included in 
State assessment systems, States are currently required to collect and 
report data or other information to the Department. For instance, 
regarding whether students with disabilities and

[[Page 37840]]

limited English proficient students are included in State assessment 
systems, States are currently required to report, through the EDFacts 
system (for the annual ESEA Consolidated State Performance Report), the 
number and percentage of such students who are included in State 
reading/language arts and mathematics assessments. Similarly, regarding 
whether students are provided high-quality State assessments, a State 
must currently submit information to the Department on its assessment 
system, which the Department reviews for compliance with the 
requirements of the ESEA and on the basis of which the Department 
issues an approval status. We propose to use these and other data and 
information currently available to the Department \6\ as indicators of 
a State's progress in these two areas; in these cases, the Department 
would provide the State with the data it most recently submitted, or 
the most recent determinations of the Department, which the State would 
be required to confirm and publicly report.
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    \6\ See below for the proposed requirements in these areas 
regarding standards and assessments that use other data and 
information currently available to the Department; these include 
Indicators (c)(3), (c)(4), and (c)(8).
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    Regarding the extent to which the State is engaged in activities to 
enhance its assessments, we propose to require, consistent with the 
statutory assurance, that a State indicate whether it is pursuing any 
of the activities described in section 6112(a) of the ESEA.\7\ These 
activities include: (1) Working in collaboration or consortia with 
other States or organizations to improve the quality, validity, and 
reliability of State academic assessments; (2) measuring student 
academic achievement using multiple measures of academic achievement 
from multiple sources; (3) charting student progress over time; and (4) 
evaluating student academic achievement using comprehensive 
instruments, such as performance and technology-based assessments. If a 
State indicates that it is engaged in any such activities, it would be 
required to briefly describe the nature of that activity.
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    \7\ These activities are supported by the Grants for Enhanced 
Assessment Instruments program. See http://www.ed.gov/programs/eag/index.html for more information on this program.
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    As a supplement to the data and information currently available to 
the Department regarding whether students with disabilities and limited 
English proficient students are included in State assessment systems 
(as discussed above), we propose to require a State to indicate whether 
it has completed, within the last two years, an analysis of the 
appropriateness and effectiveness of the accommodations it provides 
students with disabilities and limited English proficient students to 
ensure their meaningful participation in State assessments. This 
additional information will help provide a comprehensive picture of the 
effort a State is making to include these students in a valid and 
reliable assessment system consistent with the statutory assurance. 
Moreover, we note that States conducting such analyses can use results 
from those analyses to target resources and identify areas where 
improvements in the services provided to these students are needed.
    Regarding whether the State makes available information on student 
performance compared to performance of students in other States, 
Federal regulations require States to include in the annual State 
report cards required under section 1111(h)(1)(A) of the ESEA (20 
U.S.C. 6311), beginning with report cards issued for the 2009-2010 
school year, the most recent available student achievement results for 
the State from the National Assessment of Educational Progress (NAEP) 
administered by the Department (34 CFR 200.11(c)). Because of this 
regulatory requirement, we do not propose to require any new data 
collection by a State in this area; rather, in this case, the State 
would be required to confirm that its annual State report card contains 
this information. We believe that, when compared with student 
achievement results from State assessments (which a State is required 
by statute also to include in its annual State report card), student 
achievement results from NAEP provide a perspective on the extent to 
which a State has developed and is implementing high-quality academic 
content and student achievement standards.
    Regarding the extent to which students graduate from high school 
and continue on to pursue a college education or technical training, we 
propose to require that a State provide data on the following topics: 
The number and percentage of students, by subgroup, who graduate from 
high school using a four-year adjusted cohort graduation rate as 
required by 34 CFR 200.19(b)(1)(i); the number of high school graduates 
(by subgroup) \8\ who subsequently enroll in institutions of higher 
education (IHEs) as defined in section 101(a) of the Higher Education 
Act of 1965, as amended (HEA); and, of the high school graduates who 
enroll in public IHEs, the number (by subgroup) who complete at least 
one year's worth of college credit applicable to a degree. These data 
will act as key indicators of the extent to which a State has developed 
and is implementing secondary school academic content and achievement 
standards that contribute effectively to student preparation for 
college without the need for remediation.
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    \8\ States must disaggregate these data by student subgroup 
consistent with the requirements of section 1111(b)(2)(C)(v)(II) of 
the ESEA. The student subgroups discussed in that section include: 
economically disadvantaged students, students from major racial and 
ethnic groups, students with disabilities, and students with limited 
English proficiency.
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    To view a summary of the proposed requirements in this education 
reform area, please visit: http://www.ed.gov/programs/statestabilization/applicant.html.

Supporting Struggling Schools

    Regarding education reform area (d) (supporting struggling 
schools), section 14005(d)(5) of the ARRA requires a State receiving 
funds under the Stabilization program to provide an assurance that it 
will ensure compliance with the requirements of section 
1116(b)(7)(C)(iv) and section 1116(b)(8)(B) of the ESEA (20 U.S.C. 
6316) with respect to Title I schools identified for corrective action 
and restructuring. In order to provide indicators of the extent to 
which a State is implementing the statutory assurance, we propose that 
the State provide data on the extent to which dramatic reforms to 
improve student academic achievement are implemented in Title I schools 
in improvement under section 1116(b)(1)(A) of the ESEA,\9\ in 
corrective action, or in restructuring, and on the extent to which 
charter schools are operating in the State.
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    \9\ Although the statutory assurance concerns only Title I 
schools in corrective action and restructuring, we propose to 
require that States include Title I schools in improvement as well 
when providing data on the extent to which dramatic reforms to 
improve student academic achievement are being implemented. Making 
this addition would be consistent with the school reform strategies 
that States are implementing using funds available under section 
1003(g) of the ESEA (School Improvement Grants), which are intended 
to be applied to schools in improvement as well as to schools in 
corrective action or restructuring.
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    With respect to reforms implemented in Title I schools in 
improvement, corrective action, or restructuring, we propose to require 
that a State provide data on the academic progress of such schools as 
well as on certain kinds of reform actions taken regarding those 
schools. We believe that these data, a supplement to existing data and 
information on Title I schools in improvement, corrective action, or 
restructuring, will serve as useful indicators of the extent to which

[[Page 37841]]

effective reforms are being implemented in these schools consistent 
with the intent of the ESEA and ARRA.
    Regarding the operation of charter schools in the State, we propose 
to require that a State provide data and other information on the 
number of charter schools that are permitted to operate in the State, 
the number that are currently operating, the number and identity of 
charter schools that have closed within the last five years, and the 
reason(s) (including financial, enrollment, academic, or other reasons) 
for the closure of any such school.
    Under section 1116(b)(8)(B) of the ESEA, LEAs must select and 
implement an alternative governance arrangement for a school in 
restructuring, and one allowable alternative is reopening the school as 
a charter school. Possessing greater autonomy in exchange for greater 
accountability, charter schools can become engines of innovation and 
serve as models for school reform. We believe these data will be useful 
in determining the extent to which opening charter schools is a viable 
reform option for LEAs with schools in restructuring and other 
struggling schools, and the extent to which charter schools are held 
accountable for their performance so that only high-performing options 
remain available.
    With respect to the number of charter schools that are currently 
operating, States are currently required to collect and report data on 
this topic to the Department through the EDFacts system. Because these 
data are currently available, we do not propose to require a new data 
collection by a State; rather, in this case, the Department would 
provide the State with the data it most recently submitted, which the 
State would be required to confirm and make publicly available.
    To view a summary of the proposed requirements in this education 
reform area, please visit: http://www.ed.gov/programs/statestabilization/applicant.html.

State Plans

    In addition to the specific data and information requirements 
relating to the four ARRA education reform assurances discussed above, 
we also propose requirements for a plan that a State must submit to the 
Department. In general, the State plan must describe the State's 
current ability to collect the data or other information needed for the 
proposed assurance indicators and descriptors as well as the State's 
current ability to make the data or information easily available to the 
public. If the State is currently able to fully collect and report the 
required data or other information, the State must provide the most 
recent data or information with its plan. If a State is not currently 
able to collect or report the data or other information, the plan must 
describe the State's process and timeline for developing and 
implementing the means to do so as soon as possible but no later than 
September 30, 2011, the date by which funds received under the 
Stabilization program must be obligated. The State plan must describe 
the State's collection and reporting abilities with respect to each 
individual indicator or descriptor.
    As discussed above, the data or information needed for an assurance 
indicator or descriptor is in some cases already reported to the 
Department by the State, or is provided by the Department. In those 
cases, it is understood that the State is currently able to collect the 
data or information; the State's plan need only address the State's 
ability to publicly report the data or information, and the State need 
not include the data or information with its plan.
    The proposed State plan requirements apply generally across the 
education reform areas discussed above with the exception of education 
reform area (b) (improving collection and use of data), for which we 
propose to apply slightly different plan requirements. Specifically, we 
propose to require that the State describe in the State plan whether 
the State's data system includes the required elements of a statewide 
longitudinal data system and, if the data system does not, the State's 
process and timeline for developing and implementing a system that 
meets all requirements as soon as possible but no later than September 
30, 2011. As this indicator relates to a State's ability to collect and 
report data, however, these requirements do not in effect differ 
substantially from the generally applicable State plan requirements 
(i.e., the requirements that the State describe its abilities to 
collect and report data or other information for a given indicator or 
descriptor). Moreover, the development and implementation of such a 
statewide longitudinal data system is intrinsic to a State's ability to 
collect and report the data required by certain other indicators (e.g., 
the indicators on student enrollment and credit completion in 
institutions of higher education after graduation from high school). 
Such a statewide longitudinal data system can also produce and manage 
other data that States may use in developing and improving programs; 
targeting services; developing better linkages between preschool, 
elementary and secondary, and postsecondary systems, agencies, and 
institutions; and holding schools, LEAs, and institutions accountable 
for their performance. Most importantly, we believe these State plan 
requirements are supported by the statutory assurance for this 
education reform area which, as stated above, requires the State to 
assure that it will develop such a system.
    Similarly, regarding teachers' receipt of data on student 
performance that includes estimates of individual teacher impact on 
student achievement, we propose to require that the State describe in 
the State plan whether the State provides teachers with such data and, 
if the State does not, the State's process and timeline for developing 
and implementing the means to do so as soon as possible but no later 
than September 30, 2011. We believe this requirement is likewise 
supported by the statutory assurance insofar as it provides an 
illustration of the ways in which data from the State's statewide 
longitudinal data system can be used to drive education reform. School 
and LEA leaders can use these data, in particular, in developing and 
providing professional development opportunities, assigning teachers, 
and implementing compensation and other human capital policies.
    In addition to requirements relating to a State's ability to 
collect and report data or other information for the respective 
assurance indicators and descriptors, we propose other general 
requirements for the State plan relating to the State's institutional 
infrastructure and capacity, the nature of any technical assistance or 
other support provided, the plan budget, and the processes the State 
employs for data and information quality assurance purposes.
    Our experience with data collections has shown that the development 
of a plan by the agency responsible for a collection is highly 
beneficial to all parties. For the Department and the public, a plan 
provides transparency on the agency's abilities to collect and report 
the data and other information, as well as a framework for holding the 
agency accountable for meeting the respective collection and reporting 
requirements. For the agency (in this case, the State), the plan 
presents an opportunity to assess its capacity and resources with 
respect to the requirements and to develop and implement any processes 
needed in order to comply with those requirements.
    In developing a plan as proposed in this notice, the State is 
encouraged to consult with key stakeholders such as superintendents, 
educators, and parents as well as teacher union, business,

[[Page 37842]]

community, and civil rights leaders. Such consultation would ensure 
that these stakeholders are aware of the State's current ability to 
meet the proposed requirements, can provide input on the means the 
State will develop to comply with the requirements, and can prepare to 
assist the State in implementing those means.

Proposed Requirements

    The Secretary proposes the following requirements for the 
Stabilization program. We may apply these requirements in any year in 
which this program is in effect.
    I. Assurance Indicators and Descriptors: A State must collect and 
report data and other information for the following indicators and 
descriptors regarding the assurances that the State has provided in 
order to receive funds under the Stabilization program.
    (a) Achieving equity in teacher distribution. A State must collect 
and report data and other information on the extent to which students 
in high- and low-poverty schools in the State have access to highly 
qualified teachers, on how teacher and principal performance is 
evaluated, and on the distribution of performance evaluation ratings or 
levels among teachers and principals. Specifically, a State must--
    Indicator (a)(1). Confirm, for the State and for each LEA in the 
State, the number and percentage (including numerator and denominator) 
of core academic courses taught, in the highest-poverty and lowest-
poverty schools, by teachers who are highly qualified consistent with 
section 9101(23) of the ESEA;
    Descriptor (a)(1). Describe, for each LEA in the State, the systems 
used to evaluate the performance of teachers;
    Indicator (a)(2). Indicate, for each LEA in the State, whether the 
systems used to evaluate the performance of teachers include student 
achievement outcomes as an evaluation criterion;
    Indicator (a)(3). Provide, for each LEA in the State whose teachers 
receive performance ratings or levels through an evaluation system, the 
number and percentage (including numerator and denominator) of teachers 
rated at each performance rating or level;
    Indicator (a)(4). Indicate, for each LEA in the State whose 
teachers receive performance ratings or levels through an evaluation 
system, whether the number and percentage (including numerator and 
denominator) of teachers rated at each performance rating or level are 
available for each school in the LEA in a manner easily accessible and 
a format easily understandable by the public;
    Descriptor (a)(2). Describe, for each LEA in the State, the systems 
used to evaluate the performance of principals;
    Indicator (a)(5). Indicate, for each LEA in the State, whether the 
systems used to evaluate the performance of principals include student 
achievement outcomes as an evaluation criterion; and
    Indicator (a)(6). Provide, for each LEA in the State whose 
principals receive performance ratings or levels through an evaluation 
system, the number and percentage (including numerator and denominator) 
of principals rated at each performance rating or level.
    (b) Improving collection and use of data. A State must collect and 
report information on the elements of its statewide longitudinal data 
system and on whether teachers receive data on student performance in a 
manner that is timely and informs instruction. Specifically, a State 
must--
    Indicator (b)(1). Indicate which of the 12 elements described in 
section 6401(e)(2)(D) of the America COMPETES Act are included in the 
State's statewide longitudinal data system; and
    Indicator (b)(2). Indicate whether the State provides teachers of 
reading/language arts and mathematics in grades in which the State 
administers assessments in those subjects with data on the performance 
of their students on those assessments that include estimates of 
individual teacher impact on student achievement, in a manner that is 
timely and informs instruction.
    (c) Standards and assessments. A State must collect and report data 
and other information on whether students are provided high-quality 
State assessments, on whether the State is engaged in activities to 
enhance its assessments, on whether students with disabilities and 
limited English proficient students are included in State assessment 
systems, on whether the State makes information available regarding 
student academic performance in the State compared to the academic 
performance of students in other States, and on the extent to which 
students graduate from high school in four years with a regular high 
school diploma and continue on to pursue a college education or 
technical training. Specifically, a State must--
    Indicator (c)(1). Confirm the approval status, as determined by the 
Department, of the State's assessment system under section 1111(b)(3) 
of the ESEA with respect to reading/language arts, mathematics, and 
science assessments;
    Indicator (c)(2). Indicate whether the State is engaged in 
activities consistent with section 6112(a) of the ESEA to enhance the 
quality of its academic assessments;
    Descriptor (c)(1). Briefly describe the nature of any activities 
indicated in Indicator (c)(2);
    Indicator (c)(3). Confirm whether the State has developed and 
implemented valid and reliable alternate assessments for students with 
disabilities that are approved by the Department;
    Indicator (c)(4). Confirm whether the State's alternate assessments 
for students with disabilities, if approved by the Department, are 
based on grade-level, modified, or alternate academic achievement 
standards;
    Indicator (c)(5). Indicate whether the State has completed, within 
the last two years, an analysis of the appropriateness and 
effectiveness of the accommodations it provides students with 
disabilities to ensure their meaningful participation in State 
assessments;
    Indicator (c)(6). Confirm the number and percentage (including 
numerator and denominator) of students with disabilities who are 
included in State reading/language arts and mathematics assessments;
    Indicator (c)(7). Indicate whether the State has completed, within 
the last two years, an analysis of the appropriateness and 
effectiveness of the accommodations it provides limited English 
proficient students to ensure their meaningful participation in State 
assessments;
    Indicator (c)(8). Confirm whether the State provides native 
language versions of State assessments for limited English proficient 
students that are approved by the Department;
    Indicator (c)(9). Confirm the number and percentage (including 
numerator and denominator) of limited English proficient students who 
are included in State reading/language arts and mathematics 
assessments;
    Indicator (c)(10). Confirm that the State's annual State Report 
Card (under ESEA section 1111(h)(1)) contains the most recent available 
State reading and mathematics NAEP results as required by 34 CFR 
200.11(c);
    Indicator (c)(11). Provide, for the State, for each LEA in the 
State, for each high school in the State and, at each of these levels, 
by student subgroup (consistent with section 1111(b)(2)(C)(v)(II) of 
the ESEA), the number and percentage (including numerator and 
denominator) of students who graduate from high school using a four-
year adjusted cohort graduation rate as required by 34 CFR 
200.19(b)(1)(i);
    Indicator (c)(12). Provide, for the State, for each LEA in the 
State, for each

[[Page 37843]]

high school in the State and, at each of these levels, by student 
subgroup (consistent with section 1111(b)(2)(C)(v)(II) of the ESEA), of 
the students who graduate from high school consistent with 34 CFR 
200.19(b)(1)(i), the number who enroll in an IHE as defined in section 
101(a) of the HEA; and
    Indicator (c)(13). Provide, for the State, for each LEA in the 
State, for each high school in the State and, at each of these levels, 
by student subgroup (consistent with section 1111(b)(2)(C)(v)(II) of 
the ESEA), of the students who graduate from high school consistent 
with 34 CFR 200.19(b)(1)(i) who enroll in a public IHE, the number who 
complete at least one year's worth of college credit (applicable to a 
degree) within two years.
    (d) Supporting struggling schools. A State must collect and report 
data and other information on the extent to which reforms to improve 
student academic achievement are implemented in the State's Title I 
schools in improvement, corrective action, or restructuring under 
section 1116(b) of the ESEA, and on the extent to which charter schools 
are operating in the State. Specifically, a State must--
    Indicator (d)(1). Provide, for the State and for each LEA in the 
State, the number and percentage (including numerator and denominator) 
of schools in improvement, corrective action, or restructuring that 
have made progress on State assessments in reading/language arts in the 
last year;
    Indicator (d)(2). Provide, for the State and for each LEA in the 
State, the number and percentage (including numerator and denominator) 
of schools in improvement, corrective action, or restructuring that 
have made progress on State assessments in mathematics in the last 
year;
    Indicator (d)(3). Provide, for the State and for each LEA in the 
State, the number and percentage (including numerator and denominator) 
of schools in improvement, corrective action, or restructuring that 
have been turned around, consolidated, or closed in the last year;
    Indicator (d)(4). Provide, for the State, of the schools in 
improvement, corrective action, or restructuring, the number and 
identity of schools in the lowest-achieving five percent that have been 
turned around, consolidated, or closed in the last year;
    Indicator (d)(5). Provide, for the State, of the schools in the 
lowest-achieving five percent of schools in improvement, corrective 
action, or restructuring that have been turned around, consolidated, or 
closed in the last year, the number that are secondary schools;
    Indicator (d)(6). Provide, for the State and, if applicable, for 
each LEA in the State, the number of charter schools that are currently 
permitted to operate;
    Indicator (d)(7). Confirm, for the State and for each LEA in the 
State that operates charter schools, the number of charter schools 
currently operating;
    Indicator (d)(8). Provide, for the State and for each LEA in the 
State that operates charter schools, the number and identity of charter 
schools that have closed (including schools that were not reauthorized 
to operate) within the last five years; and
    Indicator (d)(9). Indicate, for each charter school that has closed 
within the last five years, whether the closure of the school was for 
financial, enrollment, academic, or other reasons.
    II. State Plans: A State receiving funds under the Stabilization 
program must develop and submit to the Department a comprehensive plan 
that includes the following information.
    (a) Indicator and descriptor requirements. Except as discussed in 
paragraph (c) of this section, the State must be able to collect and 
report the data or other information required by an assurance indicator 
or descriptor. To this end, the State must describe, for each assurance 
indicator or descriptor--
    (1) The State's current ability to fully collect the required data 
or other information at least annually;
    (2) The State's ability to fully report the required data or other 
information, at least annually through September 30, 2011, in a manner 
easily accessible and a format easily understandable by the public;
    (3) If the State is not currently able to fully collect, at least 
annually, the data or other information required by the indicator or 
descriptor--
    (A) The State's process and timeline for developing and 
implementing, as soon as possible but no later than September 30, 2011, 
the means to fully collect the data or information, including--
    (i) The milestones that the State establishes toward developing and 
implementing those means;
    (ii) The date by which the State expects to reach each milestone; 
and
    (iii) Any obstacles that may prevent the State from developing and 
implementing those means by September 30, 2011, including but not 
limited to requirements and prohibitions of State law and policy;
    (B) The nature and frequency of reports that the State will provide 
to the public regarding its progress in developing and implementing 
those means; and
    (C) The amount of funds the State is using or will use to develop 
and implement those means, and whether the funds are or will be 
Federal, State, or local funds;
    (4) If the State is not able to fully report, at least annually 
through September 30, 2011, in a manner easily accessible and a format 
easily understandable by the public, the data or other information 
required by the indicator or descriptor--
    (A) The State's process and timeline for developing and 
implementing, as soon as possible but no later than September 30, 2011, 
the means to fully report the data or information, including--
    (i) The milestones that the State establishes toward developing and 
implementing those means;
    (ii) The date by which the State expects to reach each milestone; 
and
    (iii) Any obstacles that may prevent the State from developing and 
implementing those means by September 30, 2011, including but not 
limited to requirements and prohibitions of State law and policy;
    (B) The nature and frequency of reports that the State will provide 
to the public regarding its progress in developing and implementing 
those means; and
    (C) The amount of funds the State is using or will use to develop 
and implement those means, and whether the funds are or will be 
Federal, State, or local funds.
    (b) Data or other information. If the State is currently able to 
fully collect and report the data or other information required by the 
indicator or descriptor, the State must provide the most recent data or 
information with its plan.
    (c) Requirements for indicators in reform area (b) (improving 
collection and use of data).
    (1) With respect to Indicator (b)(1), the State must develop and 
implement a statewide longitudinal data system that includes each of 
the 12 elements described in section 6401(e)(2)(D) of the America 
COMPETES Act. To this end, the State must, in its plan--
    (A) Indicate which of the 12 elements are currently included in the 
State's statewide longitudinal data system;
    (B) If the State's statewide longitudinal data system does not 
currently include all 12 elements, describe--
    (i) The State's process and timeline for developing and 
implementing, as soon as possible but no later than September 30, 2011, 
a statewide longitudinal data system that fully

[[Page 37844]]

includes all 12 elements, including the milestones that the State 
establishes toward developing and implementing such a system, the date 
by which the State expects to reach each milestone, and any obstacles 
that may prevent the State from developing and implementing such a 
system by September 30, 2011 (including but not limited to requirements 
and prohibitions of State law and policy);
    (ii) The nature and frequency of reports that the State will 
provide to the public regarding its progress in developing and 
implementing such a system; and
    (iii) The amount of funds the State is using or will use to develop 
and implement such a system, and whether the funds are or will be 
Federal, State, or local funds.
    (2) With respect to Indicator (b)(2), the State must provide 
teachers with data on the performance of their students that include 
estimates of individual teacher impact on student achievement 
consistent with the indicator. To this end, the State must--
    (A) Indicate whether the State provides teachers with such data;
    (B) If the State does not provide teachers with such data, 
describe--
    (i) The State's process and timeline for developing and 
implementing, as soon as possible but no later than September 30, 2011, 
the means to provide teachers with such data, including the milestones 
that the State establishes toward developing and implementing those 
means, the date by which the State expects to reach each milestone, and 
any obstacles that may prevent the State from developing and 
implementing those means by September 30, 2011 (including but not 
limited to requirements and prohibitions of State law and policy);
    (ii) The nature and frequency of reports that the State will 
provide to the public regarding its progress in developing and 
implementing those means; and
    (iii) The amount of funds the State is using or will use to develop 
and implement those means, and whether the funds are or will be 
Federal, State, or local funds.
    (d) General requirements. The State must describe--
    (1) The agency or agencies in the State responsible for the 
development, execution, and oversight of the plan, including the 
institutional infrastructure and capacity of the agency or agencies as 
they relate to each of those tasks;
    (2) The agency or agencies, institutions, or organizations, if any, 
providing technical assistance or other support in the development, 
execution, and oversight of the plan, and the nature of such technical 
assistance or other support;
    (3) The overall budget for the development, execution, and 
oversight of the plan;
    (4) The processes the State employs to review and verify the 
required data and other information; and
    (5) The processes the State employs to ensure that, consistent with 
34 CFR 99.31(b), the required data and other information are not made 
publicly available in a manner that personally identifies students, 
where applicable.

Proposed Definitions

Background

    The ARRA contains definitions for several key terms applicable to 
the Stabilization program. The ARRA does not, however, define all terms 
relevant to the assurances that States must provide in order to receive 
funds under the program. In this notice, we propose definitions of key 
terms not defined in the ARRA (or, by reference, in the ESEA or the 
HEA) to prevent confusion regarding the assurance indicators and 
descriptors and to ensure that grantees develop plans that are 
consistent with the purposes of the ARRA and the Department's 
requirements and intentions for the program.

Proposed Definitions

    The Secretary proposes the following definitions for Stabilization 
program terms not defined in the ARRA (or, by reference, in the ESEA or 
the HEA). We may apply these definitions in any year in which this 
program is in effect.
    With respect to the requirement that a State collect and report on 
the extent to which students in high- and low-poverty schools in the 
State have access to highly qualified teachers, highest-poverty school 
means, consistent with section 1111(h)(1)(C)(viii) of the ESEA, a 
school in the highest quartile of schools (at the State and LEA levels, 
respectively) using a measure of poverty determined by the State. 
Similarly, lowest-poverty school means, consistent with section 
1111(h)(1)(C)(viii) of the ESEA, a school in the lowest quartile of 
schools (at the State and LEA levels, respectively) using a measure of 
poverty determined by the State.
    With respect to the requirements that a State indicate whether the 
official systems used to evaluate the performance of teachers and 
principals include student achievement outcomes as an evaluation 
criterion, student achievement outcomes means outcomes including, at a 
minimum, one of the following: student performance on summative 
assessments, or on assessments predictive of student performance on 
summative assessments, in terms of absolute performance, gains, or 
growth; student grades; and rates at which students are on track to 
graduate from high school.
    With respect to the requirement that a State collect and report the 
number of high school graduates who enrolled in a public IHE who 
complete at least one year's worth of college credit (applicable to a 
degree) within two years, college credit (applicable to a degree) is 
used as that term is defined by the IHE granting such credit.
    With respect to the requirements that a State collect and report 
the numbers of Title I schools in improvement, corrective action, or 
restructuring that have made progress on State assessments in reading/
language arts and in mathematics in the last year, school that has made 
progress means a school whose gains on the assessment, in the ``all 
students'' category (as under section 1111(b)(2)(C)(v)(I) of the ESEA), 
are equal to or greater than the average gains of schools in the State 
on that assessment.
    With respect to the requirements that a State collect and report 
the number of Title I schools in improvement, corrective action, or 
restructuring that have been turned around, consolidated, or closed in 
the last year, school that has been turned around means a school that 
has had a governance change (which must include a change in the 
school's principal and other school leadership changes), implemented a 
new instructional focus, and replaced at least 50 percent of its staff 
as part of a planned intervention; school that has been consolidated 
means a school that has merged with another school so that students 
from both schools are educated together; and school that has been 
closed includes but is not limited to a school that has been closed and 
reopened under the management of a charter management organization or 
an educational management organization.
    With respect to the requirement that a State collect and report, of 
the Title I schools in improvement, corrective action, or 
restructuring, the number and identity of schools in the lowest-
achieving five percent that have been turned around, consolidated, or 
closed in the last year, lowest-achieving five percent is used as that 
term is defined by the State, except that in defining the term the 
State must consider both the absolute performance of schools on State 
assessments in reading/language arts and mathematics and whether 
schools have made progress on those assessments (see definition of 
school

[[Page 37845]]

that has made progress above), and except that, if a State has fewer 
than 100 schools in improvement, corrective action, or restructuring, 
the State must include at least five such schools.

Proposed Approval Criteria

Background

    Our experience with administering grant competitions and with 
reviewing proposals from States regarding their compliance with certain 
requirements of the ESEA (particularly the requirements in Title I of 
the ESEA relating to standards, assessments, and accountability) 
recommends the use of explicit criteria for approving the plans we 
propose to require of States receiving funds under this program. In 
addition to specifying the areas of focus in the review of these plans, 
such criteria also usefully indicate to States the qualities in a plan 
that make it approvable.
    In this notice we propose approval criteria relating to the quality 
and adequacy of the State plans. We intend to make determinations 
regarding the approval of a State's plan based on the recommendations 
of a peer review using these criteria. We will issue guidance to peer 
reviewers providing more specific information on the final criteria as 
they relate to the respective final requirements.
    As noted above, a State must submit its plan as part of its 
application for the second phase of funding under the Stabilization 
program, through which the Department will award the remaining portion 
of a State's total Stabilization allocation. A State that submits a 
plan that is determined to be sufficiently responsive to each 
requirement will immediately receive 75 percent of the remainder of its 
total allocation of funds under the program. A State will receive the 
remaining 25 percent of its remainder of funds only after its plan is 
approved in its entirety.

Proposed Approval Criteria

    The Secretary proposes the following criteria for approving the 
plan of a State receiving funds under the Stabilization program. We may 
apply one or more of these criteria in any year in which this program 
is in effect.
    (a) Quality of the State plan. Except as described in paragraph 
(b), in determining the quality of the plan submitted by a State, we 
consider the following:
    (1) Whether the plan clearly and accurately describes the State's 
abilities to collect and to report the data or other information 
required by an assurance indicator and descriptor; and
    (2) If the State is not currently able to fully collect and report 
the data or information required by an indicator or descriptor--
    (i) Whether the timeline and process for developing and 
implementing the means to fully collect and report the data or 
information are reasonable and sufficient to comply with the 
requirement;
    (ii) Whether any obstacles identified by the State as preventing it 
from developing and implementing the means to fully collect and report 
the data or information by September 30, 2011 are sufficient to justify 
a delay in complying with the requirement; and
    (iii) Whether the reports that the State will provide to the public 
will be appropriately accessible and will sufficiently indicate the 
State's progress in developing and implementing the means to comply 
with the requirement.
    (b) Quality of the State plan with respect to indicators in reform 
area (b) (improving collection and use of data). In determining the 
quality of the plan submitted by a State as it relates to the 
indicators in reform area (b), we consider the following:
    (1) Whether the plan clearly and accurately describes the State's 
ability to meet the plan requirement for the indicator (i.e., in the 
case of Indicator (b)(1), the requirement to develop and implement a 
statewide longitudinal data system that includes each of the 12 
elements described in section 6401(e)(2)(D) of the America COMPETES 
Act; and in the case of Indicator (b)(2), the requirement to provide 
teachers with data on the performance of their students that include 
estimates of individual teacher impact on student achievement); and
    (2) If the State does not currently meet the plan requirement for 
the indicator--
    (i) Whether the timeline and process for developing and 
implementing the means to meet the requirement are reasonable and 
sufficient to comply with the requirement;
    (ii) Whether any obstacles identified by the State as preventing it 
from developing and implementing the means to meet the requirement by 
September 30, 2011 are sufficient to justify a delay in complying with 
the requirement; and
    (iii) Whether the reports that the State will provide to the public 
will be appropriately accessible and will sufficiently indicate the 
State's progress in developing and implementing the means to comply 
with the requirement.
    (c) Adequacy of the State plan. In determining the adequacy of the 
plan submitted by a State, we consider the following:
    (1) Whether the institutional infrastructure and capacity of the 
agency or agencies responsible for the development, implementation, and 
oversight of the plan, together with any technical assistance or other 
support provided by other agencies, institutions, or organizations, are 
adequate to comply with the indicator and descriptor requirements 
individually and as a whole;
    (2) Whether the funds the State is using or will use are adequate 
to comply with the indicator and descriptor requirements both 
individually and as a whole;
    (3) Whether the processes the State employs to review and verify 
the required data and information are adequate to ensure that the data 
and information are accurate and of high quality; and
    (4) Whether the processes the State employs are adequate to ensure 
that, where applicable, the required data and other information are not 
made publicly available in a manner that personally identifies 
students.
Final Requirements, Definitions, and Approval Criteria
    We will announce the final requirements, definitions, and approval 
criteria for the Stabilization program in a notice in the Federal 
Register. We will determine the final requirements, definitions, and 
approval criteria after considering any comments submitted in response 
to this notice and other information available to the Department. This 
notice does not preclude us from proposing additional requirements, 
definitions, and approval criteria, subject to meeting applicable 
rulemaking requirements.

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

Executive Order 12866
    The proposed costs have been reviewed in accordance with Executive 
Order 12866. Under the terms of the order, the Department has assessed 
the costs and benefits of this regulatory action.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed requirements, the Department has 
determined that the benefits of the proposed requirements exceed the 
costs. The Department also has determined that this regulatory action 
does not unduly interfere with State, local, and tribal governments in 
the exercise of their governmental functions.

[[Page 37846]]

    To assist the Department in complying with the requirements of 
Executive Order 12866, the Secretary invites comments on whether there 
may be further opportunities to reduce any potential costs or increase 
potential benefits resulting from these proposed requirements without 
impeding the effective and efficient administration of the 
Stabilization program.
Need for Federal Regulatory Action
    These proposed requirements, definitions, and approval criteria are 
needed to implement the State Fiscal Stabilization Fund program in a 
manner that the Secretary believes will best enable the program to 
achieve its objectives of supporting meaningful education reforms in 
the States while helping to stabilize State and local budgets and 
minimize reductions in education and other essential services. In 
particular, the proposals included in this notice are necessary to 
advance the four key educational reforms listed in the ARRA, 
particularly by ensuring better reporting and more public availability 
of information on the progress of implementation in each of the four 
reform areas. The proposed requirement for each State to establish a 
longitudinal data system that includes the elements specified in the 
America COMPETES Act will have an especially significant impact on the 
availability of data that can be used in developing and improving 
programs; targeting services; developing better linkages between 
preschool, elementary and secondary schools, and postsecondary systems, 
agencies, and institutions; and holding schools, LEAs, and institutions 
accountable for their performance. Establishment of such a system by 
each participating State is also required under the ARRA.
    Further, the proposed requirement for each State to commit to 
developing procedures for providing teachers of reading/language arts 
and mathematics with data on the performance of their students that 
includes estimates of individual teacher impact reflects a need to 
ensure that teachers have better data on how well they are educating 
their students and that school and LEA leaders have valuable 
information that they can use in developing and providing professional 
development opportunities, assigning teachers, and implementing 
compensation and other human capital policies.
    The proposed definitions included in this notice are necessary to 
give clearer meaning to some of the terms used in the descriptions of 
the requirements and approval criteria. The proposed approval criteria 
themselves are needed in order to provide for a clear and objective set 
of standards that the Secretary would use in ensuring that each State, 
before receiving the remainder of its Stabilization program allocation, 
has in place a plan for collecting and reporting the required data and 
meeting the other requirements proposed in this notice.

Regulatory Alternatives Considered

    A likely alternative to promulgation of the types of requirements, 
definitions, and approval criteria proposed in this notice would be for 
the Secretary to release the remaining Stabilization program funds 
without establishing specific reporting or other requirements. Under 
such a scenario, participating States would still be required to meet 
the statutory requirements (that is, to take actions to improve teacher 
effectiveness and the equitable distribution of highly qualified 
teachers, to establish longitudinal data systems that include the 
elements specified in the America COMPETES Act, to enhance the quality 
of their standards and assessments, to ensure the inclusion of students 
with disabilities and limited English proficient students in their 
assessments, and to take steps to improve consistently low-performing 
schools), but there would be no assurance of consistent and complete 
reporting of States' progress and no uniform mechanism for measuring 
and comparing States' performance. Additionally, the need for teachers 
to obtain better information on their students' educational progress 
would likely be unfulfilled. While the Department is interested in 
public comment on the feasibility and advisability of the various 
requirements proposed herein, the Secretary regards disbursement of the 
remaining Stabilization program funds without implementation of the 
reporting and other proposed requirements as a missed opportunity for 
bringing about needed educational reforms at a critical time.

Summary of Costs and Benefits

    The Department has analyzed the costs of complying with the 
proposed requirements. Some of the costs will be very minimal and 
others more significant. As an example of a requirement that will 
result in minimal burden and cost, States are currently required to 
report annually, through EDFacts (the Department's centralized data 
collection and warehousing system), for the State as a whole and for 
each LEA, the number and percentage of core academic courses taught, in 
the highest-poverty and lowest-poverty schools, by teachers who are 
highly qualified. Proposed indicator (a)(1) would require that they 
confirm the data they have reported, which should not be a time-
consuming responsibility. As a second example, the proposed requirement 
to confirm the approval status of the State's assessment system under 
section 1111(b)(3) of the ESEA, as determined by the Department, should 
also require minimal effort.
    Other proposed requirements will impose significant new costs, but 
the Department believes that the benefits resulting from the 
requirements will exceed those costs. The major benefit of these 
requirements, taken in their totality, is better and more publicly 
available information on the status of activities related to the reform 
areas identified in the authorizing statute for the Stabilization 
program. As described in detail below, research indicates or suggests 
that progress on each of the reforms will contribute to improved 
student outcomes. The provision of better information (on teacher 
qualifications, teacher and principal evaluation systems, State student 
longitudinal data systems, State standards and assessment systems, 
student success in high school and postsecondary education, efforts to 
turn around low-performing schools, and charter school reforms) to 
policymakers, educators, parents, and other stakeholders will assist in 
their efforts to further the reforms. In addition, State reporting of 
these data will help the Department determine the impact of the 
unprecedented level of funding made available by the ARRA. Further, the 
data and plans that States submit will inform Federal education policy, 
including the upcoming reauthorization of the ESEA.
    States will be able to draw on Federal resources in meeting some of 
the requirements. The proposed requirements that would result in the 
most significant costs are related to the implementation of a State 
data system that can track individual student transitions from high 
school to college. To support these efforts, States may receive Federal 
funds from the Statewide Longitudinal Data Systems program, through 
which the Department has made over $187 million available since fiscal 
year 2005. The ARRA provided an additional $250 million for that 
program, and the Administration's budget request for fiscal year 2010 
includes an additional $65 million. In addition, it is important to 
note that States may use funds available through the Stabilization 
program's Government Services Fund (over $8.8 billion) to develop and 
implement the systems

[[Page 37847]]

necessary to report on these performance indicators.
    The following is a detailed analysis of the estimated costs of 
implementing the specific proposed requirements, followed by a 
discussion of the anticipated benefits. The costs of implementing 
specific paperwork-related requirements are also shown in the tables in 
the Paperwork Reduction Act of 1995 section of this notice.

Distribution of Highly Qualified Teachers

    Section 14005(d)(2) of the ARRA requires a State receiving funds 
under the Stabilization program to assure, in the Stabilization program 
application, that it will address inequities in the distribution of 
highly qualified teachers. In response to this requirement, the 
Department is proposing to require States to confirm, for the State and 
for each LEA in the State, the number and percentage of core academic 
courses taught, in the highest-poverty and lowest-poverty schools, by 
teachers who are highly qualified. Because States will have previously 
submitted this information to the Department through the EDFacts 
system, we anticipate that the costs of complying with this requirement 
would be minimal. A State likely would need only to ensure that it had 
correctly aggregated and reported data received from its LEAs. The 
Department expects that each State would require one hour of staff time 
to complete this effort, at a cost of $30 per hour. For the 50 States, 
the District of Columbia, and Puerto Rico, the total estimated level of 
effort would be 52 hours at a cost of $1,560.

Teacher and Principal Evaluation Systems

    Section 14005(d)(2) also requires States to take actions to improve 
teacher effectiveness. To accomplish that goal, States must first have 
a means of assessing teacher success. A limited number of States have 
implemented statewide teacher and principal evaluation systems, while 
in the other States the responsibility for evaluating teachers and 
principals rests with the LEAs or schools. Little is known about the 
design of these systems across the Nation, but the collection and 
reporting of additional information would create a resource that 
additional States and LEAs can draw on in building their own systems. 
The Department, therefore, proposes to require States to collect and 
publicly report information about these evaluation systems.
    Specifically, the Department is proposing to require that States 
describe, for each LEA in the State, the systems used to evaluate the 
performance of teachers and principals. Further, the Department 
proposes to require States to indicate, for each LEA in the State, 
whether the systems used to evaluate the performance of teachers and 
principals include student achievement outcomes as an evaluation 
criterion.
    The level of effort required to respond to these proposed 
requirements would likely vary depending on the types of teacher and 
principal evaluation systems in place in a given State or LEA. The 
Department believes that, if a system is in place at the State level, 
the response burden would be low, because the State will have the 
required information readily available. According to the National 
Council on Teacher Quality, 12 States require LEAs to use a State-
developed instrument to evaluate teachers or to develop an equivalent 
instrument that must be approved by the State.\10\ For these 12 States, 
the Department estimates that a total of 72 hours (6 hours per State) 
would be required to respond to these proposed requirements, for a 
total cost, at $30 per hour, of $2,160. The 2,632 LEAs located in these 
States would not be involved in the response to these proposed 
requirements.
---------------------------------------------------------------------------

    \10\ State Teacher Policy Yearbook: 2008, page 68. http://www.nctq.org/stpy08/reports/stpy_national.pdf.
---------------------------------------------------------------------------

    In the 40 States that do not have statewide teacher and principal 
evaluation systems in place, the level of effort required would likely 
be significantly higher. For each of these States, the Department 
estimates that 360 hours would be required at the State level to 
develop and administer a survey of LEAs (including designing the survey 
instrument, disseminating it, providing training or other technical 
assistance to LEAs on completing the survey, collecting the data and 
other information, checking accuracy, and public reporting), which 
would amount to a total of 14,400 hours and a total estimated State 
cost of $432,000 (assuming, again, a cost per hour of $30). The 12,368 
LEAs located in these States would bear the cost of collecting and 
reporting the data to their States. For the purpose of the burden 
estimates in this section, the Department estimates that 75 percent of 
these LEAs (9,276) have official teacher and principal evaluation 
systems in place. For those LEAs, we estimate that 3 hours would be 
required to respond to these proposed requirements. For the estimated 
3,092 LEAs that do not have an official evaluation system in place, we 
estimate that 2 hours would be required. The Department, thus, 
estimates that LEAs would need to spend a total of 34,012 hours to 
respond to these proposed requirements at a total cost of $850,300. 
This estimate is speculative because the Department was unable to find 
information about the prevalence of teacher and principal evaluation 
systems in LEAs. We invite comments that provide information on the 
prevalence of these systems in LEAs (so that we may further refine our 
estimates) and on the potential costs of meeting the requirements for 
LEAs that have or do not have such a system.
    The Department is also proposing to require States to provide, for 
each LEA in the State whose teachers and principals receive performance 
ratings or levels through an evaluation system, the number and 
percentage of teachers and principals rated at each performance rating 
or level. Finally, the Department proposes to require States to 
indicate, for each LEA in the State whose teachers receive performance 
ratings or levels through an official evaluation system, whether the 
number and percentage of teachers rated at each performance rating or 
level is publicly available for each school in the LEA in a manner that 
is easily accessible and in a format easily understandable by the 
public. We were unable to find information on whether LEAs will have 
this information readily available in a centralized data system and, 
therefore, invite comment on this issue. For the purpose of this 
estimate, we assume that 60 percent of LEAs will have the necessary 
information in their central office or will be so small that collecting 
this information will be a simple process. Applying this percentage to 
the estimated 11,908 LEAs that have in place an official system to 
evaluate teacher and principal performance (which includes the 2,632 
LEAs in States with statewide systems, as well as the estimated 9,276 
LEAs in other States that have their own local systems), the Department 
estimates that the total burden of responding to these proposed 
requirements would be 59,540 hours (5 hours per affected LEA) and 
$1,488,500. We estimate that each of the other 4,763 LEAs will need to 
spend 40 hours to respond. The Department, therefore, estimates the 
total LEA burden for these requirements to be 260,264 hours across the 
Nation at an estimated total cost of $6,506,600 (assuming a cost per 
hour of $25).
    States would then need to collect these data, most likely by 
including these items in the survey instrument that they will develop 
to respond to the other proposed requirements in this section, and will 
then need to aggregate

[[Page 37848]]

and publicly report the data. We estimate that this will require 8 
hours of effort per State, for a total burden of 416 hours at a cost of 
$12,480. For more detailed estimates of costs for these proposed 
requirements, please see the tables in the Paperwork Reduction Act of 
1995 section of this notice.

State Data Systems

    Section 14005(d)(3) requires States to assure that they will 
establish a longitudinal data system that includes the elements 
described in section 6401(e)(2)(D) of the America COMPETES Act. To 
track State progress in this reform area, the Department proposes to 
require each State to indicate which of the 12 elements are included in 
the State's statewide longitudinal data system. The costs of reporting 
this information should be minimal. Moreover, most States are already 
reporting information on ten of the 12 elements to the Data Quality 
Campaign, a national effort to encourage State policymakers to use 
high-quality education data to improve student achievement. The 
Department expects that States will be able to readily provide 
information on whether the two remaining elements are included in their 
data systems and that it should take little time for the States that 
have not been reporting to the Data Quality Campaign to provide 
information on their data systems. We, therefore, estimate that States 
would need only 2 hours to respond to this requirement, for a total 
level of effort of 104 hours at an estimated cost of $3,120.
    The Department also proposes to require that States report, for 
each LEA in the State, whether the State provides teachers of reading/
language arts and mathematics in the grades in which the State 
administers assessments in those subjects with data on the performance 
of their students on those assessments that include estimates of 
individual teacher impact on student achievement, in a manner that is 
timely and informs instruction. The Department believes that making 
such information available would help improve the quality of 
instruction and the quality of teacher evaluation and compensation 
systems. Under the State Plan section, we discuss the costs of 
developing systems for the provision of such information in all States. 
The costs of merely reporting on whether a State currently provides 
this information to teachers should be minimal. We estimate that each 
State would spend one hour to report this information, for a total 
level of effort of 52 hours at a cost of $1,560.

State Assessments

    In response to the section 14005(d)(4)(A) requirement that States 
enhance the quality of their student assessments, the Department 
proposes to require that the States confirm certain existing data and 
other information and submit some new information about their 
assessment systems. Specifically, the Department proposes to require 
each State to confirm the approval status, as determined by the 
Department, of the State's assessment system (with respect to reading/
language arts, mathematics, and science assessments) and indicate 
whether and how the State is engaged in activities authorized under the 
Grants for Enhanced Assessment Instruments program that would enhance 
the quality of the State's academic assessments. In addition, States 
would be required to confirm that their annual State Report Card 
(issued pursuant to the requirements of ESEA section 1111(h)) contains 
the most recent available State reading and mathematics NAEP results. 
The Department estimates that each State would require six hours to 
respond to these proposed requirements, for a total cost of $9,360.
    Section 14005(d)(4)(B) requires States to assure that they will 
administer valid and reliable assessments for children with 
disabilities and limited English proficient students. To measure State 
progress on this assurance, the Department proposes to require States 
to: Confirm whether the State has developed and implemented valid and 
reliable alternate assessments for students with disabilities that have 
been approved by the Department; confirm whether the State's 
alternative assessments for students with disabilities, if approved by 
the Department, are based on grade-level, modified, or alternate 
academic achievement standards; indicate whether the State has 
completed, within the last two years, an analysis of the 
appropriateness and effectiveness of the accommodations it provides 
students with disabilities to ensure their meaningful participation in 
State assessments; indicate whether the State has completed, within the 
last two years, an analysis of the appropriateness and effectiveness of 
the accommodations it provides limited English proficient students to 
ensure their meaningful participation in State assessments; and confirm 
whether the State provides native language versions of State 
assessments for limited English proficient students. To respond to 
these five proposed indicators, the Department estimates that the 50 
States, the District of Columbia, and Puerto Rico would each require 
five hours, for a total cost of $7,800.
    In addition, the Department proposes to require that States confirm 
the number and percentage of students with disabilities and limited 
English proficient students who are included in State reading/language 
arts and mathematics assessments. The Department expects that each 
State would, on average, require one hour of staff time to complete 
this effort, at a cost of $30 per hour. The burden estimated for this 
requirement is minimal because the States will have already submitted 
this information to the Department through the EDFacts system. For the 
50 States, the District of Columbia, and Puerto Rico, the total 
estimated level of effort would be 52 hours at cost of $1,560.

High School and Postsecondary Success

    Section 14005 (d)(4)(C) requires States to assure, in their 
Stabilization Fund applications, that they take steps to improve their 
State academic content standards and student academic achievement 
standards consistent with section 6401(e)(1)(A)(ii) of the American 
COMPETES Act, which calls for States to identify and make any necessary 
changes to their secondary school graduation requirements, academic 
content standards, academic achievement standards, and the assessments 
students take preceding graduation from secondary school in order to 
align those requirements, standards, and assessments with the knowledge 
and skills necessary for success in academic credit-bearing coursework 
in postsecondary education, in the 21st century workforce, and in the 
Armed Forces without the need for remediation. Several of the 
indicators and descriptors proposed in this notice are aligned with 
this provision of the America COMPETES Act.
    First, the Department proposes to require each State to report, for 
the State and each LEA and high school in the State and, at each of 
these levels, by student subgroup,\11\ the number and percentage of 
students who graduate from high school as determined using the four-
year adjusted cohort graduation rate. The Department believes that 
State efforts to comply with the Department's October 29, 2008 
regulation requiring the use of a four-year adjusted cohort graduation 
rate in the determination of adequate yearly progress under Title I of 
the ESEA are now underway (see 34

[[Page 37849]]

CFR 200.19(b)(1)(i)). Some additional effort would be required to 
collect and report these data for all schools as the current 
regulations apply only to Title I schools.
---------------------------------------------------------------------------

    \11\ As noted earlier in this notice, the student subgroups 
include: economically disadvantaged students, students from major 
racial and ethnic groups, students with limited English proficiency, 
and students with disabilities.
---------------------------------------------------------------------------

    Based on the Data Quality Campaign's 2008 survey of the 50 States 
and the District of Columbia, which found that 42 States have the 
capacity to calculate the National Governors Association longitudinal 
graduation rate,\12\ the Department believes that most States are well-
situated to collect and report these data, or have the processes 
underway to make such reporting possible by September 30, 2011. In 
fulfillment of the proposed requirement, the Department estimates that 
States would need to distribute to non-Title I LEAs the survey 
instrument they are using to collect this information from Title I LEAs 
and to input the data from these surveys, which would require an 
estimated 8 hours per State. The new LEA burden to respond to this 
indicator would be limited to the approximately 976 LEAs that do not 
receive Title I funds.\13\ The Department estimates that these LEAs 
would spend an average of 40 hours to respond to this indicator for a 
total LEA effort of 39,040 hours. The total estimated cost is, 
therefore, $976,000.
---------------------------------------------------------------------------

    \12\ http://www.dataqualitycampaign.org/survey.
    \13\ According to data States submitted to the Department 
through the Consolidated State Performance Report 2007-08, there are 
a total of 15,016 LEAs across the Nation, 14,040 of which receive 
Title I, Part A funds.
---------------------------------------------------------------------------

    In addition, the Department is proposing that States report, for 
the State, for each LEA in the State, for each high school in the State 
and, at each of these levels, by student subgroup, the number of 
students who graduate from high school consistent with 34 CFR 
200.19(b)(1)(i) who enroll in an IHE and, of those students who enroll 
in a public IHE, the number who complete at least one year's worth of 
college credit (applicable to a degree) within two years. The proposed 
requirements would entail considerable coordination among high schools, 
LEAs, SEAs, and IHEs. The Department expects that SEAs would have to 
develop a system to make this data collection and sharing possible, 
which they could at least partially achieve by establishing a 
longitudinal data system that includes the elements described in 
section 6401(e)(2)(D) of the America COMPETES Act. As discussed above, 
section 14005(d)(3) of the ARRA requires States to assure, in their 
Stabilization Fund application, that they will establish such a data 
system. Because the requirement to establish such a system flows from 
the statute, not from these proposed requirements, the Department does 
not include the costs of establishing such a system in the costs of 
these proposed requirements.\14\ In addition, States will be able to 
use Government Services funds that they receive as part of their 
Stabilization allocation to support these efforts, and may compete for 
funds from the Statewide Longitudinal Data Systems program. Further, 
the efforts of the National Student Clearinghouse, a non-profit 
organization that provides student enrollment and degree verification 
services, demonstrate that there is significant interest in information 
sharing between IHEs and LEAs; more than 3,300 colleges that enroll 
over 92 percent of US college students and hundreds of LEAs participate 
in the Clearinghouse's efforts. The Department expects that LEAs and 
IHEs that currently provide data to this system may require less effort 
to respond to this proposed requirement.
---------------------------------------------------------------------------

    \14\ We do acknowledge, however, that although the statute does 
not set a deadline for State establishment of the required data 
systems, item (c)(ii)(A) under State Plans in this notice would 
require States to have in place State longitudinal data systems that 
fully include all 12 elements described in the America COMPETES Act 
by September 30, 2011. Putting a full system in place by that date 
might increase costs to States or, alternatively, might reduce costs 
(if the more rapid establishment of a system results in 
efficiencies). The Department invites comments on the cost 
implications of the proposed deadline.
---------------------------------------------------------------------------

    With respect to the proposed requirement on reporting postsecondary 
enrollments, the Department expects that LEAs would need to enter, into 
their State's statewide longitudinal data system, data on each high 
school graduate's plans after high school, including the IHE where the 
student intends to enroll, if applicable. According to the Digest of 
Education Statistics, approximately 2,492,000 students who graduated 
from public high schools enrolled in IHEs as first-time freshmen in 
fall 2007.\15\ Holding that number constant, the Department estimates 
that LEAs would be able to enter data for these students at a pace of 
20 students per hour, which would result in a total level of LEA effort 
of 124,600 hours at a cost of $3,115,000.
---------------------------------------------------------------------------

    \15\ According to the Digest of Education Statistics, 2008, 
almost 2.8 million first-time freshmen enrolled in IHEs in fall 
2007. See http://nces.ed.gov/programs/digest/d08/tables/dt08_198.asp. Also according to the Digest, in fall 2005, 6,073,240 
students were enrolled in private elementary and secondary schools. 
At that time, enrollment in public elementary and secondary schools 
was 49,113,298. Extrapolating from those data, the Department 
estimates that 11 percent of all first-time postsecondary students 
graduated from private schools. See http://nces.ed.gov/programs/digest/d08/tables/dt08_058.asp.
---------------------------------------------------------------------------

    The State would then likely need to request that each IHE in the 
State confirm a student's enrollment, using the statewide longitudinal 
data system to obtain data on students who intended to enroll within 
the State. Based on data from the 2006 Integrated Postsecondary 
Education Data System (IPEDS), Spring 2007,\16\ the Department 
estimates that 2,043,440 first-time freshmen (82 percent of all first-
time freshmen who graduated from public high schools) enroll in IHEs in 
their home State. The Department estimates that IHEs will be able to 
confirm enrollment for 20 students per hour, for a total of 102,172 
hours of IHE effort at a total cost of $2,554,300 (assuming a cost of 
$25 per hour).\17\
---------------------------------------------------------------------------

    \16\ http://nces.ed.gov/programs/digest/d08/tables/dt08_223.asp.
    \17\ Note that a table in the Paperwork Reduction Act of 1995 
section of this notice provides the burden estimates by IHE, but 
that this narrative provides national estimates using the total 
number of students included in the data requirement.
---------------------------------------------------------------------------

    States would also likely need to request that IHEs outside the 
State confirm the enrollment of students who indicated that they would 
enroll in those institutions. Again, based on data from the 2006 IPEDS, 
Spring 2007, the Department estimates that 448,560 students who 
graduate from public high schools each year enroll in IHEs in States 
outside their home State. The Department estimates that it will take 
States 30 minutes per student to complete this process, including 
contacting out-of-State IHEs, obtaining the necessary information from 
them, and including data on those students in their public reports. 
This element of the proposed requirement, therefore, would result in a 
national total of 224,280 hours of State effort at a total cost of 
$6,726,840. As with students who enroll in IHEs in their home State, 
the Department estimates that IHEs will be able to confirm enrollment 
for 20 students per hour, for a total of 22,428 hours of IHE effort at 
a total cost of $560,700.
    Finally, to meet the proposed requirement that they publicly report 
the number of students who enroll in IHEs, States would need to 
aggregate the data received from all IHEs and would then need to run 
analyses and publicly post the data for the State, for each LEA, for 
each high school and, at each of these levels, by student subgroup. The 
Department estimates that each State would need 40 hours to conduct 
these analyses and post these data, for a total State burden of 2,080 
hours at a cost of $62,400.
    The proposed requirement that States report the number of students 
enrolling in a public IHE who complete at least one year's worth of 
college credit

[[Page 37850]]

applicable toward a degree within two years would also entail a 
collaborative process between SEAs and IHEs. Again, based on data from 
the Digest of Education Statistics, the Department estimates that 
2,492,000 first-time freshmen enroll in public IHEs. Further, the 
Department estimates that, once a State has established a system for 
the collection and reporting of these data, IHEs will be able to enter 
data for 20 students an hour; thus, the total estimated level of effort 
to respond to this proposed requirement would be approximately 124,600 
hours of IHE effort at an estimated cost of $3,115,000, assuming a cost 
of $25 per hour.
    As with the previous indicator, States would likely need to request 
that IHEs outside the State report whether the students enrolled in 
those institutions have completed at least one year's worth of college 
credit. Again, the Department estimates that 448,560 students who 
graduate from public high schools each year enroll in IHEs in States 
outside their home State. The Department estimates that it will take 
States 30 minutes per student to complete this process, including 
contacting out-of-State IHEs, obtaining the necessary information from 
them, and including data on those students in their public reports. 
This element of the proposed requirement, therefore, would result in a 
national total of 224,280 hours of State effort at a total cost of 
$6,726,840. As with students who enroll in IHEs in their home State, 
the Department estimates that IHEs will be able to report whether 
students obtained a year or more of college credit for 20 students per 
hour, for a total of 22,428 hours of IHE effort at a total cost of 
$560,700.
    Finally, as with the previous indicator, States would need to 
aggregate the data received from all IHEs and would then need to run 
analyses and publicly post the data for at the State, LEA, and school 
levels and at each of these levels, by student subgroup. The Department 
estimates that each State would need 40 hours to conduct these analyses 
and post these data, for a total State burden of 2,080 hours at a cost 
of $62,400.

Supporting Struggling Schools

    A key goal of the ARRA is to ensure that States and LEAs provide 
targeted, intensive support and effective interventions to turn around 
schools identified for corrective action and restructuring under Title 
I of the ESEA. Section 14005(d)(5) requires States to ensure compliance 
with the Title I requirements in this area. To track State progress, 
the Department proposes to require States to provide, for each LEA in 
the State and aggregated at the State level, the number and percentage 
of schools in improvement, corrective action, or restructuring that 
have made progress on State assessments in reading/language arts and 
mathematics in the last year, and the number and percentage of schools 
in improvement, corrective action, or restructuring that have been 
turned around, consolidated, or closed in the last year. States would 
also be required to report the number and identity of schools in the 
lowest-achieving five percent of the schools in improvement, corrective 
action, or restructuring that have been turned around, consolidated, or 
closed in the last year, as well as the number of those schools (i.e., 
the schools in the lowest-achieving five percent of the schools in 
improvement, corrective action, or restructuring that have been turned 
around, consolidated, or closed in the last year) that are secondary 
schools.
    The Department believes that States will already have available the 
data needed to report on the indicators related to the total number and 
percentage of schools in improvement, corrective action, or 
restructuring that have made progress on State assessments, although 
they might need to run new analyses of the data. However, the 
Department expects that States would have to collect new data on the 
schools in improvement, corrective action, or restructuring (in general 
and in the lowest-achieving five percent) that have been turned around, 
consolidated, or closed. In addition, the State will need to define the 
schools in the lowest-achieving five percent. We estimate that this 
data collection will entail two hours of effort in each of the 1,173 
LEAs (the number of LEAs that, according to data reported to EDFacts, 
had at least one school in improvement, corrective action, or 
restructuring in the 2007-08 school year). As a result, the Department 
estimates that the total LEA burden for this proposed requirement would 
be 2,346 hours at a cost of $58,650. States would then need to 
aggregate these data, in addition to the effort they will spend 
responding to the other indicators that relate to struggling schools. 
The Department estimates that each State would require 16 hours of 
effort to respond, for a total cost of $83,610.

Charter Schools

    The Department believes that the creation and maintenance of high-
quality charter schools is a key strategy for promoting successful 
models of school reform. To determine the level of State effort in this 
area, the Department proposes to require States to provide, at the 
State level and, if applicable, for each LEA in the State, the number 
of charter schools that are currently permitted to operate and the 
number that are currently operating. We expect that this information 
will be readily available, and that States will need only one hour to 
respond to this proposed requirement.
    In addition, the Department proposes to require States to report, 
at the State and, if applicable, LEA levels, the number and identity of 
charter schools that have closed within the last five years and to 
indicate, for each such school, whether the closure was for financial, 
enrollment, academic, or other reasons. The Department estimates that 
SEAs would likely also have this information readily available 
(although some may need to obtain additional information from their 
LEAs) and would need five hours to report it. The Department assumes 
that the effort to respond to these proposed requirements would be 
limited to the 42 States (including the District of Columbia and Puerto 
Rico) that allow charter schools. The Department thus estimates that 
the State effort required to respond to these indicators would total 
210 hours at a cost of $6,300.

State Plans

    This notice proposes to require States, as a condition of receiving 
their remaining funding for the Stabilization program, to submit a plan 
to the Department that describes the State's current ability to fully 
collect and report data for the proposed indicators and descriptors at 
least annually and in a manner easily accessible and a format easily 
understandable by the public. If the State is currently able to fully 
collect and report the data or other information required by the 
indicator or descriptor, the State must provide the most recent data or 
information with its plan. If a State is not currently able to fully 
collect and report the required data or other information, the plan 
must describe the process that the State will undertake in order to 
have the means to fully collect and report such data or information as 
soon as possible but no later than September 30, 2011.
    As a part of this plan, the State would be required to establish 
milestones and a date by which the State expects to reach each 
milestone, describe the nature and frequency of publicly available 
reports that the State will publish on its progress, and identify the 
amount and source (i.e., whether Federal, State or local) of funds that 
will support the efforts necessary to collect and report the data or 
information. The level of effort involved in preparing

[[Page 37851]]

these elements of the plan will vary from State to State based on 
individual State progress in each reform area. For example, according 
to the Data Quality Campaign's 2008 survey of the 50 States and the 
District of Columbia, 48 States have ``a unique statewide student 
identifier that connects student data across key databases across 
years,'' 28 States have the ``[a]bility to match student-level p-12 and 
higher education data,'' and 21 States have a ``statewide teacher 
identifier with a teacher-student match.'' States that have taken these 
steps have built a foundation for the efforts that would be necessary 
to meet some of the proposed requirements, and will likely need to 
spend less time completing these elements of their plans. The 
Department estimates that, in total, each State will need an average of 
396 hours to prepare these sections of the plan; thus, the total hours 
that would be necessary to meet this proposed requirement for the 50 
States, the District of Columbia, and Puerto Rico would be 20,592 
hours, for a total cost of $617,760. For more detailed estimates of 
costs for each specific proposed requirement, please see the tables in 
the Paperwork Reduction Act of 1995 section of this notice.
    As part of the planning requirements, the Department proposes to 
require each State to indicate whether it provides teachers of reading/
language arts and mathematics with data on the performance of their 
students that includes estimates of individual teacher impact on 
student achievement and, if the State does not do so, to describe a 
process and timeline for doing so by September 30, 2011. The Department 
understands that only a small number of States (approximately three) 
currently provide this type of information to their teachers. However, 
most other States that are developing State longitudinal data systems 
have included teacher identifiers in those systems and, thus, have part 
of the infrastructure to produce and report these data. The Department 
also understands that there are currently only a limited number of 
providers with which States can contract for the development of 
``value-added'' or other mechanisms for using information from the 
State data systems to produce estimates of individual teacher impact. 
This limited capacity may make the costs of acquiring this assistance 
higher than they would be otherwise. However, the Department assumes 
that as the market grows, more providers will enter the field and costs 
will come down.
    The Department further estimates that 30 percent of all K-12 public 
school teachers are teaching reading/language arts or mathematics in 
the grades in which the State administers assessments. Based on this 
assumption, the Department estimates that the State assessment results 
for approximately 14,790,000 students (30 percent of all students 
enrolled in public elementary and secondary schools) would be included 
in the calculations necessary for States to meet this proposed 
requirement.\18\ The Department estimates that the State cost of 
analyzing the data, verifying with teachers that the correct teacher-
subject-student connection is made in the system, and publishing the 
information online in a user-friendly format would be 2 dollars per 
student, for a total State cost of $29,940,000.
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    \18\ According to the Digest of Education Statistics, 49,298,945 
students were enrolled in public elementary and secondary schools in 
fall 2006. See http://nces.ed.gov/programs/digest/d08/tables/dt08_033.asp.
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    The Department also understands that an important element of State 
efforts to inform teachers of the estimated impact of their teaching on 
student achievement is providing professional development for 
principals and teachers on the interpretation and use of those data in 
raising student achievement. However, since the proposed planning 
requirements would not require States to provide this professional 
development, we have not included its cost in the estimated costs of 
these proposed requirements.
    In addition, the Department proposes to require States to describe 
in their plans the following: the entities responsible for the 
development, execution, and oversight of the plan; the agencies or 
organizations that will provide any technical assistance or other 
support that is necessary; the overall budget for the development, 
execution, and oversight of the plan; the processes that the State 
employs to review and verify the required data and other information; 
and the processes the State employs to ensure that, consistent with 34 
CFR 99.31(b), the required data and other information are not made 
publicly available in a manner that personally identifies students, 
where applicable. The Department estimates that this management and 
oversight section of the plan will require 80 hours per State, for a 
total national estimate of 4,160 hours at a cost of $124,800. The total 
estimated cost to States of preparing the plans is, thus, $742,560.

Total Estimated Costs

    The Department estimates that the total burden of responding to 
these proposed requirements would be 494,650 hours and $44,779,500 for 
SEAs, 426,250 hours and $10,656,250 for LEAs, and 249,200 hours and 
$6,230,000 for IHEs, for a total burden of 1,170,100 hours at a cost of 
$61,665,750.

Benefits

    The principal benefits of the proposed requirements are those 
resulting from the reporting and public availability of information on 
each State's progress in the four reform areas described in the ARRA. 
The Department believes that the information gathered and reported as a 
result of these requirements will improve public accountability for 
performance, help States, LEAs, and schools learn from one another and 
make improvements in what they are doing, and inform the ESEA 
reauthorization process.
    A second major benefit is that better public information on State 
and local progress in the four reform areas will likely spur more rapid 
progress on those reforms, because States and LEAs that appear to be 
lagging in one or more areas may see a need to redouble their efforts. 
The Department believes that more rapid progress on the essential 
educational reforms will have major benefits nationally, and that these 
reforms have the potential to drive dramatic improvements in student 
outcomes.
    For example, statewide longitudinal data systems are essential 
tools in advancing education reform. With these systems in place, 
States can assess the effectiveness of specific interventions, schools, 
principals, and teachers by tracking individual student achievement, 
high school graduation, and postsecondary enrollment and credit. They 
can, for example, track the academic achievement of individual students 
over time, even if those students change schools during the course of 
their education. By analyzing this information, decision-makers can 
determine if a student's ``achievement trajectory'' will result in his 
or her being college- or career-ready, and can better target services 
based on the student's academic needs.\19\
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    \19\ For example, see http://dataqualitycampaign.org/files/publications-dqc_academic_growth-100908.pdf and http://www.dataqualitycampaign.org/files/Meetings-DQC_Quarterly_Issue_Brief_092506.pdf.
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    The Department also believes that States' implementation of these 
requirements will lead to more widespread development and 
implementation of better teacher and principal evaluation systems. In 
particular, the availability of accurate, complete, and valid 
achievement data is essential to implementing better systems

[[Page 37852]]

of teacher and principal evaluation. Value-added models, for example, 
can provide an objective estimate of the impact of teachers on student 
learning and achievement.\20\ Further, they can be used by schools, 
LEAs, or States to reward excellence in teaching or school leadership, 
as a component of performance-based compensation systems, or to 
identify schools in need of improvement or teachers who may require 
additional training or professional development.\21\
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    \20\ See: Braun, Henry I. Using Student Progress To Evaluate 
Teachers: A Primer on Value-Added Models. Educational Testing 
Service, Policy Information Center, 2005; Marsh, Julie A.; Pane, 
John F.; Hamilton, Laura S. Making Sense of Data-Driven Decision 
Making in Education: Evidence from Recent RAND Research. Santa 
Monica, CA: RAND Corporation, 2006; and Sanders, William L. ``Value-
Added Assessment from Student Achievement Data: Opportunities and 
Hurdles.'' Journal of Personnel Evaluation in Education, Vol. 14, 
No. 4, p. 329-339, 2000.
    \21\ Center for Educator Compensation Reform: http://cecr.ed.gov/.
---------------------------------------------------------------------------

    The proposed requirements will have additional benefits to the 
extent that they provide States with incentives to address inequities 
in the distribution of effective teachers, improve the quality of State 
assessments, and undergo intensive efforts to improve struggling 
schools. Numerous studies document the substantial impact of improved 
teaching on educational outcomes and the need to take action to turn 
around the lowest-performing schools, including high schools (and their 
feeder middle schools) that enroll a disproportionate number of the 
students who fail to complete a high school education and receive a 
regular high school diploma. The Department believes that more 
widespread adoption of these reforms would have a significant, positive 
impact on student achievement.
    Although these benefits are not easily quantified, the Department 
believes they will exceed the projected costs.
    Accounting Statement: As required by OMB Circular A-4 (available at 
http://www.Whitehouse.gov/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 proposed 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 proposed regulatory action. Expenditures are classified 
as transfers to States.

  Table--Accounting Statement Classification of Estimated Expenditures
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annual monetized transfers................  $12,621,790,599.
From Whom to Whom.........................  Federal Government to
                                             States.
------------------------------------------------------------------------

    The Stabilization program provides approximately $48.6 billion in 
formula grants to States.\22\ As previously noted, the Department is 
awarding Stabilization program funds in two phases. In the first phase, 
the Department is awarding 67 percent of a State's Education 
Stabilization Fund allocation, unless the State can demonstrate that 
additional funds are required to restore fiscal year 2009 State support 
for education, in which case the Department will award the State up to 
90 percent of that allocation. In addition, the Department will award 
100 percent of each State's Government Services Fund allocation in 
Phase I. The Department will award the remainder of a State's Education 
Stabilization Fund allocation in the second phase. Thus, depending on 
the total amount of funds States receive in the first phase, up to 
$12.6 billion may be available in the second phase.
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    \22\ A table listing the allocations to States under the 
Stabilization program is available at: http://www.ed.gov/programs/statestabilization/funding.html.
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Paperwork Reduction Act of 1995

    This notice contains information collection requirements that are 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). It is our 
plan to offer a comment period for the information collection at the 
time of the final notice. At that time, the Department will submit the 
information collection to OMB for its review and provide the burden 
hours associated with each requirement for comment. However, because it 
is likely that the information collection will be reviewed under 
emergency OMB processing, the Department encourages the public to 
comment on the burden hours associated with each requirement in this 
notice.
    A description of the specific proposed information collection 
requirements is provided in the following tables along with preliminary 
estimates of the annual recordkeeping burden for these requirements. 
Included in a preliminary estimate is the time for collecting and 
tracking data, maintaining records, calculations, and reporting. The 
first table presents the estimated indicators burden for SEAs, the 
second table presents the estimated indicators burden for LEAs, the 
third table presents the estimated indicators burden for IHEs, and the 
fourth table presents the estimated State plan burden for SEAs.
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    Regulatory Flexibility Act Certification:
    The Secretary certifies that this proposed regulatory action will 
not have a significant economic impact on a substantial number of small 
entities. The small entities that this proposed regulatory action will 
affect are small LEAs receiving funds under this program and small 
IHEs.
    This proposed regulatory action will not have a significant 
economic impact on small LEAs because they will be able to meet the 
costs of compliance with this regulatory action using the funds 
provided under this program.
    With respect to small IHEs, the U.S. Small Business Administration 
Size Standards define these institutions as ``small entities'' if they 
are for-profit or nonprofit institutions with total annual revenue 
below $5,000,000 or if they are institutions controlled by small 
governmental jurisdictions, which are comprised of cities, counties, 
towns, townships, villages, school districts, or special districts, 
with a population of less than 50,000. Based on data from the 
Department's Integrated Postsecondary Education Data System (IPEDS), up 
to 532 small IHEs with revenues of less than $5 million may be affected 
by this proposed requirement. These small IHEs represent only 15 
percent of degree-granting IHEs. In addition, only 161,155 students 
(0.7 percent) enrolled in degree-granting IHEs in fall 2007 attended 
these small institutions. As the burden for indicators (c)(12) and 
(c)(13) is driven by the number of students for whom IHEs would be 
required to submit data, small IHEs will require significantly less 
effort to adhere to these proposed regulations than would be the case 
for larger IHEs. Based on IPEDS data, the Department estimates that 
18,050 of these students are first-time freshmen. As stated earlier in 
the Summary of Costs and Benefits section of this notice, the 
Department estimates that, as required by proposed indicator (c)(12), 
IHEs will be able confirm the enrollment of 20 first-time freshmen per 
hour. Applying this estimate to the estimated number of first-time 
freshmen at small IHEs, the Department estimates that these IHEs would 
need to spend 8,058 hours to respond to this proposed requirement at a 
total cost of $201,450 (assuming a cost of $25 per hour).
    The effort involved in reporting the number of students enrolling 
in a public IHE who complete at least one year's worth of college 
credit applicable toward a degree within two years as required by 
indicator (c)(13) would also apply to small IHEs. For this proposed 
requirement, the Department also estimates that IHEs will be able to 
report the credit completion status of 20 first-time freshmen per hour. 
Again applying this data entry rate to the estimated number of first-
time freshmen at small IHEs, the Department estimates that these IHEs 
would need to spend 8,058 hours to respond to this proposed requirement 
at a total cost of $201,450. The total cost of these proposed 
requirements for small IHEs is, therefore, $402,900, and the estimated 
cost per small IHE is $757. The Department has, therefore, determined 
that the regulations would not represent a significant burden on small 
not-for-profit IHEs.
    It is also important to note that States may use their Government 
Services Fund allocations to help small IHEs meet the costs of 
complying with the requirements that affect them, and public IHEs may 
use Education Stabilization Fund dollars they receive for that purpose.
    In addition, the Department believes the benefits provided under 
this proposed regulatory action will outweigh the burdens on these 
institutions of complying with the proposed requirements. One of these 
benefits will be the provision of better information on student success 
in postsecondary education to policymakers, educators, parents, and 
other stakeholders. The Department believes that the information 
gathered and reported as a result of these requirements will improve 
public accountability for performance; help States, LEAs, and schools 
learn from one another and improve their decision-making; and inform 
Federal policymaking.
    A second major benefit is that better public information on State 
and local progress in the four reform areas will likely spur more rapid 
progress on those reforms, because States and LEAs that appear to be 
lagging in one area or another may see a need to redouble their 
efforts. The Department believes that more rapid progress on the 
essential educational reforms will have major benefits nationally, and 
that these reforms have the potential to drive dramatic improvements in 
student outcomes. The proposed requirements that apply to IHEs should, 
in particular, spur more rapid implementation of P-16 State 
longitudinal data systems.
    The Secretary invites comments from small IHEs and small LEAs as to 
whether they believe this proposed regulatory action would have a 
significant economic impact on them and, if so, requests evidence to 
support that belief.
    Assessment of Educational Impact:
    In accordance with section 411 of the General Education Provisions 
Act, 20 U.S.C. 1221e-4, the Department invites comment on whether these 
requirements do not require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    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 computer diskette) on request to the program contact 
person listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: 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) on the 
Internet at the following site: http://www.ed.gov/news/fedregister.
    To use PDF you must have Adobe Acrobat Reader, which is available 
free at this site. If you have questions about using PDF, call the U.S. 
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in 
the Washington, DC, area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html.


    Dated: July 22, 2009.
Arne Duncan,
Secretary of Education.
[FR Doc. E9-17906 Filed 7-24-09; 11:15 am]
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