Implementation of the No Child Left Behind Act of 2001, 22178-22222 [05-8256]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Indian Affairs
• Indian Affairs Bureau

[Federal Register Volume 70, Number 81 (Thursday, April 28, 2005)]
[Rules and Regulations]
[Pages 22178-22222]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-8256]



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Part II





Department of the Interior





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Bureau of Indian Affairs



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25 CFR Part 30, et al.



Implementation of the No Child Left Behind Act of 2001; Final Rule

Federal Register / Vol. 70, No. 81 / Thursday, April 28, 2005 / Rules 
and Regulations

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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Parts 30, 37, 39, 42, 44, and 47

RIN 1076-AE49


Implementation of the No Child Left Behind Act of 2001

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Final rule.

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SUMMARY: This final rule addresses six areas involving Indian 
education: Defining adequate yearly progress; establishing geographic 
attendance areas for Bureau of Indian Affairs-funded schools (Bureau-
funded schools); establishing a formula for the minimum amount 
necessary to fund Bureau-funded schools; establishing a system of 
uniform direct funding and support for Bureau-operated schools; 
providing guidelines to ensure the Constitutional and civil rights of 
Indian students; and establishing a method for administering grants to 
tribally controlled schools. The rule implements the provisions of the 
No Child Left Behind Act of 2001.

DATES: Effective Date: May 31, 2005.

FOR FURTHER INFORMATION CONTACT: Catherine Freels, DOI Office of the 
Solicitor, 505 Marquette Avenue NW., Suite 1800, Albuquerque, NM 87102, 
phone 505-248-5600.

SUPPLEMENTARY INFORMATION: Contents of the SUPPLEMENTARY INFORMATION 
section:

I. Background
II. Public Comments--General
III. Comments on Part 30--Adequate Yearly Progress
IV. Comments on Part 37--Geographic Attendance Boundaries
V. Comments on Part 39--Indian School Equalization Program
VI. Comments on Part 42--Student Rights
VII. Comments on Part 44--Geographic Boundaries
VIII. Comments on Part 47--Uniform Direct Funding and Support for 
Bureau-funded Schools
IX. Procedural Matters

I. Background

A. What Information Does This Section Address?

    This section addresses:

--Requirements of the Act.
--Overview of Negotiated Rulemaking Process.
--How public comments were handled.

B. What Are the Negotiated Rulemaking Requirements of the No Child Left 
Behind Act of 2001?

    Under 25 U.S.C. 2018 , the Secretary of the Interior (Secretary) 
established the No Child Left Behind Negotiated Rulemaking Committee 
(Committee) to develop proposed rules to implement several sections of 
the Act relating to the Bureau-funded school system. (In this preamble 
and rule we use the term ``the Act'' to refer to the No Child Left 
Behind Act, Pub. L. 107-110, enacted January 8, 2002. The No Child Left 
Behind Act reauthorizes and amends the Elementary and Secondary 
Education Act (ESEA) and amends the Education Amendments of 1978.) The 
Act required that the Committee be comprised only of representatives of 
tribes served by Bureau-funded schools and the Federal government. It 
also required that, to the maximum extent possible, the tribal 
representative membership should reflect the proportionate share of 
students from tribes served by the Bureau-funded school system.
    The requirements of the Act that are the subject of this negotiated 
rulemaking process are:
    (1) 20 U.S.C. 6316(g): Develop a definition of ``Adequate Yearly 
Progress'' for the Bureau-funded school system;
    (2) 25 U.S.C. 2004: Attendance boundaries for Bureau-funded 
schools;
    (3) 25 U.S.C. 2007: A determination of the funds needed to sustain 
Bureau-funded schools and a formula to allocate the current funds;
    (4) 25 U.S.C. 2010: The direct funding and support of Bureau-funded 
schools;
    (5) 25 U.S.C. 2016: The rights of students in the Bureau-funded 
school system; and
    (6) 25 U.S.C. 2501, et seq., the Tribally Controlled Schools Act 
(TCSA) of 1988, as amended by the Act: Discharge of the Secretary's 
responsibilities under this Act through which tribes and tribal school 
boards can operate Bureau-funded schools under the grant mechanism 
established in the Tribally Controlled Schools Act.

C. What Was the Negotiated Rulemaking Process?

    Under the Act, in August and September, 2002, the Secretary 
conducted regional consultation meetings with tribes on the six areas 
of the Act to be negotiated. Following consultation and under the Act 
and the Negotiated Rulemaking Act (subchapter III of chapter 5, title 
5, United States Code), in November, 2002, the Secretary published a 
Notice of Intent To Form a Negotiated Rulemaking Committee (67 FR 
75828, December 10, 2002) and requested nominations for tribal 
representatives for the Committee.
    The Secretary reviewed tribal nominations for tribal 
representatives and announced selection of 19 tribal representatives 
and 6 Federal representatives from the Department of the Interior (68 
FR 23631, May 5, 2003). Tribal membership on the Committee represented, 
to the maximum extent possible, the proportionate share of students 
from tribes served by Bureau-funded schools. The Secretary chartered 
the No Child Left Behind Negotiated Rulemaking Committee under the 
Federal Advisory Committee Act (5 U.S.C. Appendix) on May 1, 2003.
    The Committee held its first meeting in June, 2003. It agreed on 
protocols to govern the meetings and selected three tribal 
representatives and two Federal representatives as co-chairs. A third 
party neutral approved by the Committee served as lead facilitator for 
all Committee meetings. The Committee met five times, from June 2003, 
through October 2003, to develop recommendations for six proposed 
rules. The Committee divided the areas subject to regulation among four 
work groups: funding and funding distribution; student rights and 
geographic boundaries; administration of grants; and adequate yearly 
progress. These work groups prepared written products for review, 
revision, and approval by the full Committee.
    The Committee operated by consensus and recommendations for 
proposed rules were consensus decisions. All Committee and work group 
meetings were open to the public, and members of the public were 
afforded the opportunity to make oral comments at each session and to 
submit written comments. Federal Register notices stating the location 
and dates of the meetings and inviting members of the public to attend 
were published prior to each meeting. In addition, Committee 
information including meeting locations and dates and meeting agendas 
and summaries were provided on the Office of Indian Education Program 
Web site at: https://www.oiep.bia.edu.
    The Department published a proposed rule in the Federal Register on 
February 25, 2004 (69 FR 8752), with a 120-day comment period. (The 
Department subsequently reopened the comment period for an additional 
10 days.) In August 2004, following the public comment period, the 
Committee reconvened to review public comments and make recommendations 
for final rules to the Secretary.

D. How Were Public Comments Handled?

    The Notice of Proposed Rulemaking for parts 30, 37, 39, 42, 44, and 
47, published February 25, 2004, provided

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for a 120-day public comment period. We also reopened the public 
comment period for an additional 10 days at the end of the 120-day 
public comment period. We received 47 comments from individuals, tribal 
leaders, schools, education associations, school boards, and the U.S. 
Department of Education. Because the proposed rules were the result of 
negotiated rulemaking, the Committee reconvened to review public 
comments at the end of the public comment period.
    The Committee was provided the full text of each comment and 
summaries of each comment for review. The Committee operated by 
consensus in reviewing comments to determine whether to accept a 
comment and make suggested changes to a rule, accept a comment and 
modify suggested changes, or acknowledge a comment and make no changes. 
Comments were handled as follows.

--Where comments referred to issues that are beyond the scope of this 
rule, such as inadequate funding or disproportionate allocations, or to 
issues that were not relevant to this rule, such as tribal recognition 
or comments on the Paperwork Reduction Act requirements (the comment 
period ended on PRA items in March, 2004), the Committee acknowledged 
the comments, but took no action on them.
--Where comments agreed with the proposed rules, the Committee 
acknowledged the comments.
--Where comments disagreed with the proposed rules, the Committee 
acknowledged the comments. The disposition of these comments and the 
reasons that they were accepted or not accepted are treated in the 
detailed discussions that follow.
--Where the Committee did not have consensus to reopen a particular 
section to consider comments suggesting changes, the Department 
reviewed the comments and made changes where it deemed necessary. These 
changes are noted in the response to comments section for each part.

    Following receipt of the Committee's recommendations for the final 
rules, the Secretary reviewed the public comments and made changes as 
noted for each part. Changes that are purely grammatical are not 
discussed. Public comments and responses are noted below under the 
applicable part.

E. How Were Oversights in the Proposed Rule Corrected?

    When the proposed rule was published, there was an oversight in the 
wording of the amendatory language for part 39. Rather than stating 
that the entire subpart was proposed for revision, the amendatory 
language should have stated that only subparts A through H were 
proposed for revision. Our intention, and that of the negotiated 
rulemaking Committee, was to leave subparts I through L in place with 
no revisions. This final rule corrects that oversight.

F. How Were Conforming Amendments to Parts 31 and 36 Handled?

    Additional changes are required in order to eliminate conflicts 
between the amendments in these regulations and existing regulations in 
other parts of 25 CFR. In a rule published elsewhere in today's Federal 
Register and identified by the RIN 1076-AE54, the Department is 
deleting provisions in parts 31 and 36 of 25 CFR that conflict with the 
amendments published in this rule.

II. Public Comments--General

    We received the following general comments referring to all parts:
    Comment: The proposed rules may go against tribal culture and 
affect tribal sovereignty and do not ensure fair and equal treatment 
for tribes.
    Response: We noted the comment and did not make any changes to the 
rules based on these comments. Congress mandated that we promulgate 
rules relating to certain sections of the Act.
    Comment: Other provisions of the Act should be included in this 
rulemaking.
    Response: We noted the comment and did not make any changes based 
on this comment. The comment is beyond the scope of these rules. The 
Secretary determined which sections of the Act to include in this 
negotiated rulemaking.
    Comment: The Act provides no additional funding for education. 
Funding is insufficient. Redistribute funding to improve the 
concentration where it is needed.
    Response: We noted the comment and did not make any changes based 
on this comment. The comment is beyond the scope of these rules.

III. Comments on Part 30--Adequate Yearly Progress

    For purposes of adequate yearly progress (AYP), the Bureau of 
Indian Affairs is considered the State Educational Agency (SEA) for the 
Bureau-funded school system.
    20 U.S.C. 6311(b) requires each State to submit a plan to the 
Secretary of Education which demonstrates that the State, through its 
SEA, has adopted challenging academic content standards and challenging 
student academic achievement standards applicable to all schools in the 
State, and to develop assessment devices through which student 
achievement will be measured.
    The Act requires each SEA to define the AYP that schools and local 
educational agencies (LEAs) must attain toward the goal of all students 
reaching the proficient level on reading/language arts and mathematics 
assessments by school year 2013-2014. Each State's AYP definition must 
include a starting point and intermediate goals for student improvement 
in reading/language arts and mathematics; if a school or LEA does not 
meet the intermediate goals for two consecutive years or more, it is 
identified as in need of improvement and must implement an improvement 
plan and take certain other actions under the Act.
    The Act requires a State and the Bureau of Indian Affairs to define 
AYP in a manner that achieves the following requirements:

--Applies the same high standards of academic achievement to all 
schools;
--Is statistically valid and reliable;
--Results in continuous and substantial academic improvement for all 
students;
--Measures progress of the SEA (BIA) and schools based primarily of the 
academic assessments; and
--Includes separate measurable annual goals for continuous and 
substantial improvement in the academic achievement of all students in 
the school; economically disadvantaged students; students from major 
racial and ethnic groups; students with disabilities; and students with 
limited English proficiency.

    The AYP definition must also include ``additional indicators.'' For 
high schools, the additional indicator must be graduation rates. The 
SEA must select one additional academic indicator applicable to 
elementary and middle schools. An SEA may also identify additional 
optional indicators of student progress to include in its definition of 
AYP.
    To define Adequate Yearly Progress (AYP) for Bureau-funded schools, 
the Committee first had to master an understanding of all of the 
components of Adequate Yearly Progress under the Act and how they 
interrelate with a final definition of AYP. While the workgroup had to 
look at the curriculum, standards, and assessments that Bureau-funded 
schools were using, the Committee did not negotiate these items. The 
negotiation was limited to the definition of AYP.
    A detailed procedure for submission of an alternative AYP 
definition by a tribe or school board, and for review/

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approval of that definition by the Secretary of the Interior is 
included in Sec. Sec.  30.106--30.108. The Department is required by 
Sec.  30.109 to provide technical assistance for development of an 
alternative definition upon the request of a tribe or school board.
    The consequences of failing to make AYP are described in Sec.  
30.117. While the remedial statuses of ``school improvement,'' 
``corrective action,'' and ``restructuring'' applicable to public 
schools are also applicable to Bureau-funded schools, the latter are 
exempt from two requirements--school choice and supplemental 
educational services--that apply to public schools (see Sec.  30.120). 
These exemptions are expressly stated in the regulation. The regulation 
also reiterates in Sec.  30.119 the tribally operated school board's 
responsibility to implement remedial actions, while the Bureau is 
responsible for implementing these remedial actions at Bureau-operated 
schools.
    The rule specifies in Sec.  30.121 the Bureau's responsibilities 
under the Act to provide funding and technical assistance to schools 
who fail to make AYP, and in Sec.  30.122 the Bureau's responsibility 
to provide ongoing support to all schools to assist them in making AYP. 
The proposed regulation also details the Bureau's reporting 
responsibilities in Sec.  30.126.
    Only major, substantive public comments are discussed below. In 
some instances, we have combined several similar or identical comments 
and replied to them in one response. Grammatical changes, minor wording 
revisions, and other purely style-oriented comments are not discussed; 
however, changes to the final rule reflect such public comment. The 
Secretary reviewed the final rule and made the changes as noted below.

A. Comments the Committee Considered That Resulted in No Change to the 
Rule

    Comment: There were several comments supporting the proposed 
definition of adequate yearly progress for Bureau-funded schools. These 
comments included:

--Agreement with the proposed definition of adequate yearly progress 
being that of the State in which a Bureau-funded school is located;
--Agreement with allowance for a tribe's submission of its own set of 
alternatives; and
--Agreement with the language describing the Secretary's trust 
responsibility, the sovereign rights of Indian Tribes, and the State's 
lack of jurisdiction over Bureau-funded schools.

    Response: These comments were considered, appreciated, and, because 
they were in agreement with the rule, no action was taken.
    Comment: Several commenters suggested that:

--The regulations should require that a school's alternative definition 
of adequate yearly progress (AYP) ``identify'' what is from the State's 
definition and what is not; and

--The Department of the Interior should establish a system of rewards 
and sanctions.

    Response: These comments were considered and no action was taken 
because the Committee had already considered this in drafting the 
proposed rule.
    Comment: Change Sec.  30.119(b), to make it more specific and state 
that:

--The school board has the sole authority and responsibility for 
determining the nature and implementation of remedial actions in 
accordance with the Act; and
--In implementing any remedial actions the Board is not subject to an 
approval process from the Bureau, but may request and receive technical 
assistance concerning remedial actions.

    Response: The comment was considered and no action was taken. The 
Committee determined that the suggested change is unnecessary as 
section 20 U.S.C. 6316(g)(4) is clear.
    Comment: There are several references in the rule to various parts 
of section 1116 of the Act, so section 1116 should be included in the 
rule.
    Response: This comment was considered and no action was taken 
because the Committee believed that this would not improve the rule.
    Comment: Language should be added to Sec.  30.122 to say that 
providing funding and technical assistance to schools that fail to make 
AYP is not just a responsibility, but a priority to the Bureau.
    Response: This comment was considered and no action was taken.
    Comment: Section 30.126 should be modified to match section 1116(g) 
and to:

--More clearly state that the Bureau collects information from grant 
and school boards to enable its reporting requirement, but that the 
Bureau does not make the determination of school improvement, 
corrective action or restructuring status for Bureau-funded grant and 
contract schools; and
--Include language implementing section 1116(g) for tribally controlled 
school boards to identify the factors that led to any determination of 
remedial actions for the school and for those factors to be reported to 
the Department of Education.

    Response: This comment was considered and no action was taken 
because the Committee felt the statutory language was clear.
    Comment: Rewards and sanctions should be the responsibility of the 
Bureau.
    Response: This comment was considered and no action was taken.

B. Comments the Committee Considered That Resulted in Changes to the 
Rule

    Comment: Delete the reference to ``curriculum'' since adoption of 
the definition of AYP used by the State in which the school is located 
would not mean a school needs to use the State curriculum. Instead add 
the phrase ``academic content and student achievement'' before 
``standards.''
    Response: This change was made and is reflected in Sec.  30.104(a).
    Comment: Delete the reference to ``curriculum'' and add ``solely 
for the purpose of using the State's academic contents and student 
performance standards, assessments, and definition of AYP.''
    Response: This change was made and is reflected in Sec.  
30.104(a)(2).
    Comment: Insert the term ``trust'' before responsibility for Indian 
education.
    Response: This change was made and is reflected in Sec.  
30.104(a)(3).
    Comment: Insert that the proposal must meet the requirement of 
section 1111(b) of the Act and 34 CFR 200.13-200.20, taking into 
account the unique circumstances and needs of the school or schools and 
students served.
    Response: This change was made in part. The term ``to be consistent 
with section'' was removed and, ``must meet the requirements of 20 
U.S.C. 6311(b), taking into account the unique circumstances and needs 
of the school or schools and the students served'' was added, as 
reflected in Sec.  30.106.
    Comment: The reference to the ``State's definition'' of AYP is in 
error. It should be a reference to the Bureau's definition of AYP.
    Response: The word ``State's'' was changed to ``Secretary's'' as 
reflected in Sec.  30.108.
    Comment: The language should be changed to say ``By the 2005-2006 
school year, a Bureau-funded school must measure the achievement of all 
students enrolled in grades three through eight, and once for all 
students enrolled in grades 10-12. Until that time, the Bureau-funded 
schools must measure the achievement of all students

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at least once during grades three through five, six through nine and 
10-12.''
    Response: Revised Sec.  30.114 states an assessment is required for 
all students in grades three through eight and at least once for all 
students in grades ten through twelve.
    Comment: The rule must be revised to clarify that a school fails to 
meet AYP if it is deficient in any of the measurements in Sec.  
30.107(b)(6)(i) or (ii) as recommended in an earlier comment.
    Response: The change was made and is reflected in Sec.  30.116.

C. Comments the Committee Considered That Resulted in No Consensus With 
No Change to Rule

    Comment: There were several comments suggesting the Department of 
the Interior, Office of Indian Education Programs should develop its 
own definition of AYP based on Bureau-wide standards and assessments.
    Response: The Committee consensus was to define the Secretary of 
the Interior's definition of AYP as each State's definition of AYP, 
since the Department lacks an independent set of standards and 
assessments necessary to establish a definition of AYP. Although the 
Committee received very few comments on this decision, some Committee 
members commented on this issue. When the comments were being reviewed, 
some of the tribal members of the Committee decided to withhold 
consensus on keeping the proposed definition of AYP. Since the 
Committee failed to reach consensus in recommending a final AYP rule, 
it is left for the Secretary to determine the rule.
    The Secretary has decided to keep the definition of AYP as 
published in the Notice of Proposed Rulemaking published on February 
25, 2004 with certain clarifying changes as described in the preceding 
section. Since the Department did not receive comments that had not 
already been considered when the Committee made the difficult choice to 
recommend the definition found in the NPRM, the Secretary decided to 
adopt the NPRM's definition. Thus, the definition of AYP remains that 
of the State in which a school is located until the school has received 
a waiver of that definition from the Secretary of the Interior.
    The AYP workgroup of the negotiated rulemaking Committee initially 
considered a definition that would require all Bureau-funded schools to 
show that a set percentage of students (e.g., 11 percent) progressed 
annually from the ``basic'' achievement level to the ``proficient'' or 
``advanced'' achievement levels. This idea was abandoned, however, 
because the Department of Education, which supplied resource 
consultants to the Committee, advised that this methodology would not 
be statistically reliable. The Department of Education notes that 
aggregating Bureau-funded school assessment data to make AYP 
determinations is not statistically reliable because each school uses a 
different assessment system and because, collectively, the assessments 
in use do not meet the requirements of the Act in 20 U.S.C. 
6311(b)(3)(C)(ii). Therefore, the Committee needed to develop a uniform 
assessment system. As the Committee discovered, Bureau had abandoned 
requiring uniform curriculum and assessments and had instead allowed 
schools to align their curriculum with the State in which the school 
was located. Thus, the Committee appeared to be left with two options:

--Selecting a single State's system with one set of curriculum, 
academic content and student achievement standards and assessments; or
--Allowing each Bureau-funded school to follow the definition of the 
State in which it is located.

    After Congress passed the Goals 2000 Act (Pub. L. 103-227), States 
had to set standards for student achievement. The Bureau chose to adopt 
national standards, but most schools chose to align with the standards 
of the State where they were located. The Committee found that the 
Bureau of Indian Affairs has traditionally allowed tribes to follow 
State curricula, academic content and student achievement standards and 
assessments. Originally, the Bureau had attempted to create a system in 
which all of the tribes would follow one set of curriculum, standards, 
and assessments. Some tribes expressed concern over this approach. 
Tribes suggested that the students of Bureau-funded schools would be 
better served by allowing the schools to follow the State's curriculum, 
standards, and assessments because the Bureau-funded school students 
are traditionally more transient and sometimes move between Bureau-
funded schools and public schools. Therefore, Bureau-funded schools 
began aligning their curriculum, standards, and assessments with the 
State in which they were located.
    In light of this history, the Committee revised its initial plan 
and decided to adopt as the Secretary's definition of AYP the 
definition of the State in which a school is located. However, a tribal 
governing body or school board may develop an alternative AYP 
definition and submit it to the Secretary for approval. This decision 
implements 20 U.S.C. 6316(g) of the Act, which expressly permits a 
tribe or school board to waive the Bureau's AYP definition and develop 
its own, subject to the Secretary's approval in consultation with the 
Secretary of Education.
    During our initial negotiations, Tribal representatives on the 
Committee expressed serious objection to adopting State AYP definitions 
as the Secretary's definition instead of establishing a Bureau-specific 
definition, which some tribes and school boards might prefer. There was 
concern that requiring use of a State's definition would imply that 
Bureau-funded schools were subject to State jurisdiction, would signal 
abandonment of the Federal Government's trust responsibility for Indian 
education, and could diminish tribal sovereignty. In recognition of 
these concerns, the Committee developed language for the proposed rules 
that expressly states that nothing in the rules diminishes the 
Secretary's trust responsibility for Indian education or any statutory 
rights, affects in any way the sovereign rights of an Indian tribe, or 
subjects Bureau-funded schools to State jurisdiction.

D. Comments the Committee Considered That Resulted in No Consensus With 
Changes to the Rule

    The Committee also had no consensus regarding comments made by the 
Department of Education on the proposed definition of AYP. The 
Department of Education did not provide these comments during the 
original public comment period.
    Since the Department of Education is a Federal agency, the 
Department of the Interior believed that it could nevertheless consider 
Education's comments. However, to ensure fairness to any member of the 
public who had not yet provided comment, the Department of the Interior 
formally reopened the public comment period for receipt of comments 
from Education and any member of the public. During review of the 
comments, the Federal Committee members believed that some of 
Education's comments should be accepted and the proposed changes be 
made to the rule. Some tribal Committee members objected that the 
Federal Committee members would not negotiate whether to consider 
Education's comments. Therefore, the Committee could not reach 
consensus on whether to accept Education's comments. Since there was no 
Committee recommendation, the Secretary in adopting the final rule has 
accepted certain Department of Education comments.

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    Comment: The rule should clarify in Sec. Sec.  30.104 and 30.105 
that any Bureau-funded school that uses the Bureau's definition of AYP 
must also use the academic, content, and student achievement standards 
and State assessments of the State in which the school is located. 
Standards and assessments are a necessary part of an accountability 
system.
    Response: The Committee could not reach consensus to change the 
proposed rule based on this comment from the Department of Education. 
Since there was no consensus Committee recommendation, the Secretary 
accepted the Department of Education's comment and changed the rule to 
read: ``Yes. A tribal governing body or school board may waive all or 
part of the Secretary's definition of academic content and student 
achievement standards and assessments and AYP. However, until the 
alternative definition is approved under Sec.  30.113 the school must 
use the Secretary's definition of academic content and student 
achievement standards, assessments, and AYP.''
    Comment: The rule should revise Sec.  30.107 to:

--Use the same language as section 1111(b) of the Act to take into 
account the unique circumstances and needs of the school or schools and 
the students served;
--Add a citation to 34 CFR 200.13-20; and
--State that a waiver request will include an explanation of what 
standards and assessments will be used, as required by section 1111(b).

    Response: Since there was no consensus Committee recommendation on 
whether to accept this comment from the Department of Education, the 
Secretary accepted the comment and made the following changes:

--Changed the term ``curriculum'' as recommended in several comments;
--Removed science from the areas that require a measurement of progress 
as recommended in several comments; and
--Added ``academic contents and achievement standards'' as recommended 
throughout the document.

    The Secretary also added the Department of Education's language 
suggestions to the Department's final rule in Sec.  30.107 to read:


Sec.  30.107  What must a tribal governing body or school board include 
in its alternative definition of AYP?

    (a) An alternative definition of AYP must meet the requirements 
of 20 U.S.C. 6311(b)(2) and 34 CFR 200.13-200.20, taking into 
account the unique circumstances and needs of the school or schools 
and the students served.
    (b) In accordance with 20 U.S.C. 6311(b) and 34 CFR 200.13-
200.20, an alternative definition of AYP must:
    (1) Apply the same high standards of academic achievement to all 
students;
    (2) Be statistically valid and reliable;
    (3) Result in continuous and substantial academic improvement 
for all students;
    (4) Measure the progress of all students based on a high-quality 
assessment system that includes, at a minimum, academic assessments 
in mathematics and reading or language arts;
    (5) Measure progress separately for reading or language arts and 
for mathematics;
    (6) Unless disaggregation of data cannot yield statistically 
reliable information or reveals personally identifiable information, 
apply the same annual measurable objectives to each of the 
following:
    (i) The achievement of all students; and
    (ii) The achievement of economically disadvantaged students, 
students from major racial or ethnic groups, students with 
disabilities, and students with limited English proficiency;
    (7) Establish a starting point;
    (8) Create a timeline to ensure that all students are proficient 
by the 2013-2014 school year;
    (9) Establish annual measurable objectives;
    (10) Establish intermediate goals;
    (11) Include at least one other academic indicator which, for 
any school with a 12th grade, must be graduation rate; and
    (12) Ensure that at least 95 percent of the students enrolled in 
each group under Sec.  30.107(b)(6) are assessed.
    (c) If a Bureau-funded school's alternative definition of AYP 
does not use a State's academic content and student achievement 
standards and academic assessments, the school must include with its 
alternative definition the academic standards and assessment it 
proposes to use. These standards and assessments must meet the 
requirements in 20 U.S.C. 6311(b) and 34 CFR 200.1-200.9.
    (d) The measurement must include graduation rates and at least 
one other academic indicator for schools that do not have a 12th 
grade (but may include more than one other academic indicator).

    Comment: There is substantial concern about a regulation that 
requires the Secretary and the Secretary of the Department of 
Education, regardless of the complexity of a particular waiver request, 
to approve or disapprove all alternative definitions of AYP within 90 
days of receiving a completed alternative definition. The suggestion 
was made to include an exception for unusual circumstances that may 
require additional time. A notification provision should also be added 
to inform a school that seeks a waiver what additional time will be 
needed.
    Response: Section 30.113(d) now states that the Secretaries will, 
``review the proposed definition to determine whether it is consistent 
with the requirements of 20 U.S.C. 6311(b) of the Act.'' It does not 
specify a time within which the Secretaries will act. While the 
Secretaries will handle each situation expeditiously, the revised 
wording of the regulation allows flexibility in processing individual 
cases and ensures that extra time can be taken where necessary.
    Comment: Merely providing the Department of Education with 
notification of the Department of the Interior's receipt of a completed 
proposed alternative definition of AYP is insufficient. The last phrase 
in the Elementary and Secondary Education Act (ESEA) section 
1111(g)(1)(B) provides for the Department of Education's Secretary to 
have the information needed to determine whether a request of an 
alternative AYP definition should take into account the unique 
circumstances and needs of school or schools and the students served. 
This statutory sentence makes no sense if interpreted to mean that the 
Secretary of Education may only disapprove an alternative definition 
that the Secretary chooses to make the subject of a consultation with 
the Department of Education--which is all that Sec.  30.113 would 
require. The Act surely did not mean to create opportunities for 
inconsistencies in the Federal government's overall approach to 
approving alternative AYP definitions. Nor should the Executive Branch 
do so as a matter of interpretative choice.
    The words of the statute in 1116(g) state that the Secretary of the 
Interior, ``in consultation with the Secretary if the Secretary of the 
Interior requests the consultation, shall approve such alternative 
definition unless the Secretary determines that the definition does not 
meet the requirements of section 1111(b), that takes into account the 
unique circumstances and needs of such school or schools and the 
students served.'' While this language is admittedly cumbersome, three 
fundamental principles compel the approach we strongly request DOI to 
take:

--The Secretary of the Department of Education expresses statutory 
responsibility for determining that, as a part of consultation with 
DOI, alternative definitions do not meet the statutory requirements (in 
keeping with the Department of Education's overall title I, part A 
statutory responsibility to administer the title I, part A requirements 
governing systems of accountability);

[[Page 22183]]

--The Executive Branch's need to avoid inconsistencies in application 
of section 1111(g)(1)(B); and
--Take into account Interior's and Education's differing expertise in 
assessing whether an alternative AYP definition meets the requirements 
of ESEA section 1111(b) and applicable regulations, taking into account 
the unique circumstances and needs of the school or schools and the 
students served.

    Response: The Committee could not reach consensus to change the 
rule based on this comment. The Notice of Proposed Rulemaking provided 
that the Secretary of the Interior made the final determination on 
whether to grant an AYP waiver. The Committee believed that the statute 
could be read to mean that the Secretary of the Interior has the final 
decision-making power. During the public comment period, the Federal 
team members engaged in discussion within the Department of the 
Interior and with the Department of Education. The Departments tried to 
find a compromise that would provide for consistency in Federal 
decision-making and ensure that the Departments work together, using 
their collective expertise, to make a decision regarding whether an 
alternate definition of AYP meets the requirements of statute and 
regulations. The result of the discussion was the Department of 
Education's comment that the decision on the waiver should be a joint 
decision by the Secretary of the Interior and the Secretary of 
Education.
    When the Committee convened to review the comments, tribal members 
expressed concerns that the Federal members engaged in this dialogue 
with the Department of Education and that the Federal team was prepared 
to withhold consensus for any other result. Consequently, the Committee 
could not reach consensus on whether to consider the Department of 
Education's comments. Thus, the final rule has adopted certain 
Department of Education comments and revised Sec.  30.113(d) through 
(h) to read:

    (d) The Secretaries review the proposed alternative definition 
of AYP to determine whether it is consistent with the requirements 
of 20 U.S.C. 6311(b). This review must take into account the unique 
circumstances and needs of the schools and students.
    (e) The Secretaries shall approve the alternative definition of 
AYP if it is consistent with the requirements of 20 U.S.C. 6311(b), 
taking into consideration the unique circumstances and needs of 
schools and students.
    (f) If the Secretaries approve the alternative definition of 
AYP:
    (1) The Secretary shall promptly notify the tribal governing 
body or school board; and
    (2) The alternate definition of AYP will become effective at the 
start of the following school year.
    (g) The Secretaries will disapprove the alternative definition 
of AYP if it is not consistent with the requirements of 20 U.S.C. 
6311(b). If the alternative definition is disapproved, the tribal 
governing body or school board will be notified of the following:
    (1) That the definition is disapproved; and
    (2) The reasons why the proposed alternative definition does not 
meet the requirements of 20 U.S.C. 6311(b).
    (h) If the Secretaries deny a proposed definition under 
paragraph (g) of this section, they shall provide technical 
assistance to overcome the basis for the denial.

    Comment: The proposed rule needs to be revised to more closely 
reflect the ED-DOI agreement in 20 U.S.C. 7824.
    Response: The Committee did not reach consensus to change the 
proposed rule based on this comment from the Department of Education. 
Since the Committee provided no recommendation on this comment, the 
Secretary has decided to delete this section of the rule, as it is 
specifically provided for in the Act.

IV. Comments on Part 37--Geographic Attendance Boundaries

    The Act requires designated separate geographic boundaries for all 
Bureau-funded schools and provides for tribes to have input into the 
process. This part provides guidance and clarifies what roles tribes 
have in establishing and revising geographic attendance boundaries for 
schools. It also clarifies some of the limitations on the Secretary's 
ability to change school boundaries. It recognizes distinctions for 
different boundary determinations for day schools, on-reservation 
boarding schools, and peripheral dorms and for off-reservation boarding 
schools. The rule provides guidance applicable to both types of 
schools, where appropriate (subpart A) and provides separate guidance 
for each type of school, where appropriate (day schools, on-reservation 
boarding schools, and peripheral dorms--subpart B and off-reservation 
boarding schools B subpart C). This part is intended to give tribes the 
opportunity to meaningfully participate in all decisions regarding 
attendance boundaries and related policies where not statutorily 
prohibited.

General Comments Requesting No Change

    Several commenters approve of provisions of the rule that allow 
tribal entities to work collaboratively with Bureau-funded schools when 
geographic boundaries are determined or revised and that provide for 
assistance from the Department if tribes need assistance. Several 
commenters agree with the rule provision that tribes have ongoing 
authority to suggest changes to and participate in the revision of 
geographic attendance boundaries for schools. Some comments support the 
flexibility for allowing students to attend schools outside their 
geographic attendance boundaries. One commenter noted that rights in 
the rule are rights recognized pursuant to reserved tribal authority 
stemming from treaties between the United States and tribes. Some 
commenters to this part in the NPRM preamble disagree with allowing 
parental choice (which was not included in the final rule). One 
commenter stated that the Bureau can and must withhold payment from a 
school when a student who does not live within the school geographic 
attendance boundary has not received a waiver in accordance with tribal 
law.
    Comment: Funding should not be withheld solely because a student is 
attending a school outside his or her attendance area.
    Response: No change was made because a student is funded at the 
school they are attending.
    Comment: Revise Sec.  37.110 to state that a change of school is 
the decision of the parents and/or the student.
    Response: No change was made because the Act requires the Secretary 
to promulgate regulations for school boundaries.
    Comment: Revise the term ``geographic attendance area'' in Sec.  
37.101 to clarify that it may include off-reservation areas, 
particularly off-reservation boarding schools.
    Response: No change was made because the rule states that 
geographic attendance areas include off-reservation boarding schools.
    Comment: If parental choice is included in the rule, geographic 
boundaries have no meaning.
    Response: No change was made because parental choice is not 
included in the rule.
    Comment: Revise Sec.  37.111 to state that tribes have input on 
authorizing transportation funds for students attending schools outside 
their geographic attendance boundaries.
    Response: The Committee acknowledged this comment, considered it, 
and made no change.
    Comment: Revise Sec.  37.111 to reflect that a Bureau-funded school 
may enroll eligible Indian students who are not members of the tribe.
    Response: We revised Sec.  37.111(b) and added paragraph (c) to 
clarify that a

[[Page 22184]]

Bureau-funded school may enroll eligible Indian students who are not 
members of the tribe. The section authorizes ISEP-eligible students 
residing within the tribe's jurisdiction to receive transportation 
funding to attend schools outside the geographic attendance area in 
which the student lives. The section also authorizes tribal member 
students who are ISEP-eligible and not residing within the tribe's 
jurisdiction to receive transportation funding to attend schools 
outside the geographic attendance area in accordance with a tribal 
resolution issued by the tribe in which the student is enrolled.
    Comment: Revise Sec.  37.122 to include a deadline for the 
Secretary to accept or reject a proposed geographic boundary change; a 
time period for publishing the Federal Register notice of an accepted 
change; and a time frame for informing a tribe why a suggested boundary 
change is not accepted.
    Response: The Committee acknowledged this comment, considered it, 
and made no change.
    Comment: Revise Sec.  37.131 to clarify that all off-reservation 
boarding schools will have separate, non-overlapping boundaries, or, if 
parental choice is applied, delete this section as unnecessary.
    Response: No change was made because the rule does not need 
clarification and the section is necessary to the rule.

V. Comments on Part 39--The Indian School Equalization Program

A. General Comments on the Indian School Equalization Program

    Comment: Several comments stated that data for actual 
transportation costs incurred by Bureau-funded schools should:

--Take into account costs of gas and additional wear and tear that 
vehicles incur in isolated, remote locations; and
--Reflect two school years' worth of transportation information.

    The commenters also felt that, after collecting this data:

--The Committee should reconvene to review the data and develop a 
proposed regulation; and
--The Secretary should then publish a proposed rule for notice and 
comment before a final recommendation is made.

    Response: The Committee acknowledged and considered this comment, 
however no change was made to the funding formula. The Committee agrees 
that it needs more information to develop an improved transportation 
funding formula. It therefore recommended to the Secretary that another 
negotiated rulemaking Committee convene after the Department and the 
Bureau-funded schools have gathered additional transportation 
information in order to develop a more accurate and fair transportation 
funding regulation.
    Comment: In the preamble, the Committee had asked for comments on 
the determination of an isolation factor. Several commenters 
acknowledged the effects of severe isolation that results in expenses 
above and beyond the norm. Some commenters felt that all schools were 
isolated and should qualify for an isolation adjustment and others 
suggested that even schools that have paved highways should be 
considered, as the areas surrounding some Bureau schools are 
underdeveloped.
    Response: The Committee acknowledged and considered these comments; 
however, there was no change made to the rule, as the comments did not 
give any specific indicators or suggestions on how to determine 
isolation factors.
    Comment: Also in the preamble, the Committee had asked if the 
funding formula should be left in the body of the rule or if it should 
be placed in the appendix. Commenters responded that the formula should 
be in the body of the rule.
    Response: The Committee recommends that the ``minimum amount of 
funding to sustain each Bureau-funded school formula'' be placed in the 
body of the rule and not in the appendix.
    Comment: The proposed rules may in practice contravene the culture 
of the Micoosukee Tribe and impinge on Tribal sovereignty. Due to the 
unique cultural aspects of Indian Tribes, the standards applied to non-
Indians cannot be applied to Indians. The result would be to infringe 
on tribal culture, violate laws designed to protect tribes, and take 
away the right of tribes to live according to their customs and 
beliefs. The proposed rules do not ensure fair and equal treatment for 
tribes.
    Response: The comment was acknowledged and considered. No action 
was taken because the Committee's charge was to develop regulations to 
implement the Act and, therefore, the Committee had no authority to 
address this comment.
    Comments: Several commenters discussed the need for additional 
funding. One commenter did not support using general funds to 
redistribute in the base program categories arguing that the proposed 
items could pose a huge financial impact on schools. Several commenters 
suggested more funding is required for general education of students. 
Another comment was that the Act will provide no additional funding but 
merely reallocate current funding.
    Several commenters shared the concern that current Bureau funding 
is insufficient in many areas, and that merely revising the 
distribution method is inadequate. What should have happened was a 
redistribution to concentrate funding where it is needed combined with 
additional funding to support the Act's mandates.
    Another commenter suggested providing recurring funding to support 
educational services to pre-K students. One Commenter suggested that 
special circumstances, such as the therapeutic dormitory pilot project, 
should be included in the ISEP base. These comments also included a 
comment that another funding mechanism is needed to fund non-ISEP 
eligible students for distance and alternative learning and expressed 
disappointment that the funding formula did not take into account 
greater lengths of service of employees. Schools incur increased costs 
with employees who have greater lengths of service. Several commenters 
also were disappointed that the formula does not provide funding for 
after school programs.
    Response: These comments were acknowledged and considered and no 
action was taken because the Committee's charge was to develop 
regulations to implement the Act but it was not authorized to make 
funding recommendations.
    Comment: Several commenters discussed Off-Reservation Boarding 
Schools (ORBS) and suggested that ORBS should not receive an additional 
weighted unit in the funding formula. Others felt that ORBS should 
receive an additional weighted unit in the funding formula because 
their needs are unique as some of their students have legal and 
behavioral problems.
    Response: The Committee acknowledged and considered this comment; 
however, no change was made to the funding formula because the 
commenters did not present any additional arguments that had not 
already been considered by the Committee in drafting the proposed 
rules.
    Comment: Several commenters recommended that the funding formula be 
revised to provide a supplemental weight for students with disabilities 
because the mandatory 15 percent set aside may cause economic hardship 
on

[[Page 22185]]

a school and the part B process is cumbersome.
    Response: The Committee did not have consensus to open this issue 
for discussion. The current regulations and the proposed regulations 
mandate that each school set aside 15 percent of their basic 
instruction allotment to meet the needs of students with disabilities. 
If the 15 percent is inadequate to fund services necessary for eligible 
students with disabilities, schools may still apply for part B funding.
    The Federal team decided that additional information is needed to 
determine if modifications are necessary to the 15 percent set-aside. 
The Committee recommends that additional information be gathered 
regarding the number of ISEP eligible students who are identified as 
disabled and who are receiving special education services, and other 
related information. If the information collected reveals that the 15 
percent set-aside does not accurately reflect the percentage of ISEP 
eligible students with disabilities in the Bureau-funded school system, 
then the Committee recommends that a negotiated rulemaking committee 
negotiate revised special education funding regulations.
    Comment: The proposed rules will allow school districts to use 
Federal funds in a manner more consistent with their own reform 
strategies and priorities. It is important to note that these rules 
allow flexibility in adopting assessment systems composed entirely of 
locally developed and administered tests.
    Response: The comment was acknowledged and considered and no action 
was taken since no change was necessary based on this comment.

B. Section-Specific Comments

Section 39.2 What are the Definitions of Terms Used in This Part?
    Comment: There is no need for a definition of ISEP student count 
week.
    Response: The Committee acknowledged and considered this comment 
and made this change.
    Comment: The definition of school bus includes a definition of the 
operator, including the requirement that the driver be State qualified.
    Response: The Committee acknowledged and considered this comment 
and changed the definition of school bus to include ``. . . operated by 
an operator in the employ of, or under contract to, a Bureau-funded 
school, who is qualified to operate such a vehicle under Tribal, State, 
or Federal regulations governing the transportation of students.''
    Comment: Why does the definition of tribally operated contract 
school include grant schools?
    Response: The Committee acknowledged and considered this comment 
and changed the definition to read `` Tribally operated school means an 
elementary school, secondary school, or dormitory that receives 
financial assistance for its operations under a contract, grant or 
agreement with the Bureau under section 102, 103(a), or 208 of the 
Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 
et seq.), or under the Tribally Controlled Schools Act of 1988.''
    Comment: Bureau-funded school and Bureau school should be defined.
    Response: The Committee acknowledged and considered this comment 
and added a definition of Bureau-funded school and Bureau school.
    Comment: Is the definition of ISEP count week still needed in view 
of the proposal to convert a 3-year rolling average for identifying the 
student count? The count period used for residential students is not 
the last full week in September. As only the transportation mileage 
count would be taken the last full week of September, the term could be 
changed to ``transportation mileage count week.''
    Response: The Committee acknowledged and considered this comment 
and took out the definition of ISEP count week, but kept the definition 
as part of the definition of transportation.
    Comment: The following corrections are needed in the definition of 
``Limited English Proficient'': ``(1) * * * means a child from a 
language background other than English who needs language assistance in 
his/her language or in English in school,'' (2) ``the child comes from 
an environment [where a language] other than English is dominant.''
    Response: The Committee acknowledged and considered this comment 
and adopted the suggested language changes to the definition of 
``Limited English Proficient.''
    Comment: The terms ``Bureau-operated or -funded schools'' used here 
is redundant. The term should be ``Bureau-funded,'' and that term 
should be defined, as suggested above.
    Response: The Committee acknowledged and considered this comment 
and took out the term ``Bureau-operated'' because it was redundant.
    Comment: The opening sentence of the definition for Special 
Education does not seem broad enough to cover the numbered items 
listed. Some special education students, especially those who are 
physically handicapped, require personal aides and other such 
accommodations that are customarily provided through special education 
programs and paid for with special education funds. Consider using the 
definition of ``special education'' in the IDEA regulations at 34 CFR 
300.26.
    Response: The Committee acknowledged and considered this comment 
and adopted the definition of ``special education'' in the IDEA 
regulations at 34 CFR 300.26.
    Comment: The definition of ``supervisor'' requires clarity. Perhaps 
in a Bureau-operated school the individual in the position of ultimate 
authority is called ``superintendent,'' but that is not the term used 
in all contract and grant schools. Furthermore, the ``ultimate 
authority'' in a contract or grant school is the school board. The 
purpose of this term should be determined and the definition clarified 
accordingly.
    Response: The Committee acknowledged and considered this comment 
and the term ``supervisor'' was removed as a definition.
    Comment: The definition of ``transported student'' does not match 
the term. A ``transported student'' is not ``the average number of 
students.'' Either the term should be revised or the definition should 
be revised.
    Response: The Committee acknowledged and considered this comment 
and removed the definition of ``transported student.''
    Comment: The definition of ``three year rolling average'' should 
expressly state that all supplemental weights should be included in the 
average. That is, the 3-year average should actually be an average of 
WSU count.
    Response: The Committee acknowledged and considered this comment 
and changed the definition to add the current year of operation in 
academic programs and residential programs.
    Comments: There were several comments on this section that did not 
result in a change to the rule. They include comments that:
    (1) The definition of ``agency'' should be changed so it reflects 
what an agency does because it does not always provide services to 
governing bodies;
    (2) The definition of ``agency school board'' is not necessary 
because they have no duties or responsibilities under ISEP;
    (3) The definitions need to clarify whether a school counts non-
ISEP students for ADM;
    (4) The definition of ``Individual Supplemental Services'' should 
include SPED since schools are required to spend ISEP funds for SPED 
services and

[[Page 22186]]

since SPED is a non-base academic service;
    (5) The ``Limited English Proficiency'' definition is too lengthy 
and should consist only of paragraph (3) because ISEP only deals with 
American Indians;
    (6) The definition of ``eligible Indian student'' should be revised 
to establish an upper age limit for eligibility for ISEF funding;
    (7) The ``homebound'' definition should require enrollment in a 
Bureau school, since a homebound student can qualify for ISEF and ADM 
count if he/she received the minimum level of contact hours; Suggested 
definition: ``Homebound'' means a student who is enrolled in a Bureau-
funded school and is educated outside the classroom''; and
    (8) The definition of ``Local School Board'' does not track the 
definition of that term in the Act and should read: ``Local School 
Board,'' when used with respect to a Bureau school, means a body chosen 
in accordance with the laws of the tribe.''
    Response: These comments were acknowledged and considered by the 
Committee, but the Committee determined that the comments did not raise 
concerns that the Committee had not already considered in the proposed 
rule and therefore no action was taken.
Section 39.102 What Is Academic Base Funding?
    Comment: The term ``base funding'' should be clarified to 
distinguish between ``academic base funding'' and ``residential base 
funding.''
    Response: The Committee acknowledged and considered this comment, 
and made this change throughout the funding section.
    Comment: The question should be revised to state, ``What is 
included in base academic funding?''
    Response: The Committee acknowledged and considered this comment, 
and changed the question to read, ``What is academic base funding?''
    Comment: The answer to Sec.  102(a) in the proposed rule is 
incorrect because it states that base funding includes all available 
funding for educational services.
    Response: The Committee acknowledged and considered this comment, 
and changed the answer to more accurately reflect that base funding is 
the average daily membership times the weighted student unit.
Section 39.103 What Are the Factors Used To Determine Base Funding?
    Comment: The answer is inaccurate, as it states, ``base funding 
factors'' when really it is the weighted unit factor for base academic 
and base residential funding.
    Response: The Committee acknowledged and considered this comment, 
and changed the chart (contained in the answer) to more accurately 
illustrate what the base academic and base residential funding is for 
the appropriate grade levels.
    Comment: In the question the words ``use'' and ``must'' are 
transposed.
    Response: The Committee acknowledged and considered this comment, 
and modified the sentence so that these two words are transposed into 
their correct positions.
Section 39.104 How Must a School's Base Funding Provide for Students 
With Disabilities?
    Comment: Is it necessary for a school to comply with the 
Individuals with Disabilities Act (IDEA) if the school does not have 
enough students to qualify for part B funding?
    Response: The Committee did not reach consensus to discuss this 
issue as it is clear that any student identified as disabled must be 
provided special education services under IDEA.
    Comment: This section needs to be revised to select one term to 
refer to the students being described and use it consistently.
    Response: The Committee acknowledged and considered this comment, 
and modified the rule to read ``students with disabilities'' throughout 
the document.
    Comment: This section contains several inaccuracies and needs 
revision. Specifically, the term ``academic base funding'' should be 
used in place of ``ISEP funds.'' What is meant by ``all components'' of 
IDEA?. Also, paragraph (b) should address only the circumstances under 
which a school may use some or all of the 15 percent reserved in 
paragraph (a)(1) for a schoolwide program.
    Response: The Committee acknowledged and considered this comment 
and modified the paragraph to refer to ``academic base funding'' 
instead of ``ISEP funds.'' The Committee rewrote the paragraph to state 
that a school may spend all or part of the 15 percent academic base 
funding reserved under paragraph (a)(1) on school-wide programs to 
benefit all students (including those without disabilities) only if:
    (1) The school can document that it has met all needs of students 
with disabilities with those funds; and
    (2) After having done so, there are unspent funds remaining from 
the funds.
Section 39.105 Are Additional Funds Available for Special Education?
    Comment: In paragraph (a) the term ``base funding'' should be 
``base academic funding'' and a reference to the 15 percent reserve 
should be inserted.
    Response: The Committee acknowledged and considered this comment, 
and changed the paragraph to read, ``a school may supplement the 15 
percent base academic funding reserved under Sec.  39.104, for special 
education with funds available under part B of the Individuals with 
Disabilities Education Act (IDEA).''
    Comment: Revise paragraph (b)(2) to read, ``provide training to 
staff to improve delivery of part B funds.''
    Response: The Committee acknowledged and considered this comment 
and revised the section to read, ``providing training to Bureau staff 
to improve the delivery of part B funds.''
    Comments: A commenter suggested clarification was needed on who 
makes the determination that schools have demonstrated that the 
reserved ISEP funds are inadequate to pay for additional SPED services 
and what criteria are used.
    Response: The comment was acknowledged and considered and no action 
was taken, as the Committee felt the rule was clear.
Section 39.106 Who Is Eligible for Special Education Funding?
    Comments: There were two comments on this section suggesting that 
clarification was needed as to whether the minimum age requirement only 
applies to ISEP SPED and if so why. The answer to the question of who 
is eligible for special education funding is not unique to special 
education. Rather it establishes age limits applicable to all students 
in the Bureau-funded system. It should be moved to the definition 
section.
    Response: The comment was acknowledged and considered and no action 
was taken as this section only refers to who is eligible for Special 
Education Funding.
Section 39.107 Are Schools Allotted Supplemental Funds for Special 
Student and/or School Costs?
    Comment: The Committee should take a serious look at categorical 
funding based on the special and unique educational needs of Indian 
children. The primary consideration seemed to be based on the 
distribution of available funds instead of the needs of children. The 
categorica