State Fiscal Stabilization Fund Program, 37837-37872 [E9-17906]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Notices]
[Pages 37837-37872]
From the Federal Register Online via the Government Printing 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.
     Federal eRulemaking Portal: Go to https://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.''
     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.
     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 https://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: phase2comments@ed.gov.
    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: https://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: https://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: https://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:
     Whether students are provided high-quality State 
assessments.
     Whether the State is engaged in activities to enhance its 
assessments (with respect to paragraph (A) of the statutory assurance).
     Whether students with disabilities and limited English 
proficient students are included in State assessment systems (with 
respect to paragraph (B) of the statutory assurance).
     Whether the State makes available information regarding 
student academic performance compared to student academic performance 
in other States.
     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

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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 https://www.ed.gov/programs/eag/ 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: https://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: https://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 ap