State Fiscal Stabilization Fund Program, 58436-58525 [E9-27161]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 74, Number 217 (Thursday, November 12, 2009)]
[Rules and Regulations]
[Pages 58436-58525]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-27161]



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Part III





Department of Education





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34 CFR Chapter II



State Fiscal Stabilization Fund Program; Final Rule

Federal Register / Vol. 74, No. 217 / Thursday, November 12, 2009 / 
Rules and Regulations

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DEPARTMENT OF EDUCATION

34 CFR Subtitle B, Chapter II

[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: Final requirements, definitions, and approval criteria.

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SUMMARY: The Secretary of Education (Secretary) establishes 
requirements, definitions, and approval criteria for the State Fiscal 
Stabilization Fund (Stabilization or SFSF) 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. 
These requirements, definitions, and approval criteria 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 publicly report with respect to those 
assurances and to help ensure grantees' ability to collect and publicly 
report the required data and information.

DATES: These requirements, definitions, and approval criteria are 
effective January 11, 2010.

FOR FURTHER INFORMATION CONTACT: James Butler, State Fiscal 
Stabilization Fund Program, U.S. Department of Education, 400 Maryland 
Ave., SW., Room 3E108, Washington, DC 20202. 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: 
    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.
    Background: Section 14005(d) of Division A of the American Recovery 
and Reinvestment Act of 2009 (ARRA) requires a State receiving funds 
under the SFSF 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 actions that the State must assure that it 
will implement. In addition, section 14005(a) of the ARRA requires a 
State that seeks 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 establish specific 
data and information requirements (the assurance indicators and 
descriptors) that a State receiving funds under the SFSF program must 
meet with respect to the statutory assurances. We also establish 
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 SFSF program, describing its ability to collect and publicly 
report the required data and other information. Together, these two 
sets of requirements will provide transparency on the extent to which a 
State is implementing the actions for which it has provided assurances. 
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 publicly 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 SFSF program funds in two phases. 
In the first phase, the Department awarded 67 percent of a State's 
Education Stabilization Fund allocation, unless the State 
demonstrated that additional funds were required to restore FY 2009 
State support for education, in which case the Department awarded 
the State up to 90 percent of that allocation. In addition, the 
Department awarded 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 SFSF 
program is available at: https://www.ed.gov/programs/statestabilization/funding.html.
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    As discussed elsewhere in this notice, an 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 establish 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 will confirm 
and publicly report.
    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 SFSF, Race to the 
Top, School Improvement Grants (SIG), and Statewide Longitudinal Data 
Systems Grant programs. Accordingly, the Department has evaluated the 
requirements and definitions for this program in context with those 
other programs.
    Section 14005(d)(2) of the ARRA requires a State receiving funds 
under the SFSF 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(b)(8)(C)), 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. The indicators the Department 
has established will measure the extent to which a State is taking such 
actions and will provide data and other information on: (1) Student 
access to highly qualified teachers in high- and low-poverty schools, 
(2) current strategies and efforts to address inequities in the 
distribution of inexperienced, unqualified, or out-of-field teachers, 
(3) how teacher and principal performance is evaluated and how the 
results of these evaluations are used, and (4) the distribution of 
performance evaluation ratings or levels among teachers and principals.
    Section 14005(d)(3) requires each State to assure that it will 
establish a longitudinal data system that includes the 12 elements 
described in section 6401(e)(2)(D) of the America COMPETES Act. The 
Department has established an indicator that will measure the extent to 
which States have implemented statewide longitudinal data systems that 
include all of the required elements. These elements constitute the 
minimum requirements of a modern statewide longitudinal data system. 
Such a system will enable States, local educational agencies (LEAs), 
and schools to, among other things: Follow student academic progress as 
a student moves from grade to grade; identify persistently lowest-
achieving schools; and evaluate the effectiveness of specific programs.
    The Department has established additional indicators identifying

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whether a State provides teachers in grades and subjects in which it 
administers assessments with student growth data and with reports of 
individual teacher impact on student achievement. We believe that 
teachers' receipt of these data and reports should be a natural product 
of a statewide longitudinal data system that includes the required 
elements, particularly the requirements that such a system includes 
unique statewide student identifiers and a teacher identifier system 
with the ability to match teachers to students. Moreover, we believe 
that these are key examples of how reliable, high-quality data from a 
State's system can drive education reform in general and improvements 
in instructional programs in particular.
    The ARRA also requires a State receiving funds under the SFSF 
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(b)(3)) through activities such as those described in 
section 6112(a) of the ESEA (20 U.S.C. 7301a(a)); (B) comply with the 
requirements of paragraphs (3)(C)(ix) and (6) of section 1111(b) of the 
ESEA (20 U.S.C. 6311(b)) and section 612(a)(16) of the Individuals with 
Disabilities Education Act (20 U.S.C. 1412(a)(16)) related to the 
inclusion of children with disabilities and limited English proficient 
students \2\ 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(e)(1)(A)(ii)). To assess the extent to which a State is taking 
these actions, we are requiring that the State collect and publicly 
report data and other information regarding State assessment systems, 
including on the assessment of students with disabilities and limited 
English proficient students; State National Assessment of Educational 
Progress (NAEP) data; and data on the number of students who graduate 
from high school using a four-year adjusted cohort graduation rate, 
enroll in an institution of higher education (IHE) within 16 months of 
receiving a regular high school diploma, and complete at least one year 
of college credit (towards a degree) within two years of enrollment.
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    \2\ The Department recognizes that stakeholders often use terms 
such as ``English language learners'' rather than ``limited English 
proficient students'' when referring to students who are acquiring 
basic English proficiency and developing academic English skills. 
However, because the ESEA defines the term ``limited English 
proficient,'' and both the statute and the implementing regulations 
use this term, as well as the phrase ``students with limited English 
proficiency,'' we will continue to use the latter terms in this 
notice.
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    As many States prepare to significantly improve the rigor and 
effectiveness of their standards and assessment systems, we believe 
this information will provide stakeholders with vital transparency on 
the current status of those systems and inform efforts that are 
currently underway to improve them. The Department continues to 
encourage States to work together to develop and implement common 
internationally benchmarked standards and assessments aligned to those 
standards in order to ensure that students are college- and career-
ready. However, until those standards and assessments are complete, 
States need to continue to ensure both the quality of their current 
standards and assessments, and that students are provided 
accommodations as necessary.
    Section 14005(d)(5) of the ARRA requires a State receiving funds 
under the SFSF program to provide an assurance that it will comply with 
the requirements of section 1116(b)(7)(C)(iv) and section 1116(b)(8)(B) 
of the ESEA (20 U.S.C. 6316(b)(7)(C)(iv) and 6316(b)(8)(B)) 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 this statutory assurance, we are requiring 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,\3\ in 
corrective action, or in restructuring and secondary schools that are 
eligible for, but not receiving, Title I funds. Additionally, a State 
must provide data on the operation and performance of its charter 
schools. SFSF definitions and requirements for these indicators and 
descriptors will, where appropriate, be consistent with those in the 
Department's Race to the Top Fund and SIG notices to encourage and 
enable States to plan effectively and use diverse funding sources to 
accomplish consistent goals.
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    \3\ Although the statutory assurance concerns only Title I 
schools in corrective action and restructuring, we are requiring 
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 (20 U.S.C. 6303(g)) (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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    In addition to the specific data and information requirements 
relating to the four ARRA education reform assurances, we also 
establish 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 
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 publicly report the 
required data or other information at least annually, the State must 
provide the most recent data or information with its plan. If a State 
is not currently able to collect or publicly report the data or other 
information at least annually, 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 States must obligate funds received under the SFSF program 
consistent with section 421 of the General Education Provisions Act 
(GEPA) (20 U.S.C. 1225(b)). The State plan must describe the State's 
collection and public reporting abilities with respect to each 
individual indicator or descriptor.
    As discussed previously, 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; accordingly, 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 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) and new Indicators 
(c)(10) and (c)(11) (proposed Indicators (c)(11) and (c)(12)), for 
which we establish slightly different plan requirements. For example, 
for Indicator (b)(1) we require that a State describe in its 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

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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 publicly 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 publicly 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 publicly report the data 
required by certain other indicators (e.g., the indicators on student 
enrollment and credit completion in IHEs after graduation from high 
school).
    In the case of new Indicators (c)(11) and (c)(12), regarding the 
data States will collect from IHEs on student enrollment and credit 
completion, the State is required to, at a minimum, possess the ability 
to collect and publicly report the data by September 30, 2011. As a 
result, a State plan need only address the development of capacity, and 
not implementation and public reporting for these indicators.
    In addition to requirements relating to a State's ability to 
collect and publicly report data or other information for the 
respective assurance indicators and descriptors, we establish 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 budget for implementing the 
plan, and the processes the State employs to ensure data and 
information quality and student privacy.
    For the purposes of this program, the data and information are 
largely intended for public use, rather than for Federal reporting. 
Individual States and communities have the greatest power to hold their 
LEAs and schools accountable for the reforms that are in the best 
interest of their students. Rather than the Department collecting and 
warehousing this information, it is our intention that States and LEAs 
will make the information available to the public in a manner that is 
useful for stakeholders in understanding key information about 
education in each State and community. The Department believes that the 
most effective and expeditious way for States to share information with 
the public is via the Internet. Accordingly, any State that receives 
SFSF funding in Phase II must maintain a public Web site that provides 
the data and information that are responsive to the indicator and 
descriptor requirements. If a State does not currently provide the 
required data and information, it must provide on this Web site its 
plan with respect to the indicator or descriptor and its reports on its 
progress in implementing that plan.
    In developing a plan as required in this notice, the State is 
encouraged to consult with key stakeholders, such as superintendents, 
educators, content experts, and parents as well as teachers' union, 
business, community, and civil rights leaders. Such consultation would 
ensure that these stakeholders are aware of the State's current ability 
to meet the 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.

    Program Authority: American Recovery and Reinvestment Act of 
2009, Division A, Title XIV--State Fiscal Stabilization Fund, Public 
Law No. 111-5.

    We published a notice of proposed requirements, definitions, and 
approval criteria (NPR) for this program in the Federal Register on 
July 29, 2009 (74 FR 37837-37872). That notice contained background 
information and our reasons for proposing the particular requirements, 
definitions, and approval criteria. In addition to some minor editorial 
changes, there are several substantive differences between the NPR and 
this notice of final requirements, definitions, and approval criteria 
(NFR). These changes are summarized in the next section and described 
in greater detail in the Analysis of Comments and Changes section 
elsewhere in this notice.

Major Changes in the Final Requirements, Definitions, and Approved 
Criteria

    The following is a summary of the major substantive changes in 
these final requirements from the requirements proposed in the NPR. 
(The rationale for each of these changes is discussed in the Analysis 
of Comments and Changes section elsewhere in this preamble.)
     The NFR makes several changes to the requirements for 
Achieving equity in teacher distribution. The specific changes are:

--The Department is adding a new Indicator (a)(2) that requires each 
State to confirm whether the State's Teacher Equity Plan (part of the 
State's Highly Qualified Teacher Plan) fully reflects the steps the 
State is currently taking to ensure that students from low-income 
families and minority students are not taught at higher rates than 
other students by inexperienced, unqualified, or out-of-field teachers 
(as required in section 1111(b)(8)(C) of the ESEA).
--Descriptors (a)(1) and (a)(2) have been revised to require States 
also to describe the use of results from teacher and principal 
evaluation systems in decisions regarding teacher and principal 
development, compensation, promotion, retention, and removal.
--New Indicator (a)(3) (proposed Indicator (a)(2)) and new Indicator 
(a)(5) (proposed Indicator (a)(4)) have been revised to have States 
indicate whether the systems used to evaluate the performance of 
teachers include student achievement outcomes or student growth data as 
an evaluation criterion.

     The NFR makes the following changes to the requirements 
for Improving collection and use of data:

--New Indicator (b)(2) requires that each State indicate whether it 
provides student growth data on their current students and the students 
they taught in the previous year to, at a minimum, teachers of reading/
language arts and mathematics in the grades in which the State 
administers assessments in those subjects, in a manner that is timely 
and informs instructional programs.
--New Indicator (b)(3) (proposed Indicator (b)(2)) has been revised to 
require each State to indicate whether it provides teachers of reading/
language arts and mathematics in grades in which the State administers 
assessments in those subjects with reports of individual teacher impact 
on student achievement on those assessments. Under proposed Indicator 
(b)(2), a State would have been required to indicate whether it 
provides such teachers with data on the performance of their students 
on those assessments that include estimates of individual teacher 
impact on student achievement, in a manner that is timely and informs 
instruction.

     The final requirements make several changes to the 
indicators for Standards and assessments. The specific changes are:

--Proposed Indicator (c)(2), which required each State to indicate 
whether it was engaged in activities to enhance the quality of its 
assessments, and Proposed Descriptor (c)(1), which required States to 
describe those activities, have been removed from the final 
requirements.
--New Indicator (c)(11) (proposed Indicator (c)(12)) has been modified 
to require a State to provide data on student enrollment for students 
who enroll in an IHE within 16 months of

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receiving a regular high school diploma. Proposed Indicator (c)(12) did 
not include a timeframe for this data element.
--New Indicator (c)(12) (proposed Indicator (c)(13)) now requires that 
a State collect data on progress toward a postsecondary degree only for 
students who attend a public IHE in the State. Under proposed Indicator 
(c)(13), a State would have provided these data for students who 
attended public IHEs both in State and out of State.

     The NFR makes several changes to the requirements for 
Supporting struggling schools. The specific changes are:

--Indicator (d)(1) and Indicator (d)(2) now require that a State also 
publicly report on average statewide school gains in the ``all 
students'' category and for each student subgroup (as defined under 
section 1111(b)(2)(C)(v) of the ESEA).
--New Descriptor (d)(1) requires each State to provide its definition 
of persistently lowest-achieving schools.
--Indicator (d)(3) now requires a State to provide the number and 
identity of Title I schools in improvement, corrective action, or 
restructuring that are persistently lowest-achieving schools.
--Indicator (d)(4) now requires a State to provide, of the persistently 
lowest-achieving Title I schools in improvement, corrective action, or 
restructuring, the number and identity of schools that have been turned 
around, restarted, closed, or transformed in the last year.
--Indicator (d)(5) now requires a State to provide the number and 
identity of secondary schools that are eligible for, but do not 
receive, Title I funds that are persistently lowest-achieving schools.
--Indicator (d)(6) now requires a State to provide, of the persistently 
lowest-achieving secondary schools that are eligible for, but do not 
receive, Title I funds, the number and identity of schools that have 
been turned around, restarted, closed, or transformed in the last year.
--New Indicator (d)(9) requires a State to provide the number and 
percentage of charter schools that have made progress on State 
assessments in reading/language arts in the last year.
--New Indicator (d)(10) requires a State to provide the number and 
percentage of charter schools that have made progress on State 
assessments in mathematics in the last year.
--New Indicators (d)(11) and (d)(12) (proposed Indicators (d)(8) and 
(d)(9)) require States to provide data and information on charter 
schools that have been closed within each of the last five years 
instead of over the last five years.

     The NFR makes several changes to the requirements under 
State Plans. The specific changes are:

--The NFR adds requirements regarding new Indicator (b)(2). For new 
Indicator (b)(2), the State must provide student growth data on their 
current students and students they taught in the previous year to, at a 
minimum, teachers of reading/language arts and mathematics in grades in 
which the State administers assessments in those subjects, in a manner 
that is timely and informs instructional programs. A State must 
indicate whether the State provides teachers with such data; if the 
State does not provide teachers with such data, it must submit a plan 
for developing and implementing, as soon as possible but no later than 
September 30, 2011, the means to provide teachers with such data.
--The NFR revises the requirements for new Indicator (b)(3) (proposed 
Indicator (b)(2)). For new Indicator (b)(3) (proposed Indicator 
(b)(2)), a State must indicate whether it provides teachers of reading/
language arts and mathematics in grades in which the State administers 
assessments in those subjects with reports of individual teacher impact 
on student achievement on those assessments. If the State does not 
provide those teachers with such reports, it must submit a plan for how 
it will develop and implement the means to do so. Under the NPR, the 
State would have been required to provide those teachers with such 
reports (consistent with the indicator); if the State did not provide 
those teachers with such reports, it would have been required to submit 
a plan for how it would develop and implement the means to do so as 
soon as possible but no later than September 30, 2011.
--The NFR revises the requirements for new Indicators (c)(11) and 
(c)(12). For new Indicators (c)(11) and (c)(12) (proposed Indicators 
(c)(12) and (c)(13)), if a State will develop but not implement the 
means to collect and publicly report the data by September 30, 2011, it 
must submit a plan for how it will develop the means to collect and 
publicly report the data and provide evidence, by September 30, 2011, 
to demonstrate that it has developed the means to collect and publicly 
report that data. If a State will develop and implement those means 
(i.e., the State will collect and publicly report those data) by 
September 30, 2011, the State must submit a plan for how it will 
collect and publicly report the data by the established deadline.

     The NFR includes definitions for publicly report, student 
growth, persistently lowest-achieving schools, turnaround model, 
restart model, school closure, transformation model, and increased 
learning time.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPR, 60 parties 
submitted comments on the proposed requirements, definitions, and 
approval criteria. An analysis of the comments and changes to the 
requirements, definitions, and approval criteria since publication of 
the NPR follows.
    We discuss substantive issues under the sections of the 
requirements to which they pertain. Generally, we do not address 
technical or minor changes, or suggested changes that we are not 
authorized to make under applicable law.

Indicator and Descriptor Requirements in General

    Comment: A few commenters asserted that the proposed data and 
information requirements do not reflect Congressional intent that the 
SFSF program relieve the economic crisis in schools and districts 
nationwide. Commenters stated that SFSF funds are intended to help 
maintain support for education, not to support new programs or 
initiatives. One commenter noted that requirements for new programs or 
initiatives may be appropriate for competitive programs such as the 
Race to the Top Fund, but not for the SFSF program. In contrast, 
another commenter asserted that States should use SFSF funds for more 
than simply maintaining support for current education programs.
    Discussion: The Department believes that SFSF funds should be used 
both to help restore support for education and to advance education 
reform. When States received funds under Phase I of the SFSF program, 
they provided assurances that they would take steps to address the key 
reform areas required under the ARRA. The data collected will provide 
information on the status of States' efforts to comply with these 
assurances.
    Changes: None.
    Comment: A number of commenters supported the Department's emphasis 
on the four reform areas and noted that focus on those four areas will 
improve

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educational outcomes for students. Several commenters also expressed 
support specifically for the focus on data systems and improving 
teacher quality. One commenter supported linking student data to 
teachers. Some commenters stated that the requirements outlined in the 
notice were well-aligned with the reform areas of ARRA. Another 
commenter believed that the Department should have worked to ensure 
greater alignment among the four reform areas. A few commenters 
believed the proposed requirements went beyond the intention of the 
ARRA, and a few commenters stated that they did not believe the ARRA 
provided the Department with the statutory authority to require States 
to collect and publicly report the data and information as proposed in 
the NPR. One commenter stated that the proposed requirements would be 
an intrusion by the Federal Government into State and local control of 
education.
    Discussion: In its application for initial funding under the SFSF 
program, each State was required, consistent with the statute, to 
provide an assurance that it would take steps to advance reforms in 
achieving equity in teacher distribution, enhancing standards and 
assessments, and supporting struggling schools. Each State also 
provided an assurance that it would establish a statewide longitudinal 
data system. The Department believes the requirements as proposed in 
the NPR and established in final in this notice are consistent with the 
statutory intent and requirements of the ARRA and will provide 
comprehensive information on a State's progress in the four assurance 
areas. The data and information that States will publicly report under 
the indicators and descriptors will inform State and local reform 
efforts and enable the Department to verify that a State is fulfilling 
the commitments it made in order to receive ARRA funds.
    Changes: None.
    Comment: Many commenters supported the Department's emphasis on 
making the data and information collected under the SFSF program 
publicly available. Commenters also noted that increased access to the 
data and information would help inform decision-making and increase 
transparency around education reform.
    Discussion: The Department appreciates the commenters' support and 
agrees that the indicator and descriptor requirements will provide the 
public with valuable information on the status of education reform in 
their State.
    Changes: None.
    Comment: Several commenters requested that the Department provide 
States with a template for publicly reporting the data and information 
collected under the SFSF program. One commenter asserted that the 
Department must provide guidance to ensure that States fully understand 
the public reporting requirements. As an example, the commenter 
questioned what constitutes making the data ``easily accessible'' for 
parents and the general public. Another commenter questioned whether 
the lack of specific guidance from the Department on how to publicly 
report the information collected meant that we would allow States to 
use a variety of methods to meet their reporting obligation. The 
commenter encouraged the Department to provide States with flexibility 
in meeting these requirements. One commenter noted that the Department 
would need to consider the unique demographics of States when 
evaluating applications.
    Discussion: The Department agrees that it is important to have 
clear guidance on the public reporting that is required under this 
notice. Accordingly, we have added a definition of publicly report to 
provide additional specificity and direction. We will also provide 
guidance on how States may meet the public reporting requirements for 
this program, and will be available to provide technical assistance to 
States throughout the application and reporting process.
    Changes: The Department has added a definition of publicly report, 
which provides that the data or information required for an indicator 
or descriptor are made available to anyone with access to an Internet 
connection without having to submit a request to the entity that 
maintains the data and information in order to access that data and 
information. Under this definition, States are required to maintain a 
public Web site that provides the data and information that are 
responsive to the indicator and descriptor requirements. If a State 
does not currently provide the required data or information, it must 
provide on this Web site its plan with respect to the indicator or 
descriptor and its reports on its progress in implementing that plan.
    In light of our addition of the definition of publicly report, we 
have modified the indicators, descriptors, plan requirements, 
definitions, and approval criteria, as appropriate, to substitute the 
term ``publicly report'' for ``report.''
    Comment: Some commenters supported our intent to ensure consistency 
in collection and reporting requirements across the various programs 
funded under the ARRA. One commenter requested that the Department 
review the reporting requirements across all ARRA programs and use 
single data-element definitions for all programs in order to reduce 
redundant reporting and maintain transparency. A few commenters 
expressed concern that applications submitted for programs under the 
ARRA will be duplicative.
    Discussion: The Department is coordinating the implementation of 
the programs under the ARRA in order to support a comprehensive 
approach to education reform and to minimize the burden on States to 
the extent possible. To that end, where appropriate, the Department is 
developing consistent requirements and definitions for SFSF, the Race 
to the Top Fund, SIG, the Investing in Innovation Fund, the Teacher 
Incentive Fund, and other ARRA programs; those changes are discussed 
later in this notice. The Department will evaluate applications based 
on the specific approval criteria we have announced for each program, 
and recognizes that, in certain instances, States will provide similar 
information across applications.
    Changes: None.
    Comment: One commenter stated that the Department did not propose 
requirements that comprehensively address the four education reform 
areas. Specifically, the commenter believed more indicators are needed 
in areas addressing the closing of achievement gaps, improving overall 
student performance, and achieving equity between high- and low-
performing schools.
    Discussion: While we agree that additional information in the four 
reform areas could be valuable to the public, educators, and policy-
makers, we believe that adding the suggested indicators would be overly 
burdensome to States and LEAs. We believe the indicators and 
descriptors established in this notice generally provide sufficient 
data and information to measure State progress in the four reform areas 
for the purposes of the SFSF program. Additionally, the Department 
believes that meeting the requirement for each State to include all 12 
elements described in the America COMPETES Act in its statewide 
longitudinal data system will provide a State with the capability to 
collect, analyze, and report meaningful information on the 
effectiveness of its programs in closing the achievement gap and 
improving student outcomes.
    Changes: None.
    Comment: One commenter stated that the Department is missing a 
major

[[Page 58441]]

opportunity to learn more about the role of professional development in 
school reform. The commenter encouraged the Department to collect data 
on how States are using and improving professional development to 
increase the performance levels of educators and their students.
    Discussion: The Department agrees that professional development is 
an important factor in developing and supporting educators in improving 
their practices and encourages States and LEAs to collect and share 
data on professional development, but we do not believe that we should 
add an indicator requiring a State to report on professional 
development. However, we note that we have added a new indicator 
requiring States to make publicly available their Teacher Equity Plans, 
which include information on teacher professional development, and 
indicate if they have updated those plans. In addition, we have revised 
Descriptors (a)(1) and (a)(2) to require States to describe the use of 
results from teacher and principal evaluation systems in decisions 
regarding, among other things, professional development.
    Changes: The Department has added new Indicator (a)(2) and has also 
revised Descriptors (a)(1) and (a)(2); these changes are described in 
more detail in the section of this notice entitled Education Reform 
Area (a)--Achieving Equity in Teacher Distribution.
    Comment: One commenter stated that the Department should require 
each State to indicate whether the information it publicly reports 
includes information from charter schools and, if such information is 
not currently available, require the State to provide information in 
its State plan on the steps it will take to collect information on 
charter schools.
    Discussion: Under the requirements as established in this notice, 
States will publicly report information on charter schools that are 
LEAs in the same manner that they provide information on any LEA. 
Further, information on public charter schools that are not LEAs will 
be provided in the same manner as for other public elementary and 
secondary schools.
    Additionally, as proposed in the NPR and as established in this 
notice, the Department is requiring States to collect and publicly 
report information on the number of charter schools that are permitted 
to operate and that are actually operating in the State and each LEA 
(new Indicators (d)(7) and (d)(8) (proposed Indicators (d)(6) and 
(d)(7))). Moreover, and as discussed in greater detail later in this 
notice, the Department agrees that it is important to collect 
information on the academic achievement of students who attend charter 
schools and has added new Indicators (d)(9) and (d)(10), which measure 
the performance of charter school students on State assessments in 
reading/language arts and mathematics.
    Changes: The Department has added new Indicators (d)(9) and (d)(10) 
to education reform area (d). These changes are described in greater 
detail in the section of this notice entitled Education Reform Area 
(d)--Supporting Struggling Schools.
    Comment: A few commenters suggested that the Department create a 
sequence of reform requirements instead of asking States to implement 
simultaneous reforms in all areas. They specifically suggested the 
Department include goals, targets, or benchmarks for improving 
performance on the indicators and descriptors in order to move States 
closer to the goal of college and career readiness for all students.
    Discussion: Section 14005(d) of the ARRA requires States to take 
action in each of the education reform areas and the Department 
envisions that in order to achieve the reform goals States will address 
each reform area simultaneously. We do not believe it is necessary to 
establish goals, targets, or benchmarks for improving performance 
because the purpose of the indicator and descriptor requirements is to 
provide transparency on the extent to which a State is implementing the 
actions for which it provided an assurance in its application for 
initial SFSF funding.
    Changes: None.

Burden and Costs

    Comment: Many commenters expressed concern that States and LEAs do 
not have the financial resources necessary to collect and publicly 
report the data and information that the Department proposed to require 
of States. One commenter noted that in order to comply with the 
collection and public reporting requirements, LEAs would need to take 
staff away from other essential functions. Another commenter stated 
that the requirements should reflect the fact that the SFSF program 
will not provide an ongoing source of funding for States.
    Discussion: The Department acknowledges that there are costs 
associated with the data collection and public reporting requirements 
and encourages States to consider available sources of Federal funds to 
support this reporting. For example, a State may use SFSF Government 
Services funds to meet the Phase II application requirements. The 
Department has also raised the statutory caps on State administration 
under Title I, part A of the ESEA and part B, section 611 of the 
Individuals with Disabilities Education Act (IDEA) with respect to 
funds available for those programs under the ARRA in order to make it 
easier for States to meet ARRA reporting requirements.
    Further, in response to comments, the Department is reducing the 
burden on States. For example, the Department is not requiring States 
to provide estimates of teacher impact on student achievement (new 
Indicator (b)(3) (proposed Indicator (b)(2)) but is now requiring that 
States provide student growth data to teachers (new Indicator 
(b)(2)).\4\ In the NPR, the Department estimated that the total cost to 
States, LEAs, and IHEs of meeting the proposed requirements was 
approximately $61.7 million. Of that amount, approximately $30 million 
was associated with the costs of providing estimates of teacher impact 
on student achievement. The Department believes that providing teachers 
of reading/language arts and mathematics in grades in which the State 
administers assessments with student growth data will be much less 
costly.
---------------------------------------------------------------------------

    \4\ States are still required, however, to indicate whether they 
provide reports of individual teacher impact on student achievement 
through new Indicator (b)(3) (proposed Indicator (b)(2)) and, if 
they do not, to provide a plan for doing so.
---------------------------------------------------------------------------

    Furthermore, the Department believes that the potential benefits 
from collecting and publicly reporting this information (e.g., greater 
accountability, implementation of a statewide longitudinal data system 
to inform instruction, and more effective teacher and principal 
evaluation systems) outweigh the costs associated with the data 
requirements. The estimated costs and benefits of these requirements 
are described in greater detail in the Summary of Costs and Benefits 
section of this notice.
    Changes: The Department has revised the State Plan requirements for 
new Indicator (b)(3) (proposed Indicator (b)(2)) to remove the 
requirement that States provide estimates of teacher impact on student 
achievement.
    Comment: A few commenters claimed that the reporting requirements 
may lead to unnecessary costs for States and LEAs that have already 
invested time and effort in creating data systems or in implementing 
school reform programs that are not directly aligned with the assurance 
areas.
    Discussion: The Department does not believe States will need to 
significantly reconfigure current State data systems in order to meet 
the ARRA requirement to establish a statewide longitudinal

[[Page 58442]]

data system that includes the 12 elements identified in the America 
COMPETES Act (although a State may need to expand its data system in 
order to include all 12 data elements). The America COMPETES Act 
predates enactment of the ARRA, and States are already designing data 
systems that incorporate the America COMPETES Act elements. We note 
that the elements have also been incorporated into the application 
requirements and guidance for the Department's Statewide Longitudinal 
Data Systems Grant program.
    As part of the SFSF program, the Department is not requiring States 
to implement new school reform programs, but to publicly report on the 
current status of their programs and if they have implemented certain 
reform models in their persistently lowest-achieving schools.
    Changes: None.
    Comment: Several commenters supported our proposal to use data that 
the Department currently collects from States through EDFacts to meet 
the public reporting requirements of the program. Commenters noted that 
the use of these data would minimize some of the burden associated with 
the reporting requirements for this program.
    Discussion: The Department agrees with the comments and has 
attempted to reduce the reporting burden by using data from EDFacts and 
other readily available data whenever possible.
    Changes: None.

State Plan Requirements

    Comment: One commenter suggested that the Department require States 
to obtain the support of key stakeholders for the plan the State will 
develop to meet the SFSF requirements. Another commenter suggested that 
the Department require States to collaborate with youth-serving 
organizations in their planning efforts so as to ensure the success of 
every young person; the commenter recommended adding workforce 
organizations, child welfare and juvenile/criminal justice agencies, 
and child and youth-serving community-based organizations to the list 
of stakeholders with whom a State must consult when developing the 
State plan.
    Discussion: The Department recognizes the importance of 
collaboration and cooperation among educational agencies, community 
stakeholders, policy-makers, and youth-serving organizations. While the 
Department encourages States to consult with key stakeholders when 
developing the State plan, we do not believe it is necessary to require 
States to consult with stakeholders generally or with any specific 
group because there will be great variation across States as to the 
groups with whom it would be appropriate to consult.
    Changes: None.
    Comment: Many commenters indicated that it is unrealistic to 
require States to implement their plans by September 30, 2011. One 
commenter characterized the deadline as arbitrary. Another commenter 
noted that the deadline will not allow States to collect data 
reflecting the potentially positive impact of SFSF funds on student 
achievement. Commenters recommended reconsideration of this timeline. 
One commenter suggested that the Department grant individual States 
extensions of the deadline without requiring States to justify such 
extensions.
    Discussion: The Department believes that the requirements of the 
State plan provide critical information that is more useful to 
stakeholders if it is presented in a timely manner. Further, the 
Department believes that two years is an appropriate amount of time to 
implement a plan to collect and publicly report the required 
information. However, in recognition of existing State work in 
transitioning to the adjusted four-year cohort graduation rate, the 
Department has modified the plan requirements applicable to new 
Indicators (c)(11) and (c)(12) (proposed Indicators (c)(12) and 
(c)(13)) so that a State is required only to provide evidence that it 
has developed the means to collect and publicly report the data by the 
deadline.
    As discussed in more detail later in this notice, we are also 
revising the State plan requirements for new Indicator (b)(3) (proposed 
Indicator (b)(2)). For new Indicator (b)(3) (proposed Indicator 
(b)(2)), a State must indicate whether it provides teachers of reading/
language arts and mathematics in grades in which the State administers 
assessments in those subjects with reports of individual teacher impact 
on student achievement on those assessments. If the State does not 
provide those teachers with such reports, it must submit a plan for how 
it will develop and implement the means to do so. Under the NPR, the 
State would have been required to provide those teachers with such 
reports (consistent with the indicator); if the State did not provide 
those teachers with such reports, it would have been required to submit 
a plan for how it would develop and implement the means to do so as 
soon as possible but no later than September 30, 2011.
    Changes: The Department has revised the State plan requirements for 
new Indicator (b)(3) (proposed Indicator (b)(2)), new Indicator (c)(11) 
(proposed Indicator (c)(12)), and new Indicator (c)(12) (proposed 
Indicator (c)(13)). These revisions are discussed in greater detail 
later in this notice.

Applications and Approval Criteria

    Comment: Three commenters expressed concern regarding the timeline 
for submission of the SFSF Phase II application, given the extensive 
information the application requires. One commenter elaborated that the 
SFSF Phase II application timeline could negatively affect a State's 
ability to meet the Race to the Top application deadline because, in a 
July 29, 2009 Federal Register notice, the Department proposed that 
States must have an approved SFSF Phase II application to be eligible 
for Race to the Top funds. One of these commenters emphasized that SFSF 
Phase II funds are critical to preventing more serious school aid 
reductions than those currently under consideration in the State.
    Discussion: The Department will review Phase II applications 
submitted by the deadline, which we will publish in a separate notice 
in the Federal Register, on a timely basis to ensure that States will 
meet any Race to the Top eligibility requirements related to SFSF 
application approval and to provide additional resources expeditiously 
to support elementary, secondary, and postsecondary education.
    Changes: None.
    Comment: One commenter proposed that the Department include an 
additional approval criterion requiring States to demonstrate that they 
have expended their SFSF funds consistent with program requirements.
    Discussion: We do not believe that the suggested approval criterion 
is necessary. States will provide information on the uses of funds in 
the quarterly reports that they submit pursuant to section 1512 of the 
ARRA; these reports will be publicly available at https://www.recovery.gov. In addition, the Department will collect information 
on uses of SFSF funds through the annual performance reports States are 
required to submit under section 14008 of the ARRA. The annual 
performance reports will be made available to the public on the 
Department's Web site at https://www.ed.gov. Furthermore, during its 
monitoring of State implementation of the SFSF program, the Department 
will review State and local uses of program funds to ensure compliance 
with applicable requirements.
    Changes: None.

[[Page 58443]]

Indicator and Descriptor Requirements Education Reform Area (a)--
Achieving Equity in Teacher Distribution

Teacher Qualifications: Indicator (a)(1)

    Comment: Several commenters expressed support for our proposal to 
use existing data on teacher qualifications from the Department's 
EDFacts system for proposed Indicator (a)(1). These commenters believed 
that leveraging existing data in EDFacts would minimize collection and 
reporting burden on States and LEAs while still ensuring that high-
quality information is provided to the public. However, one commenter 
requested clarification as to the State's responsibilities for 
confirming the data in EDFacts.
    Discussion: In general, we have sought to ensure that existing data 
from the Department's EDFacts system (or other data for which the 
Department is itself the source) are used to populate the indicators 
for this program wherever possible so as to minimize the burden on 
States and LEAs. In this case, we believe that existing data in EDFacts 
on courses taught by highly qualified teachers is appropriate as a 
measure of States' compliance with the statutory assurance.
    As stated in the NPR, a State will not be required to perform any 
additional analysis or verification in confirming indicator data that 
are in EDFacts. We believe there are sufficient safeguards in place to 
ensure the completeness and accuracy of data submitted by States in 
EDFacts and do not expect or require a State to reexamine or refresh 
the data. Rather, the confirmation a State will provide is meant to be 
limited to an acknowledgment that the data provided by the Department 
are the same data submitted by the State.
    Changes: None.
    Comment: One commenter requested that the Department clarify how 
stakeholders should use the data reported for proposed Indicator (a)(1) 
to identify inequities in the distribution of highly qualified teachers 
across LEAs. Specifically, the commenter requested clarification on 
whether stakeholders should identify inequities by comparing the data 
generally for all LEAs across the State, or for subsets of LEAs in the 
State based on shared characteristics such as size or location.
    Discussion: The Department is requiring States to make publicly 
available data on the distribution of highly qualified teachers across 
LEAs so that educators, policymakers, and other stakeholders may 
address inequities in the distribution of teachers between high- and 
low-poverty schools. Decisions on how best to use the specific data 
should be made at the State and local levels.
    Changes: None.
    Comment: A few commenters recommended that the definitions of 
highest-poverty school and lowest-poverty school applicable to proposed 
Indicator (a)(1) be revised to require States to identify these schools 
specifically using data on student eligibility for free- or reduced-
price lunches under the Richard B. Russell National School Lunch Act 
(NSLA), rather than using the poverty measure chosen by the State. One 
of these commenters asserted that these terms should be given the same 
meaning across States to prevent inconsistencies in reporting and to 
ensure that the data reported by States can be aggregated at the 
national level.
    Discussion: The Department permits States to use a poverty measure 
of their choice when reporting data on courses taught by highly 
qualified teachers in the highest- and lowest-poverty schools in their 
Consolidated State Performance Reports and in the annual State Report 
Cards required under section 1111(h)(1) of the ESEA. While States may 
and frequently do use student eligibility for free- or reduced-price 
lunches under the NSLA as the poverty measure for reporting these data, 
this is not always the case. While the Department appreciates the 
concern for comparability of data for this indicator, we believe that 
requiring the use of student eligibility for free- or reduced-price 
lunches under the NSLA as the poverty measure for this indicator would 
introduce unnecessary confusion for States that use other poverty 
measures when reporting data on the poverty level of students in their 
schools.
    Changes: None.
    Comment: One commenter recommended that the Department include 
additional metrics relating to the equitable distribution of teachers 
that would require States to describe their plans for ensuring, 
consistent with the statutory assurance, that students from low-income 
families and minority students are not taught at higher rates than 
other children by inexperienced, unqualified, or out-of-field teachers, 
and to describe the measures States would use to evaluate and report on 
the implementation of those plans.
    Discussion: We agree with the commenter on the importance of 
States' developing plans to ensure equity in the qualifications of 
teachers serving disadvantaged students and their peers and evaluating 
the impact of those plans. We note, however, that, to assess States' 
compliance with the requirements of the ESEA referenced in the 
statutory assurance in this reform area (i.e., the requirements of 
section 1111(b)(8)(C)), the Department has previously required States 
to develop Highly Qualified Teachers State Plans. Included in these 
plans is a component (known as a ``Teacher Equity Plan'') in which the 
State describes the steps being taken to ensure that students from low-
income families and minority students are not taught at higher rates 
than other children by inexperienced, unqualified, or out-of-field 
teachers.\5\ Rather than include indicators that would collect 
information on this topic that is additional to or duplicative of the 
information already provided by States in their Teacher Equity Plans, 
we have added an indicator that requires States to indicate whether 
they have updated and publicly reported these plans.
---------------------------------------------------------------------------

    \5\ These plans are available at https://www.ed.gov/programs/teacherqual/hqtplans/.
---------------------------------------------------------------------------

    Changes: We have revised the indicators in this education reform 
area to include a new Indicator (a)(2), which requires a State to 
confirm whether the State's Teacher Equity Plan (as part of the State's 
Highly Qualified Teacher Plan) fully reflects the steps the State is 
currently taking to ensure that students from low-income families and 
minority students are not taught at higher rates than other students by 
inexperienced, unqualified, or out-of-field teachers (as required in 
section 1111(b)(8)(C) of the ESEA). With the addition of these 
Indicators, we have renumbered the remaining Indicators and Descriptors 
in this Education Reform Area.
    Comment: A number of commenters expressed concern that, while 
proposed Indicator (a)(1) would require States to provide data on the 
distribution of highly qualified teachers between highest- and lowest-
poverty schools, it would not provide similar data with respect to 
teachers of minority students. These commenters typically recommended 
that an indicator be added in this education reform area requiring 
States to provide data on the distribution of highly qualified teachers 
between highest- and lowest-minority schools; one of these commenters 
further recommended that the Department include in the final 
requirements definitions of ``highest-minority school'' and ``lowest-
minority school.''
    Discussion: As discussed previously, we have revised the indicators 
in this education reform area to include an indicator requiring a State 
to confirm that its Teacher Equity Plan accurately and fully reflects 
the steps the State is

[[Page 58444]]

taking to ensure that students from low-income families and minority 
students are not taught at higher rates than other students by 
inexperienced, unqualified, or out-of-field teachers. These plans 
include data related to whether minority student populations are served 
by highly qualified teachers (in addition to data related to whether 
such teachers serve students from low-income families). We expect that, 
in confirming or providing their current plans, States will provide up-
to-date data on this indicator as well as on the distribution of highly 
qualified teachers between highest- and lowest-minority schools. For 
this reason, we do not believe it is necessary to include the 
additional indicators recommended by the commenters.
    Changes: None.
    Comment: Several commenters asserted that proposed Indicator (a)(1) 
would not furnish data on whether students from low-income families or 
minority students are taught at higher rates than other students by 
out-of-field or inexperienced teachers. These commenters typically 
recommended that indicators be added in this education reform area to 
provide data on the distribution of in-field and experienced teachers 
between highest- and lowest-poverty schools, as well as between 
highest- and lowest-minority schools.
    Discussion: Inasmuch as we have revised the requirements in this 
education reform area, as discussed previously, to include an indicator 
regarding States' Teacher Equity Plans (in which States describe the 
steps being taken to ensure that students from low-income families and 
minority students are not taught at higher rates than other students by 
inexperienced, unqualified, or out-of-field teachers), we do not 
believe it is necessary to include additional indicators that would 
provide data specifically on the distribution of in-field or 
experienced teachers. (We note also that section 9101(23) of the ESEA 
requires that a highly qualified teacher demonstrate subject knowledge 
or competence in the subjects the teacher teaches in addition to 
possessing a State teaching credential; consideration of whether a 
teacher is teaching in or out of field is, thus, incorporated in the 
definition of ``highly qualified teacher'' used in Indicator (a)(1).)
    Changes: None.
    Comment: Several commenters made general statements that the 
definition of ``highly qualified teacher'' is flawed or does not 
identify high-quality teachers, though some acknowledged the ``interim 
utility'' of the term as other, more accurate or more effective 
measures of teacher quality are considered.
    Discussion: While the Department believes that data on highly 
qualified teachers do have value, we recognize that these data are 
limited by their sole focus on teacher qualifications. As reflected in 
the other indicators in this education reform area (discussed in 
further detail later in this notice), the Department believes that 
other measures, such as measures of teacher effectiveness, are needed 
if efforts to identify high-quality teachers are to be successful.
    Changes: None.

Teacher and Principal Effectiveness: General

    Comment: Several commenters expressed support for including in this 
education reform area the proposed metr