Final Priorities, Requirements, Definitions, and Selection Criteria-Teacher Incentive Fund (TIF) Program, 35757-35794 [2012-14276]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 77, Number 115 (Thursday, June 14, 2012)]
[Notices]
[Pages 35757-35794]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14276]



[[Page 35757]]

Vol. 77

Thursday,

No. 115

June 14, 2012

Part II





Department of Education





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Final Priorities, Requirements, Definitions, and Selection Criteria--
Teacher Incentive Fund (TIF) Program; Notice

Federal Register / Vol. 77 , No. 115 / Thursday, June 14, 2012 / 
Notices

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DEPARTMENT OF EDUCATION

[Docket ID ED-2012-OESE-0001]
RIN 1810-AB12


Final Priorities, Requirements, Definitions, and Selection 
Criteria--Teacher Incentive Fund (TIF) Program

AGENCY: Office of Elementary and Secondary Education, Department of 
Education.

ACTION: Notice.

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CFDA Numbers: 84.374A and 84.374B

SUMMARY: The Assistant Secretary for Elementary and Secondary Education 
announces priorities, requirements, definitions, and selection criteria 
under the TIF program. The Assistant Secretary may use one or more of 
these priorities, requirements, definitions, and selection criteria for 
competitions in fiscal year (FY) 2012 and later years. We are taking 
this action so that TIF-funded performance-based compensation systems 
(PBCSs) will be successful and sustained mechanisms that contribute to 
continual improvement of instruction, to increases in teacher and 
principal effectiveness, and, ultimately, to improvements in student 
achievement in high-need schools. To accomplish these goals, we are 
establishing priorities, requirements, definitions, and selection 
criteria that are designed to ensure that TIF grantees use high-quality 
LEA-wide evaluation and support systems that identify effective 
educators in order to improve instruction by informing performance-
based compensation and other key human capital decisions.

DATES: Effective Date: These priorities, requirements, and definitions 
are effective July 16, 2012.

FOR FURTHER INFORMATION CONTACT: Miriam Lund, U.S. Department of 
Education, 400 Maryland Avenue SW., Room 3E245, Washington, DC 20202-
6450. Telephone: (202) 401-2871 or by email: miriam.lund@ed.gov.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:
    Purpose of Program: The purpose of the TIF program is to support 
the development and implementation of sustainable PBCSs for teachers, 
principals, and other personnel in high-need schools in order to 
increase educator effectiveness and student achievement in those 
schools.

    Program Authority: The Department of Education Appropriations 
Act, 2012 (Division F, Title III of Pub. L. 112-74).

The Statutory Requirements

    The Department's FY 2012 appropriation provides TIF funds for 
competitive grants to eligible entities to develop and implement PBCSs 
for teachers, principals, and other personnel in high-need schools. 
Eligible entities for these funds are:
    (a) Local educational agencies (LEAs), including charter schools 
that are LEAs.
    (b) States.
    (c) Partnerships of--
    (1) An LEA, a State, or both; and
    (2) At least one nonprofit organization.
    Eligible entities must use TIF funds to develop and implement, in 
high-need schools, a PBCS that--
    (a) Considers gains in student academic achievement, as well as 
classroom evaluations conducted multiple times during each school year, 
among other factors; and
    (b) Provides educators with incentives to take on additional 
responsibilities and leadership roles.
    A grantee (1) must demonstrate that its PBCS is developed with the 
input of teachers and school leaders in the schools and LEAs that the 
grant will serve, and (2) may use TIF funds to develop or improve 
systems and tools that would enhance the quality and success of the 
PBCS, such as high-quality teacher evaluations and tools that measure 
growth in student achievement. In addition, an applicant must include a 
plan to sustain financially the activities conducted and the systems 
developed under the grant once the grant period has expired.
    We published a notice of proposed priorities, requirements, 
definitions, and selection criteria for this program in the Federal 
Register on February 29, 2012 (77 FR 12257) (NPP). The NPP contained 
background information and our reasons for proposing the particular 
priorities, requirements, definitions, and selection criteria.
    There are differences between the NPP and this notice of final 
priorities, requirements, definitions, and selection criteria (NFP) as 
discussed in the Major Changes in the Final Priorities, Requirements, 
Definitions, and Selection Criteria and Analysis of Comments and 
Changes sections elsewhere in this notice.
    Public Comment: In response to our invitation in the NPP, 32 
parties submitted comments on the proposed priorities, requirements, 
definitions, and selection criteria. We used these comments to revise, 
improve, and clarify the priorities, requirements, definitions, and 
selection criteria.
    We group major issues according to subject and discuss other 
substantive issues under the title of the item to which they pertain. 
Generally, we do not address technical and other minor changes. In 
addition, we do not address general comments that raised concerns not 
directly related to the proposed priorities, requirements, definitions, 
or selection criteria.

Major Changes in the Final Priorities, Requirements, Definitions, and 
Selection Criteria

    In addition to minor technical and editorial changes, there are 
several substantive differences between the priorities, requirements, 
definitions, and selection criteria proposed in the NPP and the final 
priorities, requirements, definitions, and selection criteria that we 
establish in this notice. Those substantive changes are summarized in 
this section and discussed in greater detail in the Analysis of 
Comments and Changes section that follows.

Priorities

    We have made the following changes to the priorities for this 
program:
     We have revised Priority 2--LEA-Wide Educator Evaluation 
Systems Based, in Significant Part, on Student Growth, to clarify that 
the LEA-wide evaluation system must use classroom-level growth data to 
evaluate teachers (as defined in this notice) with regular 
instructional responsibilities consistent with paragraph (2)(ii) of the 
priority. An applicant must use classroom-level growth, rather than 
school-level or grade-level growth, in significant part, when 
evaluating teachers with regular instructional responsibilities because 
we believe classroom-level student growth data is the most appropriate 
for evaluating the individual effectiveness of these teachers. If an 
applicant wishes to use school-level or grade-level growth to evaluate 
teachers with regular instructional responsibilities, it may do so, but 
the Department will consider the use of those data to be the use of 
``additional factors'' under paragraph (2)(iii) of Priority 2.
     We have revised paragraph (2) of Priority 3--Improving 
Student Achievement in Science, Technology, Engineering, and 
Mathematics (STEM), to better align this priority with the language in 
Selection Criterion (g)--Comprehensive Approach To Improving STEM 
Instruction. With this change, while applicants will be required to 
describe how each participating LEA will identify and develop the 
unique competencies that characterize effective STEM teachers, they 
will not need to describe how those LEAs will evaluate those 
competencies to meet this priority.

[[Page 35759]]

     We have amended Priority 4--New or Rural Applicants to the 
Teacher Incentive Fund, (referred to as Priority 4--New Applicants to 
the Teacher Incentive Fund in the NPP) to give priority to projects 
serving rural LEAs (as defined in this notice). An applicant can meet 
this priority if it provides--and the Department accepts--an assurance 
that each LEA to be served by the project is a rural LEA or an LEA not 
served by a current or past TIF grant.
     We have revised Priority 5--An Educator Salary Structure 
Based on Effectiveness, by removing the language requiring applicants 
to propose a comprehensive revision to each participating LEA's salary 
structure. The revised priority no longer requires an applicant to 
describe the salary increase that educators (as defined in this notice) 
with an evaluation rating of effective or higher would receive, or how 
TIF funds used for salary increases would be used only to support the 
additional cost of the revised salaries. Instead, the priority now 
requires that the applicant propose a timeline for implementing a 
salary structure based on educator effectiveness, and describe the 
extent to which and how each LEA will use overall evaluation ratings to 
determine educator salaries as well as how TIF funds will support the 
salary structure based on effectiveness in high-need schools identified 
in response to Requirement 3--Documentation of High-Need Schools. While 
we have eased the application requirements related to this priority, to 
implement their new salary structures many applicants after award will 
need to design and implement comprehensive revisions to their salary 
structures. Further, we have amended the priority to require applicants 
to describe the feasibility of implementing the proposed salary 
structure and by removing language requiring that implementation begin 
no later than the third year of the project period.

Requirements

    We have made the following changes to the requirements for this 
program:
     We have revised Requirement 5--Limitations on Multiple 
Applications, to specify that an LEA may participate in no more than 
one application in any fiscal year, an SEA may participate in no more 
than one group application for the General TIF Competition and no more 
than one group application for the TIF Competition with a Focus on STEM 
in any fiscal year, and a nonprofit organization may participate in 
multiple group applications under either one or both competitions in 
any fiscal year.
     We have revised Requirement 6--Use of TIF Funds to Support 
the PBCS, to clarify that TIF funds may be used to support the costs of 
both salaries and salary augmentations for teachers who take on 
additional responsibilities and leadership roles (as defined in this 
notice), including career ladder positions (as defined in this notice), 
up to the salary cost of 1 full-time equivalent position for every 12 
teachers who are not in a career ladder position in the high-need 
schools (as defined in this notice) identified in response to 
Requirement 3--Documentation of High-Need Schools. Further, we have 
added an exception to the limitation on educator compensation to allow 
applicants to compensate educators who attend TIF-supported 
professional development outside of official duty hours.

Definitions

     We have defined ``rural local educational agency'', to 
mean an LEA that is eligible under the Small Rural School Achievement 
program or the Rural and Low-Income School program authorized under 
Title VI, Part B of the ESEA.

Selection Criteria

    We have made the following changes to the selection criteria for 
this program:
     We have amended Selection Criterion (a)(2)(iii)--A 
Coherent and Comprehensive Human Capital Management System, to evaluate 
the feasibility of an applicant's proposed human capital management 
system (HCMS) (as defined in this notice) based, in part, on any 
applicable LEA-level policies that might inhibit or facilitate the use 
of educator effectiveness as a factor in human capital decisions.
     We have amended Selection Criterion (b)(2)(ii)--Rigorous, 
Valid, and Reliable Educator Evaluation Systems to evaluate the quality 
of each participating LEA's evaluation system based, in part, on the 
evidence provided by an applicant to demonstrate the rigor and 
comparability of the assessment tools used for educator evaluation.
     We have amended Selection Criterion (c)--Professional 
Development Systems To Support the Needs of Teachers and Principals 
Identified Through the Evaluation Process, to evaluate the quality of 
each participating LEA's plan for professional development based, in 
part, on the extent to which the plan provides for school-based, job-
embedded opportunities for educators to transfer new knowledge into 
practice.
    Analysis of Comments and Changes: An analysis of the comments and 
of any changes in the priorities, requirements, definitions, and 
selection criteria since publication of the NPP follows.

General Comments

    Comment: Several commenters expressed strong support for the TIF 
program, as outlined in the NPP, both for its overall effort to improve 
evaluation, to provide educators with support, and to provide 
additional compensation for effective educators and for specific 
components of the NPP, including the emphasis on STEM under Priority 
3--Improving Student Achievement in Science, Technology, Engineering, 
and Mathematics (STEM).
    Discussion: The Department appreciates the support of these 
commenters for the priorities, requirements, definitions, and selection 
criteria proposed in the NPP.
    Changes: None.
    Comment: Several commenters recommended designations of absolute, 
competitive preference, or invitational for the proposed priorities.
    Discussion: The Department appreciates these recommendations, and 
has considered them in developing the notice inviting applications for 
the fiscal year 2012 TIF competition (NIA). To preserve future 
flexibility to adjust priority designations as needed to better serve 
the needs of LEAs, the Department is not designating in this notice 
whether priorities are absolute, competitive preference, or 
invitational.
    Changes: None.
    Comment: We received several comments regarding the LEA-wide 
provisions, such as Priority 1--An LEA-Wide Human Capital Management 
System (HCMS) With Educator Evaluation Systems at the Center and 
Priority 2--LEA-Wide Educator Evaluation Systems Based, in Significant 
Part, on Student Growth, included in the NPP. One commenter expressed 
support for Priority 1, and recommended that we designate it as 
absolute. According to the commenter, the priority underscores the 
importance of comprehensive approaches to human capital management and 
takes advantage of economies of scale in promoting LEA-wide strategies.
    However, several commenters opposed the LEA-wide provisions in 
Priority 1 and Priority 2, and requested that we remove from the notice 
any requirement that applicants implement LEA-wide human capital 
management and educator evaluation systems. One commenter stated that 
it would be premature to require LEAs to undertake LEA-wide human 
capital management

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reform while also working to implement a new PBCS. Another commenter 
argued that LEA-wide requirements may discourage LEAs from attempting 
new reforms. According to this and other commenters, pilot efforts are 
a preferable alternative to requiring LEA-wide reform because pilot 
efforts introduce change in manageable steps, and LEAs are often 
willing to bring reforms to scale after implementing a pilot 
demonstration.
    Further, one commenter argued against requiring an LEA-wide 
evaluation system and PBCS, because, according to the commenter, 
performance-based compensation and evaluation reforms work best for 
high-need schools when they provide opportunities to educators in those 
schools that are not also available to educators in non-high-need 
schools.
    Finally, some commenters expressed concern that an LEA-wide 
approach may encourage applicants to abandon rigorous measures of 
educator buy-in, such as teacher votes, in favor of less rigorous 
measures. One commenter expressed concern that Priority 1 promotes a 
top-down approach to human capital management reform, when, according 
to the commenter, these efforts are most effectively driven by 
teachers. One commenter predicted that these provisions would 
essentially eliminate applications from strong union areas.
    Discussion: As noted in the NPP, we believe that, to be successful 
and sustainable, any PBCS must be an integral part of an HCMS that is 
well-designed and implemented LEA-wide. In the absence of sustainable, 
LEA-wide educator evaluation systems that focus on educator 
effectiveness and underlie key parts of the LEA's HCMS, the TIF-
supported PBCS is not likely to be sustainable. For this reason, we 
believe it to be both reasonable and advantageous to require LEAs to 
undertake, under Priority 1--An LEA-wide Human Capital Management 
System (HCMS) With Educator Evaluation Systems at the Center and 
Priority 2--LEA-wide Educator Evaluation Systems Based, in Significant 
Part, on Student Growth, LEA-wide human capital management reforms that 
support each LEA's PBCSs. Further, while we agree that pilot projects 
may provide an LEA with the opportunity to explore the benefits of an 
innovative approach, and may create the possibility for long-term, 
large-scale implementation, we disagree with the assertion that the 
LEA-wide implementation requirements in this notice will discourage 
LEAs from attempting reform. We have designed the priorities, 
requirements, and definitions included in this notice to align with the 
provisions of the Department's Elementary and Secondary Education Act 
of 1965, as amended (ESEA) Flexibility initiative. Under that 
initiative, States that receive flexibility must agree to implement 
LEA-wide educator evaluation systems, and, to date, the Department has 
received 38 requests from States for flexibility and has granted 11 
requests. Based on our experience with the ESEA Flexibility initiative, 
we believe that requiring LEA-wide implementation will further, rather 
than inhibit, LEA reform efforts.
    While we wish to clarify that nothing in this notice requires 
applicants to implement an LEA-wide PBCS, we disagree with the 
assertion that an LEA-wide PBCS and evaluation system would provide 
fewer benefits to high-need schools than would a smaller-scale 
implementation plan that focuses solely on high-need schools. To the 
contrary, we believe that an LEA-wide evaluation system will strengthen 
the capacity of high-need schools, which are the only schools that may 
implement a TIF-funded PBCS, to use performance-based compensation to 
identify and attract educators from other schools in an LEA. Further, 
for an applicant that proposes to expand its PBCS to educators in non-
high-need schools in the LEA, using non-TIF funds, nothing in this 
notice would preclude the applicant from designing its PBCSs to offer 
educators in high-need schools larger salary augmentations than those 
educators in non-high-need schools.
    With regard to educator evaluation reform, we believe that 
evaluation systems are more likely to receive the broad LEA commitment 
that is crucial to their success and sustainability if those systems 
are used to evaluate every educator within the LEA. We designed the 
priorities, requirements, definitions, and selection criteria in this 
notice so that applications will be evaluated based on the extent to 
which the proposed project has educator involvement and support. 
Therefore, applicants will be less likely to receive funding if they 
abandon rigorous measures of teacher buy-in or use a top-down approach 
to project development and implementation that does not include high-
quality teacher and principal involvement. Furthermore, we disagree 
with the assertion that the LEA-wide provisions included in this notice 
will inhibit unionized LEAs from applying. The Department believes that 
for those LEAs the process for securing widespread, high-quality 
educator support is more straightforward than for LEAs where unions are 
not designated as the exclusive representative of educators for the 
purposes of collective bargaining.
    For these reasons, the Department declines to revise the provisions 
in Priorities 1 and 2 that require applicants to implement an LEA-wide 
HCMS and educator evaluation systems.
    Changes: None.
    Comment: One commenter noted that it may be difficult for charter 
school consortia to satisfy Priority 1--An LEA-Wide HCMS With Educator 
Evaluation Systems at the Center. The commenter expressed concern that, 
because charter schools are LEAs, we would require each charter school 
to develop its own HCMS.
    Discussion: For charter-school LEAs, the HCMS described in response 
to Priority 1--An LEA-Wide HCMS With Educator Evaluation Systems at the 
Center must apply to the entire charter school, but, depending on the 
organization of the charter consortia or the involvement of a charter 
management organization, the HCMS may extend to more than one charter 
school. In the case of a charter-school LEA consortium with a single 
shared HCMS, an applicant could describe how the various components of 
the HCMS apply to each charter-school LEA, and would not need to 
implement a separate HCMS for each individual charter school.
    Changes: None.
    Comment: One commenter stated that there is insufficient evidence 
that evaluation systems are ready for large-scale implementation, and 
no evidence that evaluation systems are more important for school 
improvement than other investments. This commenter argued that we can 
help LEAs to implement educator incentive programs without requiring 
evaluation systems, which, according to the commenter, will be 
unsustainable without continued Federal assistance.
    Discussion: The Department rejects the contention that there is 
insufficient evidence that reformed educator evaluation systems can be 
implemented at scale; the current efforts of numerous States and LEAs 
to reform their evaluation systems provide ample evidence of the 
viability of this strategy. The Department also does not agree that it 
would be worthwhile to invest in educator incentive programs that are 
not linked to a comprehensive educator evaluation system that 
meaningfully differentiates educator performance. Performance-based 
compensation systems (as defined in this notice) that are disconnected 
from an LEA's official evaluation system have proven difficult

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to sustain and require a costly and burdensome duplication of effort.
    Changes: None.
    Comment: A few commenters stated that our encouragement of LEA-wide 
performance systems was laudable, but unrealistic, as TIF provides 
funding for only a portion of an LEA's schools. Further, one commenter 
argued that implementing LEA-wide educator evaluation systems would 
place a large financial burden on LEAs during tight budget times.
    Discussion: TIF funds may be used for the development or 
improvement of systems and tools that would enhance the quality and 
success of the PBCS and benefit the entire LEA. TIF is, therefore, a 
potential source of funding for LEAs seeking to reform their HCMS and 
educator evaluation systems in what one commenter noted are tight 
budget times. With these and other resources, we believe that the 
development and implementation of LEA-wide performance systems is a 
very attainable goal.
    Changes: None.
    Comment: A few commenters noted that the LEA-wide provisions in 
this notice would favor small districts, charter schools, and charter 
management organizations over large districts because larger districts 
would face difficulty securing the educator support and outreach needed 
for implementation. To avoid penalizing larger LEAs, one commenter 
recommended that we relax the LEA-wide provisions of the notice to 
allow LEAs to participate if a substantial number of their schools, to 
be determined by the Department, agree to participate in the TIF-
supported PBCS.
    Discussion: The Department does not agree that the LEA-wide 
provisions in this notice disadvantage large districts. Larger LEAs 
typically have greater human capital, technology, and other resources 
needed to implement the systemic reforms promoted by the TIF program 
than smaller LEAs have. We also note that, to address difficulties in 
implementation in any type of LEA, we permit the LEA-wide educator 
evaluation system requirements to be phased in over time, with full 
implementation required at the beginning of the third project year. We 
decline to accept the commenter's recommendation that the Department 
permit an LEA to implement reformed educator evaluation systems on a 
non-LEA-wide basis because this approach would not result in the 
system-wide change we believe is necessary to support the 
sustainability and success of the TIF-funded PBCS.
    Changes: None.
    Comment: Two commenters recommended that we amend the priorities, 
requirements, definitions, and selection criteria so as to more 
strongly emphasize educator development and support as the central 
purpose of human capital management. One of the commenters suggested 
that we amend paragraph (3) of Priority 1--An LEA-Wide Human Capital 
Management System (HCMS) With Educator Evaluation Systems at the 
Center, to require applicants to describe human capital strategies the 
LEA uses or will use to ensure that high-need schools are able to 
support effective teachers. Further, the commenter recommended that we 
add a new paragraph in Priority 2 to require applicants to describe how 
the LEA's evaluation systems will be used to identify and address the 
professional development needs of educators.
    A second commenter stated that evidence-based professional 
development is more effective in improving student outcomes than 
performance-based compensation, and, therefore, should be the 
foundation of proposed HCMSs. According to this commenter, an HCMS 
should focus on diagnosing areas in need of improvement, providing 
timely and targeted professional development to address those areas, 
and monitoring progress to ensure the success of educators and 
students. Further, this commenter noted that punitive HCMS that focus 
on educator dismissal are ineffective for promoting educator competency 
or student growth.
    Discussion: The Department fully agrees that professional 
development must be a key component of any HCMS, and that evaluation 
systems are critical tools that should guide LEA- and school-level 
decisions regarding instructional supports. In this notice, as in the 
NPP, we clarify that a well-designed HCMS, including the evaluation 
system supporting it, must be aligned with the LEA's vision of 
instructional improvement (as defined in this notice) that summarizes: 
(1) The key competencies and behaviors of effective teaching needed to 
produce high levels of student achievement, and (2) how educators 
acquire or improve these competencies and behaviors. Accordingly, the 
Department believes that LEA-wide evaluation systems aligned with this 
vision are an extremely valuable tool for professional development and 
improvement. When the evaluation rubrics used in these systems include 
the key competencies the LEA has identified in its vision of 
instructional improvement, the feedback and professional learning 
inherent in the evaluation process will give all educators a clearer 
understanding of what the LEA has identified as the key competencies 
needed to be effective educators. Given these linkages between 
evaluation, professional development, and vision of instructional 
improvement that are provided for in this notice, we believe it is 
unnecessary to modify the priorities, requirements, definitions, and 
selection criteria to further highlight the use of evaluation 
information for providing educator support.
    The Department disagrees with the second commenter's assertion that 
professional development alone is more effective in improving student 
outcomes than a PBCS that recognizes and rewards educators who have an 
impact on student achievement. Rather, it is the Department's view that 
student outcomes are most likely to improve when an LEA implements a 
coherent and comprehensive HCMS that is aligned to its vision of 
instructional improvement and that integrates both professional 
development and a PBCS.
    Changes: None.
    Comment: Three commenters provided feedback regarding the timeline 
for implementing TIF-funded projects that was included in the NPP. One 
commenter recommended that we revise the priorities, requirements, 
definitions, and selection criteria so that the first year of a TIF-
funded project's implementation would take place in 2013-2014 following 
an optional planning period of one year. The commenter stated that this 
shift in the timeline would be appropriate given that the Department is 
likely to award grants during the most difficult time of year for 
applicants to begin implementation. A second commenter encouraged us to 
allow LEAs to pilot evaluation systems in a sample of schools prior to 
full implementation, rather than require LEAs to fully implement the 
evaluation systems in all schools simultaneously. A third commenter 
expressed support for the timeline for implementing of the evaluation 
system, and stated that the requirements provided applicants with 
adequate time to gain competence in building and using the new 
evaluation system before the LEA uses the evaluations to make 
decisions.
    Discussion: Under the proposed priorities, requirements, 
definitions, and selection criteria, a grantee must begin the 
implementation of its TIF project at the beginning of the first year of 
the project period. However, we have included provisions in Priority 
1--An LEA-Wide HCMS With Educator Evaluation Systems at the Center and 
Priority 2--LEA-Wide Educator

[[Page 35762]]

Evaluation Systems Based, in Significant Part, on Student Growth to 
allow grantees to delay the implementation of certain components of 
their projects. For example, under Priority 2, a grantee must implement 
its proposed evaluation system in at least a subset of an LEA's 
schools, as the official system for assigning overall evaluation 
ratings, by no later than the beginning of the second year of the 
project period. Because LEA-wide implementation would not need to begin 
for another year, we believe that the flexibility included in these 
priorities already addresses the concerns raised by the commenter 
because it allows for implementation of the LEA-wide evaluation system 
over a long period of time.
    Further, the Department understands that the implementation of 
effective and sustained TIF-funded PBCSs requires substantial effort on 
the part of its grantees. For this reason, applicants under a TIF 
competition using the priorities, requirements, definitions, and 
selection criteria in this notice will be asked to provide additional 
information regarding their capacity for implementation (e.g., on the 
extent to which they have developed their evaluation system rubric, and 
on the extent to which they have obtained educator support), which will 
allow reviewers to evaluate the strength of their applications. 
Applicants will also provide timelines for their projects to satisfy 
the provisions of Priority 1 and Priority 2; these timelines will 
better meet local needs than would a uniform planning period for all 
grantees. For these reasons, we decline to allow applicants an optional 
planning period prior to implementation.
    Changes: None.
    Comment: A few commenters encouraged us to require that applicants 
use performance measures that are valid and reliable for use in 
educator evaluation, while one commenter stressed that performance 
measures should be validated and found reliable for each type of human 
capital decision prior to their use for that decision.
    Discussion: The Department believes that the validity and 
reliability of performance measures for the determination of educator 
effectiveness are key for maintaining the credibility of the measures, 
first, among stakeholders who will use them to inform their practice 
and manage human capital, and, second, among the educators affected by 
the outcome of the evaluation using the measures and any consequences 
or rewards that follow. With this in mind, the Department will evaluate 
applicants, under Selection Criterion (b)(2)--Rigorous, Valid, and 
Reliable Educator Evaluation Systems, based on the extent to which they 
have provided (1) a clear rationale to support their approach to 
differentiating performance levels based on the level of student growth 
(as defined in this notice) achieved and (2) evidence, such as current 
research and best practices, that supports the LEA's choice of student 
growth models and demonstrates the rigor and comparability of 
assessment tools. Further, the Department will evaluate applicants, 
under Selection Criterion (b)(3), based on the extent to which they 
have made substantial progress in developing a high-quality plan for 
multiple teacher and principal (as defined in this notice) 
observations, including the procedures for ensuring a high-degree of 
inter-rater reliability.
    We do not believe it is necessary to require that measures 
validated for use in evaluation be validated further for use in other 
human capital decisions. Rather, once measures are used to develop an 
educator's overall evaluation rating, we expect that the rating will be 
used to inform other human capital decisions in accordance with the 
LEA's vision of instructional improvement.
    Changes: None.
    Comment: We received many comments regarding the use of student 
growth measures to inform human capital decisions, such as the 
requirement, under Priority 2--LEA-wide Educator Evaluation Systems 
Based, in Significant Part, on Student Growth, to use these measures as 
a significant factor in educator evaluation systems. Three commenters 
expressed support for the use of student growth for informing educator 
evaluation, though one stated that student growth should not be used 
for other types of human capital decisions, including decisions 
regarding compensation.
    One commenter stated that student growth should be introduced 
gradually into educator evaluation systems, and that both the weight 
given to student growth and the prevalence of its use among educators 
should increase following the availability of new assessments for 
evaluating educators and the availability of professional development 
aligned with the evaluation system.
    Several other commenters expressed concern that the NPP relied 
excessively on indicators of student achievement and student growth as 
predictors of teacher and principal effectiveness, and offered 
arguments against the use of student growth to inform human capital 
management. One commenter, in particular, recommended that we neither 
require nor encourage the use of student growth in educator evaluation, 
and advised that we, at most, allow grantees the option of 
incorporating student growth into educator evaluation. A few commenters 
stated that the NPP put a disproportionate weight on student growth as 
compared with performance measures that the commenters regarded as more 
reliable, such as classroom observations and student surveys.
    The commenters provided a number of arguments against the use of 
student growth. First, a few commenters cautioned against the use of 
value-added measures due to inaccuracy, bias, instability, and lack of 
precision, while others cautioned against the use of student growth, 
irrespective of the model used, for any human capital decision-making, 
including for evaluation. Second, commenters argued that the use of 
student growth for human capital decisions would make educators 
reluctant to teach or enroll English learners, students with 
disabilities, students of color, low-income students, and students 
connected with either child welfare or released from juvenile 
detention, or otherwise encourage educators to push students out of 
school using formal disenrollment, discouragement, or the excessive and 
disparate use of discipline. Third, some commenters stressed that an 
emphasis on student growth would encourage educators to teach to the 
test, engage in cheating behaviors, and narrow the scope of the 
curriculum offered to students.
    Discussion: To meet Priority 2--LEA-Wide Educator Evaluation 
Systems Based, in Significant Part, on Student Growth, an applicant 
must describe its timeline for implementing its proposed LEA-wide 
educator evaluation systems. Consistent with this priority, an 
applicant must implement the evaluation system for at least a subset of 
educators or in at least a subset of schools no later than the 
beginning of the second year of the grant's project period, and must 
use the evaluation system to evaluate all educators in the LEA by no 
later than the beginning of the third year of the grant's project 
period. We find this timeline, which allows for gradual implementation, 
to be consistent with the recommendation presented by one of the 
commenters. However, from the start of this implementation, each 
educator's overall evaluation rating must be based, in significant 
part, on student growth. We believe that student growth data is a 
meaningful measure of educator effectiveness and that its use in TIF 
projects is wholly consistent with the

[[Page 35763]]

statutory requirement that TIF-funded PBCSs consider gains in student 
academic achievement. We wish to clarify for the commenters that, for 
the purposes of this notice, ``student growth'' means the change in 
student achievement for an individual student between two or more 
points in time, and, further, that nothing in this notice requires an 
applicant to use value-added measures to assess student growth.
    Furthermore, student growth is just one of the multiple measures 
that are required under the rigorous, valid, and reliable educator 
evaluation systems required under Priority 2; this priority also 
requires two or more observations during each evaluation period and the 
use of additional factors determined by the LEA. While the Department 
agrees with commenters that student growth should not be used in 
isolation to make human capital management decisions, we also believe 
that student growth, as a meaningful measure of effectiveness, should 
be weighed significantly when making a number of human capital 
decisions, including decisions on professional development and 
performance-based compensation. The Department further believes that, 
from the start of the evaluation system's implementation, including 
student growth as one of multiple measures is important so that human 
capital decisions, such as those regarding professional development, 
are based upon a range of measures and do not consider any one measure 
in isolation. We believe the use of multiple measures, as provided for 
under Priority 2, ensures that no one measure is relied upon 
disproportionately, as some commenters fear might occur.
    Further, the use of multiple measures is essential to evaluate 
educators based on a range of important measures, beyond student 
achievement, so that they may improve instruction for students with 
diverse learning needs and provide all students with a well-rounded, 
complete education that will prepare them for college and a career. 
Accordingly, the Department will evaluate applicants, under paragraphs 
(5) and (6) of Selection Criterion (b)--Rigorous, Valid, and Reliable 
Educator Evaluation Systems, based on whether the proposed educator 
evaluation systems evaluate the practice of teachers and principals in 
meeting the needs of special student populations, such as students with 
disabilities and English learners. While we find it worthwhile to 
highlight the needs of these two student subgroups, we would encourage 
applicants to consider how their evaluation systems might assess the 
competencies and behaviors of teachers, principals, and other personnel 
(as defined in this notice) so as to improve the capacity of school 
staff to instruct and support various types of students. In response to 
the commenters' concerns regarding school pushout and excessive or 
disparate use of discipline, we believe that the priorities, 
requirements, definitions, and selection criteria in this notice 
provide applicants with a unique opportunity to build comprehensive and 
robust evaluation systems that may monitor for these behaviors and 
provide the professional development that teachers and principals need 
to end these practices. In particular, we encourage applicants to 
consider how the ``additional factors'' requirement, under paragraph 
(2)(iii) of Priority 2, will allow for comprehensive assessments.
    Regarding the comments about the use of standardized tests and 
potentially encouraging dishonest behavior among educators, the 
Department strongly disagrees with the notion that the existence of 
cheating or ``teaching to the test'' reflects on the merits of 
standardized testing or the use of standardized test data for 
accountability purposes. Instead, cheating robs students of their fair 
shot at a world-class education, and cheating reflects a willingness to 
lie at children's expense to avoid accountability. It is the 
Department's belief that standardized testing is no more vulnerable to 
cheating behaviors than other forms of instructional accountability; 
rather, under any educational performance assessment designed for 
either schools or educators, we must work to develop high-quality, 
rigorous assessment tools and work to ensure that performance metrics 
are fair, transparent, and rigorous.
    Lastly, we disagree with the commenters' assertion that the use of 
student growth in educator evaluation, as provided for in the 
priorities, requirements, definitions, and selection criteria included 
in this notice, may lead to a narrowing of student curriculum. To meet 
Priority 2, an applicant must propose LEA-wide educator evaluation 
systems that generate an overall evaluation rating for every teacher in 
the LEA, irrespective of grade or subject taught and in accordance with 
applicable State and local definitions of ``teacher''. Because TIF 
funds may be used, under Requirement 6--Use of TIF Funds to Support the 
PBCS, to develop and improve systems and tools, such as assessments, 
that support the PBCS and benefit the entire LEA, TIF presents a unique 
opportunity for applicants to modify their existing evaluation systems 
so that they properly account for the full range of curriculum, be it 
math instruction, health instruction, arts instruction, or instruction 
in other subjects. It is our belief that the priorities and 
requirements in this notice will encourage applicants to design 
evaluation systems that use a range of performance assessments, both in 
subjects in which assessments are required and not required under 
section 1111(b)(3) of ESEA, to evaluate educator effectiveness. 
Therefore, there is no reason to assume that the use of student growth, 
as a factor in determining overall evaluation ratings, will lead to a 
narrowing of student curriculum.
    Changes: None.
    Comment: Four commenters recommended that we invest in research 
related to the impact of various human capital management decisions on 
educators and students. One commenter encouraged us to invest in 
research on effective, evaluation-driven professional development. 
Another commenter expressed support for the continued evaluation of 
TIF-funded projects. Two other commenters requested that we conduct 
research to determine whether performance-based compensation has had 
disparate impact, considering graduation rates and disciplinary action, 
on students of color, students from low-income communities, English 
learners, or students with disabilities.
    Discussion: The Department recognizes that there are many aspects 
of performance-based compensation and human capital management systems 
in LEAs and schools that would benefit from additional research. The 
Department will continue to look to recommendations from the field, 
such as those made by the commenters, when determining which research 
questions are of the greatest significance.
    Changes: None.
    Comment: One commenter strongly opposed the proposed priorities, 
requirements, definitions, and selection criteria due to a concern 
that, according to the commenter, they would directly affect issues and 
provisions that are subject to collective bargaining under State 
statutes. The commenter stated that the proposed action may encourage 
applicants to circumvent the provisions of collectively bargained 
agreements, where they exist, or exclude stakeholders from providing 
ongoing input into subjects governed by these provisions. A second 
commenter recommended that we require that the elements of the 
applicant's proposed HCMS, including the student growth measures and 
their use for human capital management, be collectively bargained where 
unions have been

[[Page 35764]]

designated the exclusive representative of educators for the purposes 
of collective bargaining.
    Discussion: The Department frequently issues regulations that may 
impact education-related matters that are subject to collective 
bargaining. Further, we disagree with the commenter's speculation that 
the TIF program may encourage applicants to circumvent the provisions 
of collectively bargained agreements or exclude stakeholders from 
providing ongoing input into subjects governed by these provisions. To 
the contrary, applicants must provide evidence that educator 
involvement in the design of the PBCS and the educator evaluation 
systems has been extensive and will continue to be extensive during the 
grant period. To clarify the relationship between other Federal, State, 
and local laws and the regulations that govern the TIF program, we have 
added a ``Note'' to Requirement 2--Involvement and Support of Teachers 
and Principals to inform applicants of their responsibilities if they 
become grantees under the TIF program. The note states that it is the 
responsibility of the grantee to ensure that, in observing the rights, 
remedies, and procedures afforded school or school district employees 
under Federal, State, or local laws (including applicable regulations 
or court orders) or under terms of collective bargaining agreements, 
memoranda of understanding, or other agreements between those employees 
and their employers, the grantee also remains in compliance with the 
priorities, requirements, and definitions included in this notice. The 
note goes on to clarify that in the event that a grantee is unable to 
comply with these priorities, requirements, and definitions, the 
Department may take appropriate enforcement action (e.g., discontinue 
support for the project).
    With regard to the request that we require that the elements of an 
applicant's HCMS, including student growth measures and their use, be 
collectively bargained, we decline to make this change because we 
believe it would constitute inappropriate Federal involvement in local 
matters.
    Changes: We have added a Note to Requirement 2 that clarifies the 
relationship between existing Federal, State, and local law and 
collective bargaining agreements and similar agreements between 
employees and employers, and the priorities, requirements, and 
definitions established in this notice.
    Comment: Five commenters opposed the Department using Federal funds 
to support performance-based compensation. These commenters stated that 
there is a lack of evidence demonstrating that additional educator 
compensation results in improved academic outcomes for students. Of 
these commenters, four also objected to funding performance-based 
compensation systems due to concerns that a PBCS might encourage 
teachers and principals to push struggling and at-risk youth out of 
their classrooms and schools.
    Discussion: The Department acknowledges the concerns raised by 
these commenters, and continues to invest in the research to assess the 
impact of performance-based compensation systems on student growth and 
educator behavior. However, in The Department of Education 
Appropriations Act, 2012 (Division F, Title III of Public Law 112-74), 
Congress authorized and appropriated funding for the TIF program 
specifically to support the development and use of PBCSs in high-need 
schools. Through the TIF program, the Department is implementing the 
provisions of this law.
    Changes: None.
    Comment: Two commenters recommended that the Department revise the 
priorities, requirements, definitions, and selection criteria to 
promote evidence-based programs. These commenters stated that, in 
making these changes, we would encourage applicants to direct their 
scarce resources toward programs that are evidence-based, sustainable, 
and scalable.
    Discussion: The Department fully agrees that applicants should use 
TIF funds to support evidence-based, sustainable, and scalable 
approaches for improving educator effectiveness. To meet Priority 1--An 
LEA-Wide HCMS With Educator Evaluation Systems at the Center and 
Priority 2--LEA-Wide Educator Evaluation Systems Based, in Significant 
Part, on Student Growth, applicants must implement an LEA-wide HCMS, 
including LEA-wide evaluation systems, which will support the 
implementation of a PBCS to be implemented in high-need schools under 
the grant. As mentioned elsewhere in this notice, it is the 
Department's belief that these LEA-wide systems will support the 
sustainability and scalability of all TIF-funded PBCSs. Moreover, we 
also intend, under Selection Criterion (f)--Sustainability, to award 
points to applicants that develop a feasible sustainability plan that 
identifies non-TIF resources that would support the PBCS and 
evaluations systems during and after the grant period. As Congress has 
authorized and appropriated funding for the TIF program specifically to 
support the development and implementation of PBCSs in high-need 
schools, we encourage applicants to embed evidence-based approaches 
into their plans to evaluate, develop, and reward educators as they 
respond to the priorities, requirements, definitions, and selection 
criteria in this notice. Under Selection Criterion (b)--Rigorous, 
Valid, and Reliable Educator Evaluation Systems, in particular, we 
intend to award points to those applicants that provide evidence 
supporting the LEA's (or LEAs') selection of student growth models and 
assessments, and to those applicants that have made substantial 
progress in developing procedures for ensuring a high-degree of inter-
rater reliability between observers. For these reasons, we do not 
believe any changes are necessary; we believe that that priorities and 
selection criteria already address the concerns raised by the 
commenters.
    Changes: None.
    Comment: Two commenters requested that the Department further 
clarify the local match requirements applicable to this program.
    Discussion: Nothing in the NPP or this notice requires applicants 
to provide a non-Federal or non-TIF match, local or otherwise, for 
their TIF projects. That said, it is true that we have designed the 
selection criteria to award points to applicants that will leverage 
non-TIF funds to support their projects. We have done this in view of 
the statutory requirement that applications for TIF grants include a 
plan to sustain financially the activities conducted and systems 
developed under the grant once the grant period has ended, and because 
we believe that applicants should work to ensure that TIF-funded PBCSs, 
and the evaluation systems that support them, are themselves 
sustainable. Specifically, under Selection Criterion (f)--
Sustainability, we will award points to applicants that develop a 
feasible sustainability plan that identifies non-TIF resources that 
will be used to support the PBCS and evaluations systems during and 
after the grant period. In addition, for applicants applying to the TIF 
Competition with a Focus on STEM, under Selection Criterion (g)--
Comprehensive Approach to Improving STEM Instruction, we will award 
points to applicants that propose to significantly leverage STEM-
related funds across other Federal, State, and local programs when 
implementing a high-quality and comprehensive STEM plan.
    Changes: None.

[[Page 35765]]

    Comment: One commenter encouraged us to safeguard the privacy of 
educators, and the integrity of performance evaluations, by taking a 
stand against the publishing of individual evaluation data. The 
commenter expressed concern that providing individual evaluation data 
to the public injures the professional relationship needed to conduct 
meaningful evaluations and provide substantive feedback to educators. 
Further, in cases where evaluation systems are still under development, 
the data may not yet provide an accurate assessment of individual 
effectiveness.
    Discussion: While the Department acknowledges the concerns raised 
by the commenter, we decline to address the release of individual 
educator's evaluation data in this notice. The release of this type of 
data is governed by State or local law and policies. We believe that 
directing grantees to release or withhold this type of information 
would constitute inappropriate Federal involvement in State and local 
matters.
    Changes: None.
    Comment: One commenter recommended that, in funding TIF 
applications, we give priority to applicant capacity over the quality 
of project design or project scope, and fund those applicants that can 
demonstrate the capacity to implement high-quality project design or 
project scope above applicants without this capacity.
    Discussion: While the Department fully agrees that TIF should 
support applicants that have the capacity to implement an effective and 
sustainable PBCS, we also believe it is important to encourage 
applicants to propose high-quality project designs. For example, under 
Selection Criterion (a)(2)(iii)--A Coherent and Comprehensive Human 
Capital Management System, we will evaluate applications based on the 
extent to which the participating LEAs have experience using evaluation 
data to inform human capital decision-making. Further, under Selection 
Criterion (b)(3)--Rigorous, Valid, and Reliable Educator Evaluation 
Systems, we will award points to those applications that demonstrate 
that the participating LEAs have made substantial progress in 
developing a high-quality plan for completing multiple teacher and 
principal observations. Lastly, we have devoted all of Selection 
Criterion (e)--Project Management to project management, and will give 
points to applicants that have carefully considered issues such as 
staff and timeline for implementation.
    Further, we do not designate in this notice the point values for 
these selection criteria. With this approach, we retain the flexibility 
to adjust the point allocation in future TIF competitions to achieve 
the appropriate balance between capacity for implementation and quality 
of project design in any given year. For the 2012 competition, the 
Department has considered the commenter's recommendations in 
designating point values in the NIA.
    Changes: None.
    Comment: One commenter requested that we broaden the eligibility 
requirements for the TIF program to allow more schools and LEAs to 
participate in TIF-funded projects. Specifically, the commenter stated 
that we should allow schools and LEAs located in economically depressed 
counties (i.e., counties identified by the U.S. Department of Commerce 
as having a per-capita personal income below the national average, 
below the State average, and ranked in the bottom twenty-five percent 
of counties within the State in per-capita income) to be eligible for 
TIF funding. The commenter stated that, by broadening eligibility in 
this way, TIF could better assist high-need areas where Federal aid 
participation is low due to the cultural stigma associated with public 
assistance.
    Discussion: While we acknowledge the concerns raised by the 
commenter, we decline to change the definition of high-need school or 
otherwise change the eligibility requirements. Congress has authorized 
and appropriated funding for the TIF program specifically to support 
the development and use of PBCSs in high-need schools, as opposed to 
schools in high-need regions, and has designated all LEAs that have 
those schools as entities eligible to receive TIF funds.
    Changes: None.
    Comment: Two commenters requested that we clarify the implications 
of the priorities for nonprofit applicants. Specifically, the 
commenters asked (1) whether, for the purposes of Priority 1--An LEA-
Wide HCMS With Educator Evaluation Systems at the Center, Priority 2--
LEA-Wide Educator Evaluation Systems Based, in Significant Part, on 
Student Growth, and Priority 5--An Educator Salary Structure Based on 
Effectiveness, nonprofit applicants partnering with charter schools 
that are considered LEAs under State law (charter-school LEAs) are 
required to describe and propose reforms for the LEAs in which the 
charter school partners reside; (2) whether nonprofit applicants may 
provide a table or chart to summarize each LEA partner's HCMS in order 
to remain within maximum page limits; and (3) whether nonprofit 
applicants partnering with more than one charter school may, for the 
purposes of Priority 1--An LEA-Wide HCMS With Educator Evaluation 
Systems at the Center, describe how each charter school's HCMS aligns 
with a vision of instructional improvement shared across the 
consortium.
    Discussion: To meet the priorities in this notice, nonprofit 
applicants that partner with charter-school LEAs must describe the 
vision of instructional improvement and HMCS, including the evaluation 
systems and professional development, of each charter school included 
in a group application. Because the charter-school LEA is not 
administered by the LEA within whose boundaries the charter school is 
located, an applicant need not, in these cases, provide a description 
of the HCMS (or other features) of that LEA beyond what the applicant 
considers to be useful in explaining the project proposal. Regarding 
the details of application submission, which are not addressed in this 
notice, we encourage interested applicants to read the TIF Application 
Package for the 2012 competition.
    Changes: None.
    Comment: One commenter suggested that the proposed priorities, 
requirements, definitions, and selection criteria include provisions 
that exceed the scope of the TIF authorizing language. Another 
commenter observed that the focus of TIF has moved from performance-
based compensation to developing human management systems based on 
educator evaluation.
    Discussion: Congress has authorized and appropriated funding for 
the TIF program specifically to support the development and use of 
effective and sustainable PBCSs. As we explain in the NPP and this 
notice, the purpose of these priorities, requirements, definitions, and 
selection criteria is to ensure that TIF-funded PBCSs will be 
successful and sustained mechanisms that contribute to continual 
improvement of instruction, to increases in teacher and principal 
effectiveness and, ultimately, to improvements in student achievement 
in high-need schools. To accomplish these goals, we have designed the 
priorities, requirements, definitions, and selection criteria to ensure 
that TIF grantees use high-quality LEA-wide evaluation and support 
systems that identify effective educators in order to improve 
instruction by informing performance-based compensation and other key 
human capital decisions.
    Changes: None.

[[Page 35766]]

    Comment: One commenter requested that we allow STEM specialty 
schools to participate in TIF projects, even if they are located in 
LEAs that are not engaged in system-wide compensation reforms.
    Discussion: In years when we designate Priority 1--An LEA-Wide HCMS 
With Educator Evaluation Systems at the Center and Priority 2--LEA-Wide 
Educator Evaluation Systems Based, in Significant Part, on Student 
Growth as absolute, all applicants must implement LEA-wide HCMSs and 
LEA-wide evaluation systems. If the STEM specialty schools are charter-
school LEAs, then they may satisfy Priority 1 and Priority 2 by 
implementing school-wide HCMSs and evaluation systems. However, if the 
STEM specialty schools are not themselves LEAs, they may not 
participate in the TIF project unless the LEA of which they are a part 
participates in the project. Because we believe that LEA-wide HCMSs and 
educator evaluation systems are critical for the sustainability and 
success of TIF-supported PBCSs, we decline to create an exception for 
single schools that, whether they are specialty schools or not, are not 
themselves LEAs so that they may participate in TIF projects in years 
we designate either Priority 1 or Priority 2 as absolute.
    Further, given the commenter's reference to system-wide 
compensation reform, we wish to clarify that it is not our intent to 
require applicants to implement an LEA-wide PBCS. Under Requirement 1--
Performance Based Compensation for Teachers, Principals, and Other 
Personnel and Requirement 6--Use of TIF Funds To Support the PBCS, 
applicants must implement a PBCS, but may only use TIF funds to provide 
additional compensation to educators in high-need schools identified in 
the application in response to Requirement 3--Documentation of High-
Need Schools.
    Changes: None.
    Comment: One commenter recommended that we encourage applicants to 
propose evaluation systems that use consistent and sustainable 
observation methods implemented by school leadership. According to the 
commenter, the formal training of principals, including their 
certification and testing, is necessary for developing and sustaining 
an effective teaching force, and will ensure that judgments about the 
quality of teachers' practice are valid and reliable for use in various 
human capital decisions. To embed this approach into TIF projects, the 
commenter recommended that we encourage applicants to construct 
evaluation systems that measure principal effectiveness using, in part, 
meaningful evidence of regular teacher observations.
    Discussion: The Department agrees that the training of principals 
may be one approach for ensuring high-quality, reliable observations, 
but declines to prescribe that this method be used by all grantees. 
While some LEAs may select principals to be the observers for teacher 
observations, it is also likely that other LEAs will assign that 
responsibility to external observers, or to those peers taking on 
career ladder positions. In either case, applicants should carefully 
consider the implications of their proposal for observation quality and 
sustainability; applicants will receive additional points for their 
proposed project based, under Selection Criterion (b)(3)--Rigorous, 
Valid, and Reliable Educator Evaluation Systems, on whether they have 
made substantial progress in developing a high-quality plan for 
conducting teacher and principal observations.
    Changes: None.
    Comment: A few commenters suggested that we require grantees to 
collect and report the discipline indicators included in the 
Department's Civil Rights Data Collection, and require them to take 
measures to improve their performance as measured by those indicators. 
Two commenters encouraged the Department to promote equity in schools 
by requiring applicants to monitor school discipline indicators and use 
that data to guide professional development.
    Discussion: The Department fully agrees that schools should monitor 
student outcome data--including discipline indicators--and use those 
data to inform improvement efforts. Starting with the 2011-2012 school 
year, the Department will conduct a Civil Rights Data Collection every 
two years that includes every school district in the Nation where data 
for any one school year are collected and reported the subsequent year. 
As the discipline indicators included in the Civil Rights Data 
Collection will be provided to the public, disaggregated by LEA and by 
school, we find it unnecessary and burdensome to require TIF applicants 
to duplicate their reporting for the purposes of this program. While we 
encourage applicants to monitor school discipline indicators and 
develop appropriate human capital strategies to address this important 
area and thereby promote equity and improve practice in their high-need 
schools, we do not agree that the Department should mandate the 
specific additional factors that LEAs include in their educator 
evaluation systems. Thus, we decline to make the suggested changes, but 
we encourage LEAs to carefully consider how school and classroom 
discipline will be incorporated into evaluation and educator support 
systems, including professional development.
    Changes: None.

Priority 1--An LEA-Wide Human Capital Management System (HCMS) With 
Educator Evaluation Systems at the Center

    Comment: One commenter recommended that we require applicants to 
involve the curriculum and instructional staff of the LEA in the 
management, design, and implementation of the PBCS.
    Discussion: The Department agrees that these central office staff 
are essential to the development of a well-designed and well-
implemented HCMS. The knowledge and expertise needed to design and 
implement an LEA's HCMS will come from many individuals within the 
central office, including those responsible for curriculum and 
instruction. However, the Department believes each LEA should be free 
to identify the central office staff who will be best able to design 
and implement whatever HCMS changes may be necessary. Given the 
variation in organizational structure among LEAs throughout the 
country, we have determined that individual LEAs--not the Department--
should identify the appropriate personnel for this task.
    Changes: None.
    Comment: One commenter recommended that we require TIF projects to 
have HCMSs that provide a minimum level of compensation for new 
teachers and paraprofessionals and a minimum rate of increase in 
compensation based on their years of service.
    Discussion: To attract high-quality candidates into teaching and to 
retain effective educators in the profession (and, in particular, in 
high-need schools), the Department believes that compensation for 
educators must be competitive with other professions requiring a 
similar level of skill and educational attainment. Even so, 
compensation at the local level will vary depending on the cost of 
living, the labor market, and other factors unique to that area. LEAs 
must consider these local factors when determining the levels of 
compensation that will attract and retain the best and brightest to the 
teaching profession. Moreover, the Nation does not have a single labor 
market for educators. Not only will there be different geographic labor 
markets, but there may be (and arguably should be) different labor 
markets by

[[Page 35767]]

content area, as evidenced by shortages in particular subjects.
    Further, we do not believe it is consistent with TIF's statutorily-
defined purpose--supporting performance-based compensation--to require 
that applicants provide educators a specified salary or a specified 
rate of salary increase based on years of service. Congress authorized 
TIF to assist LEAs in developing and implementing PBCSs and, through 
this final notice, the Department recognizes that TIF-supported PBCSs 
should align with a broader HCMS if they are to be successful and 
sustainable. We believe that HCMSs are likely, over time, to offer 
competitive salaries when they are designed to attract and retain 
effective teachers consistent with Priority 1--An LEA-Wide Human 
Capital Management System (HCMS) With Educator Evaluation Systems at 
the Center.
    Changes: None.
    Comment: One commenter recommended that we add language to the NFP 
to clarify that the rights, remedies, and procedures, including due 
process rights, afforded school or school district employees under 
existing Federal, State, or local laws supersede any and all provisions 
established in this notice, and that, in instances where a conflict 
exists, non-compliance with the TIF final priorities, requirements, 
definitions, and selection criteria will not result in grant 
termination.
    Discussion: The Department agrees that it should clarify the 
relationship between other Federal, State, and local laws and the 
priorities, requirements, definitions, and selection criteria that 
govern the TIF program. We have added a ``Note'' to Requirement 2--
Involvement and Support of Teachers and Principals to inform applicants 
of their responsibilities if they were to become a grantee under the 
TIF program. The note states that it is the responsibility of the 
grantee to ensure that, in observing the rights, remedies, and 
procedures afforded school or school district employees under Federal, 
State, or local laws (including applicable regulations or court orders) 
or under terms of collective bargaining agreements, memoranda of 
understanding, or other agreements between those employees and their 
employers, the grantee also remains in compliance with the priorities, 
requirements, and definitions included in this notice. It also states 
that in the event that a grantee is unable to comply with these 
priorities, requirements, and definitions, the Department may take 
appropriate enforcement action (e.g., discontinue support for the 
project).
    Changes: We have added a Note to Requirement 2 that clarifies the 
relationship between existing Federal, State, and local law and 
collective bargaining agreements and similar agreements between 
employees and employers, and the priorities, requirements, and 
definitions established in this notice.
    Comment: One commenter advised the Department to use the TIF 
program to make large grant awards to entities with fully-designed 
HCMSs. The commenter stated that fully-designed HCMSs (i.e., those 
systems that bring the full range of personnel decisions into alignment 
with a vision of instructional improvement) are a better investment 
than are separate smaller grants focusing on separate, siloed 
components of an HCMS.
    Discussion: The Department believes that a well-designed and well-
implemented HCMS will be the best mechanism to support a successful and 
sustainable PBCS, which is the statutorily defined purpose of the TIF 
program. For this reason, we have designed Priority 1 to support State 
and LEA efforts to strengthen LEAs' HCMSs. Although we believe that 
every LEA already has a system in place for making hiring and related 
personnel decisions (that is, an HCMS), we know that some systems are 
less coherent or comprehensive than others.
    LEA needs may vary with respect to aligning the HCMS with the LEA's 
instructional vision and building into the HCMS human capital decisions 
that are based on ratings generated by educators evaluation systems 
consistent with Priority 2--LEA-wide Educator Evaluation Systems Based, 
in Significant Part, on Student Growth. This being said, the Department 
wants to support reform-oriented LEAs wherever they may be on the 
continuum as they work to align their HCMS with their vision of 
instructional improvement. Although we do not require applicants to 
include the full range of personnel decisions in their proposed HCMS 
revisions, under Selection Criterion (a)--A Coherent and Comprehensive 
Human Capital Management System reviewers will consider the quality and 
comprehensiveness of each participating LEA's HCMS as described in the 
application, including the range of human capital decisions for which 
the applicant proposes to factor in educator effectiveness and the 
weight given to educator effectiveness when human capital decisions are 
made.
    Changes: None.
    Comment: One commenter recommended that we clarify the provisions 
regarding professional development that are in Priority 1--An LEA-Wide 
Human Capital Management System (HCMS) With Educator Evaluation Systems 
at the Center, and that we require applicants to address individual 
professional development, school or team improvement, and program 
implementation as part of their proposed professional development 
systems.
    Discussion: To meet Priority 1, applicants must propose a timeline 
for implementing an HCMS such that applicants use evaluation 
information to inform the design and delivery of performance-based 
compensation by no later than the third year of the project period. 
Further, as professional development is one component of an HCMS, an 
applicant may choose to describe in its response to Priority 1 how it 
will use evaluation information to inform professional development, 
whether professional development is or will be part of its strategy for 
attracting and retaining effective teachers, and how professional 
development fits into the LEAs vision of instructional improvement.
    Further, Selection Criterion (c) applies to an LEA's professional 
development plan for educators in the high-need schools that are part 
of a TIF-funded PBCS. Under Selection Criterion (c)(1), reviewers will 
specifically evaluate the extent to which the proposed plan will use 
disaggregated information from the educator evaluation systems ``to 
identify the professional development needs of individual educators and 
schools.'' Thus, we expect applicants to design professional 
development plans that strive for the improvement of individual 
educators, teams, and the broader school community, but we leave the 
ultimate decision on how to do that to applicants. Reviewers will 
evaluate and provide points under Selection Criterion (c)(1) based on 
the quality and comprehensiveness of applicant's proposals in this 
area. For this reason, we find it unnecessary to change Priority 1 
because the commenter's concern is adequately addressed through the 
selection criteria.
    Changes: None.
    Comment: None.
    Discussion: Upon further review of Priority 1, we have determined 
that it may be helpful to clarify the restrictions on the use TIF funds 
to support the components of the HCMS (which includes the PBCS, 
professional development, and LEA systems and strategies to recruit, 
retain, and reward effective educators). In response to Priority 1, an 
applicant must describe

[[Page 35768]]

each LEA's HCMS as it exists currently and with any planned 
modifications as well as the human capital strategies each LEA uses or 
will use to ensure that high-need schools are able to attract and 
retain effective educators. Applicants will be evaluated on the 
adequacy of the financial and nonfinancial strategies and incentives, 
including the PBCS, in its HCMS for attracting effective educators to 
work in high-need schools and retaining them in those schools. 
Therefore, in providing a description of the HCMS in response to 
Priority 1, an applicant may describe a range of systems, strategies, 
and incentives of which some may be supported by TIF funds while others 
may not. We have added the ``Note'' following Priority 1 to clarify 
that TIF funds may not support all of the systems, strategies, and 
incentives that an applicant describes in response to these and other 
elements of the priorities. Whether a cost can be supported with TIF 
funds is governed by the rules set forth in Requirement 6--Use of TIF 
Funds To Support the PBCS.
    Upon review of the Priority, we also have determined that paragraph 
(4) of Priority 1 may not be clear that even if an applicant does not 
need to make modifications to an existing LEA-wide HCMS, the applicant 
will need to describe a timeline for using evaluation information to 
inform the design and delivery of professional development an award of 
performance-based compensation beginning in identified high-need 
schools no later than the third year of the grant's project period. We 
have revised the beginning phrase of the paragraph to clarify that all 
applicants must include such a timeline regardless of whether it has 
modification to make in its LEA-wide HCMS to meet other provisions of 
the Priority.
    Changes: We have added a Note to Priority 1 stating that TIF funds 
can be used to support the costs of the systems and strategies 
described under Priority 1--An LEA-Wide HCMS With Educator Evaluation 
Systems at the Center, Priority 3--Improving Student Achievement in 
Science, Technology, Engineering, and Mathematics (STEM), and Priority 
5--An Educator Salary Structure Based on Effectiveness only to the 
extent allowed under Requirement 6--Use of TIF Funds To Support the 
PBCS. We also have revised paragraph (4) to clarify that all applicants 
must submit the timeline regardless of whether modifications are needed 
to an existing HCMS to ensure that it comports with paragraphs (1), 
(2), and (3) of the Priority.

Priority 2--LEA-Wide Educator Evaluation Systems Based, in Significant 
Part, on Student Growth

    Comment: One commenter noted that its LEA currently operates two 
different evaluation systems, each of which meets the needs of schools 
using different instructional approaches. The commenter asked that, 
when establishing final priorities, requirements, and definitions for 
the TIF program, we take this into consideration.
    Discussion: By requiring an LEA-wide approach to evaluation reform 
under Priority 2--LEA-Wide Educator Evaluation Systems Based, in 
Significant Part, on Student Growth, we seek to prevent situations in 
which a TIF-funded PBCS relies upon evaluations that are separate from 
the official educator evaluation systems the LEA uses to provide 
overall evaluation ratings. With these ancillary evaluations, an LEA 
might evaluate the educators in high-need schools once to determine 
eligibility for TIF-funded performance-based compensation and then 
again under separate criteria that the LEA uses for purposes of the 
educators' overall performance ratings. Consequently, when TIF funding 
ends, the ancillary evaluations that had been supported by a TIF-funded 
project, and which are needed to inform the PBCS, are also likely to 
end. To avoid this scenario and increase the sustainability and impact 
of the TIF-funded PBCS, Priority 2 requires applicants to use the 
evaluation systems described in response to the priority to both inform 
TIF-funded performance-based compensation and assign overall evaluation 
ratings to every educator in an LEA. Further, these overall evaluation 
ratings will provide an LEA with a single index--one for teachers and 
one for principals--with which to identify effective educators and, 
using their TIF-funded PBCS, recruit them to high-need schools.
    Nothing in this notice precludes an applicant from using its own 
funds to implement an evaluation system in addition to the systems 
described in response to Priority 2 if, for example, the applicant 
finds that such an additional system would meet the needs of unique 
schools or groups of educators. However, those evaluations may not be 
supported by TIF funds, used to inform the TIF-funded PBCS, or used to 
assign overall evaluation ratings.
    Changes: None.
    Comment: Three commenters urged us to require applicants to 
propose, as part of their evaluation rubrics, a minimum of four 
performance levels so that those rubrics align with current, evidence-
based evaluation models and encourage more meaningful performance-based 
differentiation.
    Discussion: We proposed and are now finalizing the requirement in 
Priority 2 that applicants include a minimum of three performance 
levels in their evaluation rubrics because we want to align this 
program with the requirements of other Department initiatives, 
including the ESEA Flexibility initiative. States that receive approval 
for ESEA flexibility will be developing, piloting, and implementing 
educator evaluation systems that differentiate performance using at 
least three levels of performance. The Department believes that an 
evaluation rubric that uses three performance levels provides for 
adequate differentiation of educator effectiveness and is a significant 
improvement over the binary rating system that continues to be used by 
many LEAs. We note that nothing in this notice precludes an applicant 
from proposing an evaluation rubric that uses more than three 
performance levels.
    Changes: None.
    Comment: One commenter recommended that we require TIF-funded 
evaluation systems to assess educator performance twice annually. The 
commenter stated that this would provide educators a baseline 
performance rating, identify early on areas in need of improvement, and 
allow educators greater opportunity to demonstrate professional growth.
    Discussion: While the Department agrees with the commenter that 
educators can benefit from regular and frequent feedback on their 
performance, we do not believe it is necessary to require summative 
evaluations twice annually. Rather, we expect that the various educator 
evaluation systems that applicants describe in their TIF applications 
in response to Priority 2 will present many different models for 
securing multiple opportunities for performance feedback. For example, 
under paragraph (2)(ii) of Priority 2, applicants are required to 
incorporate two or more observations during each evaluation period. The 
observations, which will occur multiple times each year, should 
generate abundant feedback. Moreover, applicants that find it desirable 
to evaluate educators twice annually will have the flexibility to 
propose to do so.
    Changes: None.
    Comment: A few commenters recommended that we revise Priority 2--
LEA-Wide Educator Evaluation Systems Based, in Significant Part, on 
Student Growth to require

[[Page 35769]]

comprehensive evaluations that consider multiple factors without 
specifically requiring that the evaluations consider student growth in 
significant part. One commenter recommended that we require applicants 
to consider several factors--teacher portfolios, contributions to the 
school community, parent feedback, and professionalism--to improve the 
predictive power of their evaluation tools and strengthen the utility 
of performance assessment for identifying areas of weakness. A few 
commenters recommended that the Department require consideration of 
student and parent surveys, and one commenter cited research concluding 
that student surveys, in particular, correlate as strongly with student 
learning as classroom observation. Two commenters advised the 
Department to emphasize the use of observation over student growth for 
educator evaluation. One commenter advised the Department to require 
applicants to embed classroom management, conflict prevention and 
resolution, and cultural competence into their teacher evaluation 
rubrics.
    Discussion: As we have noted throughout this notice, Congress has 
required that any TIF-funded PBCS consider gains in student achievement 
(i.e., student growth), and this requires that student growth be part 
of an educator evaluation system that would determine which educators 
are eligible for performance-based compensation. We have stated 
previously, in announcing priorities, requirements, definitions, and 
selection criteria for the FY 2010 TIF competition (75 FR 28713, 28718-
19), that given the wide range of possible factors that might be 
included in an LEA's teacher evaluation system as well as the fact that 
improving student achievement is the underlying purpose of the TIF 
program, we believe it is both appropriate and consistent with the 
statute to ensure that TIF grantees give student growth significant 
weight among the factors included in these systems.
    As the comments indicate, there are many points of view, as well as 
many valid practices, that may guide an LEA's decision regarding the 
factors to include in its educator evaluation systems. Given the 
statutory requirement that grantees also base their educator 
evaluations on multiple annual observations, among other factors, the 
LEA, in consultation with school staff and with the support of any 
teacher's union that represents teachers in collective bargaining, is 
in the best position to determine the relative weight to give these 
other factors. The Department believes that it is important to preserve 
for applicants the flexibility to identify the additional factors that 
will be included in their educator evaluation systems. Providing 
applicants this discretion will help ensure that the systems they 
establish are responsive to local needs, circumstances, and 
perspectives. For this reason, we decline to change paragraph (2)(iii) 
of Priority 2 to prescribe the additional factors which applicants must 
include in their evaluation systems. Further, we decline to change 
Priority 2 to indicate the relative weight that observation should 
carry, in relation to other factors such as student growth, in the 
determination of educator effectiveness.
    Changes: None.
    Comment: One commenter recommended that we revise Priority 2 to 
require TIF-funded evaluation systems to include monthly observations.
    Discussion: While paragraph (2)(ii) of Priority 2 requires at least 
two observations during each evaluation period, the Department believes 
that applicants should retain the discretion to decide whether a 
greater number of observations should occur. We believe that a minimum 
of two observations per year would be sufficient if the observations 
and resulting feedback are high-quality: two comprehensive observations 
by a well-prepared evaluator may provide a more accurate picture of 
teacher performance than five cursory classroom visits. For this 
reason, the Department declines to make the change recommended by the 
commenter. However, we note that under Priority 2, applicants have the 
flexibility to propose additional observations beyond two per year, if 
they choose.
    Changes: None.
    Comment: One commenter recommended that we require applicants to 
clarify how they will define student growth for the purpose of educator 
evaluation. This commenter recommended that we require applicants to 
describe how their definition of student growth will help students 
achieve proficiency, how their definition will help teachers to better 
understand their performance, and how the definition will identify 
educator strengths.
    Discussion: The Department defines ``student growth'' as the change 
in student achievement for an individual student between two or more 
points in time. This definition, and the various options it provides 
for determining ``student achievement'' for grades and subjects for 
which assessments are and are not required under section 1111(b)(3) of 
the ESEA, aligns with the use of the term in other Department 
initiatives, including the recent ESEA Flexibility initiative. It 
allows applicants to choose a student growth model that best meets 
their needs in developing rigorous, valid, and reliable educator 
evaluation systems. Applications will then be evaluated, in part, under 
Selection Criterion (b)(2)(ii)--Rigorous, Valid, and Reliable Educator 
Evaluation Systems on the evidence they present, including current 
research and best practices, to support the LEA's choice of student 
growth models. In their response to this selection criterion, we expect 
that applicants will provide a full justification for their selection, 
which may include such considerations as those described by the 
commenter (e.g., how the model will help students achieve proficiency, 
how it will help teachers to better understand their performance) or 
include other evidence to support their choice of student growth 
models. For these reasons, we find it unnecessary to further require 
applicants to clarify their definition of student growth.
    Changes: None.
    Comment: One commenter recommended that we require LEA applicants 
to use widely-accepted formalized assessments to determine student 
growth.
    Discussion: The Department believes that the definition of student 
growth in this notice is adequate to ensure the use of valid and 
reliable assessments and other methods that the definition includes for 
measuring student growth. Under this definition, applicants must use, 
at minimum, the formal assessments required under section 1111(b)(3) of 
the ESEA to measure student growth for certain grades and subjects. For 
grades and subjects not covered by section 1111(b)(3) of the ESEA, the 
definition requires that the alternative measures of student learning 
and performance, such as student results on assessments, be rigorous 
and comparable across schools. Beyond these requirements, we do not 
agree that these measures of student growth need to be based on 
assessments that, as the commenter proposes, are widely accepted and 
formalized.
    Further, the Department has determined that TIF grantees need the 
flexibility to develop or adopt new assessments for certain grades and 
subjects. Where new assessment tools may be needed to measure student 
achievement, applicants should consider LEA capacity, costs, and the 
project timeline when determining

[[Page 35770]]

whether to adopt readily available, valid, and reliable instruments, 
rather than develop new assessment tools.
    For these reasons, we decline to require applicants to use widely-
accepted formalized assessments to determine student growth.
    Changes: None.
    Comment: Several commenters expressed concerns regarding the use of 
classroom-level growth for measuring teacher performance, and 
recommended that we allow LEAs to determine the level of student 
growth, be it classroom-level, school-level, or grade-level growth, 
appropriate for assessing educators. These commenters were particularly 
concerned that, under Priority 2--LEA-Wide Educator Evaluation Systems 
Based, in Significant Part, on Student Growth, applicants must use 
classroom-level student growth for the evaluation of teachers with 
regular instructional responsibilities. The commenters asserted that 
this provision might encourage the evaluation of teachers in non-tested 
grades and subjects based on their students' achievement in other 
subjects or based on new assessments not yet tested for reliability, 
standardization, or validity. Additionally, one commenter stated that 
requiring classroom-level growth in each subject and grade could create 
conflict between teachers in tested subjects and grades, who are 
evaluated using accepted assessment instruments, and those in non-
tested grades and subjects, who might be evaluated using instruments 
that have not been validated.
    Discussion: The Department believes that the improved educator 
evaluation systems implemented under Priority 2--which depend upon 
generating an evaluation rating that is an appropriate reflection of 
each educator's effectiveness--are a central component of the reforms 
upon which the PBCS and other human capital decisions must be based. In 
order to produce educator evaluation data that are reflective of an 
educator's effectiveness, at least for teachers with regular classroom 
responsibilities for whom paragraph (2)(ii) of Priority 2 requires 
consideration of classroom-level growth, applicants must base the 
student growth component of the evaluation rating on the growth of the 
students in a teacher's own classroom, rather than the growth of 
students in other classrooms. Therefore, for the vast majority of 
teachers, student growth must be determined at the classroom level.
    Further, the Department recognizes that some teachers do not have 
regular instructional responsibilities, which makes evaluation based on 
classroom-level student growth inappropriate. For these teachers' 
overall evaluation ratings, LEAs are free to identify another level of 
student growth measurement.
    Lastly, the Department does not agree with the commenter that an 
evaluation system that treats all classroom teachers the same, 
evaluating each, in significant part, on the basis of the achievement 
of the students they teach, will create conflict among teachers who 
teach different subjects. Conflict is more likely among teachers when 
only some teachers are evaluated using the achievement of students in 
their classrooms, while others are not. At the same time, the 
Department agrees with the commenters that the assessments used to 
determine student growth must, for all grades and subjects, be rigorous 
and comparable across the schools in the LEA, and this is reflected in 
our definition of student growth. By requiring that all measures of 
student growth that an LEA uses be rigorous and comparable across the 
LEA's schools, we believe that the definition levels the playing field 
sufficiently between teachers of tested grades and subjects, on the one 
hand, and teachers of non-tested grades and subjects, on the other. To 
help ensure that applicants focus their applications on this issue, we 
have added language to Selection Criterion (b)(2)(ii)--Rigorous, Valid, 
and Reliable Educator Evaluation Systems to make clear that reviewers 
will examine the rigor and comparability of assessment tools an 
applicant proposes to use.
    Changes: The Department has added language to Selection Criterion 
(b)(2)(ii) so that, in considering the extent to which an applicant has 
provided evidence, such as current research and best practices, 
supporting the LEA's choice of student growth models, the Department 
also considers how those models demonstrate the rigor and comparability 
of assessment tools used.
    Comment: Several commenters advised us to further clarify paragraph 
(3) of Priority 2--LEA-Wide Educator Evaluation Systems Based, in 
Significant Part, on Student Growth, which requires that applications 
include a plan for how the evaluation systems will generate an overall 
evaluation rating that is based, in significant part, on student 
growth. The commenters requested that we set clear expectations 
regarding how student growth must be incorporated into the proposed 
evaluation rubric, and otherwise promote the strong use of student 
growth for differentiating educators based on their performance. Of 
these commenters, three requested that we require that student growth 
comprise 50 percent of an educator's evaluation, and two commenters 
requested that we not specify a minimum percentage or otherwise 
restrict the applicant's flexibility to determine significance.
    Discussion: LEAs have wide discretion in determining how to weight 
or otherwise combine the evaluation factors to derive an overall 
evaluation rating under Priority 2. However, a key requirement relates 
to the student growth component of the evaluation rubric: The overall 
evaluation rating must be based, in significant part, on an educator's 
student growth outcomes. While understanding the commenters' desire 
that student growth comprise 50 percent of an educator's evaluation, 
the Department has decided that such a requirement would be too 
inflexible, and so has not established a specific minimum weight for 
the student growth component of the overall rating. This is, in part, 
because there are reasonable ways to derive an overall rating that 
considers student growth, in significant part, without relying on a 
weighting approach. For example, an LEA may decide that student growth 
outcomes below an established minimum will always generate an overall 
rating of ineffective--regardless of the other measures included in the 
evaluation rubric. Generally, however, an overall rating is not based, 
in significant part, on student growth if the growth measure has little 
effect on the overall rating or will affect an overall rating in only 
the most extreme circumstances. Under paragraphs (b)(5)(i) and 
(b)(6)(i) of Selection Criterion--Rigorous, Valid, and Reliable 
Educator Evaluation Systems, peer reviewers will consider whether an 
applicant bases its overall evaluation rating on student growth, in 
significant part. In response to this criterion, applicants should 
carefully explain why they believe that the student growth component of 
their proposed overall rating calculation is significant.
    While the Department appreciates the concerns of commenters who 
argued for giving greater weight to student growth in TIF-funded PBCSs, 
we continue to require that this factor be given ``significant'' weight 
in this final notice. In light of the statutory requirement that 
grantees also base their evaluations on multiple annual observations 
among other factors, we believe that the LEA, in consultation with 
school staff and with the support of any teacher's union that 
represents teachers in collective bargaining, is in the best position 
to determine the relative weight to give these other factors.
    Changes: None.

[[Page 35771]]

    Comment: One commenter requested that we clarify in the priority 
that, for charter-school consortia applicants, the proposed evaluation 
system may extend to the entire consortium, rather than to the entire 
LEA in which the charter schools are located.
    Discussion: In a consortium of charter schools in which each 
charter school is considered an LEA in its State, each of the charter 
schools listed in the partnership application is an LEA for purposes of 
Federal grants. Accordingly, each charter school in the consortium 
could implement its own evaluation system because doing so would result 
in implementing an LEA-wide evaluation system. Alternatively, all 
charter schools in the consortium (or group application) may choose to 
implement the same evaluation system in all charter schools in the 
consortium. In either case, the application would meet the LEA-wide 
requirement of Priority 2.
    For the purposes of this notice, the evaluation system in a charter 
school that is considered an LEA has nothing to do with the evaluation 
system of the LEA in which the charter school is located (which might 
not be a part of the charter schools' TIF application).
    Changes: None.
    Comment: Two commenters expressed concern regarding the background 
statement provided for proposed Priority 2--LEA-Wide Educator 
Evaluation Systems Based, in Significant Part, on Student Growth in the 
NPP. Specifically, the commenters questioned the statement that our 
intent behind this priority is to ensure that educators eligible for 
performance-based compensation meet minimum performance thresholds on 
all measures included in an evaluation rubric. One of the commenters 
stated that interpreting Priority 2 to require that educators meet 
minimum thresholds on all measures in an evaluation rubric would be too 
restrictive for applicants that propose to use many performance 
measures in their evaluation rubric. Another commenter suggested that 
such an interpretation would require that any one of an educator's 
performance measures override any of the others, rather than permit 
applicants to propose evaluation systems that distribute weight more 
evenly across the various performance measures.
    Discussion: In the background discussion of proposed Priority 2 
contained in the NPP, we did not intend to suggest that, to consider an 
educator effective, LEAs must find the educator's performance to be 
satisfactory on each of the performance measures the LEA adopts for its 
evaluation systems. Rather, the LEA must determine the educator to be 
effective overall, taking into consideration his or her performance on 
all measures. Each LEA will determine the degree or weight to be given 
to each measure in the evaluation systems, bearing in mind that the 
overall rating must be based, in significant part, on student growth.
    The Department believes that requiring payments made under the PBCS 
to be based upon an overall rating of effective or higher will ensure 
that grantees will provide compensation to educators eligible for 
performance-based compensation in high-need schools based on an 
evaluation of effectiveness that considers both practice and student 
outcome data. While the Department believes that compensating educators 
with very low scores on key aspects of the evaluation rubric may send 
the wrong message as to who should be compensated based on performance, 
Priority 2 leaves to applicants to determine how an LEA should ensure 
that its overall evaluation ratings for educators are based, in 
significant part, on student growth. Doing so provides great 
flexibility to an applicant on how to design its evaluation systems and 
PBCS while ensuring that an educator's impact on student achievement is 
central to the overall determination.
    Changes: None.
    Comment: None.
    Discussion: Upon further consideration of the language in proposed 
paragraph 2(ii) of Priority 2, we believe that a slight wording change 
would better reflect what we intended this provision to mean. We 
intended this paragraph to require applicants to determine overall 
evaluation ratings for teachers with regular instructional 
responsibilities based, in part, on student growth at the classroom 
level. To ensure that this component of Priority 2 is sufficiently 
clear, we have revised this paragraph to state that, for the purpose of 
determining overall evaluation ratings for those teachers, student 
growth ``must be'', rather than ``must include'', the growth of the 
students included in an individual teacher's own classroom. We note 
that as long as applicants are using classroom-level growth to 
determine the overall evaluation ratings for teachers with regular 
instructional responsibilities to meet paragraph (2)(ii) of the 
priority, they may also consider whole-school growth as an additional 
factor under paragraph (2)(iii) of the priority.
    Changes: The Department has revised paragraph (2)(ii) of Priority 2 
to clarify that, for the purpose of determining overall evaluation 
ratings for teachers with regular instructional responsibilities, 
student growth must be, rather than must include, classroom-level 
growth.

Priority 3--Improving Student Achievement in Science, Technology, 
Engineering, and Mathematics (STEM)

    Comment: Several commenters recommended that we not conduct a 
separate TIF Competition with a Focus on STEM. The commenters expressed 
concern that encouraging applicants to single out educators in specific 
fields, such as the STEM fields, for additional compensation could 
cause misalignment in components of an LEA's HCMS.
    Discussion: In the past several months, Federal agencies and 
private partners have launched national efforts, such as Educate to 
Innovate, to increase the number of effective STEM teachers in the 
Nation over the next few years. While we appreciate the commenters' 
concerns, the Department believes it is necessary to help States and 
LEAs attract and retain highly-effective STEM teachers to schools, 
particularly high-need schools where students are in greatest need of 
academic improvement. As TIF provides applicants a unique opportunity 
to rethink LEA-wide human capital management and revamp educator 
compensation, we believe it is appropriate to use the TIF program to 
encourage applicants to leverage this opportunity to recruit and 
develop top-quality STEM educators, and thereby improve STEM 
instruction. On the other hand, it is not our intent to prohibit, or 
even discourage, applicants proposing to meet Priority 3--Improving 
Student Achievement in Science, Technology, Engineering, and 
Mathematics (STEM) from expanding performance-based compensation to 
non-STEM educators, principals, or other personnel.
    Changes: None.
    Comment: Several commenters requested that we designate Priority 
3--Improving Student Achievement in Science, Technology, Engineering, 
and Mathematics (STEM) as either competitive preference or 
invitational, but not absolute.
    Discussion: As mentioned elsewhere in this notice, to preserve 
future flexibility to designate priorities as absolute, competitive 
preference, or invitational, as needed to serve the intended goals of 
any TIF competition, we will not designate in this notice whether the 
final priorities are absolute, competitive preference, or invitational. 
Rather, we will make these designations in the notice inviting 
applications for any competition in which we use one or more of the 
priorities. While we have considered the commenter's suggestions

[[Page 35772]]

in designing the TIF 2012 competition, we have determined that, 
consistent with our announcement in the NPP, we will designate Priority 
3 as an absolute priority in the NIA and hold a separate TIF with a 
Focus on STEM competition in 2012.
    Changes: None.
    Comment: One commenter recommended replacing Priority 3--Improving 
Student Achievement in Science, Technology, Engineering, and 
Mathematics (STEM) with a priority focused on providing additional pay 
to all teachers in high-need schools. The commenter opposed providing 
educators in a single field additional compensation, because doing so 
would create inherently unequal pay systems and communicate to 
educators that some fields are more important than others. In making 
this statement, the commenter pointed to a number of hard-to-staff 
fields, such as special education, bilingual education, and specialized 
instructional support, that are not addressed by our proposed 
priorities, requirements, definitions, and selection criteria.
    Discussion: We do not prescribe, in either Priority 3 or 
Requirement 1--Performance-Based Compensation for Teachers, Principals, 
and Other Personnel, the proportion of educators in high-need schools 
that must be served by the applicant's proposed PBCS. Rather, we 
provide applicants the flexibility to propose a PBCS that best serves 
the human capital needs of its high-need schools, has the full support 
of the school community, and considers the feasibility of sustaining 
the PBCS past the five-year project period. While we acknowledge that 
applicants proposing to meet Priority 3 may choose to limit 
opportunities for performance-based compensation to STEM educators, 
applicants would not be prohibited from expanding performance-based 
compensation to other educators, principals, or other personnel, such 
as those in the types of hard-to-staff fields mentioned by the 
commenter. Accordingly, applicants with shortages in the areas of 
special education and bilingual education would have the option to use 
TIF funds on performance-based compensation to attract new staff in 
those fields to their high-need schools. While we recognize the merits 
of the commenter's recommendation, and agree that comprehensive 
compensation systems would be ideal, we find it more important to offer 
applicants the flexibility to tailor their proposals to local need. We 
decline to replace Priority 3 with a priority focused on providing 
competitive pay to all teachers in high-need schools.
    Changes: None.
    Comment: None.
    Discussion: The Department determined that a minor edit to Priority 
3 will improve its alignment with Selection Criterion (g)--
Comprehensive Approach to Improving STEM Instruction and avoid 
duplicating elements required under Priority 2--LEA-Wide Educator 
Evaluation Systems Based, in Significant Part, on Student Growth. As 
applicants must describe their evaluation systems under Priority 2, we 
do not believe it necessary to ask that applicants provide a separate 
description of how they propose to evaluate STEM teachers. Instead, we 
will require applicants to describe how each participating LEA will 
identify and develop the unique competencies that characterize 
effective STEM teachers. We will assess this description, in part, 
under Selection Criterion (g)(2), which makes reference to STEM-
specific professional development opportunities, but not evaluation.
    Changes: We have removed the term ``evaluate'' from paragraph (2) 
of Priority 3.

Priority 4--New Applicants to the Teacher Incentive Fund (Now New or 
Rural Applicants to the Teacher Incentive Fund)

    Comment: Several commenters requested that we remove Priority 4 
from the final priorities, or that we designate it as either 
competitive preference or invitational, in order to allow previous TIF 
cohorts to apply for a new grant. Many commenters that are recipients 
of a TIF grant expressed concern that they would not be able to sustain 
their current programming without the financial support that TIF 
provides. Many commenters stated that, if Priority 4 were an absolute 
priority, it would slow momentum in those LEAs that have already 
demonstrated their willingness to pursue challenging reform efforts. 
Many commenters also noted that, given the provisions in the TIF NPP, 
the next competition would help previously served LEAs to bring their 
projects to scale. Further, one commenter recommended that we allow 
SEAs and Regional Education Service Agencies to apply as lead 
applicants, even if an entity were the lead applicant under a previous 
TIF project, as SEAs and Regional Education Service Agencies have the 
capacity to serve a diverse group of LEAs. The commenter noted that it 
was unclear whether these entities would be ineligible to apply for a 
new TIF grant under Priority 4. One commenter asked whether a nonprofit 
applicant could meet Priority 4 if it proposed to serve charter schools 
located in an LEA that previously participated in a TIF-supported 
project, but that had excluded its charter schools from participation 
in the previous TIF project.
    Discussion: As mentioned elsewhere in this notice, to preserve 
future flexibility to designate priorities as absolute, competitive 
preference, or invitational, as needed to serve the intended goals of 
any TIF competition, we do not designate in this notice whether 
priorities are absolute, competitive preference, or invitational. We 
will make these designations in the notice inviting applications for 
any TIF competition that uses one or more of these priorities.
    Priority 4 applies to all applicants, including SEAs, LEAs, and 
nonprofit applicants. To the extent that a regional educational service 
center or the like is ``a public board of education or other public 
authority legally constituted within a State ... to perform a service 
function for, public elementary schools or secondary schools in a city, 
county, township, school district, or other political subdivision of a 
State, or of or for a combination of school districts or counties that 
is recognized in a State as an administrative agency for its public 
elementary schools or secondary schools'' it is an LEA (See section 
9101(23)(A) of the ESEA (20 U.S.C. Sec.  7801(26)(A))). Therefore, 
since a regional educational service center or like agency that meets 
this definition is an LEA, it may apply for a TIF grant and Priority 4 
applies to it.
    In years we designate Priority 4 as absolute, applicants would not 
be eligible to receive TIF funds unless they provide an assurance, 
which the Department accepts, that each LEA to be served by the project 
has not previously participated in a TIF-supported project. In years we 
designate Priority 4 as a competitive preference priority, applicants 
that fail to meet this priority would be eligible to receive TIF funds; 
however, applicants that meet this priority would receive additional 
points or preference over an application of comparable merit that did 
not meet this priority. Regardless of whether this priority is 
designated competitive preference or absolute, SEAs and nonprofit 
organization applicants that have previously participated in a TIF-
supported project may meet this priority, and, if they so choose, apply 
as a lead applicant, if they propose to serve only LEAs that have not 
previously participated in a TIF-supported project. In years when we 
designate this priority as absolute, LEA applicants (which may include 
regional education service agency applicants) may meet this

[[Page 35773]]

priority, and, if they so choose, apply as a lead applicant, only if 
they have not previously participated in a TIF-supported project. In 
years when we designate this priority as competitive preference, LEA 
applicants that have previously participated in a TIF-supported project 
may apply as a lead applicant, but may not meet this priority or 
receive competitive preference. Further, group applications that 
include charter schools in the application may meet this priority only 
if each charter school included is either: an LEA that has not 
previously participated in a TIF-supported project, or, if not an LEA, 
is located in an LEA that has not previously participated in a TIF-
supported project.
    With this priority, it is our intent to direct TIF resources to 
those LEAs that are ready to pursue compensation reform, but have not 
yet benefited from the Federal financial assistance available under TIF 
to help support effective and sustained PBCSs and related areas of 
reform. We agree that this year's notice inviting applications would 
provide current and former TIF grantees a unique opportunity to bring 
their projects to scale, and, in years this priority is designated 
either competitive or invitational, we would encourage entities to 
submit an application. At the same time, the Department notes that, 
consistent with the TIF authorizing statute, all current and former TIF 
grantees were expected to sustain their PBCSs past the conclusion of 
the project period. As they have already implemented a PBCS with 
Federal TIF funding, these grantees have already had an opportunity to 
convince stakeholders of the merits of performance-based compensation 
and thereby solicit the local investment needed for sustainability and 
scale up. In order to provide new LEAs with the same opportunity, we 
decline to remove Priority 4 from this notice.
    Changes: None.
    Comment: One commenter recommended that we amend proposed Priority 
4--New Applicants to the Teacher Incentive Fund to give preference to 
rural applicants because these applicants are often not able to 
successfully compete for Federal discretionary grants.
    Discussion: We agree that this notice should help the Department 
ensure geographic diversity among TIF grantees, and have modified 
Priority 4 to give priority to applicants that propose to serve only 
rural LEAs. We have limited the rural component of the priority to 
applicants that propose to serve only rural LEAs in order to ensure 
that the priority is not undermined by applicants that might otherwise 
seek to include only one or some rural LEAs in the project. We also 
have modified the title of the priority accordingly.
    Changes: The Department has modified Priority 4 to give priority to 
applicants that agree to serve either only LEAs that have not 
previously participated in a TIF-supported project, or only rural LEAs.

Priority 5--An Educator Salary Structure Based on Effectiveness

    Comment: Several commenters requested that we revise Priority 5 to 
allow applicants to choose between performance-based compensation 
systems that either award bonuses or are implemented through a salary 
structure, rather than require that all applicants revise their salary 
schedules. While two commenters expressed support for our effort to 
encourage salary schedule reform so that salary is linked to 
performance--one because adjustments to the salary schedule would 
influence base pay, increase career earnings, and factor into pension 
calculations--they and other commenters expressed concern about making 
Priority 5 absolute (i.e., requiring that applicants meet it). One 
commenter disagreed with these views, and suggested that we require 
applicants to include a plan to transition from performance-based 
compensation to a salary structure based on effectiveness. Many other 
commenters expressed concern that such a requirement may lead to 
negative consequences. For example, a commenter stated that such a 
requirement might dissuade LEAs from applying for a TIF grant because 
teacher salary schedules are often subject to collective bargaining, 
and many LEAs would be unwilling to commit to a scope of work that has 
not been negotiated. A second commenter cited one State's laws 
regarding performance-based compensation--which requires the 
implementation of performance-based compensation, but allows 
compensation to take the form of a bonus or new salary--and argued that 
greater flexibility for TIF applicants would enable high-need schools 
to satisfy both State law and the priorities, requirements, 
definitions, and selection criteria included in this notice. A third 
commenter expressed concern that requiring all applicants to revise 
their salary schedules would reduce overall TIF participation, as it 
would create significant resource and stakeholder challenges.
    A fourth commenter advised against promoting any tie between newly 
developed evaluation systems and educator salary before the new 
evaluation system has been tested for reliability, and cautioned that 
linking educator salary to what could be flawed evaluation ratings may 
work against TIF's goal of teacher retention. A fifth commenter 
expressed concern that it would be difficult to convince teachers in 
schools not participating in the TIF grant to support changes to their 
salary schedule, and such an effort would require significant outreach 
at the outset of the project.
    Discussion: As mentioned elsewhere in this notice, to preserve 
future flexibility to designate priorities as absolute, competitive 
preference, or invitational, as needed to serve the goals of the TIF 
program, we do not designate in this notice whether priorities are 
absolute, competitive preference, or invitational. We will make these 
designations in the notice inviting applications for any TIF 
competition that uses one or more of these priorities. In response to 
the first comment, in years when Priority 5 is designated as a 
competitive preference or invitational priority, applicants would be 
able to choose whether their proposed PBCS would be implemented through 
a salary structure based on educator effectiveness or through a bonus 
structure. In years when Priority 5 is designated as an absolute 
priority, applicants would be required to implement their proposed PBCS 
through a salary structure based on educator effectiveness.
    The Department agrees with many of the commenters about the 
practical concerns that applicants will need to address in responding 
to Priority 5. We also recognize the challenges local laws and 
collective bargaining can pose to such a change within an LEA. However, 
the Department believes one way to increase the likelihood that a PBCS 
continues after the end of the grant period, and is sustained through 
local budget fluctuations, is to award additional compensation not as 
incentive awards or bonuses, but rather as part of an educator's 
salary. In response to the challenges raised by commenters, the 
Department has modified the priority by removing the language that 
would have required implementation of the salary structure beginning no 
later than the third year of the project period. Instead, to meet this 
priority, applicants must describe a timeline for implementing a salary 
structure based on effectiveness as well as the extent to which the 
proposed implementation is feasible, given that implementation will 
depend upon stakeholder support and applicable LEA-level policies. We 
believe that these changes will provide LEAs with

[[Page 35774]]

the flexibility needed for this type of work. As a result of these 
changes, LEAs addressing Priority 5 will not be held to a uniform 
deadline. Rather, proposed timelines will be based on local contexts. 
Thus, we believe Priority 5 will not dissuade LEAs from applying to the 
program.
    The flexibility when Priority 5 is designated as a competitive 
preference or invitational priority addresses a commenter's concern 
regarding an applicant's ability to meet both State law and the 
priorities, requirements, definitions, and selection criteria included 
in the notice as well as one commenter's concern that requiring 
applicants to revise their salary schedules would reduce overall TIF 
participation by creating significant resource and stakeholder 
challenges. Our revision to the timeline requirement will allow an 
applicant to ensure a high-quality implementation of the evaluation 
system and the subsequent linkages to the salary structure. In 
addition, we believe that a sustained performance-based salary 
structure will enhance an LEA's ability to retain effective teachers.
    We understand the commenter's concern about the Department's making 
Priority 5 an absolute priority and will take that concern into 
consideration in any decision to designate the Priority as absolute, a 
competitive preference, or invitational. Finally, we agree with the 
commenter who expressed concern that change of this scope would require 
significant outreach at the outset of the project. The Department 
believes that significant outreach is required for all types of 
performance-based compensation reform and has designed this notice so 
that applicants must include evidence that educators in each 
participating LEA have been involved, and will continue to be involved, 
in the development and implementation of the PBCS and evaluation 
systems described in the application.
    Changes: We have revised Priority 5 to require that each applicant 
describe, as part of its plan for implementing the PBCS, a timeline for 
implementing the proposed LEA salary structure as well as a rationale 
for why the applicant views its implementation plan as feasible. We 
also have removed language from the priority that would have required 
implementation of the salary structure beginning no later than the 
third year of the project period.
    Comment: One commenter recommended that we add language to Priority 
5--An Educator Salary Structure Based on Effectiveness to require that 
the proposed salary structure be collectively bargained or agreed upon 
by the organization representing educators. Further, the commenter 
recommended that the priority stipulate that the process for creating 
any new salary structure be transparent to ensure that performance-
based compensation is attainable and that teachers clearly understand 
the criteria for earning additional compensation.
    Discussion: With regard to the request that we require that 
elements of an applicant's proposal, including a proposal for a salary 
schedule based on educator effectiveness, be collectively bargained, we 
decline to make this change because we believe it would constitute 
inappropriate Federal involvement in local matters. With regard to the 
comment about the transparency of the new salary structure, we believe 
that a transparent and inclusive process is essential for a change of 
this scope and scale to be successful. To this end, applicants must 
provide evidence that educator involvement in the design of the PBCS 
and the educator evaluation systems has been extensive and will 
continue to be extensive during the grant period. Thus, we do not 
believe that any change is required at this time.
    Changes: None.
    Comment: A few commenters expressed concerns regarding the impact 
of a salary schedule, based on effectiveness, on educator behaviors and 
TIF's objective of attracting and retaining effective educators. The 
commenters argued that salary structures based on effectiveness, 
compared with performance-based bonuses, do not give educators the same 
incentive to remain in high-need schools or to maintain high-levels of 
performance. Moreover, the commenters noted that, under a salary 
schedule based on effectiveness, if an effective teacher decides to 
move from a high-need school to a school that is not high-need, it may 
prove difficult to reduce the teacher's salary. Similarly, if an 
effective teacher earns a higher salary due to performance, but lags in 
performance at a later point, it may again be difficult, and 
potentially impermissible, to remove the performance increment from the 
teacher's salary. Further, one commenter noted that there would be a 
significant delay between performance and compensation, which would 
potentially weaken the performance incentive. This is because, quite 
often, student growth does not become available until six months 
following the end of the school year. Once the data is received, it is 
unlikely that an LEA would be able to change base salary until the 
beginning of the next school year.
    Discussion: The Department believes a salary structure based on 
effectiveness will not negatively impact the goal of attracting and 
retaining effective educators in high-need schools. In fact, we believe 
the opposite is likely to occur where the proposed salary structure 
results in a highly sustainable PBCS that may be more resistant to 
budgetary fluctuations at the local level than other PBCS designs. The 
concerns expressed by commenters generally do not consider the 
flexibility an applicant has in developing a salary structure based on 
educator effectiveness. We disagree with the commenters who expressed 
concern that a salary structure based on effectiveness does not give 
educators the same incentive to remain in high-need schools or to 
maintain high levels of performance. Salary structures may contain many 
performance-based incentives, including potential for greater base-pay 
progression at high-need schools or career-ladder position 
opportunities only at high-need schools. Although an LEA may not lower 
the salary of an educator moving from a high-need school to a low-need 
school, in this instance, the move would result in lower income 
potential. The concern that a salary structure based on effectiveness 
does not provide an incentive for educators to maintain high-levels of 
performance or is problematic in addressing lags in performance does 
not acknowledge that the typical salary structure provides educators 
with an annual increase in income based on years of service with no 
consideration given to effectiveness. Lastly, the potential delay 
between performance and receipt of performance-based compensation 
(often due to delays in an LEA's receipt of student growth data) is no 
greater for a PBCS delivered through a salary structure than through a 
bonus system. In both instances, applicants need to consider how best 
to address this challenge in designing an effective PBCS.
    Changes: None.
    Comment: Two commenters provided feedback regarding the impact of a 
salary schedule, based on effectiveness, on sustainability and educator 
evaluation. One commenter speculated that, to sustain a new salary 
structure during tough budget times, municipalities might raise the 
criteria for a determination of effectiveness so that fewer teachers 
would be awarded a higher salary. Under this scenario, according to the 
commenter, bonuses would become less accessible and this,

[[Page 35775]]

in turn, could undermine educator collaboration and result in declines 
in educator base pay. A second commenter expressed concern that salary 
schedules, based on effectiveness, would be harder to sustain than 
bonuses, because adjustments to base pay would increase pension 
obligations while bonuses would not.
    Discussion: The Department believes a new salary structure will 
enhance sustainability and secure educator performance-based 
compensation past the duration of the TIF grant. We further believe 
that a PBCS delivered through a salary structure based on effectiveness 
will be more likely to be maintained during periods of budget 
fluctuations as compared with a bonus structure that is ancillary to an 
LEA's official salary structure and, therefore, easily discontinued 
during such periods. As one commenter speculated, during tough budget 
times an LEA could respond by attempting to reduce educator salaries. 
We do not believe this would be either unique to a salary structure 
based on effectiveness or more likely to occur under such a salary 
structure. Further, we believe that a salary structure based on 
effectiveness may impact pension obligations, but, as previously 
discussed, a typical salary schedule provides for annual increases to 
an educator's salary with no consideration for educator effectiveness. 
These increases have the same impact on pension obligations as 
increases that do take effectiveness into consideration.
    Changes: None.
    Comment: One commenter requested clarification of whether Priority 
5--An Educator Salary Structure Based on Effectiveness pertained only 
to schools supported under the TIF grant or to all schools in the LEA.
    Discussion: Under Priority 5, applicants will have the discretion 
to choose how broadly to implement the comprehensive salary schedule 
based on effectiveness. At a minimum, the salary schedule discussed in 
Priority 5 must include educators participating in the PBCS in the 
high-need schools identified in response to paragraph (a) of 
Requirement 3--Documentation of High-Need Schools. We have revised 
paragraph (b) of Priority 5 to make this clear. The LEA may choose to 
extend the salary schedule to cover additional teachers or additional 
schools but should carefully consider the restrictions on the use of 
TIF funds described in Requirement 6--Use of TIF Funds to Support the 
PBCS.
    Changes: We have revised paragraph (b) of Priority 5 to require 
applicants to describe in their proposal how each LEA will use TIF 
funds to support the salary structure based on effectiveness in the 
high-need schools listed in response to paragraph (a) of Requirement 
3--Documentation of High-Need Schools.
    Comment: None.
    Discussion: Upon further review, the Department has determined that 
paragraph (b) of proposed Priority 5--An Educator Salary Structure 
Based on Effectiveness--which required applicants to describe how TIF 
funds used for salary increases would be used only to support the 
additional cost of the revised salaries for educators in high-need 
schools--might erroneously suggest to applicants that TIF funds may not 
be used to support the entire cost of salary for effective educators 
who accept career ladder positions. Under Requirement 6--Use of TIF 
Funds to Support the PBCS, applicants may use TIF funds to support the 
entire cost of salary, up to 1 full-time equivalent position for every 
12 teachers who are not in a career ladder position. As paragraph (b) 
of proposed Priority 5 seemed to conflict with Requirement 6, we have 
revised Priority 5 to require applicants to describe how each LEA will 
use TIF funds to support the salary structure based on effectiveness in 
the high-need schools.
    Changes: We have removed from this priority language that would 
have required applicants to describe how TIF funds used for salary 
increases would be used only to support the additional cost of the 
revised salaries. Further, we have revised paragraph (b) of Priority 5 
to require applicants to describe in their proposal how each LEA will 
use TIF funds to support the salary structure based on effectiveness in 
the high-need schools listed in response to paragraph (a) of 
Requirement 3--Documentation of High-Need Schools.
    Comment: None.
    Discussion: Upon further review, the Department has determined that 
additional revisions are necessary to improve Priority 5--An Educator 
Salary Structure Based on Effectiveness. First, after publishing the 
NPP, we realized that some LEAs may already have salary structures that 
meet or are close to satisfying the requirements of this priority. For 
this reason, we have removed the language requiring a comprehensive 
revision of an existing salary schedule. Second, the Department 
recognizes that there might be instances where only a discrete portion 
of an educator's salary increase would be based on the educator's 
overall evaluation rating and that the remaining increase would be 
based on other factors. In such a case, an applicant may use TIF funds 
to pay for only the discrete portion of the educator's salary increase 
that would be based on the educator's overall evaluation rating. By 
revising this priority to require applicants to describe the extent to 
which each LEA will use these evaluation ratings to determine educator 
salaries, the Department intends that applicants should describe only 
the part of the salary structure that constitutes the increase 
attributable to the PBCS.
    Changes: We have revised Priority 5 by removing the requirement 
that an applicant propose ``a comprehensive revision'' of an existing 
salary schedule. In paragraph (b) of the priority, we have added 
language requiring the applicant to describe the extent to which each 
LEA will use the overall rating of the evaluation to determine educator 
salaries.

Requirement 1--Performance-Based Compensation for Teachers, Principals, 
and Other Personnel

    Comment: A few commenters stated that applicants should not be 
allowed to propose PBCSs based solely on Design Model 2; instead these 
commenters urged us to require all applicants to implement a PBCS 
consistent with Design Model 1. Three commenters expressed concern that 
Requirement 1--Performance-Based Compensation for Teachers, Principals, 
and Other Personnel is inconsistent with the TIF authorizing statute, 
which requires both performance-based compensation and incentives to 
encourage educators to take on additional responsibilities and 
leadership roles. According to these commenters, each applicant must 
offer both components, and the Department may not allow applicants to 
select only one for their TIF project. Further, a number of commenters 
expressed concern that Design Model 2 would support a very limited 
concept of performance-based compensation, and stated that any TIF-
funded PBCS should provide all educators, not simply teacher leaders or 
principals, an opportunity to receive additional compensation.
    Discussion: We disagree that Design Model 2 is inconsistent with 
the TIF authorizing statute. As the commenters stated, the TIF statute 
requires the Department to make funding available to applicants to 
support their implementation of PBCSs for educators in high-need 
schools and offer educators incentives to take on additional leadership 
roles and responsibilities. More specifically, the FY 2012 TIF 
authorizing statute (Pub. L. 112-74) provides that TIF-supported PBCSs 
must consider gains in student

[[Page 35776]]

academic achievement as well as classroom evaluations conducted 
multiple times during each school year among other factors and provide 
educators with incentives to take on additional responsibilities and 
leadership roles.
    Under Design Model 1, applicants would establish a PBCS under which 
they provide performance-based compensation to effective educators and 
would provide those educators with incentives to take on additional 
leadership roles and responsibilities. Under Design Model 2, applicants 
would include additional leadership roles and responsibilities in the 
PBCS, and then provide performance-based compensation to teachers who 
have received an overall evaluation rating of effective or higher and 
who accept a career ladder position as both another factor in the PBCS 
and an additional role or responsibility. Consistent with Priority 2 of 
this notice, applicants under either design model must propose to use 
student growth, multiple observations, and other factors in the 
determination of each educator's overall evaluation rating, which 
aligns with the statutory requirements governing educator eligibility 
for performance-based compensation. We also note in response to the 
last comment that an applicant has the option to offer performance-
based compensation to other personnel who work in identified high-need 
schools under either design model.
    Further, it is our intent to give an LEA flexibility to use its 
best judgment in designing a PBCS that will increase educator 
effectiveness and student achievement. While a PBCS under Design Model 
2 could make a smaller number of teachers eligible for performance-
based compensation than a PBCS under Design Model 1, as some commenters 
suggest, a PBCS under Design Model 2 might still produce greater gains 
in teacher effectiveness and student achievement. Achieving these 
important goals does not depend solely on the number of teachers 
eligible for compensation. It depends on a variety of factors, 
including the quality of the evaluation system and the job-embedded 
professional development the career ladder teachers provide. For these 
reasons, we decline to remove Design Model 2 from this notice.
    Changes: None.
    Comment: A few commenters recommended that we allow applicants to 
award forms of compensation not described in Requirement 1--
Performance-Based Compensation for Teachers, Principals, and Other 
Personnel. A few commenters recommended that we allow applicants to 
provide separate performance-based incentives to educators based on the 
outcome of separate measures of performance, such as classroom 
observation and student growth. One of the commenters explained that 
performance-based compensation systems offering separate awards for 
student performance and practice are attractive to teachers, who can 
easily recognize the relationship between their work and the resulting 
award. Additionally, one commenter recommended that we allow applicants 
to propose whole-school awards, based on school-level performance, as 
part of their PBCS. The commenter expressed concerns about the effects 
of individual performance-based compensation on turnaround schools, 
which could erode collegiality in fragile schools. The commenter 
asserted that whole-school awards may help to promote a shared sense of 
ownership of reform amongst educators in high-need schools.
    Discussion: We acknowledge the potential merits of either providing 
whole-school compensation based on school-level performance or 
rewarding educators based on separate measures of performance, as these 
approaches may prove effective for encouraging specific practices or 
behaviors. However, we believe that the effectiveness and 
sustainability of a PBCS, and its impact on increasing student 
achievement in high-need schools is much greater if TIF dollars reward 
only individual educators determined to be effective based on a 
comprehensive evaluation that uses multiple factors, student growth, 
and observations of educator practice. We believe that, by using 
rigorous evaluations to identify the highest quality educators, and 
then rewarding these educators with opportunities for advancement and 
additional compensation, high-need schools will be in the best position 
to attract and retain the highly-skilled workforce needed to help 
students achieve. Further, we recognize the importance of communicating 
to educators the nuances of any proposed PBCS or evaluation system so 
that educators may recognize the relationship between their efforts and 
accomplishments and the resulting rewards and other consequences. We 
note, however, that this challenge is present regardless of the design 
of the proposed reform.
    Accordingly, we decline to revise Requirement 1 to allow for either 
whole-school compensation or compensation based on separate measures 
for performance. That said, nothing in this notice prohibits applicants 
from providing performance-based compensation outside of the proposed 
TIF-funded PBCS, provided that non-TIF funds are used for performance-
based compensation.
    Changes: None.
    Comment: One commenter recommended that we fund additional 
compensation for teachers and principals who take on additional 
responsibilities and leadership roles, even if they have not shown a 
record of classroom effectiveness. This commenter noted that teacher 
attrition and turnover has created challenges for many schools, and 
claimed that additional compensation for additional responsibilities 
should enable schools to compensate teachers for their work, encourage 
them to advance based on their interests and accomplishments, and 
provide them with opportunities for leadership while maintaining the 
teacher's instructional responsibilities. A second commenter expressed 
support for the requirement limiting awards for taking on additional 
responsibilities to those who have demonstrated effectiveness, but 
noted that implementation of career ladder programs may be delayed in 
areas where the evaluation system has not yet been developed.
    Discussion: The purpose of the TIF program is to support LEA 
implementation of an effective and sustainable PBCS that rewards 
educators determined to be effective based on student growth, multiple 
observations, and other factors, and to provide educators with 
incentives to take on additional responsibilities and leadership roles. 
The Department believes that, to best meet this purpose, all payments 
made to educators under a PBCS, including those provided to take on 
additional responsibilities and leadership roles, must be made to 
educators determined to be effective. Requirement 2, like all of the 
priorities, requirements, definitions, and selection criteria contained 
in this notice are designed to do this.
    As mentioned elsewhere in this notice, it is the Department's 
belief that, by using rigorous evaluations to identify the highest 
quality educators, and, subsequently, rewarding these educators with 
opportunities for advancement and additional compensation, high-need 
schools will be in the best position to attract and retain the highly-
skilled workforce needed to help students in those schools to achieve. 
While grantees may wish to supplement their TIF project, using local 
dollars, so that educators who have not been determined to be effective 
under the LEA's evaluation system are rewarded

[[Page 35777]]

for accepting additional responsibilities, they may do so, but they may 
only use TIF dollars for educators who have been determined to be 
effective.
    We fully recognize that the development of the required PBCSs and 
related evaluation systems as well as the procedures for directing TIF 
funds to purposes permitted under this notice will require applicants 
to consider carefully their timelines for implementing the evaluation 
systems and PBCSs. Moreover, some applicants, if awarded a TIF grant, 
will need time to implement their PBCSs and evaluation systems, and 
meet the other requirements and priorities we have established for this 
program. We believe that the timelines we have established provide 
sufficient time for grantees to do so. Under Priority 2, applicants 
must propose a plan to implement their evaluations for at least a 
subset of teachers or schools in the LEA by the beginning of the second 
project year. Under paragraph (4) of Priority 1, applicants must use 
evaluation information to inform the design and delivery of 
professional development and the award of performance compensation 
under their proposed PBCS (to educators in high-need schools listed in 
response to paragraph (a) of Requirement 3--Documentation of High-Need 
Schools) by the third project year. While applicants may, at their 
discretion, begin implementation sooner, we have established these 
timelines as base requirements to help applicants that need time to put 
their PBCSs and evaluation systems in place, for reasons such as those 
noted by one of the commenters.
    Comment: One commenter opposed our restricting applicants from 
offering effective educators an opportunity to receive additional 
compensation for taking on career ladder positions and for taking on 
additional responsibilities and leadership roles.
    Discussion: Applicants proposing to implement Design Model 1 must 
provide, as part of their PBCS, additional compensation to effective 
teachers (and, at their discretion, effective principals) who 
voluntarily accept additional responsibilities and leadership roles. To 
satisfy Design Model 1, therefore, applicants must compensate effective 
teachers (and, at their discretion, effective principals) for taking on 
additional responsibilities and leadership roles, which may include 
career ladder positions. However, under Design Model 2, applicants are 
required to offer effective teachers career ladder positions and do not 
have the option of offering other types of additional responsibilities 
and leadership roles. Through this restriction, we intend to reserve 
this design model for LEAs that wish to move ahead with an improvement 
strategy that relies heavily on career ladder positions and the 
comprehensive career ladder program that these positions require to be 
successful in improving teacher practice and student achievement. We 
expect that an LEA opting for this design model will develop a 
comprehensive plan through which career ladder teachers will get the 
extensive training and release time they need to make a significant 
difference in teacher practice in each participating high-need school. 
By contrast, the other types of additional responsibilities and 
leadership roles contemplated under the definition of that term in the 
NIA may be very limited in their scope and effect. To ensure that any 
career ladder program proposed under Design Model 2 is both 
comprehensive and coherent, we decline to expand the model to allow 
applicants to provide additional compensation to effective teachers who 
take on other types of additional responsibilities and leadership 
roles.
    Changes: None.
    Comment: One commenter opposed limitations restricting applicants 
to only one of the two PBCS design models, and recommended that we 
revise Requirement 1 to allow applicants to include both components in 
their PBCS proposal.
    Discussion: We fully agree that applicants should have the 
flexibility to implement any of the allowable PBCS components included 
in Design Models 1 and 2. We view Design Model 1 as inclusive of all of 
the components of Design Model 2, because career ladder positions, 
which are specifically referenced in Design Model 2, are included in 
the definition of additional responsibilities and leadership roles. For 
this reason, we do not believe any change is necessary to respond to 
this comment.
    Changes: None.
    Comment: One commenter suggested that we encourage applicants to 
offer career ladder positions to a team of educators, rather than 
individuals, to build team collaboration among instructional leadership 
and thereby increase the impact of their work.
    Discussion: The Department recognizes the merit of offering career 
ladder positions to a team of educators, rather than doing so to 
selected individuals, and encourages applicants to consider the 
benefits of this approach. However, we believe that applicants should 
have the flexibility to tailor their proposed PBCSs to best meet the 
needs of their high-need schools.
    Changes: None.
    Comment: One commenter recommended that we require teachers and 
principals who receive performance-based compensation to share their 
effective practices with other educators.
    Discussion: We fully agree that effective teachers and principals 
should be provided opportunities to demonstrate instructional 
leadership and share their practices with peers. We believe that this 
is adequately addressed by Requirement 1--Performance-Based 
Compensation for Teachers, Principals, and Other Personnel, which 
requires applicants proposing to implement Design Model 1 to offer 
effective teachers, and, at their discretion, effective principals, 
opportunities to take on additional responsibilities and leadership 
roles. Similarly, Design Model 2 requires applicants to offer career 
ladder positions to effective teachers and allows applicants to offer 
additional compensation to principals, at their discretion, for taking 
on additional responsibilities and leadership roles. We have defined 
additional responsibilities and leadership roles, including career 
ladder positions, to mean meaningful, school-based opportunities to 
strengthen instruction and instructional leadership in a systemic way. 
While this certainly may include responsibilities to share effective 
practices with other educators, we believe that how to define these 
responsibilities, too, is best left to each participating LEA and those 
with whom it collaborates on the components of its PBCS.
    Changes: None.
    Comment: One commenter recommended that we revise the proposed 
priorities, requirements, definitions, and selection criteria to 
provide applicants with the flexibility to propose collaboratively 
developed compensation systems that integrate the following salary 
schedule principles: (a) A professional growth salary schedule must 
start with a professional-level salary of at least $40,000 for all 
beginning teachers entering the classroom, a minimum of $25,000 for 
education support professionals, and educators should be able to reach 
their ``maximum'' salary on the schedule within 10 years; (b) a 
professional growth salary schedule must be co-created or designed with 
educators through collective bargaining or, where there is no 
collective bargaining, agreed to by the organization representing 
educators, and it must allow for the strictly voluntary participation 
of current educators; (c) a professional growth salary schedule must 
contain

[[Page 35778]]

several levels through which educator progress is based on prescribed 
skills, knowledge, licenses, certifications, degrees, responsibilities, 
and accomplishments; (d) each level of any professional growth salary 
schedule should build on previous ones and contain salary increases for 
specified time periods within each level; (e) generally, early levels 
on any professional growth salary schedule should be linked to the 
probationary period of employment, advancement through the initial 
levels should be required, and movement through later levels may be 
voluntary; (f) a professional growth salary schedule must be linked to 
a professional development system that has been locally developed with 
educators and tied to high-quality professional development standards; 
(g) any professional growth salary schedule should clearly define what 
will be measured and how those measurements will be conducted; (h) any 
professional growth salary schedule should be tied to locally 
developed, research-based, professional learning opportunities targeted 
to the needs of the students; (i) a professional growth salary schedule 
must have adequate and sustainable sources of funding, both initially 
and on an ongoing basis, and grants should be viewed only as temporary 
resources that are not capable of sustaining a career salary program; 
(j) any professional growth salary schedule should be accessible to 
everyone who is eligible, without quotas; (k) any professional growth 
salary schedule should be locally bargained or, where there is no 
collective bargaining, agreed to with the organization representing the 
educators, flexible and structured for the contexts in which they will 
be implemented; (l) a professional growth salary schedule must be 
understandable to educators and the public; (m) an annual assessment of 
any professional growth salary schedule should be undertaken to 
determine its effectiveness in improving educator salaries, teaching 
quality, and the recruitment and retention of high-quality staff; and 
(n) all parties must agree on, and clarify, who is eligible to 
participate in a professional growth salary schedule.
    Discussion: We believe that the proposed priorities, requirements, 
definitions, and selection criteria encourage applicants to 
collaboratively develop compensation systems. Under Requirement 2--
Involvement and Support of Teachers and Principals, we require each 
applicant to provide evidence that educators have been involved, and 
will continue to be involved, in the development and implementation of 
the PBCS and evaluation systems described in the application. Under 
Selection Criterion (d)--Involvement of Educators, we will evaluate 
applicants based on the quality of educator involvement in the 
development of those same PBCSs and evaluation systems.
    Further, the Department has reviewed the salary schedule principles 
submitted by the commenter, and has determined that the final 
priorities, requirements, definitions, and selection criteria allow 
applicants to develop compensation systems in ways that align with 
these principles. Given that applicants will have the flexibility 
requested by the commenters, we do not believe a change is necessary.
    Changes: None.
    Comment: None.
    Discussion: Upon further review, we have determined that the 
``Note'' in Requirement 1 should be amended to provide additional 
context for the charts provided in that Requirement. These charts 
illustrate how applicants can design their PBCS to meet the definition 
of a PBCS.
    Changes: We have amended the note in Requirement 1 to provide an 
applicant with additional context for the charts found in the 
Requirement.

Requirement 2--Involvement and Support of Teachers and Principals

    Comment: One commenter appeared to interpret Priority 1 as 
requiring LEAs to make significant modifications to their HCMSs, and 
expressed concern that applicants would not be able to secure educator 
support for systems still in their development stages. While the 
commenter acknowledged that educator support was important, the 
commenter stated that this support is only one of multiple factors that 
should be considered in the decision to implement a PBCS.
    Discussion: The TIF authorizing statute requires that each TIF 
grantee demonstrate that its PBCS has been developed with the input of 
teachers and principals in the schools and LEAs to be served by the 
grant. Further, it is the Department's belief that ongoing involvement 
by educators in the development and implementation of the PBCS and 
evaluation systems is critical to the success and sustainability of the 
PBCS, and that educators are more likely to embrace these reforms if 
they have had a role in developing and implementing them. Accordingly, 
we believe it is appropriate and consistent with the statute to require 
each applicant to include in its application evidence of the 
involvement of educators in participating LEAs in the design of the 
PBCS, as well as in the design of the underlying evaluation systems 
that inform the PBCS. Further, under this requirement, an applicant 
must include in its application evidence demonstrating how educators in 
the participating LEAs will be involved in an ongoing basis with the 
implementation of the PBCS and evaluation systems. Beyond educator 
involvement, an applicant must also provide a description of the extent 
to which the applicant has educator support for the proposed PBCS and 
evaluation systems.
    In requiring this description in the application, it is not our 
intent to require that applicants demonstrate in their applications 
that they have already secured a specific level of educator support; 
rather, under Selection Criterion (d), we will evaluate applications 
based on the strength of educator support that those applications 
describe in response to Requirement 2--Involvement and Support of 
Teachers and Principals. Applications that reflect low levels of 
educator support can be expected to receive a lower score under 
Selection Criterion (d). Conversely, applications that reflect higher 
levels of educator support can be expected to receive a higher score.
    Changes: None.
    Comment: Three commenters recommended that we prescribe the forms 
of evidence that an applicant must submit, and the processes in which 
applicants must engage, to meet Requirement 2--Involvement and Support 
of Teachers and Principals. One commenter suggested that we require 
applicants to conduct an educator vote, as such a process would be a 
definitive method for assessing whether there is sufficient support to 
implement a PBCS. A second commenter recommended that we require 
applicants to collaborate with effective teachers and a diverse cross-
section of stakeholders in designing and implementing the PBCS. 
According to this commenter, involving these stakeholders would help to 
create professional education communities where top performers help to 
solve complex challenges. This commenter also recommended that we 
provide strong guidelines for submitting letters of support to ensure 
that these letters are genuine and represent a significant portion of 
educators. A third commenter recommended that we require applicants to 
collaborate with recognized educator representatives.
    Discussion: While applicants must submit evidence of educator 
involvement to meet Requirement 2--

[[Page 35779]]

Involvement and Support of Teachers and Principals, we do not believe 
it is necessary or appropriate to prescribe the composition of 
educators that an applicant must include in the collaboration. We 
anticipate that some high-scoring applicants may engage in ongoing 
collaborative efforts where a handful of effective teachers and 
principals continuously work with district officials to manage the 
design and implementation of the PBCS and evaluations systems. 
Conversely, some high-scoring applicants may seek less substantive or 
formal involvement and input, but pursue feedback on a larger scale, 
and provide all educators in high-need schools listed in response to 
paragraph (a) of Requirement 3--Documentation of High-Need Schools with 
opportunities to provide feedback on the development and implementation 
of the project. Thus, while the commenters' recommendations regarding 
the form of collaboration are all reasonable and may be very 
appropriate for certain LEAs, we do not accept any of them as 
procedures the Department should mandate for all LEAs that would 
participate in a TIF project.
    Further, while evidence of educators' support in the form of 
letters or other communications that endorse the specifics of the 
applicant's proposal may make a stronger application for TIF funds, the 
Department has chosen not to require applicants to submit evidence of 
educator support in their applications in order to satisfy Requirement 
2. Rather, to meet this requirement, applicants must provide a 
description of the extent to which the applicant has educator support 
for the proposed PBCS and educator evaluation systems. We will then 
evaluate the evidence provided to support this description, under 
paragraph (2) of Selection Criterion (d)--Involvement of Educators; 
applications that include strong evidence of educator support can be 
expected to receive a greater number of points under paragraph (2) than 
applications that do not include this level of support.
    As the Department is letting applicants decide how best to describe 
educator support in their applications without requiring applicants to 
submit evidence of educator support in their TIF applications, we 
decline to prescribe the methods an applicant may use to submit 
evidence for the purposes of Selection Criterion (d)(2).
    Changes: None.
    Comment: One commenter recommended that we not allow educator 
representation to influence determinations of applicant eligibility. 
This commenter also stated that, to ensure the highest return on the 
TIF investment, we should not award funds to applicants when union 
policy would prohibit implementation of the PBCS or evaluation system.
    Discussion: As mentioned elsewhere in this notice and in the NPP, 
educator involvement and support is critical to the successful 
implementation and sustainability of any applicant's proposed PBCS and 
evaluation systems. For this reason, each applicant must provide 
evidence of educator involvement in the development and implementation 
of both components of its project, and must describe the extent to 
which it has educator support for both of these components. Further, 
under Selection Criterion (d)--Involvement of Educators, applications 
that demonstrate strong evidence of educator involvement and support 
can be expected to receive more points than those that do not.
    With these requirements and selection criteria, we believe it 
unnecessary to include the additional restriction, recommended by the 
commenter, which would prohibit the involvement of LEAs whose unions 
have policies prohibiting implementation of the PBCS or evaluation 
system. We hope that those unions would be willing to reconsider their 
positions and see the benefit of the reforms that we are proposing 
through the priorities, requirements, definitions, and selection 
criteria described in this notice. In addition, we have added a 
``Note'' to Requirement 2 to clarify that it is the responsibility of 
the grantee to ensure that, in observing the rights, remedies, and 
procedures afforded school or school district employees under Federal, 
State, or local laws (including applicable regulations or court orders) 
or under terms of collective bargaining agreements, memoranda of 
understanding, or other agreements between these employees and their 
employers, the grantee also remains in compliance with the priorities, 
requirements, and definitions included in this notice. Further, this 
``Note'' clarifies that if a grantee is unable to comply with these 
priorities, requirements, and definitions, the Department may take 
appropriate enforcement action (e.g., discontinue support for the 
project).
    At the same time, the Department agrees that local policies, 
including union policies, may have a strong impact on the feasibility 
of an applicant's proposal. For this reason, we have revised both 
Priority 5--An Educator Salary Structure Based on effectiveness and 
Selection Criterion (a)--A Coherent and Comprehensive Human Management 
Capital System (HMCS) to address the impact of local policies on 
project feasibility.
    Changes: Under Priority 5--An Educator Salary Structure Based on 
effectiveness, we have included new language (in paragraph (c)) 
directing applicants to describe the feasibility of its proposed salary 
structure's implementation, considering, in part, applicable local 
policies. In addition, under Selection Criterion (a)(2)(iii)--A 
Coherent and Comprehensive Human Capital Management System, we have 
added language to allow the Secretary to consider LEA-level policies 
that might inhibit or facilitate modifications needed to use educator 
effectiveness as a factor in human capital decisions when evaluating 
project feasibility. We have also added a Note to Requirement 2 to 
clarify that it is the responsibility of the grantee to ensure that, in 
observing the rights, remedies, and procedures afforded school or 
school district employees under Federal, State, or local laws 
(including applicable regulations or court orders) or under terms of 
collective bargaining agreements, memoranda of understanding, or other 
agreements between these employees and their employers, the grantee 
also remains in compliance with the priorities, requirements, and 
definitions included in this notice. Further, this Note clarifies that, 
in the event that a grantee is unable to comply with these priorities, 
requirements, and definitions, the Department may take appropriate 
enforcement action (e.g., discontinue support for the project).

Requirement 3--Documentation of High-Need Schools

    We received no comments regarding Requirement 3.

Requirement 4--SEA and Other Group Applications

    Comment: One commenter asked whether an LEA that was part of a 
group application in a previous TIF project, but not the lead applicant 
for that project, is eligible to apply for TIF funding under the 
priorities, requirements, definitions, and selection criteria in this 
notice.
    Discussion: Priority 4--New or Rural Applicants to the Teacher 
Incentive Fund and Requirement 7--Limitation on Using TIF Funds in 
High-Need Schools Served by Existing TIF Grants address eligibility for 
LEA applicants that previously participated in a TIF-supported project. 
As noted elsewhere in this notice, we designate whether a priority is 
absolute, competitive preference, or invitational in the notice

[[Page 35780]]

inviting applications for a competition. For competitions in which we 
designate Priority 4 as absolute, applicants would not be eligible to 
receive TIF funds unless they provide an assurance, which the 
Department accepts, that each LEA to be served by the project has not 
previously participated in a TIF-supported project. In years when we 
designate Priority 4 as a competitive preference, LEA applicants that 
fail to provide this assurance would still be eligible to receive TIF 
funds although ineligible to receive the additional points available 
under the Priority. We consider an LEA to have previously participated 
in a TIF-supported project if it participated, or was included, in a 
previous or current TIF grant. For example, an LEA has previously 
participated if a previous TIF application that the Department funded 
identified it as a recipient of services under a previous TIF 
competition--even if the funded project did not move into full 
implementation, did not continue to receive funding throughout the 
entire performance period, or the LEA for some reason did not directly 
benefit from its participation in the project. Similarly, we consider 
an LEA to have previously participated if the grantee added the LEA as 
a participant in the project after a TIF project's initial funding.
    Where Priority 4 is designated as a competitive preference, 
Requirement 7--Limitation on Using TIF Funds in High-Need Schools 
Served by Existing TIF Grants will impact the permissible scope of an 
application, submitted under a new TIF competition, that involves an 
LEA that is currently participating in a TIF project at the beginning 
of the new grant's project period. Under Requirement 7, applicants must 
provide an assurance that TIF funds received under the competition will 
only be used to implement the PBCS in high-need schools that are not 
served, as of the beginning of the grant's project period or as planned 
in the future, by an existing TIF grant. Thus, if all the high-need 
schools in an LEA are already being served--or will be served--by a 
current TIF grant as of the beginning of the grant's project period, 
that LEA would not be eligible to receive funds or otherwise 
participate in a grant funded under this competition. Current TIF 
grantees with one or more high-need schools that are not served--and 
will not be served--by the current grant as of the beginning of the 
grant's project period would be eligible to receive funds under this 
notice.
    Changes: None.
    Comment: One commenter recommended that we remove the requirement 
that SEAs or other group applicants must implement a full HCMS when 
partnering with LEAs. According to the commenter, this change would 
allow SEAs and other group applicants to form partnerships with LEAs 
while also maintaining their flexibility to apply for a different scope 
of work, such as a PBCS, educator evaluation system, or salary 
structure overhaul.
    Discussion: We are not certain that we understand this comment 
fully. We believe that the commenter recommended that we not require 
SEAs or nonprofit organizations that apply as part of group application 
to enter into an MOU with participating LEAs. It appears that the 
commenter believes that, in entering into such an MOU, SEAs and 
nonprofit organizations would thereby take on responsibility for the 
development of the LEAs' HCMSs. The commenter stated that, if we did 
not require SEAs or nonprofit organizations to execute such an MOU, we 
would enable them to have a different scope of work, such as the PBCS, 
educator evaluation system, or salary structure overhaul.
    It appears that the commenter misinterpreted the purpose of the MOU 
that group applicants would execute under Requirement 4. Under 
paragraph (1) the MOU would contain a commitment by each participating 
LEA to implement the HCMS, including the educator evaluation systems 
and the PBCS, described in the application, and under paragraph (5) the 
MOU must contain a description of the activities that each member of 
the group will perform. Requirement 4 does not require that an SEA or 
nonprofit organization partner must take responsibility for developing 
the HCMS. While the participating LEA(s) in the group or partnership 
application must do so, the responsibility of SEA or nonprofit 
organization partners, if any, to assist the LEA(s) would be determined 
by the partners and described in the MOU.
    Under Priority 1--An LEA-wide Human Capital Management System 
(HCMS) with Educator Evaluation Systems at the Center, and Requirement 
1--Performance-Based Compensation for Teachers, Principals, and Other 
Personnel, each participating LEA must have a TIF-funded PBCS that is 
implemented as part of an LEA-wide HCMS. As we have explained elsewhere 
in this notice, we believe that integrating a PBCS within an LEA's 
larger HCMS will help ensure that the PBCS is a successful mechanism 
for improving classroom instruction and educator effectiveness, and 
that an LEA is more likely to sustain a PBCS that is embedded within a 
comprehensive HCMS. All TIF applications, whether from individual LEAs 
or from groups of LEAs, SEAs, or nonprofit organizations, must propose 
ways to ensure that the participating LEA(s) implement this 
responsibility, but how a group does this is up to the group to decide. 
We, therefore, decline to make a change in the requirement based on 
this comment.
    Changes: None.

Requirement 5--Submitting an Application for One Competition

    Comment: None.
    Discussion: In reviewing proposed Requirement 5--Submitting an 
Application for One Competition, under which all eligible applicants 
were prohibited from applying to both competitions offered in any 
fiscal year, the Department has determined that this restriction was 
overly broad. With this restriction, our original intent was to 
encourage each applicant to develop one high-quality application that 
reflects the goals of the participating LEAs that will implement the 
new evaluation systems, HCMS, and PBCS. Based on this rationale, we 
have now determined that the restriction of one application per fiscal 
year need only apply to LEAs. Further, the Department has decided to 
rephrase this restriction to clarify that an LEA can participate in 
only one application--an application in the General TIF Competition or 
an application in the TIF Competition with a Focus on STEM. This means 
that an LEA may be included in only one application for one competition 
in any fiscal year--whether it applies on its own or with a group of 
LEAs, an SEA, or a nonprofit organization. Because the LEA will be the 
primary actor in any TIF project, the Department believes that this 
clarification is essential to avoid multiple awards for the same 
project.
    The Department has also determined that its goals can be achieved 
by allowing an SEA to participate in a group application for one 
competition (General) and to participate in another group application 
for the other competition (TIF Competition with a Focus on STEM) so 
long as the LEAs in each group application are different. To minimize 
the risk of double funding, an SEA can participate in only one 
application for each competition.
    Similarly, with the focus on not having multiple applications from 
any one LEA, the Department has decided not to restrict the number of 
group applications in which a nonprofit organization can participate. 
If two or more applications from the same entity

[[Page 35781]]

(an SEA or a non-profit) are successful, the Department will allocate 
any overlapping costs to the appropriate grant during the post-award 
period.
    Changes: The Department has revised Requirement 5-- Submitting an 
Application for One Competition to stipulate the number of 
applications, and the number of competitions, that any applicant may 
participate in during any fiscal year, with special rules for LEAs, 
SEAs, and nonprofits. In new paragraph (a) of this requirement, we 
state that an LEA may participate in only one application in any fiscal 
year. In new paragraph (b) of this requirement, we state that an SEA 
may participate in a group application for each of the competitions in 
any fiscal year. In new paragraph (c) of this requirement, we state 
that a non-profit organization may participate in an unlimited number 
of group applications for each competition in any fiscal year. Finally, 
to be consistent with the substantive changes to this requirement, we 
have changed the name of the requirement to ``Limitations on Multiple 
Applications.''

Requirement 6--Use of TIF Funds To Support the PBCS

    Comment: In the NPP, we requested comments regarding the use of TIF 
funds to support the full amount of salary and salary augmentations 
associated with career ladder positions and other additional 
responsibilities and leadership roles. We received several comments 
responding to this request. Two commenters recommended that we fund 
only salary augmentations, and not full salaries, for career ladder 
positions. One of those two commenters noted that this approach would 
be more consistent with our goal of enhancing project sustainability. 
At the same time, the commenter recommended that we place no limit on 
salary augmentations associated with additional responsibilities and 
leadership roles because this compensation may be more effective for 
improving student outcomes than compensation awarded strictly on the 
basis of educator performance.
    Several commenters recommended that we support the cost of both 
salaries and salary augmentations, even in spite of, according to one 
commenter, the potential risks to project sustainability. These 
commenters noted that master teachers have the greatest impact when 
they are fully released from instructional responsibilities to provide 
full-time support to other teachers (e.g., by analyzing data, 
conducting evaluations, coaching teachers individually, and 
facilitating instructional team meetings); however, LEAs often do not 
have the funding to support non-instructional positions. Therefore, 
without TIF support, most LEAs could not fully release their master 
teachers from instructional responsibilities. One commenter shared that 
its LEA could not continue to support full-time master teacher 
positions without TIF support, even though the LEA currently relies on 
an assortment of Federal, State, and local funds. Several commenters 
recommended that we fund one salary augmentation and one salary for a 
given number of classroom teachers to allow for appropriate TIF support 
that meets the needs of small and large schools.
    Specifically, a few commenters recommended that we fund the full-
time salary of one fully-released master teacher for every 15 classroom 
teachers and, additionally, the salary augmentation for one mentor 
teacher, who would retain some instructional responsibilities, for 
every eight regular classroom teachers. One commenter recommended a 
ratio of one master teacher for every 12 to 15 classroom teachers and 
one mentor teacher for every six to eight classroom teachers. While 
acknowledging this approach may cause concern for project 
sustainability, one commenter argued that financial support is critical 
for ensuring that career ladder positions have a strong foundation for 
lasting implementation.
    Discussion: We greatly appreciate all of the thoughtful comments 
provided on this critical issue. After careful consideration of the 
recommendations provided, we have revised Requirement 6--Use of TIF 
Funds to Support the PBCS to limit the amount of TIF funds available to 
support the costs of career ladder positions and other additional 
responsibilities and leadership roles for teachers.
    In setting this limit, we balance several considerations, including 
the desire to promote the sustainability of projects funded by the TIF 
program while also promoting the routine delivery of job-embedded 
professional development in the high-need schools. While the 
availability of TIF support should not encourage applicants to propose 
projects too large to sustain beyond the grant's project period, TIF 
funds should provide applicants, and their stakeholders, an opportunity 
to realize the benefits of full-time, fully-released career ladder 
positions for providing high-quality, job-embedded professional 
development. By providing this opportunity, we believe Requirement 6 
will increase the likelihood that career ladder positions will garner 
the support, including financial support, needed to sustain the 
applicant's PBCS once grant funds are spent.
    For these reasons, we are revising Requirement 6 to allow 
applicants to use TIF funds for full-time salaries of teachers in 
career ladder positions in participating high-need schools up to a 
ceiling. As suggested by several commenters, this ceiling is expressed 
as a ratio. We carefully considered the recommendations made by 
commenters based on current work in the field regarding individuals in 
career ladder positions, such as master teacher, mentor teacher, and 
others, taking on additional roles and responsibilities. Our approach 
differs from commenters' recommendations by providing one ratio for 
both career ladder positions and other additional roles and 
responsibilities to allow for the greatest flexibility for project 
design to best meet local needs.
    In light of these recommendations, we have determined that TIF 
funds may support the cost of up to one full-time equivalent position 
for every 12 teachers who are not in a career ladder position in the 
high-need schools listed in response to paragraph (a) of Requirement 
3--Documentation of High-Need Schools. This ratio falls within the 
range of the commenters recommendations. Further, we believe that the 
ratio reflects an appropriate use of TIF dollars for additional 
responsibilities and leadership roles, particularly in view of the 
flexibility provided to grantees to configure the various positions 
that TIF funds would support.
    Thus, if there are 48 classroom teachers in these participating 
high-need schools, TIF funds may be used to support the full-time 
salary of up to four career ladder positions. This approach provides 
applicants with significant flexibility by enabling an LEA to design 
its program of additional responsibilities and leadership roles using 
only full-time career ladder positions, only part-time positions, or 
some combination of both, as necessary to implement either PBCS Design 
Model 1 or Design Model 2. Thus, in the preceding example, while TIF 
funds could support four full-time positions, the applicant could elect 
instead to use the amount of available funds differently. For example, 
rather than supporting four full-time positions, the applicant could 
use TIF funds to support two full-time positions and four half-time 
positions. In the latter case, TIF funds would support two salaries and 
four salary augmentations (i.e., an additional amount of compensation 
over

[[Page 35782]]

and above what the LEA would otherwise pay the effective teacher).
    Further, we intend for this limitation to apply to compensation for 
both career ladder positions and educators who take on additional 
responsibilities and leadership roles in accordance with the 
priorities, requirements, and definitions in this notice. In the 
preceding example, an applicant using Design Model 1 may use TIF-funds 
to support the costs of two full-time positions, and four salary 
augmentations for effective teachers who accept additional 
responsibilities and leadership roles. As several commenters noted, 
both full-time and part-time career ladder positions, and similar 
activities, can play a critical role in supporting teacher growth and 
student outcomes.
    Changes: We have revised Requirement 6--Use of TIF Funds to Support 
the PBCS to clarify that applicants may use TIF funds to support the 
costs of both salaries and salary augmentations up to the cost of one 
full-time equivalent position for every 12 teachers who are not in a 
career ladder position in the high-need schools identified in response 
to paragraph (a) of Requirement 3--Documentation of High-Need Schools. 
This new element of the requirement appears in paragraph (b)(3) of 
Priority 5.
    Comment: Two commenters requested that we allow TIF funds to be 
used to assist schools that are not high-need. One commenter requested 
that we allow applicants to use TIF funds to assist all schools within 
an LEA or a State. A second commenter requested that we allow TIF funds 
to be used to provide professional development to schools that are not 
high-need because doing so would allow for the efficient use of scarce 
resources without harm to the high-need schools.
    Discussion: While the Department does not dispute the potential 
advantages of LEA-wide PBCSs or professional development opportunities, 
the statutory authority for the TIF program does not allow applicants 
to use TIF funds to support performance-based compensation for 
educators working in schools that are not high-need. By law, TIF funds 
may be used only for additional compensation to teachers, principals, 
and other personnel who work in high-need schools. While the 
authorizing statute also permits TIF funds to be used to help develop 
and implement the tools and systems, such as evaluation systems, that 
would be needed to implement a PBCS in non-high-need schools and that 
would help to identify what professional development educators in non-
high-need schools may need, additional compensation and professional 
development for teachers, principals, and other personnel who work in 
non-high-need schools must be paid for with non-TIF funds.
    Changes: None.
    Comment: One commenter asked whether TIF funds may be used for 
direct services for students. Specifically, the commenter asked whether 
TIF funds could be used to support a STEM Academy for students run by 
effective teachers taking on career ladder positions or other 
additional responsibilities and leadership roles.
    Discussion: Under the priorities, requirements, and definitions in 
this notice, TIF funds generally may not be used to provide direct 
services to students. Given the purpose of the TIF program, we have 
trouble envisioning how TIF funds may be used to provide direct 
services for students except perhaps, under PBCS Design Model 1, as 
part of an LEA's incentives for effective teachers to take on 
additional leadership roles and responsibilities. In this regard, the 
definition of additional responsibilities and leadership roles provides 
that these are ``meaningful school-based responsibilities that teachers 
may voluntarily accept to strengthen instruction or instructional 
leadership in a systemic way''. So any direct services to students 
would need to be provided within the context of strengthening 
instruction or instructional leadership in a systemic way.
    To the extent that (1) the additional responsibilities and 
leadership roles assumed by the teachers in a STEM academy involve the 
provision of direct services to students, and (2) the STEM academy is 
located in a high-need school that is identified in response to 
paragraph (a) of Requirement 3--Documentation of High-Need Schools, TIF 
funds may be used for incentives for the academy's teachers to take on 
these additional responsibilities and leadership roles.
    Changes: None.
    Comment: One commenter requested that the Department allow grantees 
to use TIF funds to address specific components of an LEA's broader 
HCMS. For example, the commenter stated that the Department should 
allow an LEA that already has a robust teacher evaluation system to use 
TIF funds to build and implement a principal evaluation system as long 
as the LEA demonstrates alignment between the two.
    Discussion: TIF funds may be used to support the development and 
implementation of the PBCS in the high-need schools identified in 
response to paragraph (a) of Requirement 3--Documentation of High-Need 
Schools. TIF funds may also be used both to support (1) the development 
and improvement of systems and tools that are necessary to implement 
the PBCS under the priorities, requirements, and definitions contained 
in this notice, and (2) the processes the LEA uses to act on the 
information generated by these systems and tools, for example, in 
determining to whom to award performance-based compensation. In keeping 
with these general principles, TIF funds may be used for costs needed 
to make proposed modifications to an LEA's HCMS that are needed to 
address Priority 1--An LEA-Wide Human Capital Management System (HCMS) 
with Educator Evaluation Systems at the Center, where these costs are 
reasonable and necessary for the development or improvement of systems 
and tools that support the PBCS.
    Further, consistent with the TIF authorizing statute, TIF funds may 
be used for the development and improvement of systems and tools that 
support the PBCS and benefit the entire LEA, but not for the LEA-wide 
implementation of these systems and tools. Therefore, the salaries of 
staff who are charged with implementing these systems and tools that 
would be charged to TIF funds are subject to basic principles regarding 
allocation of costs charged to Federal grant funds among different 
programs or cost objectives. For example, given the timelines in this 
notice, the costs related to new evaluation systems can be considered 
development and improvement costs up to the first year of LEA-wide 
implementation. From the beginning of the first year of LEA-wide 
implementation, these costs would no longer be considered development 
or improvement costs for purposes of the TIF program; rather, they are 
implementation costs, which TIF funds cannot support on an LEA-wide 
basis. Under generally applicable Federal cost principles related to 
cost allocation, TIF funds may only support that proportion of the 
total implementation costs that benefit the high-need schools 
identified in response to paragraph (a) of Requirement 3--Documentation 
of High-Need Schools.
    Changes: None.
    Comment: None.
    Discussion: As proposed, Requirement 6--Use of TIF Funds to Support 
the PBCS generally restricted grantees from using TIF funds to 
compensate educators except in two circumstances: when the compensation 
is part of the PBCS or involves compensating an educator who is

[[Page 35783]]

employed or hired to help administer the TIF project. The Department 
has determined that a third exception to the general restriction is 
appropriate. This third exception would allow grantees to use TIF funds 
to compensate educators who work in high-need schools identified in the 
application as included in the TIF project for attending professional 
development that addresses needs identified through the educators' 
evaluation results and that educators need to enable them to benefit 
from the PBCS. As the provision of professional development to these 
educators with TIF funds is itself permissible, we view payment of 
reasonable and necessary compensation to educators for their time 
attending TIF-related professional development outside of official duty 
hours as likewise permissible. In this situation, TIF funds may only be 
used to compensate educators if the PBCS-related professional 
development they attend occurs outside of the educators' official duty 
hours.
    Changes: We have revised the last paragraph of this requirement 
(paragraph (c)) to clarify that TIF funds may be used to compensate 
educators for attending TIF-related professional development outside 
their official duty hours.

Requirement 7--Limitation on Using TIF Funds in High-Need Schools 
Served by Existing TIF Grants

    We received no comments regarding Requirement 7.

Definitions

Performance-based Compensation System (PBCS)

    Comment: One commenter requested that we clarify paragraph (b)(1) 
of the definition of performance-based compensation system (PBCS). This 
paragraph describes the optional recruitment components of a PBCS. This 
commenter recommended that we revise this paragraph to specify that 
additional compensation may be provided to educators transferring from 
one high-need school to another and to first-year teachers in a high-
need school. The commenter stated that this change would help high-need 
schools address common challenges with recruitment and retention.
    Discussion: It was not our intent in the NPP to allow TIF-funded 
PBCSs to support either educator recruitment for first year teachers, 
for whom there may be no evaluation information available, or educator 
transfers between high-need schools. These proposals would not 
necessarily support the overall purpose of the TIF program--to improve 
educator effectiveness and student achievement in high-need schools. 
However, nothing in this notice precludes applicants from proposing to 
use non-TIF funds to provide additional compensation to first-year 
teachers or to effective educators who transfer from one high-need 
school to another.
    Changes: None.
    Comment: One commenter requested that we revise paragraph (b)(1) of 
the definition of performance-based compensation by removing the 
requirement that compensation for educators who previously worked in 
another LEA and who are hired to work in a high-need school be based on 
an overall evaluation rating of effective or higher under evaluation 
systems that are comparable to the applicant's proposed evaluation 
systems. The commenter expressed concern that this element of the 
definition would increase applicant burden, as applicants would have to 
investigate the evaluation systems of other LEAs.
    Discussion: The TIF authorizing statute requires that TIF-funded 
performance-based compensation be provided on the basis of a PBCS that 
considers student growth, multiple observations, and other factors. In 
the case of an educator hired from another LEA, payment of performance-
based compensation would thus be based on the new LEA's PBCS--not the 
former LEA in which the educator had worked. Accordingly, applicants 
may not use TIF funds to provide additional compensation to educators 
transferring from another LEA, where those educators have not been 
evaluated using factors that are comparable to the receiving LEA's 
proposed evaluation system and the provisions of the TIF authorizing 
statute. While we acknowledge that there is some burden associated with 
investigating another LEA's educator evaluation system, the only 
alternative to the exception we have provided would be to prohibit 
payment of additional compensation to educators who previously worked 
in another LEA and who are hired to work in a high-need school. We 
believe the exception we have provided is preferable.
    Changes: None.

Rural Local Educational Agency

    Comment: None.
    Discussion: We have modified Priority 4 to give priority to 
applicants that propose to serve only rural LEAs to help ensure 
geographic diversity. The Department needs to define the term ``rural 
local educational agency'' for the purpose of this notice. In 
developing this definition, the Department chose to highlight those 
LEAs eligible to receive funds under the Department's Rural Education 
Achievement Program, including the Small Rural School Achievement 
program and the Rural and Low-Income School program.
    Changes: We have defined ``rural local educational agency'' in this 
notice as an LEA that is eligible under the Small Rural School 
Achievement program or the Rural and Low-Income School program 
authorized under Title VI, Part B of the ESEA.

Student Growth

    Comment: One commenter recommended that we amend the definition of 
student growth to reduce the emphasis on standardized tests, and 
promote the use of other assessment instruments and other measures, in 
order to avoid incenting teachers to teach to the test and to ensure 
that educators provide instruction that promotes 21st century skills.
    Discussion: As mentioned elsewhere in this notice, Congress has 
authorized and appropriated funds for the TIF program to support the 
development of PBCSs that consider gains in student achievement (i.e., 
student growth), and the Department believes that student growth is a 
meaningful measure of teacher and principal effectiveness that should 
be a significant part of rigorous, transparent, and fair evaluation 
systems that include multiple measures. The Department strongly 
disagrees with the notion that the existence of cheating reflects on 
the merits of standardized testing or the usage of standardized test 
data for accountability purposes. Moreover, the Department believes 
that standardized testing has no special vulnerability to this type of 
behavior; rather, under any system of educational accountability, we 
must work to ensure that the metrics used are as fair, transparent, and 
rigorous as possible. Further, under the definition of student growth 
in this notice, applicants have broad flexibility to select the 
assessments used to measure student achievement for those grades and 
subjects not required to be assessed under section 1111(b)(3) of the 
ESEA, and to supplement the assessments in grades and subjects that are 
required under section 1111(b)(3) with other measures of student 
learning. For these reasons, we decline to amend the definition of 
student growth as requested by the commenter.
    Changes: None.

Vision of Instructional Improvement

    Comment: Two commenters requested that we expand the definition of 
vision of instructional improvement to include

[[Page 35784]]

cultural competency, classroom management, social and emotional 
learning, and conflict prevention and resolution among the key 
competencies for which LEAs must evaluate educators. One of the 
commenters noted that school safety, school discipline, and academic 
achievement are interlinked, and cited research showing that positive, 
evidence-based and preventative approaches to discipline resulted in 
higher attendance, achievement, and teacher morale.
    Discussion: The Department agrees that competencies related to 
school climate may support educator efforts to help students attain 
higher levels of academic achievement. At the same time, however, we do 
not believe it is necessary or appropriate to require LEAs 
participating in a TIF project to develop or amend their vision of 
instructional improvement in any particular way. Rather, to meet 
Priority 1, applicants must articulate how their HCMS aligns or will 
align with the LEA's vision, leaving to the LEA whether it chooses to 
adjust it for purposes of implementing a TIF-funded project. Therefore, 
we decline to amend the definition of vision of instructional 
improvement to include specific competencies as recommended by the 
commenters.
    Changes: None.

Selection Criteria

    Comment: One commenter recommended that we revise Selection 
Criterion (a)--A Coherent and Comprehensive Human Capital Management 
System (HCMS), to reward applicants who have in place policies that 
support the usage of evaluation information from human capital 
decision-making.
    Discussion: The Department agrees with the commenter's 
recommendation, and has amended Selection Criterion (a)(2)(iii) to 
allow the Secretary to provide more points to applicants whose local 
policies would support the usage of evaluation information for human 
capital decision-making.
    Changes: The Department has amended Selection Criterion (a)(2)(iii) 
to allow the Secretary to consider the extent to which the LEA has 
applicable LEA-level policies that might either inhibit or facilitate 
modifications needed to use educator effectiveness as a factor in human 
capital decision-making.
    Comment: Two commenters recommended the addition of new measures to 
Selection Criteria (b)(5) and (b)(6)(Rigorous, Valid, and Reliable 
Educator Evaluation Systems). One commenter requested that we amend 
Selection Criterion (b) to encourage applicants to use a range of 
prescribed factors, reflective of a principal's many responsibilities, 
to evaluate principal performance. Another commenter suggested that we 
amend Selection Criterion (b) to encourage applicants to develop 
comprehensive evaluations, where multiple factors are equally weighted 
in each applicant's proposed evaluation rubric, instead of evaluations 
where student growth receives significant weight. According to this 
commenter, comprehensive evaluations will properly assess whether 
students are provided the opportunities to learn 21st century skills 
without giving educators incentives to push students out of school or 
take steps to artificially raise test scores.
    Discussion: We agree with the commenters that there are merits to 
using a range of factors to evaluate principal and teacher 
effectiveness. However, the Department believes that applicants should 
have the flexibility to select which other factors, apart from student 
growth and multiple evaluations, that they will use as part of their 
evaluation rubrics. We decline to prescribe factors beyond those 
required by statute, and outlined in Selection Criterion (b).
    Changes: None.
    Comment: Two commenters recommended that we make changes to 
Selection Criterion (c)--Professional Development Systems to Support 
the Needs of Teachers and Principals Identified Through the Evaluation 
Process, to encourage applicants to propose strong, evidence-based 
professional development supports as part of their TIF project. One 
commenter stated that, to remain consistent with research and best 
practice, we should amend Selection Criterion (c) to encourage 
applicants to propose professional development opportunities that are 
both job-embedded and ongoing. Another commenter recommended that we 
amend Selection Criterion (c) to award additional points to applicants 
who provide a methodology for examining the impact of their proposed 
professional development on student growth and instructional practice.
    Discussion: We agree that applicants should propose ongoing, job-
embedded supports as part of the professional development opportunities 
offered to educators, and have amended Selection Criterion (c)(3) 
accordingly. With respect to the comment regarding awarding additional 
points to applicants who provide a methodology for examining the impact 
of the proposed professional development on student growth and 
instructional practice, we believe such a change is unnecessary. We 
believe that our new Selection Criterion (c)(3) is sufficient to 
encourage applicants to propose school-based, job-embedded professional 
development opportunities likely to improve instructional and 
leadership practice, without prescribing how applicants should 
demonstrate that these supports are effective.
    Changes: The Department has revised Selection Criterion (c) by 
adding a new paragraph (3) under which the Department will consider the 
extent to which each participating LEA has a high-quality plan to 
provide school-based, job-embedded opportunities for educators to 
transfer new knowledge into instructional and leadership practices.
    Comment: One commenter suggested that we amend Selection Criterion 
(f)--Sustainability, to allow an applicant to make adjustments and 
improvements to its PBCS, as needed, during and after the project 
period has ended. Citing what the commenter considered a model 
performance-based compensation system, which differs significantly from 
the pilot project that preceded it, the commenter expressed concern 
that proposed Selection Criterion (f) would not allow for the continual 
improvement that was critical for bringing that system to its current 
state.
    Discussion: We do not agree that Selection Criterion (f) precludes 
an applicant from making adjustments and improvements to its educator 
evaluation systems and PBCS.
    Moreover, the Department certainly agrees that it is important to 
continually improve projects based on a formal project evaluation. In 
this regard, under Selection Criterion (e)--Project Management, an 
applicant will be awarded points depending on the extent to which its 
management plan includes an effective evaluation plan. The Department 
also believes that any adjustments and improvements made to a project 
based on the results of a formal evaluation that examines the project 
during various phases of implementation can help ensure the project's 
long-term sustainability.
    Regardless of how applications are evaluated, grantees are free to 
work to continually improve their projects once awarded a TIF grant. We 
fully expect all grantees to make adjustments and improvements in their 
projects subject to the following conditions: That any changes that 
might affect the scope of the project first receive Department 
approval, and that the project remain consistent with their approved 
applications and the priorities,

[[Page 35785]]

requirements and definitions contained in this notice.
    Changes: None.
    Comment: One commenter expressed concern that minimal attention is 
given to project evaluation under Selection Criterion (e)--Project 
Management; this commenter requested that we add a new selection 
criterion focused on project evaluation. The commenter noted that, as 
many educators and school officials are skeptical of performance-based 
compensation, rigorous and independent evaluation of each project would 
help to increase the credibility of compensation reforms.
    Discussion: The Department fully agrees that an evaluation of each 
TIF project would help to build the evidence supporting performance-
based compensation, and, therefore, local support both for sustaining 
the PBCS beyond the project period and, more generally, for 
compensation reform based on PBCSs. For this reason, we proposed and 
have included Selection Criterion (e)(4) so that when evaluating 
applications, we can award points based on the effectiveness of the 
project evaluation plans included in the applications. Further, the 
Department has recently invested in two rigorous, national evaluations 
of performance-based compensation--one of which is an evaluation of 
grantees that received funds under the TIF fiscal year 2010 competition 
(the TIF 2010 competition)--that will provide the field with 
information related to the commenter's request. For these reasons, we 
decline to include a new selection criteria focused on project 
evaluation.
    Changes: None.
    Comment: One commenter recommended that we add a new selection 
criterion, under which we would award points to those applicants that 
articulate how they will modify and improve their project, as needed, 
with the goal of continual improvement.
    Discussion: The Department agrees that it is important for TIF 
grantees to continually improve projects, whether based on a formal 
project evaluation or other data the grantee gathers about project 
implementation. That said, the Department does not believe it is 
necessary to include a new selection criterion solely focused on the 
goal of continual improvement. Under Selection Criterion (e)--Project 
Management, an applicant will receive points depending on the extent to 
which the proposed project's management plan includes an effective 
evaluation plan. In addition, we expect all grantees during the course 
of their project period to work to secure and examine data with which 
to continually improve their projects and project outcomes, consistent 
with their approved applications and the priorities, requirements, and 
definitions contained in this notice.
    Changes: None.

Final Priorities

    The Assistant Secretary establishes the following 5 priorities for 
the TIF program. The Assistant Secretary may apply one or more of these 
priorities in FY 2012 and later years in which this program is in 
effect.

Priority 1--An LEA-Wide Human Capital Management System (HCMS) With 
Educator Evaluation Systems at the Center

    To meet this priority, the applicant must include, in its 
application, a description of its LEA-wide HCMS, as it exists currently 
and with any modifications proposed for implementation during the 
project period of the grant. The application must describe--
    (1) How the HCMS is or will be aligned with the LEA's vision of 
instructional improvement;
    (2) How the LEA uses or will use the information generated by the 
evaluation systems it describes in its application to inform key human 
capital decisions, such as decisions on recruitment, hiring, placement, 
retention, dismissal, compensation, professional development, tenure, 
and promotion;
    (3) The human capital strategies the LEA uses or will use to ensure 
that high-need schools are able to attract and retain effective 
educators; and
    (4) Whether or not modifications are needed to an existing HCMS to 
ensure that it includes the features described in response to 
paragraphs (1), (2), and (3) of this priority, a timeline for 
implementing the described features, provided that the use of 
evaluation information to inform the design and delivery of 
professional development and the award of performance-based 
compensation under the applicant's proposed PBCS in high-need schools 
begins no later than the third year of the grant's project period in 
the high-need schools listed in response to paragraph (a) of 
Requirement 3--Documentation of High-Need Schools.

    Note:  TIF funds can be used to support the costs of the systems 
and strategies described under this priority, Priority 3--Improving 
Student Achievement in Science, Technology, Engineering, and 
Mathematics (STEM), and Priority 5--An Educator Salary Structure 
Based on Effectiveness only to the extent allowed under Requirement 
6--Use of TIF Funds to Support the PBCS.

Priority 2: LEA-Wide Educator Evaluation Systems Based, in Significant 
Part, on Student Growth.

    To meet this priority, an applicant must include, as part of its 
application, a plan describing how it will develop and implement its 
proposed LEA-wide educator evaluation systems. The plan must describe--
    (1) The frequency of evaluations, which must be at least annually;
    (2) The evaluation rubric for educators that includes at least 
three performance levels and the following--
    (i) Two or more observations during each evaluation period;
    (ii) Student growth, which for the evaluation of teachers with 
regular instructional responsibilities must be growth at the classroom 
level; and
    (iii) Additional factors determined by the LEA;
    (3) How the evaluation systems will generate an overall evaluation 
rating that is based, in significant part, on student growth; and
    (4) The applicant's timeline for implementing its proposed LEA-wide 
educator evaluation systems. Under the timeline, the applicant must 
implement these systems as the LEA's official evaluation systems for 
assigning overall evaluation ratings for at least a subset of educators 
or schools no later than the beginning of the second year of the 
grant's project period. The applicant may phase in the evaluation 
systems by applying them, over time, to additional schools or educators 
so long as the new evaluation systems are the official evaluation 
systems the LEA uses to assign overall evaluation ratings for all 
educators within the LEA no later than the beginning of the third year 
of the grant's project period.

Priority 3: Improving Student Achievement in Science, Technology, 
Engineering, and Mathematics (STEM)

    To meet this priority, an applicant must include a plan in its 
application that describes the applicant's strategies for improving 
instruction in STEM subjects through various components of each 
participating LEA's HCMS, including its professional development, 
evaluation systems, and PBCS. At a minimum, the plan must describe--
    (1) How each LEA will develop a corps of STEM master teachers who 
are skilled at modeling for peer teachers pedagogical methods for 
teaching STEM skills and content at the appropriate grade level by 
providing additional compensation to teachers who--
    (i) Receive an overall evaluation rating of effective or higher 
under the evaluation system described in the application;

[[Page 35786]]

    (ii) Are selected based on criteria that are predictive of the 
ability to lead other teachers;
    (iii) Demonstrate effectiveness in one or more STEM subjects; and
    (iv) Accept STEM-focused career ladder positions;
    (2) How each LEA will identify and develop the unique competencies 
that, based on evaluation information or other evidence, characterize 
effective STEM teachers;
    (3) How each LEA will identify hard-to-staff STEM subjects, and use 
the HCMS to attract effective teachers to positions providing 
instruction in those subjects;
    (4) How each LEA will leverage community support, resources, and 
expertise to inform the implementation of its plan;
    (5) How each LEA will ensure that financial and non-financial 
incentives, including performance-based compensation, offered to reward 
or promote effective STEM teachers are adequate to attract and retain 
persons with strong STEM skills in high-need schools; and
    (6) How each LEA will ensure that students have access to and 
participate in rigorous and engaging STEM coursework.

Priority 4: New or Rural Applicants to the Teacher Incentive Fund

    To meet this priority, an applicant must provide at least one of 
the two following assurances, which the Department accepts:
    (a) An assurance that each LEA to be served by the project has not 
previously participated in a TIF-supported project.
    (b) An assurance that each LEA to be served by the project is a 
rural local educational agency (as defined in this notice).

Priority 5: An Educator Salary Structure Based on Effectiveness

    To meet this priority, an applicant must propose, as part of its 
PBCS, a timeline for implementing no later than in the fifth year of 
the grant's project period a salary structure based on effectiveness 
for both teachers and principals. As part of this proposal, an 
applicant must describe--
    (a) The extent to which and how each LEA will use overall 
evaluation ratings to determine educator salaries;
    (b) How each LEA will use TIF funds to support the salary structure 
based on effectiveness in the high-need schools listed in response to 
Requirement 3(a); and
    (c) The extent to which the proposed implementation is feasible, 
given that implementation will depend upon stakeholder support and 
applicable LEA-level policies.

    Note:  To meet Priority 2--LEA-wide Educator Evaluation Systems 
Based, in Significant Part, on Student Growth, an applicant must 
implement its proposed PBCS in the high-need schools listed in 
response to paragraph (a) of Requirement 3--Documentation of High-
Need Schools by the beginning of the third year of the grant's 
project period. If the timeline for implementing the salary 
structure proposed under this Priority 5 does not meet that 
deadline, the applicant must describe, under Requirement 1--
Performance-Based Compensation for Teachers, Principals, and Other 
Personnel, a proposed PBCS that the LEA will implement until the 
proposed salary structure is implemented.

Types of Priorities

    When inviting applications for a competition using one or more 
priorities, we designate the type of each priority as absolute, 
competitive preference, or invitational through a notice in the Federal 
Register. The effect of each type of priority follows:
    Absolute priority: Under an absolute priority, we consider only 
applications that meet the priority (34 CFR 75.105(c)(3)).
    Competitive preference priority: Under a competitive preference 
priority, we give competitive preference to an application by (1) 
awarding additional points, depending on the extent to which the 
application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) 
selecting an application that meets the priority over an application of 
comparable merit that does not meet the priority (34 CFR 
75.105(c)(2)(ii)).
    Invitational priority: Under an invitational priority, we are 
particularly interested in applications that meet the priority. 
However, we do not give an application that meets the priority a 
preference over other applications (34 CFR 75.105(c)(1)).

Final Requirements

    The Assistant Secretary establishes the following requirements for 
the TIF program. The Assistant Secretary may apply one or more of these 
requirements in FY 2012 and later years in which this program is in 
effect. These requirements are in addition to the statutory 
requirements that apply to the program and any priorities, definitions, 
and selection criteria we announce in the notice inviting applications 
for a TIF competition.

Requirement 1--Performance-Based Compensation for Teachers, Principals, 
and Other Personnel

    In its application, an applicant must describe, for each 
participating LEA, how its proposed PBCS will meet the definition of a 
PBCS set forth in this notice.

    Note:  The following charts illustrate how applicants can design 
their PBCS to meet the definition of PBCS. Chart 1 describes the two 
types of design models that meet the statutory requirements. Chart 2 
identifies additional optional features that could be implemented as 
part of a PBCS. To ensure that funded applications reflect a 
diversity of PBCSs, the Secretary reserves the right to fund a 
sufficient number of high-quality Design Model 1 and Design Model 2 
projects, as shown in Chart 1.


       Chart 1--PBCS Design Options To Meet Statutory Requirements
------------------------------------------------------------------------
         Design model                      Mandatory elements
------------------------------------------------------------------------
1 *..........................  Proposed PBCS provides both of the
                                following:
    * Corresponds to              (1) Additional compensation for
     paragraph (a)(1) of the       teachers and principals who receive
     PBCS definition.              an overall rating of effective or
                                   higher under the evaluation systems
                                   described in the application.
                               (2) Of those teachers and principals
                                eligible for compensation under
                                paragraph (1), additional compensation
                                for teachers and, at the applicant's
                                discretion, for principals, who take on
                                additional responsibilities and
                                leadership roles (as defined in this
                                notice).
2\*\.........................  Proposed PBCS provides both of the
                                following:
    * Corresponds to              (1) Additional compensation for
     paragraph (a)(2) of the       teachers who receive an overall
     PBCS definition.              rating of effective or higher under
                                   the evaluation system described in
                                   the application and who take on
                                   career ladder positions (as defined
                                   in this notice).
                               (2) Additional compensation for one or
                                both of the following:
                                  (A) Principals who receive an overall
                                   rating of effective or higher under
                                   the evaluation system described in
                                   the application, or

[[Page 35787]]

 
                                  (B) Principals who receive an overall
                                   rating of effective or higher under
                                   the evaluation system described in
                                   the application and who take on
                                   additional responsibilities and
                                   leadership roles (as defined in this
                                   notice).
------------------------------------------------------------------------


                     Chart 2--PBCS Optional Features
------------------------------------------------------------------------
                                           Optional elements
------------------------------------------------------------------------
Compensation for Transfers to  Proposed PBCS provides additional
 High-Need Schools.             compensation for educators (which at the
                                applicant's option may be for teachers
                                or principals or both) who receive an
                                overall rating of effective or higher
                                under the evaluation systems described
                                in the application or under comparable
                                evaluation systems in another LEA, and
                                who either:
                                  (1) Transfer to a high-need school
                                   from a school of the LEA that is not
                                   high-need, or
                                  (2) For educators who previously
                                   worked in another LEA, are hired to
                                   work in a high-need school.
Compensation for Other         Proposed PBCS provides additional
 Personnel.                     compensation for other personnel, who
                                are not teachers or principals, based on
                                performance standards established by the
                                LEA so long as those standards, in
                                significant part, include student
                                growth, which may be school-level
                                student growth.
------------------------------------------------------------------------

Requirement 2--Involvement and Support of Teachers and Principals

    In its application, the applicant must include--
    (a) Evidence that educators in each participating LEA have been 
involved, and will continue to be involved, in the development and 
implementation of the PBCS and evaluation systems described in the 
application;
    (b) A description of the extent to which the applicant has educator 
support for the proposed PBCS and educator evaluation systems; and
    (c) A statement indicating whether a union is the exclusive 
representative of either teachers or principals in each participating 
LEA.

    Note:  It is the responsibility of the grantee to ensure that, 
in observing the rights, remedies, and procedures afforded school or 
school district employees under Federal, State, or local laws 
(including applicable regulations or court orders) or under terms of 
collective bargaining agreements, memoranda of understanding, or 
other agreements between these employees and their employers, the 
grantee also remains in compliance with the priorities, 
requirements, and definitions included in this notice. In the event 
that a grantee is unable to comply with these priorities, 
requirements, and definitions, the Department may take appropriate 
enforcement action (e.g., discontinue support for the project).

Requirement 3--Documentation of High-Need Schools

    Each applicant must demonstrate, in its application, that the 
schools participating in the implementation of the TIF-funded PBCS are 
high-need schools (as defined in this notice), including high-poverty 
schools (as defined in this notice), priority schools (as defined in 
this notice), or persistently lowest-achieving schools (as defined in 
this notice). Each applicant must provide, in its application--
    (a) A list of high-need schools in which the proposed TIF-supported 
PBCS would be implemented;
    (b) For each high-poverty school listed, the most current data on 
the percentage of students who are eligible for free or reduced-price 
lunch subsidies under the Richard B. Russell National School Lunch Act 
or are considered students from low-income families based on another 
poverty measure that the LEA uses (see section 1113(a)(5) of the ESEA 
(20 U.S.C. 6313(a)(5))). Data provided to demonstrate eligibility as a 
high-poverty school must be school-level data; the Department will not 
accept LEA- or State-level data for purposes of documenting whether a 
school is a high-poverty school; and
    (c) For any priority schools listed, documentation verifying that 
the State has received approval of a request for ESEA flexibility, and 
that the schools have been identified by the State as priority schools.

Requirement 4--SEA and Other Group Applications

    (a) Applications from the following are group applications:
    (1) Any application from two or more LEAs.
    (2) Any application that includes one or more SEAs.
    (3) Any application that includes a nonprofit organization.
    (b) An applicant that is a nonprofit organization must apply in a 
partnership that includes one or more LEAs, and must identify in the 
application the LEA(s) and any SEA(s) with which the proposed project 
would be implemented.
    (c) An applicant that is an SEA must apply for a grant under this 
program as part of a group application that includes one or more LEAs 
in the same State as the SEA, and must identify in the application the 
LEA(s) in which the project would be implemented.
    (d) All group applications must include a Memorandum of 
Understanding (MOU) or other binding agreement signed by all of the 
members of the group.

At a minimum, the MOU or other agreement must include--
    (1) A commitment by each participating LEA to implement the HCMS, 
including the educator evaluation systems and the PBCS, described in 
the application;
    (2) An identification of the lead applicant;
    (3) A description of the responsibilities of the lead applicant in 
managing any grant funds and ensuring overall implementation of the 
proposed project as described in the application if approved by the 
Department;
    (4) A description of the activities that each member of the group 
will perform; and
    (5) A statement binding each member of the group to every statement 
and assurance made in the application.
    (e) In any group application identified in paragraph (a) of this 
requirement, each entity in the group is considered a grantee.

[[Page 35788]]

Requirement 5--Limitations on Multiple Applications

    (a) An LEA applicant may participate in no more than one 
application in any fiscal year.
    (b) An SEA applicant may participate in no more than one group 
application for the General TIF Competition, and no more than one group 
application for the TIF Competition with a Focus on STEM in any fiscal 
year.
    (c) Nonprofit organization applicants may participate in one or 
more group applications for the General TIF Competition, and in one or 
more applications for the TIF Competition with a Focus on STEM, in any 
fiscal year.

Requirement 6--Use of TIF Funds To Support the PBCS

(a) LEA-Wide Improvements to Systems and Tools

    TIF funds may be used to develop and improve systems and tools that 
support the PBCS and benefit the entire LEA.

(b) Performance-Based Compensation and Professional Development

    (1) High Need Schools. TIF funds may be used to provide 
performance-based compensation and related professional development in 
the high-need schools listed in response to paragraph (a) of 
Requirement 3--Documentation of High-Need Schools. TIF funds may not be 
used to provide performance-based compensation or professional 
development in schools other than those high-need schools listed in 
response to paragraph (a) of Requirement 3--Documentation of High-Need 
Schools.
    (2) PBCSs. TIF funds may be used to compensate educators only when 
the compensation is provided as part of the LEA's PBCS, as described in 
the application.
    (3) For Additional Responsibilities and Leadership Roles. When a 
proposed PBCS provides additional compensation to effective educators 
who take on additional responsibilities and leadership roles, TIF funds 
may be used for either the entire amount of salary for career ladder 
positions, or for salary augmentations (i.e., an additional amount of 
compensation over and above what the LEA would otherwise pay the 
effective teacher), or both. TIF-funds may be used to fund additional 
compensation for additional responsibilities and leadership roles up to 
the cost of 1 full-time equivalent position for every 12 teachers, who 
are not in a career ladder position, located in the high-need schools 
listed in response to Requirement 3(a).

(c) Other Permissible Types of Compensation

    Nothing in this requirement precludes the use of TIF funds to 
compensate educators who are hired by a grantee to administer or 
implement the TIF-supported PBCS, or to compensate educators who attend 
TIF-supported professional development outside their official duty 
hours, or to develop or improve systems and tools needed to support the 
PBCS.

Requirement 7--Limitation on Using TIF Funds in High-Need Schools 
Served by Existing TIF Grants

    Each applicant must provide an assurance, in its application, that, 
if successful under this competition, it will use the grant award to 
implement the proposed PBCS and professional development only in high-
need schools that are not served, as of the beginning of the grant's 
project period or as planned in the future, by an existing TIF grant.

Final Definitions

    The Assistant Secretary establishes the following definitions for 
the TIF program. The Assistant Secretary may apply one or more of these 
definitions in FY 2012 and later years in which this program is in 
effect.
    Additional responsibilities and leadership roles means:
    (a) In the case of teachers, meaningful school-based 
responsibilities that teachers may voluntarily accept to strengthen 
instruction or instructional leadership in a systemic way, such as 
additional responsibilities related to lesson study, professional 
development, and peer evaluation, and may also include career ladder 
positions.
    (b) In the case of principals, additional responsibilities and 
leadership roles that principals may voluntarily accept, such as a 
position in which an effective principal coaches a novice principal.
    Career ladder positions means school-based instructional leadership 
positions designed to improve instructional practice, which teachers 
may voluntarily accept, such as positions described as master teacher, 
mentor teacher, demonstration or model teacher, or instructional coach, 
and for which teachers are selected based on criteria that are 
predictive of the ability to lead other teachers.
    Educators means teachers and principals.
    High-need school means:
    (a) A high-poverty school, or
    (b) A persistently lowest-achieving school, or
    (c) In the case of States that have received the Department's 
approval of a request for ESEA flexibility, a priority school.
    High-poverty school means a school with 50 percent or more of its 
enrollment from low-income families, based on eligibility for free or 
reduced-price lunch subsidies under the Richard B. Russell National 
School Lunch Act, or other poverty measures that LEAs use (see section 
1113(a)(5) of the ESEA (20 U.S.C. 6313(a)(5)). For middle and high 
schools, eligibility may be calculated on the basis of comparable data 
from feeder schools. Eligibility as a high-poverty school under this 
definition is determined on the basis of the most currently available 
data.
    Human capital management system (HCMS) means a system by which an 
LEA makes and implements human capital decisions, such as decisions on 
recruitment, hiring, placement, retention, dismissal, compensation, 
professional development, tenure, and promotion.
    Other personnel means school-based personnel who are not serving in 
a teacher or principal position. Other personnel may include, for 
example, school counselors, media specialists, or para-educators.
    Performance-based compensation system (PBCS) means a system that--
    (a) Provides additional compensation for teachers and principals in 
one of the following circumstances--
    (1)(i) Design Model 1. Additional compensation for teachers and 
principals who receive an overall evaluation rating of effective or 
higher under the evaluation systems described in the application; and
    (ii) Of those teachers and principals eligible for compensation 
under paragraph (a)(1)(i) of this definition, additional compensation 
for teachers and, at the applicant's discretion, for principals, who 
take on additional responsibilities and leadership roles; or
    (2)(i) Design Model 2. Additional compensation for teachers who 
receive an overall evaluation rating of effective or higher under the 
evaluation system described in the application and who take on career 
ladder positions; and
    (ii) Additional compensation for (A) principals who receive an 
overall evaluation rating of effective or higher under the evaluation 
system described in the application, or (B) principals who receive an 
overall evaluation rating of effective or higher under the evaluation 
system described in the application and who take on additional 
responsibilities and leadership roles.
    (b) May provide the following compensation:

[[Page 35789]]

    (1) Additional compensation for educators (which at the applicant's 
option may be for teachers or principals or both) who receive an 
overall evaluation rating of effective or higher under the evaluation 
systems described in the application or under comparable evaluation 
systems in another LEA, and who either: (i) Transfer to a high-need 
school from a school of the LEA that is not high-need, or, (ii) for 
educators who previously worked in another LEA, are hired to work in a 
high-need school.
    (2) Additional compensation for other personnel, who are not 
teachers or principals, based on performance standards established by 
the LEA so long as those standards, in significant part, include 
student growth, which may be school-level student growth.
    Persistently lowest-achieving school means, as determined by the 
State:
    (i) Any Title I school in improvement, corrective action, or 
restructuring that--
    (a) Is among the lowest-achieving five percent of Title I schools 
in improvement, corrective action, or restructuring or the lowest-
achieving five Title I schools in improvement, corrective action, or 
restructuring in the State, whichever number of schools is greater; or
    (b) Is a high school that has had a graduation rate as defined in 
34 CFR 200.19(b) that is less than 60 percent over a number of years; 
and
    (ii) Any secondary school that is eligible for, but does not 
receive, Title I funds that--
    (a) Is among the lowest-achieving five percent of secondary schools 
or the lowest-achieving five secondary schools in the State that are 
eligible for, but do not receive, Title I funds, whichever number of 
schools is greater; or
    (b) Is a high school that has had a graduation rate as defined in 
34 CFR 200.19(b) that is less than 60 percent over a number of years.
    To identify the persistently lowest achieving schools, a State must 
take into account both:
    (i) The academic achievement of the ``all students'' group in a 
school in terms of proficiency on the State's assessments under section 
1111(b)(3) of the ESEA in reading/language arts and mathematics 
combined; and
    (ii) The school's lack of progress on those assessments over a 
number of years in the ``all students'' group.
    Principal means any person who meets the definition of that term 
under State or local law. At an LEA's discretion, it may also include 
an assistant or vice principal or a person in a position that 
contributes to the organizational management or instructional 
leadership of a school.
    Priority school means a school that has been identified by the 
State as a priority school pursuant to the State's approved request for 
Elementary and Secondary Education Act (ESEA) flexibility.
    Rural local educational agency means an LEA that is eligible under 
the Small Rural School Achievement program or the Rural and Low-Income 
School program authorized under Title VI, Part B of the ESEA. 
Applicants may determine whether a particular LEA is eligible for these 
programs by referring to information on the Department's Web site at 
https://www2.ed.gov/nclb/freedom/local/reap.html.
    Student growth means the change in student achievement for an 
individual student between two or more points in time. For the purpose 
of this definition, student achievement means--
    (a) For grades and subjects in which assessments are required under 
section 1111(b)(3) of ESEA: (1) A student's score on such assessments 
and may include (2) other measures of student learning, such as those 
described in paragraph (b) of this definition, provided those measures 
are rigorous and comparable across schools within an LEA.
    (b) For grades and subjects in which assessments are not required 
under section 1111(b)(3) of ESEA: Alternative measures of student 
learning and performance such as student results on pre-tests, end-of-
course tests, and objective performance-based assessments; student 
learning objectives; student performance on English language 
proficiency assessments; and other measures of student achievement that 
are rigorous and comparable across schools within an LEA.
    Teacher means any person who meets the definition of that term 
under State or local law.
    Vision of instructional improvement means a summary of the key 
competencies and behaviors of effective teaching that an LEA views as 
necessary to produce high levels of student achievement, as well as how 
educators acquire or improve these competencies and behaviors.

Final Selection Criteria

    The Assistant Secretary announces two sets of selection criteria--
the General TIF Competition selection criteria (selection criteria (a) 
through (f)) and the TIF Competition with the Focus on STEM selection 
criteria (selection criterion (g))--to be used to review an applicant's 
proposal for funding under any FY 2012 competition and any future 
competitions. The Assistant Secretary may apply General TIF Competition 
selection criteria, in whole or in part, in any year in which we 
conduct a General TIF Competition. The Assistant Secretary may apply 
the TIF Competition with a Focus on STEM selection criteria, in whole 
or in part, together with one or more of the General TIF Competition 
selection criteria, in any year in which we conduct a TIF Competition 
with a Focus on STEM. In combination with or in place of the General 
TIF Competition selection criteria or the TIF Competition with a Focus 
on STEM selection criteria, the Assistant Secretary may apply the 
general selection criteria in the Education Department General 
Administrative Regulations (EDGAR) in 34 CFR 75.210; criteria based on 
statutory provisions in accordance with 34 CFR 75.209; or any 
combination thereof in any year in which there is a TIF competition. In 
the notice inviting applications, or the application package, or both, 
we will announce the maximum possible points assigned to each 
criterion.
    (a) A Coherent and Comprehensive Human Capital Management System 
(HCMS). We will consider the quality and comprehensiveness of each 
participating LEA's HCMS as described in the application. In 
determining the quality of the HCMS, as it currently exists and as the 
applicant proposes to modify it during the grant period, we will 
consider the extent to which the HCMS described in the application is--
    (1) Aligned with each participating LEA's clearly described vision 
of instructional improvement; and
    (2) Likely to increase the number of effective educators in the 
LEA's schools, especially in high-need schools, as demonstrated by--
    (i) The range of human capital decisions for which the applicant 
proposes to consider educator effectiveness--based on the educator 
evaluation systems described in the application.
    (ii) The weight given to educator effectiveness--based on the 
educator evaluation systems described in the application--when human 
capital decisions are made;
    (iii) The feasibility of the HCMS described in the application, 
including the extent to which the LEA has prior experience using 
information from the educator evaluation systems described in the 
application to inform human capital decisions, and applicable LEA-level 
policies that might inhibit or facilitate modifications needed to use 
educator effectiveness as a factor in human capital decisions;
    (iv) The commitment of the LEA's leadership to implementing the

[[Page 35790]]

described HCMS, including all of its component parts; and
    (v) The adequacy of the financial and nonfinancial strategies and 
incentives, including the proposed PBCS, for attracting effective 
educators to work in high-need schools and retaining them in those 
schools.
    (b) Rigorous, Valid, and Reliable Educator Evaluation Systems. We 
will consider, for each participating LEA, the quality of the educator 
evaluation systems described in the application. In determining the 
quality of each evaluation system, we will consider the extent to 
which--
    (1) Each participating LEA has finalized a high-quality evaluation 
rubric, with at least three performance levels (e.g., highly effective, 
effective, developing, unsatisfactory), under which educators will be 
evaluated;
    (2) Each participating LEA has presented:
    (i) A clear rationale to support its consideration of the level of 
student growth achieved in differentiating performance levels; and
    (ii) Evidence, such as current research and best practices, 
supporting the LEA's choice of student growth models and demonstrating 
the rigor and comparability of assessments;
    (3) Each participating LEA has made substantial progress in 
developing a high-quality plan for multiple teacher and principal 
observations, including identification of the persons, by position and 
qualifications, who will be conducting the observations, the 
observation tool, the events to be observed, the accuracy of raters in 
using observation tools and the procedures for ensuring a high degree 
of inter-rater reliability;
    (4) The participating LEA has experience measuring student growth 
at the classroom level, and has already implemented components of the 
proposed educator evaluation systems;
    (5) In the case of teacher evaluations, the proposed evaluation 
system--
    (i) Bases the overall evaluation rating for teachers, in 
significant part, on student growth;
    (ii) Evaluates the practice of teachers, including general 
education teachers and teachers of special student populations, in 
meeting the needs of special student populations, including students 
with disabilities and English learners;
    (6) In the case of principal evaluations, the proposed evaluation 
system--
    (i) Bases the overall evaluation rating on, in significant part, 
student growth; and
    (ii) Evaluates, among other factors, a principal's practice in--
    (A) Focusing every teacher, and the school community generally, on 
student growth;
    (B) Establishing a collaborative school culture focused on 
continuous improvement; and
    (C) Supporting the academic needs of special student populations, 
including students with disabilities and English learners, for example, 
by creating systems to support successful co-teaching practices, 
providing resources for research-based intervention services, or 
similar activities.
    (c) Professional Development Systems to Support the Needs of 
Teachers and Principals Identified Through the Evaluation Process. We 
will consider the extent to which each participating LEA has a high-
quality plan for professional development to help all educators located 
in high-need schools, listed in response to Requirement 3(a), to 
improve their effectiveness. In determining the quality of each plan 
for professional development, we will consider the extent to which the 
plan describes how the participating LEA will--
    (1) Use the disaggregated information generated by the proposed 
educator evaluation systems to identify the professional development 
needs of individual educators and schools;
    (2) Provide professional development in a timely way;
    (3) Provide school-based, job-embedded opportunities for educators 
to transfer new knowledge into instructional and leadership practices; 
and
    (4) Provide professional development that is likely to improve 
instructional and leadership practices, and is guided by the 
professional development needs of individual educators as identified in 
paragraph (c)(1) of this criterion.
    (d) Involvement of Educators. We will consider the quality of 
educator involvement in the development and implementation of the 
proposed PBCS and educator evaluation systems described in the 
application. In determining the quality of such involvement, we will 
consider the extent to which--
    (1) The application contains evidence that educator involvement in 
the design of the PBCS and the educator evaluation systems has been 
extensive and will continue to be extensive during the grant period; 
and
    (2) The application contains evidence that educators support the 
elements of the proposed PBCS and the educator evaluation systems 
described in the application.
    (e) Project Management. We will consider the quality of the 
management plan of the proposed project. In determining the quality of 
the management plan, we will consider the extent to which the 
management plan--
    (1) Clearly identifies and defines the roles and responsibilities 
of key personnel;
    (2) Allocates sufficient human resources to complete project tasks;
    (3) Includes measurable project objectives and performance 
measures; and
    (4) Includes an effective project evaluation plan;
    (5) Specifies realistic and achievable timelines for:
    (i) Implementing the components of the HCMS, PBCS, and educator 
evaluation systems, including any proposal to phase in schools or 
educators.
    (ii) Successfully completing project tasks and achieving 
objectives.
    (f) Sustainability. We will consider the quality of the plan to 
sustain the proposed project. In determining the quality of the 
sustainability plan, we will consider the extent to which the 
sustainability plan--
    (1) Identifies and commits sufficient non-TIF resources, financial 
and nonfinancial, to support the PBCS and educator evaluation systems 
during and after the grant period; and
    (2) Is likely to be implemented and, if implemented, will result in 
a sustained PBCS and educator evaluation systems after the grant period 
ends.
    (g) Comprehensive Approach to Improving STEM Instruction. To meet 
Priority 3, we will consider the quality of an applicant's plan for 
improving educator effectiveness in STEM instruction. In determining 
the quality of the plan, we will consider the extent to which--
    (1) The financial and nonfinancial strategies and incentives, 
including the proposed PBCS, are adequate for attracting effective STEM 
educators to work in high-need schools and retaining them in these 
schools;
    (2) The proposed professional development opportunities--
    (a) Will provide college-level STEM skills and content knowledge to 
STEM teachers while modeling for teachers pedagogical methods for 
teaching those skills and that content at the appropriate grade level; 
and
    (b) Will enable STEM teachers to provide students in high-need 
schools with increased access to rigorous and engaging STEM coursework 
appropriate for their grade level, including college-level material in 
high schools;
    (3) The applicant will significantly leverage STEM-related funds 
across

[[Page 35791]]

other Federal, State, and local programs to implement a high-quality 
and comprehensive STEM plan; and
    (4) The applicant provides evidence (e.g., letters of support) that 
the LEA has or will develop extensive relationships with STEM experts 
and resources in industry, academic institutions, or associations to 
effectively implement its STEM plan and ensure that instruction 
prepares students to be college-and-career ready.
    This notice does not preclude us from proposing additional 
priorities, requirements, definitions, or selection criteria, subject 
to meeting applicable rulemaking requirements.

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

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and therefore subject to the 
requirements of the Executive order and subject to review by Office of 
Management and Budget (OMB). Section 3(f) of Executive Order 12866 
defines a ``significant regulatory action'' as an action likely to 
result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local or 
tribal governments, or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This regulatory action will have an annual effect on the economy of 
more than $100 million because the amount of government transfers 
provided through the TIF program will exceed that amount. Therefore, 
this regulatory action is ``economically significant'' and subject to 
OMB review under section 3(f)(1) of Executive Order 12866. 
Notwithstanding this determination, we have assessed the potential 
costs and benefits--both quantitative and qualitative--of this 
regulatory action and have determined that the benefits justify the 
costs.
    We have also reviewed these priorities, requirements, definitions, 
and selection criteria under Executive Order 13563, which supplements 
and explicitly reaffirms the principles, structures, and definitions 
governing regulatory review established in Executive Order 12866. To 
the extent permitted by law, Executive Order 13563 requires that an 
agency--
    (1) Propose or adopt regulations only on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are establishing these priorities, requirements, definitions, 
and selection criteria only on a reasoned determination that their 
benefits justify their costs. In choosing among alternative regulatory 
approaches, we selected those approaches that maximize net benefits. 
Based on the analysis that follows, the Department believes that this 
regulatory action is consistent with the principles in Executive Order 
13563.
    In this regulatory impact analysis we discuss the need for 
regulatory action, the potential costs and benefits, net budget 
impacts, assumptions, limitations, and data sources, as well as 
regulatory alternatives we considered.

Need for Federal Regulatory Action

    These priorities, requirements, definitions, and selection criteria 
are needed to implement the TIF program. The Department does not 
believe that the authorizing legislation for this program, by itself, 
provides a sufficient level of detail to ensure that the program 
achieves the greatest national impact in promoting the development and 
implementation of PBCSs. The authorizing and appropriations language is 
very brief and provides only broad parameters to govern the program. 
The priorities, requirements, definitions, and selection criteria in 
this notice clarify the types of activities the Department seeks to 
fund, and permit the Department to evaluate proposed projects using 
selection criteria that are based on the purpose of the program and are 
closely aligned with the Department's priorities.
    In the absence of specific selection criteria for the TIF program, 
the Department would use the general selection criteria in 34 CFR 
75.210 of the Education Department General Administrative Regulations 
in selecting grant recipients. However, the Department does not believe 
the use of those general criteria would be appropriate for a TIF 
program competition because they do not focus on the development of 
PBCSs or activities most likely to increase the quality of teaching and 
school administration and improve educational outcomes for students.

Regulatory Alternatives Considered

    The Department considered a variety of possible priorities, 
requirements, definitions, and selection criteria before deciding on 
those included in this notice. For example, the Department considered--
    (1) Limiting eligible LEA applicants to those that already have in 
place the basic infrastructure necessary to generate student growth 
data at the classroom level. However, we took an alternative approach 
because we recognize that one purpose of the TIF program is to nurture 
innovation and reform in LEAs that may be beginning their reform 
efforts in this area.
    (2) Requiring an applicant to commit a certain percentage of non-
TIF funds to the project in order to help ensure the project's 
sustainability after the grant period. However, we took an alternative 
approach that requires the PBCS to be part of an LEA-wide HCMS because 
we believe that having the PBCS implemented as part of an LEA-wide

[[Page 35792]]

HCMS will help generate project sustainability. Further, we believe 
that the selection criteria that direct reviewers to assess the degree 
of LEA commitment, both financial and nonfinancial, and its effect on 
project sustainability, will be sufficient to ensure that funded 
projects are sustained after the end of the grant period.
    The priorities, requirements, definitions, and selection criteria 
in this notice reflect and promote the purpose of the TIF program. They 
also align TIF, where possible and permissible, with other Presidential 
and Departmental priorities, such as the State Fiscal Stabilization 
Fund, the Race to the Top Fund, the School Improvement Grants program, 
and the ESEA Flexibility initiative. Through this regulatory action, 
the Department provides an eligible applicant with a great deal of 
flexibility in designing the systems and selecting the activities to 
carry out its proposed project. The Secretary believes that the 
priorities, requirements, definitions, and selection criteria in this 
notice appropriately balance the need for specific programmatic 
guidance while providing each applicant with flexibility to design 
innovative and enduring PBCSs.

Summary of Costs and Benefits

    The Department believes that these priorities, requirements, 
definitions, and selection criteria do not impose significant costs on 
eligible States, LEAs, or nonprofit organizations that would receive 
assistance through the TIF program. The Secretary also believes that 
the benefits of implementing the priorities and requirements contained 
in this notice justify any associated costs.
    The Department believes that the priorities, requirements, 
definitions, and selection criteria in this notice will result in the 
selection of high-quality applications to implement activities that 
will improve the quality of teaching and educational administration. 
Through these priorities, requirements, and selection criteria, we 
clarify the scope of activities we expect to support with program funds 
and the expected burden to prepare an application and implement a 
project under the program. A potential applicant must consider 
carefully the resources needed to prepare a strong application and its 
capacity to implement a successful project.
    The Department believes that the costs imposed on an applicant by 
the priorities, requirements, definitions, and selection criteria are 
largely limited to the paperwork burden of preparing an application and 
that the benefits of implementing this regulatory action will justify 
any costs incurred by the applicant. This is because, during the 
project period, the applicant will pay the costs of actually carrying 
out activities under a TIF grant with program funds and any matching 
funds. Further, many of the systems that TIF funds will support, 
including educator evaluation systems and systems of professional 
development, are ones that LEAs regularly support with their own funds. 
Thus, the costs of implementing a TIF project using these priorities, 
requirements, definitions, and selection criteria will not be a 
significant burden for any eligible applicant, including a small 
entity.
    Elsewhere in this section under Paperwork Reduction Act of 1995, we 
identify and explain burdens specifically associated with information 
collection requirements associated with this regulatory action.

Accounting Statement

    As required by OMB Circular A-4 (available at https://www.Whithouse.gov/omb/Circulars/a004/a-4.pdf), in the following table, 
we have prepared an accounting statement showing the classification of 
the expenditures associated with the provisions of this regulatory 
action. This table provides our best estimate of the Federal payments 
to be made to States, LEAs, and nonprofit organizations under this 
program as a result of this regulatory action. This table is based on 
funds available for new awards under the FY 2012 appropriation. 
Expenditures are classified as transfers to States, LEAs, and nonprofit 
organizations.

Accounting Statement Classification of Estimated Expenditures

------------------------------------------------------------------------
                 Category                      Transfers (in millions)
------------------------------------------------------------------------
Annual Monetized Transfers                  $284.5.
From Whom to Whom                           Federal Government to
                                             States, LEAs, and
                                             nonprofits.
------------------------------------------------------------------------

Effect on Other Levels of Government

    We have also determined that this regulatory action will not unduly 
interfere with State, local, or tribal governments in the exercise of 
their governmental functions.

Waiver of Congressional Review Act

    These priorities, requirements, definitions, and selection criteria 
have been determined to be a major rule for purposes of the 
Congressional Review Act (CRA) (5 U.S.C. 801, et seq.). Generally, 
under the CRA, a major rule takes effect 60 days after the date on 
which the rule is published in the Federal Register. Section 808(2) of 
the CRA, however, provides that any rule which an agency for good cause 
finds (and incorporates the finding and a brief statement of reasons 
therefore in the rule issued) that notice and public procedure thereon 
are impracticable, unnecessary, or contrary to the public interest, 
shall take effect at such time as the Federal agency promulgating the 
rule determines.
    These final priorities, requirements, definitions, and selection 
criteria are needed to implement the TIF program, authorized under the 
Department of Education Appropriations Act, 2012 (Division F, Title III 
of Public Law 112-74), which was signed into law on December 23, 2011. 
The Department must award TIF funds under this authority to qualified 
applicants by September 30, 2012, or the funds will lapse. Even on an 
extremely expedited timeline, it is impracticable for the Department to 
adhere to a 60-day delayed effective date for the final priorities, 
requirements, definitions, and selection criteria and make grant awards 
to qualified applicants by the September 30, 2012 deadline. When the 
60-day delayed effective date is added to the time the Department will 
need to receive applications (approximately 45 days), review the 
applications (approximately 21 days), and finally approve applications 
(approximately 65 days), the Department will not be able to award funds 
authorized under the Department of Education Appropriations Act, 2012 
to applicants by September 30, 2012. The Department has therefore 
determined that, pursuant to section 808(2) of the CRA, the 60-day 
delay in the effective date generally required for congressional review 
is impracticable, contrary to the public interest, and waived for good 
cause.

Paperwork Reduction Act of 1995

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department conducts a preclearance consultation process to 
provide the public and Federal agencies with an opportunity to comment 
on proposed and continuing collections of information in accordance 
with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3506(c)(2)(A)). This helps ensure that: The public understands the 
Department's collection instructions, respondents can provide the 
requested data in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and the Department

[[Page 35793]]

can properly assess the impact of collection requirements on 
respondents.
    This notice contains information collection requirements that are 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). We estimate 
that each applicant will spend approximately 248 hours of staff time to 
address the priorities, requirements, definitions, and selection 
criteria, prepare the application, and obtain necessary clearances. 
Based on the number of applications the Department received in the FY 
2010 competition, we expect to receive approximately 120 applications 
for these funds. The total number of hours for all expected applicants 
is an estimated 29,760 hours. We estimate the total cost per hour of 
the applicant-level staff who carry out this work to be $30 per hour. 
The total estimated cost for all applicants is $892,800.
    In the NPP we invited comment on the paperwork burden estimated for 
this collection. We did not receive any comments.
    The Paperwork Reduction Act of 1995 does not require you to respond 
to a collection of information unless it displays a valid OMB control 
number. The OMB control number assigned to this information collection 
is 1810-0700.

Regulatory Flexibility Act Certification

    The Secretary certifies that this regulatory action will not have a 
significant economic impact on a substantial number of small entities. 
The small entities that this regulatory action may affect are (1) small 
LEAs, and (2) nonprofit organizations applying for and receiving funds 
under this program in partnership with an LEA or SEA. The Secretary 
believes that the costs imposed on an applicant by the priorities, 
requirements, definitions, and selection criteria will be limited to 
paperwork burden related to preparing an application and that the 
benefits of implementing these priorities, requirements, definitions, 
and selection criteria would outweigh any costs incurred by the 
applicant.
    Participation in the TIF program is voluntary. For this reason, the 
priorities, requirements, definitions, and selection criteria included 
in this notice will impose no burden on small entities unless they 
apply for funding under the TIF program using the priorities, 
requirements, definitions, and selection criteria in this notice. We 
expect that in determining whether to apply for TIF funds, an eligible 
entity will evaluate the costs of preparing an application and 
implementing a TIF project and weigh them against the benefits likely 
of implementing the TIF project. An eligible entity will probably apply 
only if it determines that the likely benefits exceed the costs of 
preparing an application and implementing a project. The likely 
benefits of applying for a TIF program grant include the potential 
receipt of a grant as well as other benefits that may accrue to an 
entity through its development of an application, such as the use of 
its TIF application to spur development and implementation of PBCSs 
without Federal funding through the TIF program.
    The U.S. Small Business Administration (SBA) Size Standards define 
``small entities'' as for-profit or nonprofit institutions with total 
annual revenue below $7,000,000 or, if they are institutions controlled 
by small governmental jurisdictions (that are comprised of cities, 
counties, towns, townships, villages, school districts, or special 
districts), with a population of less than 50,000. The Urban 
Institute's National Center for Charitable Statistics reported that of 
173,172 nonprofit organizations that had an educational mission and 
reported revenue to the Internal Revenue Service (IRS) by December 
2011, 168,669 (over 97 percent) had revenues of less than $5 million. 
In addition, there are 12,358 LEAs in the country that meet the SBA's 
definition of small entity. While these entities are eligible to apply 
for funding under the TIF program, the Secretary believes that only a 
small number of them will apply. In the FY 2010 TIF competition, 
approximately 23 nonprofit organizations applied for funding in 
partnership with an LEA or SEA, and few of these organizations appeared 
to be a small entity. The Secretary has no reason to believe that a 
future competition under this program would be different. To the 
contrary, we expect that the FY 2012 competition will be similar to the 
FY 2010 competition because only a limited number of nonprofit 
organizations are working actively on the development of PBCSs and many 
of these organizations are larger organizations. Thus, the likelihood 
that the priorities, requirements, definitions, and selection criteria 
in this notice will have a significant economic impact on small 
entities is minimal.
    In addition, the Secretary believes that the priorities, 
requirements, definitions, and selection criteria in this notice do not 
impose any additional burden on a small entity applying for a grant 
than the entity would face in the absence of the regulatory action. 
That is, the length of the applications those entities would submit in 
the absence of this regulatory action and the time needed to prepare an 
application would be comparable if the competition relied exclusively 
on the selection criteria in 34 CFR 75.210 for this competition.
    Further, this regulatory action may help a small entity determine 
whether it has the interest, need, or capacity to implement activities 
under the program and, thus, prevent a small entity that does not have 
such an interest, need, or capacity from absorbing the burden of 
applying.
    This regulatory action will not have a significant economic impact 
on a small entity once it receives a grant because it will be able to 
meet the costs of compliance using the funds provided under this 
program and with any matching funds provided by private-sector 
partners.

Intergovernmental Review

    This program is subject to the requirements of Executive Order 
12372 and the regulations in 34 CFR part 79. One of the objectives of 
the Executive order is to foster an intergovernmental partnership and a 
strengthened federalism. The Executive order relies on processes 
developed by State and local governments for coordination and review of 
proposed Federal financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or computer diskette) on request to the program contact 
person listed under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
Internet access to the official edition of the Federal Register is 
available via the Federal Digital System at www.gpo.gov/fdsys. At this 
site you can view this document, as well as all other documents of this 
Department published in the Federal Register, in text or Adobe Portable 
Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, 
which is available free at this site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    Delegation of Authority: The Secretary of Education has delegated 
authority to

[[Page 35794]]

Michael Yudin, Deputy Assistant Secretary for Policy for Elementary and 
Secondary Education to perform the functions and duties of the 
Assistant Secretary for Elementary and Secondary Education.

    Dated: June 7, 2012.
Michael Yudin,
Deputy Assistant Secretary for Policy and Strategic Initiatives, 
delegated the authority to perform the functions and duties of the 
Assistant Secretary for Elementary and Secondary Education.
[FR Doc. 2012-14276 Filed 6-13-12; 8:45 am]
BILLING CODE 4000-01-P