CARES Act Programs; Equitable Services to Students and Teachers in Non-Public Schools, 39479-39488 [2020-14224]

Download as PDF Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations Dated: June 25, 2020. Lowell J. Schiller, Principal Associate Commissioner for Policy. [FR Doc. 2020–14082 Filed 6–30–20; 8:45 am] BILLING CODE 4164–01–P DEPARTMENT OF EDUCATION 34 CFR Part 76 [Docket ID ED–2020–OESE–0091] RIN 1810–AB59 CARES Act Programs; Equitable Services to Students and Teachers in Non-Public Schools Office of Elementary and Secondary Education, Department of Education. ACTION: Interim final rule with request for comments. AGENCY: The U.S. Department of Education (Department) issues this interim final rule to clarify the requirement in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that local educational agencies (LEAs) provide equitable services to students and teachers in nonpublic schools under the Governor’s Emergency Education Relief Fund (GEER Fund) and the Elementary and Secondary School Emergency Relief Fund (ESSER Fund) (collectively, the CARES Act programs). DATES: Effective Date: This interim final rule is effective July 1, 2020. Comment Due Date: We must receive your comments on or before July 31, 2020. SUMMARY: Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments. • Federal eRulemaking Portal: Go to www.regulations.gov to submit your comments electronically. Information on using Regulations.gov, including instructions for accessing agency documents, submitting comments, and viewing the docket, is available on the site under ‘‘How to use Regulations.gov.’’ • Postal Mail, Commercial Delivery, or Hand Delivery: If you mail or deliver your comments about this interim final rule, address them to Amy Huber, U.S. ADDRESSES: VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 Department of Education, 400 Maryland Avenue SW, Room 3W219, Washington, DC 20202. Privacy Note: The Department’s policy for comments received from members of the public is to make these submissions available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should be careful to include in their comments only information that they wish to make publicly available. FOR FURTHER INFORMATION CONTACT: Amy Huber, U.S. Department of Education, 400 Maryland Avenue SW, Room 3W219, Washington, DC 20202. Telephone: (202) 453–6132. Email: EquitableServices.CaresAct@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: Invitation to Comment: We invite you to submit comments on this interim final rule. We will consider these comments in determining whether to take any future action. See ADDRESSES for instructions on how to submit comments. During and after the comment period, you may inspect all public comments about this interim final rule by accessing Regulations.gov. Once the LBJ building reopens to the public, you may also inspect the comments in person in Room 3W219, 400 Maryland Avenue SW, Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., Eastern time, Monday through Friday of each week except Federal holidays. If you want to schedule time to inspect comments, please contact the person listed under FOR FURTHER INFORMATION CONTACT. Assistance to Individuals with Disabilities in Reviewing the Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public record for this interim final rule. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT. Background: This rulemaking resolves a critical ambiguity in section 18005(a) of Division B of the CARES Act, Public Law 116–136, 134 Stat. 281 (Mar. 27, 2020) with respect to the equitable services obligation owed by LEAs that receive CARES Act funds to students and teachers in non-public schools. Section 18005(a) of the CARES Act, PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 39479 titled ‘‘Assistance to Non-public Schools,’’ requires an LEA to ‘‘provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 [Elementary and Secondary Education Act of 1965 (ESEA)] to students and teachers in nonpublic schools, as determined in consultation with representatives of non-public schools.’’ Section 18005(b) lodges control of funds for the services and assistance mandated in section 18005(a) in a ‘‘public agency.’’ The Department must construe the CARES Act based on plain meaning, context, and coherence within the overall statutory structure. We are obliged to interpret the CARES Act coherently, and fit, if possible, all its parts into a harmonious whole. Finally, we must give meaning to each element of the statute so that no language is surplus. The CARES Act is a special appropriation to combat the effects of the novel Coronavirus Disease 2019 (COVID–19). The pandemic has harmed all our Nation’s students by disrupting their education. Nothing in the CARES Act suggests Congress intended to differentiate between students based upon the public or non-public nature of their school with respect to eligibility for relief. Construing the phrase ‘‘provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965’’ as if Congress simply incorporated the entirety of section 1117 by reference requires a wholly inappropriate disregard for statutory text and for controlling legal authorities requiring us to harmonize all relevant statutory provisions. It would create significant and unnecessary interpretative conflicts and ambiguity. Finally, a mechanistic application of section 1117 detached from the relevant CARES Act text would disadvantage some students based simply on where they live. Therefore, exercising our interpretative authority under Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 (1984), and relying on statutory language and context to develop a harmonious construction faithful to all relevant CARES Act text and to the entire statutory structure, see Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132–33 (2000), we have concluded the phrase ‘‘in the same manner as provided under section 1117’’ does not simply mean ‘‘as provided under section 1117’’ and that we must implement section 1117 in a fashion fully consistent with all relevant CARES Act text, purposes, and requirements. E:\FR\FM\01JYR1.SGM 01JYR1 39480 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations On April 30, 2020, the Department issued guidance titled Providing Equitable Services to Students and Teachers in Non-Public Schools under the CARES Act Programs (Equitable Services guidance), available at https:// oese.ed.gov/files/2020/04/FAQsEquitable-Services.pdf. Specifically, the Department concluded that the provision of equitable services under the CARES Act ‘‘in the same manner as provided under section 1117’’ of Title I requires the application of, among other provisions, section 1117(a)(3)(A) as outlined in Question #7 of the Equitable Services guidance. Because services under the CARES Act programs can be available for all students—public and non-public—without regard to poverty, low achievement, or residence in a participating Title I public school attendance area, the Department instructed LEAs to use enrollment data in non-public schools that will participate under the CARES Act programs compared to the total enrollment in all public schools and participating non-public schools in the LEA to determine the proportional share of CARES Act funds available to provide equitable services. A number of States took issue with the Department’s guidance with respect to using total non-public school enrollment to determine the proportional share of CARES Act funds for equitable services.1 The Council of Chief State School Officers (CCSSO), in particular, expressed concern on behalf of its members. According to CCSSO, Congress ‘‘intended to concentrate ESSER funds in areas of the most need, where the educational and social impacts of the COVID crisis will be most extreme and difficult to overcome with limited local funds.’’ The text of the CARES Act is inconsistent with CCSSO’s assertion that Congress intended a rigid application of section 1117. Rather, the CARES Act affords LEAs more flexibility. In light of concerns expressed, as discussed below, we are affording flexibility to an LEA that helps poor children by spending its CARES Act funds only in its Title I schools to use the proportional share it calculated under section 1117(a)(4)(A) for the 2019–2020 school year or to use the number of children, ages 5 through 17, who attend a non-public school in the LEA that will participate under a CARES Act program and who are from low-income families compared to the total number of children, ages 5 through 17, who are from low-income families in both Title I schools and participating non-public schools in the LEA. However, if an LEA spends any funds from a CARES Act program on students and teachers in non-Title I public schools, then the law requires equity for students and teachers in participating non-public schools, achieved by using enrollment to determine the proportional share. Discussion: 1 See, e.g., letter from Carissa Moffat Miller, Executive Director, Council of Chief State School Officers, to Betsy DeVos, U.S. Secretary of Education (May 5, 2020), available at https:// ccsso.org/sites/default/files/2020-05/ DeVosESLetter050520.pdf; letter from Pedro A. Rivera, Secretary of Education, Pennsylvania Department of Education, to Frank T. Brogan, Assistant Secretary for Elementary and Secondary Education, U.S. Department of Education (May 7, 2020), available at https://www.education.pa.gov/ Documents/K-12/Safe%20Schools/COVID/ CARESAct/Letter%20to%20 Secretary%20Brogan.pdf. II. Analysis VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 I. Legal Framework It is a ‘‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’’ Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989). We must interpret the CARES Act ‘‘as a symmetrical and coherent regulatory scheme,’’ Gustafson v. Alloyd Co., 513 U.S. 561, 569 (1995), and ‘‘fit, if possible, all parts into an harmonious whole.’’ FTC v. Mandel Brothers, Inc., 359 U.S. 385, 389 (1959). When Congress has not supplied a definition, a statutory term generally has its ordinary meaning. See, e.g., Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S. 401, 407 (2011). The plainness or ambiguity of statutory language is determined not only by reference to the language itself, but also by the specific context in which that language is used, and the broader context of the statute as a whole. Yates v. United States, 135 S.Ct. 1074, 1081 (2015). Constructions creating surplus language are disfavored as the Department is ‘‘obliged to give effect, if possible, to every word Congress used.’’ Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979); see also Nat’l Ass’n of Mfgs v. Dep’t of Defense, 138 S.Ct. 617, 632 (2018). A. The CARES Act The CARES Act authorizes new Federal education programs to ‘‘prevent, prepare for, and respond to’’ COVID–19. Three of those programs—the GEER Fund (section 18002(c)(1), (3)), the ESSER Fund formula grants to LEAs (section 18003(c)), and the ESSER State educational agency (SEA) Reserve PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 (section 18003(e))—make funds potentially available to LEAs. GEER funds are available to, among other eligible entities, LEAs that the SEA deems have been ‘‘most significantly impacted’’ by COVID–19 to continue to provide educational services and to support the on-going functionality of the LEA (section 18002(c)(1)) or to LEAs that the Governor ‘‘deems essential’’ for carrying out emergency educational services authorized under section 18003(d)(1) of the ESSER Fund; provision of child care and early childhood education; social and emotional support; and the protection of education-related jobs (section 18003(c)(3)).2 Ninety percent or more of ESSER funds are awarded by formula to LEAs (including charter schools that are LEAs) in proportion to the amount of funds such LEAs ‘‘received under part A of title I of the ESEA of 1965 in the most recent fiscal year’’ (section 18003(c)). An LEA may allocate the ESSER funds it receives without restriction and use them for ‘‘any’’ activity in a long list, including any activity authorized under the ESEA, the Individuals with Disabilities Education Act, the Adult Education and Family Literacy Act, the Carl D. Perkins Career and Technical Education Act, and the McKinney-Vento Homeless Assistance Act (section 18003(d)(1)). From the SEA Reserve under the ESSER Fund, an SEA may allocate those funds to LEAs, among other entities, for emergency needs determined by the SEA to address issues responding to COVID–19 (section 18003(e)).3 The CARES Act programs do not favor students based on public or non-public school attendance. Any student attending a public or non-public school may receive a broad array of services irrespective of where the student resides or whether he or she is low achieving or from a low-income family. Section 18005(a) of the CARES Act requires an LEA receiving funds under sections 18002 or 18003 of the CARES Act to ‘‘provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools.’’ Section 1117 is a provision of Title I, Part A (Title I) of the ESEA, a program whose purpose is to improve the 2 A Governor may target GEER funds for a specific purpose or population of students, in which case an LEA would need to use the funds accordingly. 3 An SEA may target ESSER SEA Reserve funds for a specific purpose or population of students, in which case an LEA would need to use the funds accordingly. E:\FR\FM\01JYR1.SGM 01JYR1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations academic achievement of low-achieving students who reside in public school attendance areas with a high concentration of poverty (Title I schools) (20 U.S.C. 6301 et seq.). Section 1117 requires an LEA that receives Title I funds to provide equitable services to non-public school students (20 U.S.C. 6320; 34 CFR 200.62–200.68). Under Title I, funds for equitable services are generated by students from low-income families who reside in a participating Title I public school attendance area and attend a non-public school (20 U.S.C. 6320(a)(4)(A)(i); 34 CFR 200.64(a)). Using these funds, the LEA provides services to low-achieving students who reside in a participating Title I public school attendance area and attend a non-public school, regardless of the location of the nonpublic school (i.e., inside or outside the public school attendance area or the LEA in which the student resides) (20 U.S.C. 6320(a)(1); 34 CFR 200.62(b)(1)). The same framework applies for public school students under Title I. An LEA must identify eligible public school attendance areas and rank them on the basis of concentration of poverty (20 U.S.C. 6313(a)(2), (b); 34 CFR 200.78(a)). The LEA then selects areas to participate in Title I services in rank order of poverty, either for the LEA as a whole or within a grade span—e.g., all elementary schools (20 U.S.C. 6313(a)(3)–(4); 34 CFR 200.78(a)). Eligible public school students must live in a school attendance area selected to participate under Title I and be low achieving (20 U.S.C. 6314(b)(6), 6315(c)). Thus, for both public and nonpublic school students, generation of Title I funds and eligibility for Title I services depend on residence in a participating Title I public school attendance area; that is, similarly situated students receive the same benefits under Title I (i.e., are treated ‘‘equitably’’) whether they attend a public Title I school or a non-public school. B. Resolving Ambiguity in Section 18005(a) Section 18005(a) of the CARES Act is facially ambiguous. To begin with, Congress did not need to add the words ‘‘in the same manner’’ if it simply intended to incorporate ‘‘section 1117 of the ESEA of 1965’’ by reference in the CARES Act. The unqualified phrase ‘‘as provided in’’ alone would have been sufficient. Furthermore, Congress included a separate consultation requirement in section 18005(a) of the CARES Act, and a public control of funds provision in section 18005(b), notwithstanding the VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 fact that section 1117 contains precisely parallel provisions. Compare section 18005(a) and (b) of the CARES Act with section 1117(b) and (d) of Title I, respectively. If Congress intended to incorporate ‘‘section 1117 of the ESEA of 1965’’ wholesale into the CARES Act, and to have the Department mechanistically apply it, then these provisions in sections 18005(a) and (b) must be deemed superfluous and other key CARES Act text ignored. Compare, e.g., section 1117(a)(1) (meeting the needs of non-public school students who are low-achieving and reside in a participating Title I public school attendance area) with sections 18002(c)(1) (emergency support for LEAs significantly impacted by COVID– 19 to continue education services to their students and to support on-going functionality of the LEAs) and 18003(d) (support any activity from a broad array of permissible purposes for any student and staff without limitation on income, residence, or school attendance). Finally, the CARES Act is a separate appropriation allowing separate permissible uses of taxpayer funds. By definition, the provisions in section 1117 relating to funding and eligibility for services, e.g., section 1117(a)(1) and (4) and (b)(1)(E) and (J)(ii), are inapposite in a CARES Act frame. However, the provisions in section 1117 relating to the ‘‘manner’’ in which services are delivered, e.g., section 1117(a)(2), (3), and (b)(1)(A)–(D), (F)–(I), and (K), arguably do fit within and can be applied under the CARES Act. These facts must be acknowledged and should drive construction of section 18005(a)’s operative phrase ‘‘in the same manner as provided under section 1117’’ of Title I. Accordingly, in the exercise of our interpretative discretion, the Department has resolved the ambiguity by permitting LEAs flexibility to provide equitable services, particularly with respect to determining the proportional share, based on the services it provides to public school students. An LEA that spends funds from a CARES Act program only on students and teachers in Title I schools may determine the proportional share on the basis of enrollment or by either using the LEA’s Title I proportional share for the 2019–2020 school year or by using the number of students from low-income families in participating non-public schools compared to the total number of students from lowincome families in Title I and participating non-public schools in the LEA. All other LEAs must determine the proportional share based on enrollment in public and participating non-public schools. PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 39481 We believe this flexibility is a reasoned and consistent construction giving effect to all relevant statutory text. Any other construction requires the words of section 18005(a) ‘‘in the same manner’’ to be denuded of meaning, the consultation and public use of funds provisions of section 18005(a) and (b) to be discarded as surplus language, and, paradoxically, the equity mandate of section 1117(a)(3) to be ignored. Significant Regulations To carry out functions vested in the Secretary by law, she is ‘‘authorized to make, promulgate, issue, rescind, and amend rules and regulations . . . governing the applicable programs administered by, the Department.’’ 20 U.S.C. 1221e–3; see also 20 U.S.C. 3474 (Secretary is ‘‘authorized to prescribe such rules and regulations as the Secretary determines necessary or appropriate to administer and manage the functions of the Secretary or the Department’’). A ‘‘rule’’ is defined broadly to include ‘‘statement[s] of general or particular applicability and future effect’’ that are designed to ‘‘implement, interpret, or prescribe law or policy.’’ 5 U.S.C. 551(4). We discuss substantive issues under the sections of the interim final rule to which they pertain. There are no current regulations. In General Statute: Section 18005(a) of the CARES Act requires an LEA that receives funds under the GEER Fund or the ESSER Fund to provide equitable services in the same manner as provided under section 1117 of the ESEA to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools. New Regulations: Section 76.665(a)(1) incorporates the statute. Section 76.665(a)(2) identifies the CARES Act programs to which this section applies: The GEER Fund, the ESSER Fund formula grants to LEAs, and the ESSER SEA Reserve. Reasons: It is necessary to include the statutory requirement that an LEA provide equitable services ‘‘in the same manner’’ as provided under section 1117 of the ESEA to students and teachers in non-public schools to provide context and authorization for the remaining provisions. Consultation Statute: Section 18005(a) of the CARES Act requires an LEA to provide equitable services ‘‘as determined in consultation with representatives of non-public schools.’’ E:\FR\FM\01JYR1.SGM 01JYR1 39482 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations New Regulations: Consultation must be ‘‘in the same manner’’ as conducted under section 1117 of the ESEA. Section 76.665(b)(1) incorporates section 1117’s requirement that consultation must occur during the design and development of the LEA’s plans to spend CARES Act funds and before the LEA makes any decision affecting the opportunities of students and teachers in non-public schools to benefit from those funds. As provided in section 1117(b)(1) of the ESEA, the LEA and private school officials shall both have the goal of reaching timely agreement on how to provide equitable and effective programs for private school students and teachers. Section 76.665(b)(2) makes clear that the requirements for consultation in section 1117(b) of the ESEA apply to the CARES Act programs unless they are inconsistent with the CARES Act statutory provisions. For example, sections 1117(b)(1)(E) and (J)(ii), which deal with calculating the proportional share in accordance with section 1117(a)(4)(A) of the ESEA, would not apply if an LEA chooses the measure in § 76.665(c)(1)(i)(B) or (ii). Reasons: Consultation is the foundation on which equitable services are provided and is mandated by section 18005(a). The regulations clarify that section 1117(b) of the ESEA, including the due process safeguards it contains, applies to the CARES Act programs, unless certain provisions are inconsistent with the CARES Act. We have identified two provisions that, on their face, are inconsistent with two of the measures these regulations permit for determining the proportional share because they refer to the proportional share as calculated under Title I. The CARES Act is an emergency appropriation to address exigent circumstances caused by responses to the pandemic. Although section 18005(a) does not specify how consultation is to occur, the Department believes using the section 1117(b) framework (to the extent consistent with the CARES Act itself), which is very familiar to schools and families, is a highly effective approach for the speedy provision of equitable services. Determining Proportional Share Statute: Section 18005(a) of the CARES Act requires an LEA to provide equitable services ‘‘in the same manner as provided under section 1117 of the ESEA’’ to students and teachers in nonpublic schools. New Regulations: Section 76.665(c) sets out measures that an LEA may use to determine the proportional share of funds available under each CARES Act VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 program to provide equitable services to students and teachers in non-public schools. An LEA need not use the same measure for each CARES Act program; however, it must use only one measure for a single program. Section 76.665(c)(1)(i) addresses an LEA that allocates all its funds under a CARES Act program only to students and teachers in Title I schools. In that case, the LEA has two options in addition to using enrollment to determine the proportional share: (1) By using the proportional share it calculated under section 1117(a)(4)(A) for the 2019–2020 school year; or (2) by using the number of children, ages 5 through 17, who attend a non-public school in the LEA that will participate under a CARES Act program and who are from low-income families compared to the total number of children, ages 5 through 17, who are from low-income families in both Title I schools and participating non-public schools in the LEA. If an LEA uses one of these options, then the LEA must take care to ensure that it does not violate the supplement not supplant requirement in section 1118(b)(2) of the ESEA by allocating CARES Act funds to Title I schools and redirecting State and local funds from those schools to non-Title I schools. See § 76.665(c)(3). For all other LEAs, § 76.665(c)(1)(ii) applies. This requires the LEA to calculate the proportional share based on enrollment in participating nonpublic elementary and secondary schools in the LEA compared to the total enrollment in both public and participating non-public elementary and secondary schools in the LEA. Section 76.665(c)(2) requires an LEA to calculate the proportional share of CARES Act funds off the top of the LEA’s total CARES Act allocation for each program under which it receives funds prior to any expenditures or transfers by the LEA in accordance with section 1117(a)(4)(A)(ii) of the ESEA. Reasons: Under § 76.665(c)(1)(i), an LEA spending all its funds under a CARES Act program only in its Title I schools may determine the proportional share for equitable services based on enrollment or in two additional ways based on the share of students from lowincome families attending participating non-public schools within the LEA. One path permits an LEA to use the proportional share it calculated for Title I purposes in the 2019–2020 school year. This approach has the obvious advantage of simplicity because it is a known proportion. Alternatively, if an LEA believes an actual poverty count would better meet respective needs, then it may count students, ages 5 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 through 17, from low-income families in Title I and participating non-public schools using one of the poverty measures in section 1117(c)(1) of the ESEA. Given that the purpose of the CARES Act is to ‘‘prevent, prepare for, and respond to’’ the effects of COVID–19, timely provision of services to both public and non-public students and teachers is critical. To the extent collecting poverty data from non-public school families under § 76.665(c)(1)(i)(B) would delay services, we encourage an LEA to use proportionality, wherein the LEA would apply the poverty percentage of its Title I schools as a whole to the enrollment in non-public schools that will participate in a CARES Act program. Whichever path an LEA chooses, it achieves the equity required under section 1117(a)(3) of the ESEA—that is, educational services and other benefits for students in non-public schools must be equitable in comparison to those for public school students. For all other LEAs, equity requires comparable treatment for non-public school students and teachers, which is achieved by basing the proportional share on enrollment in both public and participating non-public schools in the LEA. Congress has already taken poverty into consideration in allocating CARES Act funds to LEAs. An LEA receives ESSER funds based on its proportionate share of Title I funds (section 18003(c) of the CARES Act). The Department allocates Title I funds to LEAs through four statutory formulas, all of which are based on poverty counts that include both public and non-public school children.4 An LEA’s Title I allocation is generally the sum it receives through each formula less any required or authorized reservations by the State. Similarly, 40 percent of the GEER funds a Governor receives is based on the State’s share of Title I formula children (section 18002(b)(2) of the CARES Act). Thus, Congress targeted both ESSER and GEER funds to high-poverty areas to reflect their need. However, once this allocation is made, the CARES Act authorizes an LEA to serve all students—public and non-public—who have been affected by COVID–19. If the CARES Act does not limit services based on residence and 4 Title I’s four formulas direct funds to LEAs based primarily on an LEA’s relative share of formula children, 97 percent of whom are children ages 5 through 17 in poverty in public and nonpublic schools as determined annually by the Census Bureau. In varying degrees, the formulas address concentrations of poverty. 20 U.S.C. 6333– 6337. E:\FR\FM\01JYR1.SGM 01JYR1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations poverty, then it stands to reason that an LEA should not use residence and poverty to determine the proportional share of available funds for equitable services to non-public school students. In this context, only the use of enrollment data ensures that sufficient CARES Act funds are reserved to provide services to non-public school students and teachers that are equitable in comparison to their public school counterparts.5 In fact, this is the only way to give meaning to the phrase ‘‘in the same manner’’ consistent with section 1117(a)(3) of the ESEA, which requires that benefits for ‘‘private school children shall be equitable in comparison to services and other benefits for public school children.’’ In other words, if an LEA elects to use CARES Act funds to serve all its students, then only a calculation of proportional share based on all students—i.e., enrollment—satisfies the requirements of section 1117(a)(3). To best meet its needs, an LEA may choose to use funds from one CARES Act program (e.g., ESSER formula-grant funds) to serve students and teachers only in its Title I schools and funds from another CARES Act program (e.g., GEER funds) to serve students and teachers in any school. In this case, the LEA would use the appropriate measure in § 76.665(c)(1) to determine the proportional share under each program. In sum, the measures in § 76.665(c)(1)ensure the equitable treatment of non-public school students and teachers compared to their public school counterparts. The measures are also reasonable from the standpoint of administrative efficiency, minimizing LEA and parent burden, and carrying out the CARES Act’s mandate to provide funds in response to the COVID–19 pandemic promptly and to do so in a way providing for equitable treatment of all students and teachers. Equity Statute: Section 18005(a) of the CARES Act requires an LEA to provide equitable services ‘‘in the same manner 5 About 4.9 million students or 9.1 percent of all elementary and secondary school students in the Nation are enrolled in non-public schools. Broughman, S.P., Kincel, B., and Peterson, J. (2019). Characteristics of Private Schools in the United States: Results From the 2017–18 Private School Universe Survey First Look (NCES 2019–071), U.S. Department of Education. Using enrollment to determine the share of CARES Act funds for equitable services and assuming that every private elementary and secondary school chose to participate in the CARES Act programs, less than 10 percent of the CARES Act funding nationwide would be provided for equitable services for nonpublic school students and teachers, with more than 90 percent of the funding directed to public school students and teachers nationwide. VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 as provided under section 1117 of the ESEA’’ to students and teachers in nonpublic schools. New Regulations: Section 76.665(d)(1) implements section 1117(a)(3) of the ESEA, which requires educational services and other benefits for students and teachers in non-public schools be equitable in comparison to services and other benefits for public school students and teachers. Section 76.665(d)(2) makes clear that, irrespective of the measure an LEA uses to determine the proportional share under paragraph (c)(1), the LEA still has the obligation to afford students and teachers in any nonpublic school in the LEA the opportunity to receive CARES Act services. Reasons: As explained above, section 1117(a)(3) of the ESEA mandates equity in equitable services. Only if services and other benefits to students and teachers in non-public schools are comparable to those provided to public school students and teachers can they be equitable. Under § 76.665(d)(2), each non-public school in an LEA may request CARES Act services for its students and teachers. A non-public school, however, is not required to accept equitable services. In fact, the Department particularly discourages the small number of financially well-resourced non-public K–12 schools from accepting CARES Act-funded equitable services. Such schools include non-public boarding and day schools with tuition and fees comparable to those charged by the most highly selective postsecondary institutions. These schools tend to serve families from the highest income brackets, although they sometimes offer a limited number of scholarships to lowand middle-income students each year. The Department believes such nonpublic schools have ample resources to serve their students and teachers during the COVID–19 national emergency and should not rely on taxpayer funds to do so. Secular, Neutral, and Nonideological Statute: Section 18005(a) of the CARES Act requires an LEA to provide equitable services ‘‘in the same manner as provided under section 1117 of the ESEA’’ to students and teachers in nonpublic schools. Section 1117(a)(2) of the ESEA requires educational services or other benefits, including materials and equipment, be secular, neutral, and nonideological. New Regulations: Section 76.665(e) implements section 1117(a)(2) of the ESEA. Reasons: Section 76.665(e) makes clear that the services and benefits an PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 39483 LEA provides under the CARES Act programs must be secular, neutral, and nonideological. Public Control of Funds Statute: Section 18005(b) of the CARES Act requires the control of CARES Act funds for services and assistance to students and teachers in non-public schools and title to materials, equipment, and property must be in a public agency and a public agency must administer those funds, materials, equipment, and property. An LEA must provide services directly or contract for the provision of services with a public or private entity. New Regulations: Section 76.665(f) implements section 18005(b) of the CARES Act. Reasons: Section 76.665(f) emphasizes the importance of the statutory requirements that control of CARES Act funds and title to materials, equipment, and property for equitable services to students and teachers in nonpublic schools be in a public agency and that the LEA or public agency continuously administers the funds, materials, equipment, and property. Waiver of Proposed Rulemaking and Delayed Effective Date Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the Department generally offers interested parties the opportunity to comment on a proposed rule. However, the APA provides that an agency is not required to conduct notice and comment rulemaking when the agency, for good cause, finds that the requirement is impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). There is good cause here for waiving rulemaking. The CARES Act programs were enacted to address the immediate effects of COVID–19. The statute requires an LEA to provide services for students and teachers in non-public schools that are equitable in comparison to services provided to public school students and teachers. Before an LEA makes any decision that affects the opportunity of non-public school students and teachers to participate, it must consult with appropriate nonpublic school representatives. Thus, an LEA cannot begin services for public or non-public school students and teachers without consulting on determining the amount of funds available for those services. Therefore, in light of the current national emergency, its disruption on education in both public and non-public schools, and the immediate need for certainty regarding applicable requirements, the normal rulemaking process would be E:\FR\FM\01JYR1.SGM 01JYR1 39484 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations impracticable and contrary to the public interest because time is of the essence. However, the Department is providing a 30-day comment period and invites interested persons to participate in this rulemaking by submitting written comments. The Department will consider the comments received and may conduct additional rulemaking based on the comments. The APA also generally requires that a final or interim final rule be published at least 30 days before its effective date, unless the agency has good cause to implement its regulations sooner (5 U.S.C. 553(d)(3)). Again, this interim final rule is necessary immediately to address the effects of COVID–19 on both public and non-public school students and teachers. In response to the pressing need for States and LEAs to have clear guidance on the use of funds under the CARES Act programs so that they can help all schools address the disruption created by COVID–19 and ensure that learning continues for all students, consistent with the purposes of the CARES Act, it is impracticable and contrary to the public interest to delay the effective date. Accordingly, we make this rule effective on the day it is published. Executive Orders 12866, 13563, and 13771 Regulatory Impact Analysis Under Executive Order 12866, the Office of Management and Budget (OMB) must determine whether this regulatory action is ‘‘significant’’ and, therefore, subject to the requirements of the Executive order and subject to review by 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 ‘‘economically significant’’ regulations); (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 stated in the Executive order. This regulatory action is an economically significant regulatory VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 action subject to review by OMB under section 3(f) of Executive Order 12866. Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as a ‘‘major rule,’’ as defined by 5 U.S.C. 804(2). Under Executive Order 13771, for each new regulation that the Department proposes for notice and comment or otherwise promulgates that is a significant regulatory action under Executive Order 12866 and that imposes total costs greater than zero, it must identify two deregulatory actions. For FY 2020, any new incremental costs associated with a new regulation must be fully offset by the elimination of existing costs through deregulatory actions. The designation of this rule under Executive Order 13771 will be informed by public comments. We have also reviewed these regulations 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 upon 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 providing 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 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 might result from technological innovation or anticipated behavioral changes.’’ The Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action, and we are issuing this interim final rule only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows and the reasons stated elsewhere in this document, the Department believes that this interim final rule is consistent with the principles in Executive Order 13563. We also have determined that this regulatory action does not unduly interfere with State, local, or Tribal governments in the exercise of their governmental functions. 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. Elsewhere, under Paperwork Reduction Act of 1995, we identify and explain burdens specifically associated with information collection requirements. 1. Need for Regulatory Action and Analysis of Benefits The Department is issuing this interim final rule to clarify the provision of equitable services under section 18005 of the CARES Act. More specifically, this interim final rule specifies the measures that LEAs may use to determine the proportional share of CARES Act funds available for equitable services to students and teachers in non-public schools. This interim final rule is meant to provide flexibility and clarify administration for SEAs and LEAs so that the equitable services provisions are implemented consistent with the requirements of the CARES Act and that funds may be used to provide services to both public and non-public students and teachers in a timely manner while imposing as little burden and costs on program participants as possible. In doing so, it reconciles applicable equitable services provisions of the CARES Act in a manner that is reasonable, offers appropriate flexibility, and ensures that CARES Act programs serve public and non-public school students equitably. In particular, the rule expands the options available for determining the proportional share of CARES Act funds that must be made available for equitable services by allowing an LEA to E:\FR\FM\01JYR1.SGM 01JYR1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations select a measure based on the students and schools it will serve with CARES Act funds. The Department believes that these benefits outweigh any associated costs. As discussed elsewhere in this preamble, in light of the current national emergency and the importance of ensuring that LEAs provide services immediately under the CARES Act to students and teachers in schools—both public and non-public—consistent with the requirements of law, the normal rulemaking process would be impracticable and contrary to the public interest. Moreover, in light of clear evidence that a significant number of SEAs have indicated their intention to implement the equitable services provisions of the CARES Act in a manner that the Department deems contrary to statutory requirements, which means that thousands of LEAs in these States may be in the process of violating the CARES Act as it pertains to equitable services, it is essential to clarify those requirements as soon as possible. 2. Analysis of Costs Section 18005 of the CARES Act is intended to ensure that LEAs receiving funds under the GEER Fund or ESSER Fund provide equitable services to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools. In accordance with OMB Circular A–4 (available at www.whitehouse.gov/sites/default/files/ omb/assets/omb/circulars/a004/a4.pdf), we are evaluating the costs and benefits of this interim final rule compared to a pre-statutory baseline. This rule defines the measures that may be used to determine the proportional share of funds that LEAs must reserve for equitable services but does not interpret or otherwise alter other statutory requirements related to equitable services. Affected LEAs will likely face some administrative costs to implement these statutory requirements, but the Department largely lacks data to quantify these costs. However, the Department expects that these entities will largely experience benefits exceeding these administrative costs. Because an LEA has flexibility in the manner in which it provides equitable services under the CARES Act programs, including the extent to which it relies on processes and procedures previously established to consult with non-public school officials and provide services under ESEA programs, and because the Department lacks data on the extent to which non-public schools may choose to participate in equitable VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 services under the CARES Act, the Department does not know the exact costs attributable to the statutory requirements. Moreover, LEAs are permitted to reserve funds, from the proportional share determined in accordance with this interim final rule, to pay the reasonable and necessary costs of administering equitable services under the CARES Act. In the following paragraphs, we estimate the costs of determining the proportional share in accordance with the interim final rule, while recognizing that those costs may be financed using CARES Act program funds.6 Implementation Costs for SEAs, LEAs, Affected Schools, and the Government Costs of Determining the Proportional Share for LEAs Serving Students and Teachers in Both Title I and Non-Title I Schools For LEAs using CARES Act funds to serve students and teachers in both Title I and non-Title I schools, the interim final rule requires the use of enrollment data to determine the proportional share. For the majority of these LEAs, enrollment data should already be available for non-public schools that participate in equitable services under ESEA programs other than Title I. Equitable services under those programs are governed by section 8501 of the ESEA, which requires in determining expenditures for equitable services that an LEA take into account the number of non-public school students to be served. In complying with this requirement, an LEA customarily obtains enrollment data from participating non-public schools. For such LEAs, complying with the interim final rule accordingly imposes no additional burden with respect to those schools. If an LEA does not already obtain enrollment data in this manner from a non-public school that will participate in equitable services under the CARES Act programs, we expect that, in a majority of States, the LEA can obtain the data immediately from the SEA, particularly the approximately 35 SEAs that collect enrollment data from their non-public schools on an annual basis.7 For LEAs in this circumstance, the interim final rule similarly imposes no burden, and it imposes a negligible burden on affected SEAs, which would merely need to share previously collected enrollment data through long6 For the purpose of this analysis, we assume that an LEA receiving funds under the GEER Fund and ESSER Fund will use the same measure to determine the proportional share for each program. 7 See https://www2.ed.gov/about/inits/ed/nonpublic-education/regulation-map/. PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 39485 established means of communication with their LEAs. For LEAs that do not already have enrollment data for one or more participating non-public schools and that cannot obtain such data from the SEA, complying with the interim final rule entails obtaining the data directly from those schools through the consultation process. The Department believes this will be minimally burdensome on these LEAs, which we estimate to include 20 percent of affected LEAs. Specifically, we estimate that an LEA will have on average two non-public schools for which enrollment data are needed and that it will take on average 0.5 total hours to obtain the data from those schools. At $35 per hour for LEA staff, the average cost is an estimated $18 per LEA. Assuming that 10,125 LEAs (or 75 percent of an estimated 13,500 LEAs with attendance areas) are subject to the equitable services provisions of the CARES Act and that 7,595 (or 75 percent) of these LEAs will choose to serve students and teachers in both Title I and non-Title I schools, approximately 1,520 LEAs (20 percent of 7,595 affected LEAs) would bear this cost, for a total estimated cost of $27,360. Costs of Determining the Proportional Share for LEAs Serving Title I Schools Only For LEAs using CARES Act funds to serve students and teachers only in Title I schools, the interim final rule provides the option to determine the proportional share using one of two poverty alternatives. The first is simply to use as the proportional share for CARES Act purposes the proportional share of Title I funds available for equitable services under section 1117(a)(4)(A) of the ESEA, which is determined based on residence of students from low-income families in participating Title I public school attendance areas. Using this pre-existing alternative would of course impose no additional burden on LEAs. The second alternative is to determine the proportional share for equitable services using data on the number of students from low-income families who attend participating Title I schools and participating non-public elementary and secondary schools in the LEA. Under this alternative, an LEA may choose to obtain poverty counts for students in non-public schools that wish to participate. We estimate that 12.5 percent of affected LEAs will implement this alternative by obtaining poverty counts and that it will take an LEA on average 240 hours to obtain those counts. At $35 per hour for LEA staff, the average cost is an estimated $8,400 E:\FR\FM\01JYR1.SGM 01JYR1 39486 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations per LEA. Assuming that 2,530 LEAs (or 25 percent of the estimated 10,125 LEAs subject to the equitable services provisions of the CARES Act) will choose to serve students and teachers in Title I schools only, approximately 315 LEAs (12.5 percent of 2,530 affected LEAs) would bear this cost, for a total estimated cost of $2,646,000. As discussed elsewhere in this document, LEAs may also implement this poverty alternative using a proportionality method, wherein the LEA applies the average poverty rate of its Title I schools to the enrollment in non-public schools that will participate in a CARES Act program to generate poverty estimates for those schools. LEAs that choose to implement this alternative using a proportionality method would accordingly need to have enrollment data from participating nonpublic schools, but not poverty data— that is, the same enrollment data required of LEAs serving students and teachers in both Title I and non-Title I schools to determine the proportional share. As discussed elsewhere in this analysis with respect to those LEAs, enrollment data are generally already available. We estimate that only 20 percent of affected LEAs would need to obtain those data from one or more participating non-public schools, and that it would take on average 0.5 hours to obtain the data. At $35 per hour for LEA staff, the average cost is an estimated $18 per LEA. Assuming that 315 LEAs (or 12.5 percent of the estimated 2,530 LEAs that will choose to serve students and teachers in Title I schools only) will choose to implement this poverty alternative using a proportionality method or, as permitted, use enrollment data to determine the proportional share, approximately 65 LEAs (20 percent of 315 affected LEAs) would bear this cost, for a total estimated cost of $1,170. 3. Net Budget Impacts We estimate that the discretionary elements of this interim final rule will not have an impact on the Federal budget. This rule specifies the measures that LEAs may use to determine the proportional share of funds for equitable services under the CARES Act programs but does not change the amount of funding available for such programs. We anticipate that $16.2 billion in CARES Act funds will be disbursed in 2020, and therefore estimate $16.2 billion in transfers in 2020 relative to a prestatutory baseline. 4. Accounting Statement As required by OMB Circular A–4, in the following table we have prepared an accounting statement showing the classification of the impacts associated with the provisions of these regulations in 2020. Impacts classified as transfers are from the Federal Government to LEAs. ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED IMPACTS [In millions] Category Benefits Clarity and flexibility in administration of equitable services .............................................................................................. Not Quantified. Costs Determining proportional share for equitable services ....................................................................................................... $2.7. Transfers Providing educational services in preparation for and response to COVID–19, including for students and teachers in non-public schools. 5. Regulatory Alternatives Considered As an alternative to the options for determining the proportional share provided in this interim final rule, the Department considered requiring all LEAs subject to equitable services requirements in the CARES Act to determine the proportional share using enrollment data. Ultimately, we determined that such a requirement could be inequitable if an LEA chooses to serve only its Title I schools and therefore uses its Title I proportional share as the proportional share for CARES Act purposes. Clarity of the Regulations Executive Order 12866 and the Presidential memorandum ‘‘Plain Language in Government Writing’’ require each agency to write regulations that are easy to understand. The Secretary invites comments on how to make these regulations easier to understand, including answers to questions such as the following: VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 • Are the requirements in the regulations clearly stated? • Do the regulations contain technical terms or other wording that interferes with their clarity? • Does the format of the regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity? • Would the regulations be easier to understand if we divided them into more (but shorter) sections? (A ‘‘section’’ is preceded by the symbol ‘‘§ ’’ and a numbered heading; for example, § 76.665.) • Could the description of the regulations in the SUPPLEMENTARY INFORMATION section of this preamble be more helpful in making the regulations easier to understand? If so, how? • What else could we do to make the regulations easier to understand? To send any comments that concern how the Department could make these regulations easier to understand, see the instructions in the ADDRESSES section. PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 $16,182. Regulatory Flexibility Act Certification The Regulatory Flexibility Act does not apply to this rulemaking because there is good cause to waive notice and comment under 5 U.S.C. 553. The Secretary certifies that these interim final requirements would not have a significant economic impact on a substantial number of small entities. Under the U.S. Small Business Administration’s Size Standards, small entities include small governmental jurisdictions such as cities, towns, or school districts (LEAs) with a population of less than 50,000. Although the majority of LEAs that receive CARES Act funds and are subject to CARES Act equitable services requirements would qualify as small entities under this definition, this rule will benefit small entities by providing multiple options for determining the proportional share of funds that must be reserved for equitable services and clarifying that such entities have discretion to select the option that E:\FR\FM\01JYR1.SGM 01JYR1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations minimizes costs and burdens. As discussed in the Regulatory Impact Analysis, unless an LEA seeks to serve only Title I schools and determine the proportional share for equitable services by obtaining poverty counts based on student enrollment, the costs associated with the interim final rule are minimal. We estimate that the vast majority of LEAs (9,810 LEAs out of an estimated 10,125 LEAs subject to equitable services requirements) will choose to employ a minimally burdensome option in determining the proportional share. Moreover, for any small-entity LEA that chooses to serve only Title I schools and determine the proportional share for equitable services by obtaining poverty counts based on student enrollment, we presume the benefit of obtaining accurate poverty counts outweighs any associated costs. Finally, we note that all costs entailed in administering the equitable services provisions of the CARES Act may be paid for with funds received under the respective CARES Act programs; consequently, neither the statutory CARES Act equitable services requirements nor the provisions of this interim final rule impose any uncompensated costs on small entities. Paperwork Reduction Act of 1995 As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general 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 provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents. A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of the law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number. Information collections related to the CARES Act programs are included in paperwork clearances OMB control numbers 1810–0741 and 1810–0743. The Department is currently requesting VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 public comment on these clearances. Those clearances do not address the information collection applicable to this rule. Accordingly, the Department is requesting a separate emergency paperwork clearance from OMB on the data collections associated with this interim final rule and will add the burden to the clearances currently out for public comment. As discussed in the Analysis of Costs and Benefits section of the Regulatory Impact Statement in these interim final regulations, for LEAs that do not already have enrollment data for one or more participating non-public schools and that cannot obtain such data from the SEA, complying with the interim final regulations entails obtaining the data directly from those schools through the consultation process. The Department believes this will be minimally burdensome on these LEAs, which we estimate to include 20 percent of affected LEAs. Specifically, we estimate that an LEA will have on average two non-public schools for which enrollment data are needed and that it will take on average 0.5 total hours to obtain the data from those schools. At $35 per hour for LEA staff, the average cost is an estimated $18 per LEA. Assuming that 10,125 LEAs (or 75 percent of an estimated 13,500 LEAs with attendance areas) are subject to the equitable services provisions of the CARES Act and that 7,595 (or 75 percent) of these LEAs will choose to serve students and teachers in both Title I and non-Title I schools, approximately 1,520 LEAs (20 percent of 7,595 affected LEAs) would bear this cost, for a total estimated cost of $27,360. For LEAs using CARES Act funds to serve students and teachers only in Title I schools, the interim final regulations provide the option to determine the proportional share using one of two poverty alternatives; however, only one of these alternatives would impose additional burden. For the alternative that imposes additional burden, LEAs would determine the proportional share for equitable services using data on the number of students from low-income families who attend participating Title I schools, which are already available, and participating non-public elementary and secondary schools in the LEA. Under this alternative, an LEA may choose to obtain poverty counts for students in non-public schools that wish to participate. We estimate that 12.5 percent of affected LEAs will implement this alternative by obtaining poverty counts and that it will take an LEA on average 240 hours to obtain those counts. At $35 per hour for LEA staff, the average cost is an estimated PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 39487 $8,400 per LEA. Assuming that 2,530 LEAs (or 25 percent of the estimated 10,125 LEAs subject to the equitable services provisions of the CARES Act) will choose to serve students and teachers in Title I schools only, approximately 315 LEAs (12.5 percent of 2,530 affected LEAs) would bear this cost, for a total estimated cost of $2,646,000. As discussed elsewhere in this document, LEAs may also implement this poverty alternative using a proportionality method, wherein the LEA applies the average poverty rate of its Title I schools to the enrollment in non-public schools that will participate in a CARES Act program to generate poverty estimates for those schools. LEAs that choose to implement this alternative using a proportionality method would accordingly need to have enrollment data from participating nonpublic schools, but not poverty data— that is, the same enrollment data required of LEAs serving students and teachers in both Title I and non-Title I schools to determine the proportional share. With respect to those LEAs, enrollment data are generally already available. We estimate that only 20 percent of affected LEAs would need to obtain those data from one or more participating non-public schools, and that it would take on average 0.5 hours to obtain the data. At $35 per hour for LEA staff, the average cost is an estimated $18 per LEA. Assuming that 315 LEAs (or 12.5 percent of the estimated 2,530 LEAs that will choose to serve students and teachers in Title I schools only) will choose to implement this poverty alternative using a proportionality method or, as permitted, use enrollment data to determine the proportional share, approximately 65 LEAs (20 percent of 315 affected LEAs) would bear this cost, for a total estimated cost of $1,170. Intergovernmental Review The CARES Act programs covered by the interim final rule are not subject to Executive Order 12372 and the regulations in 34 CFR part 79. Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) 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. You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov. At this site you can E:\FR\FM\01JYR1.SGM 01JYR1 39488 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Rules and Regulations view this document, as well as all other documents of this Department published in the Federal Register, in text or portable document format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the 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. List of Subjects in 34 CFR Part 76 Accounting, Administrative practice and procedure, American Samoa, Education, Grant programs—education, Guam, Northern Mariana Islands, Pacific Islands Trust Territory,Prisons, Private schools, Reporting and recordkeeping requirements, Virgin Islands, Youth organizations. Betsy DeVos, Secretary of Education. For the reasons discussed in the preamble, the Secretary amends title 34 of the Code of Federal Regulations by revising part 76 to read as follows: PART 76—STATE-ADMINISTERED PROGRAMS 1. The authority citation for part 76 continues to read as follows: ■ Authority: 20 U.S.C. 1221e–3 and 3474, unless otherwise noted. §§ 76.663 and 76.664 [Reserved] 2. Add reserved §§ 76.663 and 76.664. 3. Add an undesignated center heading after reserved § 76.664 to read as follows: ■ ■ Equitable Services Under the CARES Act 4. Section 76.665 is added to read as follows: ■ § 76.665 Providing equitable services to students and teachers in non-public schools. (a) In general. (1) A local educational agency (LEA) receiving funds under a CARES Act program must provide equitable services to students and teachers in non-public elementary and secondary schools in the LEA ‘‘in the same manner’’ as provided under section 1117 of the Elementary and Secondary Education Act of 1965 (ESEA), as determined in consultation with representatives of non-public schools. (2) For purposes of this section, the CARES Act programs are the Governor’s VerDate Sep<11>2014 17:21 Jun 30, 2020 Jkt 250001 Emergency Education Relief (GEER) Fund (Section 18002), formula grants to LEAs under the Elementary and Secondary School Emergency Relief (ESSER) Fund (Section 18003(c)), and ESSER SEA Reserve (Section 18003(e)). (b) Consultation. (1) An LEA must promptly consult with representatives of non-public elementary and secondary schools during the design and development of the LEA’s plans to spend funds from a CARES Act program and before the LEA makes any decision affecting the opportunities of students and teachers in non-public schools to benefit from those funds. As provided in section 1117(b)(1) of the ESEA, the LEA and non-public school officials shall both have the goal of reaching timely agreement on how to provide equitable and effective programs for non-public school students and teachers. (2) Consultation must occur in accordance with section 1117(b) of the ESEA, except to the extent inconsistent with the CARES Act and this section, such as section 1117(b)(1)(E) and (J)(ii). (c) Determining proportional share. (1) To determine the proportional share of funds for equitable services to students and teachers in non-public elementary and secondary schools for each CARES Act program, an LEA must use one of the following measures. The LEA need not use the same measure for each CARES Act program. (i) An LEA using all its funds under a CARES Act program to serve only students and teachers in public schools participating under Title I, Part A of the ESEA may calculate the proportional share in accordance with paragraph (c)(1)(ii) of this section or by using— (A) The proportional share of Title I, Part A funds it calculated under section 1117(a)(4)(A) of the ESEA for the 2019– 2020 school year; or (B) The number of children, ages 5 through 17, who attend each non-public school in the LEA that will participate under a CARES Act program and are from low-income families compared to the total number of children, ages 5 through 17, who are from low-income families in both Title I schools and participating non-public elementary and secondary schools in the LEA. (ii) Any other LEA must calculate the proportional share based on enrollment in participating non-public elementary and secondary schools in the LEA compared to the total enrollment in both public and participating non-public elementary and secondary schools in the LEA. (2) An LEA must determine the proportional share of funds available for services for students and teachers in non-public elementary and secondary PO 00000 Frm 00028 Fmt 4700 Sfmt 9990 schools based on the total amount of CARES Act funds received by the LEA under a CARES Act program prior to any allowable expenditures or transfers by the LEA. (3) An LEA using funds from a CARES Act program in Title I schools under paragraph (c)(1)(i) of this section must comply with the supplement not supplant requirement in section 1118(b) of the ESEA, which would prohibit the LEA from allocating CARES Act funds to Title I schools and then redirecting State or local funds to non-Title I schools, among other things. (d) Equity. (1) Educational services and other benefits for students and teachers in non-public elementary and secondary schools must be equitable in comparison to services and other benefits for public school students and teachers participating in CARES Act programs, and must be provided in a timely manner. (2) The measure an LEA uses to determine the proportional share under paragraph (c)(1) of this section does not limit the obligation of the LEA to provide the opportunity to receive services to students and teachers in any non-public elementary or secondary school in the LEA. (e) Secular, neutral, and nonideological. Educational services and benefits, including materials and equipment, an LEA provides to students and teachers in non-public elementary and secondary schools under the CARES Act programs must be secular, neutral, and nonideological. (f) Public control of funds. An LEA must— (1) Maintain control of CARES Act funds; (2) Keep title to and exercise continuing administrative control of all materials, equipment, and property purchased with CARES Act funds; and (3) Provide services with CARES Act funds directly or through a contract with a public or private entity. (Authority: 20 U.S.C. 6320, 6321(b); section 18005 of the CARES Act) §§ 76.666 through 76.669 [Reserved] 5. Add reserved §§ 76.666 through 76.669. ■ [FR Doc. 2020–14224 Filed 6–30–20; 8:45 am] BILLING CODE 4000–01–P E:\FR\FM\01JYR1.SGM 01JYR1

Agencies

[Federal Register Volume 85, Number 127 (Wednesday, July 1, 2020)]
[Rules and Regulations]
[Pages 39479-39488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14224]


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DEPARTMENT OF EDUCATION

34 CFR Part 76

[Docket ID ED-2020-OESE-0091]
RIN 1810-AB59


CARES Act Programs; Equitable Services to Students and Teachers 
in Non-Public Schools

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

ACTION: Interim final rule with request for comments.

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SUMMARY: The U.S. Department of Education (Department) issues this 
interim final rule to clarify the requirement in the Coronavirus Aid, 
Relief, and Economic Security Act (CARES Act) that local educational 
agencies (LEAs) provide equitable services to students and teachers in 
non-public schools under the Governor's Emergency Education Relief Fund 
(GEER Fund) and the Elementary and Secondary School Emergency Relief 
Fund (ESSER Fund) (collectively, the CARES Act programs).

DATES: 
    Effective Date: This interim final rule is effective July 1, 2020.
    Comment Due Date: We must receive your comments on or before July 
31, 2020.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments submitted by fax or by email or those submitted after 
the comment period. To ensure that we do not receive duplicate copies, 
please submit your comments only once. In addition, please include the 
Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket, is available on the site 
under ``How to use Regulations.gov.''
     Postal Mail, Commercial Delivery, or Hand Delivery: If you 
mail or deliver your comments about this interim final rule, address 
them to Amy Huber, U.S. Department of Education, 400 Maryland Avenue 
SW, Room 3W219, Washington, DC 20202.
    Privacy Note: The Department's policy for comments received from 
members of the public is to make these submissions available for public 
viewing in their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to include 
in their comments only information that they wish to make publicly 
available.

FOR FURTHER INFORMATION CONTACT: Amy Huber, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 3W219, Washington, DC 20202. 
Telephone: (202) 453-6132. Email: [email protected].
    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:
    Invitation to Comment: We invite you to submit comments on this 
interim final rule. We will consider these comments in determining 
whether to take any future action. See ADDRESSES for instructions on 
how to submit comments.
    During and after the comment period, you may inspect all public 
comments about this interim final rule by accessing Regulations.gov. 
Once the LBJ building reopens to the public, you may also inspect the 
comments in person in Room 3W219, 400 Maryland Avenue SW, Washington, 
DC, between the hours of 8:30 a.m. and 4:00 p.m., Eastern time, Monday 
through Friday of each week except Federal holidays. If you want to 
schedule time to inspect comments, please contact the person listed 
under FOR FURTHER INFORMATION CONTACT.
    Assistance to Individuals with Disabilities in Reviewing the 
Record: On request, we will provide an appropriate accommodation or 
auxiliary aid to an individual with a disability who needs assistance 
to review the comments or other documents in the public record for this 
interim final rule. If you want to schedule an appointment for this 
type of aid, please contact the person listed under FOR FURTHER 
INFORMATION CONTACT.
    Background: This rulemaking resolves a critical ambiguity in 
section 18005(a) of Division B of the CARES Act, Public Law 116-136, 
134 Stat. 281 (Mar. 27, 2020) with respect to the equitable services 
obligation owed by LEAs that receive CARES Act funds to students and 
teachers in non-public schools. Section 18005(a) of the CARES Act, 
titled ``Assistance to Non-public Schools,'' requires an LEA to 
``provide equitable services in the same manner as provided under 
section 1117 of the ESEA of 1965 [Elementary and Secondary Education 
Act of 1965 (ESEA)] to students and teachers in non-public schools, as 
determined in consultation with representatives of non-public 
schools.'' Section 18005(b) lodges control of funds for the services 
and assistance mandated in section 18005(a) in a ``public agency.''
    The Department must construe the CARES Act based on plain meaning, 
context, and coherence within the overall statutory structure. We are 
obliged to interpret the CARES Act coherently, and fit, if possible, 
all its parts into a harmonious whole. Finally, we must give meaning to 
each element of the statute so that no language is surplus.
    The CARES Act is a special appropriation to combat the effects of 
the novel Coronavirus Disease 2019 (COVID-19). The pandemic has harmed 
all our Nation's students by disrupting their education. Nothing in the 
CARES Act suggests Congress intended to differentiate between students 
based upon the public or non-public nature of their school with respect 
to eligibility for relief.
    Construing the phrase ``provide equitable services in the same 
manner as provided under section 1117 of the ESEA of 1965'' as if 
Congress simply incorporated the entirety of section 1117 by reference 
requires a wholly inappropriate disregard for statutory text and for 
controlling legal authorities requiring us to harmonize all relevant 
statutory provisions. It would create significant and unnecessary 
interpretative conflicts and ambiguity. Finally, a mechanistic 
application of section 1117 detached from the relevant CARES Act text 
would disadvantage some students based simply on where they live. 
Therefore, exercising our interpretative authority under Chevron 
U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 
(1984), and relying on statutory language and context to develop a 
harmonious construction faithful to all relevant CARES Act text and to 
the entire statutory structure, see Food and Drug Admin. v. Brown & 
Williamson Tobacco Corp., 529 U.S. 120, 132-33 (2000), we have 
concluded the phrase ``in the same manner as provided under section 
1117'' does not simply mean ``as provided under section 1117'' and that 
we must implement section 1117 in a fashion fully consistent with all 
relevant CARES Act text, purposes, and requirements.

[[Page 39480]]

    On April 30, 2020, the Department issued guidance titled Providing 
Equitable Services to Students and Teachers in Non-Public Schools under 
the CARES Act Programs (Equitable Services guidance), available at 
https://oese.ed.gov/files/2020/04/FAQs-Equitable-Services.pdf. 
Specifically, the Department concluded that the provision of equitable 
services under the CARES Act ``in the same manner as provided under 
section 1117'' of Title I requires the application of, among other 
provisions, section 1117(a)(3)(A) as outlined in Question #7 of the 
Equitable Services guidance. Because services under the CARES Act 
programs can be available for all students--public and non-public--
without regard to poverty, low achievement, or residence in a 
participating Title I public school attendance area, the Department 
instructed LEAs to use enrollment data in non-public schools that will 
participate under the CARES Act programs compared to the total 
enrollment in all public schools and participating non-public schools 
in the LEA to determine the proportional share of CARES Act funds 
available to provide equitable services.
    A number of States took issue with the Department's guidance with 
respect to using total non-public school enrollment to determine the 
proportional share of CARES Act funds for equitable services.\1\ The 
Council of Chief State School Officers (CCSSO), in particular, 
expressed concern on behalf of its members. According to CCSSO, 
Congress ``intended to concentrate ESSER funds in areas of the most 
need, where the educational and social impacts of the COVID crisis will 
be most extreme and difficult to overcome with limited local funds.''
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    \1\ See, e.g., letter from Carissa Moffat Miller, Executive 
Director, Council of Chief State School Officers, to Betsy DeVos, 
U.S. Secretary of Education (May 5, 2020), available at https://ccsso.org/sites/default/files/2020-05/DeVosESLetter050520.pdf; 
letter from Pedro A. Rivera, Secretary of Education, Pennsylvania 
Department of Education, to Frank T. Brogan, Assistant Secretary for 
Elementary and Secondary Education, U.S. Department of Education 
(May 7, 2020), available at https://www.education.pa.gov/Documents/K-12/Safe%20Schools/COVID/CARESAct/Letter%20to%20Secretary%20Brogan.pdf.
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    The text of the CARES Act is inconsistent with CCSSO's assertion 
that Congress intended a rigid application of section 1117. Rather, the 
CARES Act affords LEAs more flexibility. In light of concerns 
expressed, as discussed below, we are affording flexibility to an LEA 
that helps poor children by spending its CARES Act funds only in its 
Title I schools to use the proportional share it calculated under 
section 1117(a)(4)(A) for the 2019-2020 school year or to use the 
number of children, ages 5 through 17, who attend a non-public school 
in the LEA that will participate under a CARES Act program and who are 
from low-income families compared to the total number of children, ages 
5 through 17, who are from low-income families in both Title I schools 
and participating non-public schools in the LEA. However, if an LEA 
spends any funds from a CARES Act program on students and teachers in 
non-Title I public schools, then the law requires equity for students 
and teachers in participating non-public schools, achieved by using 
enrollment to determine the proportional share.
    Discussion:

I. Legal Framework

    It is a ``fundamental canon of statutory construction that the 
words of a statute must be read in their context and with a view to 
their place in the overall statutory scheme.'' Davis v. Michigan Dept. 
of Treasury, 489 U.S. 803, 809 (1989). We must interpret the CARES Act 
``as a symmetrical and coherent regulatory scheme,'' Gustafson v. 
Alloyd Co., 513 U.S. 561, 569 (1995), and ``fit, if possible, all parts 
into an harmonious whole.'' FTC v. Mandel Brothers, Inc., 359 U.S. 385, 
389 (1959). When Congress has not supplied a definition, a statutory 
term generally has its ordinary meaning. See, e.g., Schindler Elevator 
Corp. v. United States ex rel. Kirk, 563 U.S. 401, 407 (2011). The 
plainness or ambiguity of statutory language is determined not only by 
reference to the language itself, but also by the specific context in 
which that language is used, and the broader context of the statute as 
a whole. Yates v. United States, 135 S.Ct. 1074, 1081 (2015). 
Constructions creating surplus language are disfavored as the 
Department is ``obliged to give effect, if possible, to every word 
Congress used.'' Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979); 
see also Nat'l Ass'n of Mfgs v. Dep't of Defense, 138 S.Ct. 617, 632 
(2018).

II. Analysis

A. The CARES Act

    The CARES Act authorizes new Federal education programs to 
``prevent, prepare for, and respond to'' COVID-19. Three of those 
programs--the GEER Fund (section 18002(c)(1), (3)), the ESSER Fund 
formula grants to LEAs (section 18003(c)), and the ESSER State 
educational agency (SEA) Reserve (section 18003(e))--make funds 
potentially available to LEAs.
    GEER funds are available to, among other eligible entities, LEAs 
that the SEA deems have been ``most significantly impacted'' by COVID-
19 to continue to provide educational services and to support the on-
going functionality of the LEA (section 18002(c)(1)) or to LEAs that 
the Governor ``deems essential'' for carrying out emergency educational 
services authorized under section 18003(d)(1) of the ESSER Fund; 
provision of child care and early childhood education; social and 
emotional support; and the protection of education-related jobs 
(section 18003(c)(3)).\2\
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    \2\ A Governor may target GEER funds for a specific purpose or 
population of students, in which case an LEA would need to use the 
funds accordingly.
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    Ninety percent or more of ESSER funds are awarded by formula to 
LEAs (including charter schools that are LEAs) in proportion to the 
amount of funds such LEAs ``received under part A of title I of the 
ESEA of 1965 in the most recent fiscal year'' (section 18003(c)). An 
LEA may allocate the ESSER funds it receives without restriction and 
use them for ``any'' activity in a long list, including any activity 
authorized under the ESEA, the Individuals with Disabilities Education 
Act, the Adult Education and Family Literacy Act, the Carl D. Perkins 
Career and Technical Education Act, and the McKinney-Vento Homeless 
Assistance Act (section 18003(d)(1)).
    From the SEA Reserve under the ESSER Fund, an SEA may allocate 
those funds to LEAs, among other entities, for emergency needs 
determined by the SEA to address issues responding to COVID-19 (section 
18003(e)).\3\
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    \3\ An SEA may target ESSER SEA Reserve funds for a specific 
purpose or population of students, in which case an LEA would need 
to use the funds accordingly.
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    The CARES Act programs do not favor students based on public or 
non-public school attendance. Any student attending a public or non-
public school may receive a broad array of services irrespective of 
where the student resides or whether he or she is low achieving or from 
a low-income family.
    Section 18005(a) of the CARES Act requires an LEA receiving funds 
under sections 18002 or 18003 of the CARES Act to ``provide equitable 
services in the same manner as provided under section 1117 of the ESEA 
of 1965 to students and teachers in non-public schools, as determined 
in consultation with representatives of non-public schools.''
    Section 1117 is a provision of Title I, Part A (Title I) of the 
ESEA, a program whose purpose is to improve the

[[Page 39481]]

academic achievement of low-achieving students who reside in public 
school attendance areas with a high concentration of poverty (Title I 
schools) (20 U.S.C. 6301 et seq.). Section 1117 requires an LEA that 
receives Title I funds to provide equitable services to non-public 
school students (20 U.S.C. 6320; 34 CFR 200.62-200.68). Under Title I, 
funds for equitable services are generated by students from low-income 
families who reside in a participating Title I public school attendance 
area and attend a non-public school (20 U.S.C. 6320(a)(4)(A)(i); 34 CFR 
200.64(a)). Using these funds, the LEA provides services to low-
achieving students who reside in a participating Title I public school 
attendance area and attend a non-public school, regardless of the 
location of the non-public school (i.e., inside or outside the public 
school attendance area or the LEA in which the student resides) (20 
U.S.C. 6320(a)(1); 34 CFR 200.62(b)(1)).
    The same framework applies for public school students under Title 
I. An LEA must identify eligible public school attendance areas and 
rank them on the basis of concentration of poverty (20 U.S.C. 
6313(a)(2), (b); 34 CFR 200.78(a)). The LEA then selects areas to 
participate in Title I services in rank order of poverty, either for 
the LEA as a whole or within a grade span--e.g., all elementary schools 
(20 U.S.C. 6313(a)(3)-(4); 34 CFR 200.78(a)). Eligible public school 
students must live in a school attendance area selected to participate 
under Title I and be low achieving (20 U.S.C. 6314(b)(6), 6315(c)). 
Thus, for both public and non-public school students, generation of 
Title I funds and eligibility for Title I services depend on residence 
in a participating Title I public school attendance area; that is, 
similarly situated students receive the same benefits under Title I 
(i.e., are treated ``equitably'') whether they attend a public Title I 
school or a non-public school.

B. Resolving Ambiguity in Section 18005(a)

    Section 18005(a) of the CARES Act is facially ambiguous. To begin 
with, Congress did not need to add the words ``in the same manner'' if 
it simply intended to incorporate ``section 1117 of the ESEA of 1965'' 
by reference in the CARES Act. The unqualified phrase ``as provided 
in'' alone would have been sufficient.
    Furthermore, Congress included a separate consultation requirement 
in section 18005(a) of the CARES Act, and a public control of funds 
provision in section 18005(b), notwithstanding the fact that section 
1117 contains precisely parallel provisions. Compare section 18005(a) 
and (b) of the CARES Act with section 1117(b) and (d) of Title I, 
respectively. If Congress intended to incorporate ``section 1117 of the 
ESEA of 1965'' wholesale into the CARES Act, and to have the Department 
mechanistically apply it, then these provisions in sections 18005(a) 
and (b) must be deemed superfluous and other key CARES Act text 
ignored. Compare, e.g., section 1117(a)(1) (meeting the needs of non-
public school students who are low-achieving and reside in a 
participating Title I public school attendance area) with sections 
18002(c)(1) (emergency support for LEAs significantly impacted by 
COVID-19 to continue education services to their students and to 
support on-going functionality of the LEAs) and 18003(d) (support any 
activity from a broad array of permissible purposes for any student and 
staff without limitation on income, residence, or school attendance).
    Finally, the CARES Act is a separate appropriation allowing 
separate permissible uses of taxpayer funds. By definition, the 
provisions in section 1117 relating to funding and eligibility for 
services, e.g., section 1117(a)(1) and (4) and (b)(1)(E) and (J)(ii), 
are inapposite in a CARES Act frame. However, the provisions in section 
1117 relating to the ``manner'' in which services are delivered, e.g., 
section 1117(a)(2), (3), and (b)(1)(A)-(D), (F)-(I), and (K), arguably 
do fit within and can be applied under the CARES Act.
    These facts must be acknowledged and should drive construction of 
section 18005(a)'s operative phrase ``in the same manner as provided 
under section 1117'' of Title I. Accordingly, in the exercise of our 
interpretative discretion, the Department has resolved the ambiguity by 
permitting LEAs flexibility to provide equitable services, particularly 
with respect to determining the proportional share, based on the 
services it provides to public school students. An LEA that spends 
funds from a CARES Act program only on students and teachers in Title I 
schools may determine the proportional share on the basis of enrollment 
or by either using the LEA's Title I proportional share for the 2019-
2020 school year or by using the number of students from low-income 
families in participating non-public schools compared to the total 
number of students from low-income families in Title I and 
participating non-public schools in the LEA. All other LEAs must 
determine the proportional share based on enrollment in public and 
participating non-public schools.
    We believe this flexibility is a reasoned and consistent 
construction giving effect to all relevant statutory text. Any other 
construction requires the words of section 18005(a) ``in the same 
manner'' to be denuded of meaning, the consultation and public use of 
funds provisions of section 18005(a) and (b) to be discarded as surplus 
language, and, paradoxically, the equity mandate of section 1117(a)(3) 
to be ignored.
Significant Regulations
    To carry out functions vested in the Secretary by law, she is 
``authorized to make, promulgate, issue, rescind, and amend rules and 
regulations . . . governing the applicable programs administered by, 
the Department.'' 20 U.S.C. 1221e-3; see also 20 U.S.C. 3474 (Secretary 
is ``authorized to prescribe such rules and regulations as the 
Secretary determines necessary or appropriate to administer and manage 
the functions of the Secretary or the Department''). A ``rule'' is 
defined broadly to include ``statement[s] of general or particular 
applicability and future effect'' that are designed to ``implement, 
interpret, or prescribe law or policy.'' 5 U.S.C. 551(4).
    We discuss substantive issues under the sections of the interim 
final rule to which they pertain. There are no current regulations.
In General
    Statute: Section 18005(a) of the CARES Act requires an LEA that 
receives funds under the GEER Fund or the ESSER Fund to provide 
equitable services in the same manner as provided under section 1117 of 
the ESEA to students and teachers in non-public schools, as determined 
in consultation with representatives of non-public schools.
    New Regulations: Section 76.665(a)(1) incorporates the statute. 
Section 76.665(a)(2) identifies the CARES Act programs to which this 
section applies: The GEER Fund, the ESSER Fund formula grants to LEAs, 
and the ESSER SEA Reserve.
    Reasons: It is necessary to include the statutory requirement that 
an LEA provide equitable services ``in the same manner'' as provided 
under section 1117 of the ESEA to students and teachers in non-public 
schools to provide context and authorization for the remaining 
provisions.
Consultation
    Statute: Section 18005(a) of the CARES Act requires an LEA to 
provide equitable services ``as determined in consultation with 
representatives of non-public schools.''

[[Page 39482]]

    New Regulations: Consultation must be ``in the same manner'' as 
conducted under section 1117 of the ESEA. Section 76.665(b)(1) 
incorporates section 1117's requirement that consultation must occur 
during the design and development of the LEA's plans to spend CARES Act 
funds and before the LEA makes any decision affecting the opportunities 
of students and teachers in non-public schools to benefit from those 
funds. As provided in section 1117(b)(1) of the ESEA, the LEA and 
private school officials shall both have the goal of reaching timely 
agreement on how to provide equitable and effective programs for 
private school students and teachers.
    Section 76.665(b)(2) makes clear that the requirements for 
consultation in section 1117(b) of the ESEA apply to the CARES Act 
programs unless they are inconsistent with the CARES Act statutory 
provisions. For example, sections 1117(b)(1)(E) and (J)(ii), which deal 
with calculating the proportional share in accordance with section 
1117(a)(4)(A) of the ESEA, would not apply if an LEA chooses the 
measure in Sec.  76.665(c)(1)(i)(B) or (ii).
    Reasons: Consultation is the foundation on which equitable services 
are provided and is mandated by section 18005(a). The regulations 
clarify that section 1117(b) of the ESEA, including the due process 
safeguards it contains, applies to the CARES Act programs, unless 
certain provisions are inconsistent with the CARES Act. We have 
identified two provisions that, on their face, are inconsistent with 
two of the measures these regulations permit for determining the 
proportional share because they refer to the proportional share as 
calculated under Title I. The CARES Act is an emergency appropriation 
to address exigent circumstances caused by responses to the pandemic. 
Although section 18005(a) does not specify how consultation is to 
occur, the Department believes using the section 1117(b) framework (to 
the extent consistent with the CARES Act itself), which is very 
familiar to schools and families, is a highly effective approach for 
the speedy provision of equitable services.
Determining Proportional Share
    Statute: Section 18005(a) of the CARES Act requires an LEA to 
provide equitable services ``in the same manner as provided under 
section 1117 of the ESEA'' to students and teachers in non-public 
schools.
    New Regulations: Section 76.665(c) sets out measures that an LEA 
may use to determine the proportional share of funds available under 
each CARES Act program to provide equitable services to students and 
teachers in non-public schools. An LEA need not use the same measure 
for each CARES Act program; however, it must use only one measure for a 
single program.
    Section 76.665(c)(1)(i) addresses an LEA that allocates all its 
funds under a CARES Act program only to students and teachers in Title 
I schools. In that case, the LEA has two options in addition to using 
enrollment to determine the proportional share: (1) By using the 
proportional share it calculated under section 1117(a)(4)(A) for the 
2019-2020 school year; or (2) by using the number of children, ages 5 
through 17, who attend a non-public school in the LEA that will 
participate under a CARES Act program and who are from low-income 
families compared to the total number of children, ages 5 through 17, 
who are from low-income families in both Title I schools and 
participating non-public schools in the LEA. If an LEA uses one of 
these options, then the LEA must take care to ensure that it does not 
violate the supplement not supplant requirement in section 1118(b)(2) 
of the ESEA by allocating CARES Act funds to Title I schools and 
redirecting State and local funds from those schools to non-Title I 
schools. See Sec.  76.665(c)(3).
    For all other LEAs, Sec.  76.665(c)(1)(ii) applies. This requires 
the LEA to calculate the proportional share based on enrollment in 
participating non-public elementary and secondary schools in the LEA 
compared to the total enrollment in both public and participating non-
public elementary and secondary schools in the LEA.
    Section 76.665(c)(2) requires an LEA to calculate the proportional 
share of CARES Act funds off the top of the LEA's total CARES Act 
allocation for each program under which it receives funds prior to any 
expenditures or transfers by the LEA in accordance with section 
1117(a)(4)(A)(ii) of the ESEA.
    Reasons: Under Sec.  76.665(c)(1)(i), an LEA spending all its funds 
under a CARES Act program only in its Title I schools may determine the 
proportional share for equitable services based on enrollment or in two 
additional ways based on the share of students from low-income families 
attending participating non-public schools within the LEA. One path 
permits an LEA to use the proportional share it calculated for Title I 
purposes in the 2019-2020 school year. This approach has the obvious 
advantage of simplicity because it is a known proportion. 
Alternatively, if an LEA believes an actual poverty count would better 
meet respective needs, then it may count students, ages 5 through 17, 
from low-income families in Title I and participating non-public 
schools using one of the poverty measures in section 1117(c)(1) of the 
ESEA.
    Given that the purpose of the CARES Act is to ``prevent, prepare 
for, and respond to'' the effects of COVID-19, timely provision of 
services to both public and non-public students and teachers is 
critical. To the extent collecting poverty data from non-public school 
families under Sec.  76.665(c)(1)(i)(B) would delay services, we 
encourage an LEA to use proportionality, wherein the LEA would apply 
the poverty percentage of its Title I schools as a whole to the 
enrollment in non-public schools that will participate in a CARES Act 
program. Whichever path an LEA chooses, it achieves the equity required 
under section 1117(a)(3) of the ESEA--that is, educational services and 
other benefits for students in non-public schools must be equitable in 
comparison to those for public school students.
    For all other LEAs, equity requires comparable treatment for non-
public school students and teachers, which is achieved by basing the 
proportional share on enrollment in both public and participating non-
public schools in the LEA.
    Congress has already taken poverty into consideration in allocating 
CARES Act funds to LEAs. An LEA receives ESSER funds based on its 
proportionate share of Title I funds (section 18003(c) of the CARES 
Act). The Department allocates Title I funds to LEAs through four 
statutory formulas, all of which are based on poverty counts that 
include both public and non-public school children.\4\ An LEA's Title I 
allocation is generally the sum it receives through each formula less 
any required or authorized reservations by the State. Similarly, 40 
percent of the GEER funds a Governor receives is based on the State's 
share of Title I formula children (section 18002(b)(2) of the CARES 
Act). Thus, Congress targeted both ESSER and GEER funds to high-poverty 
areas to reflect their need.
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    \4\ Title I's four formulas direct funds to LEAs based primarily 
on an LEA's relative share of formula children, 97 percent of whom 
are children ages 5 through 17 in poverty in public and non-public 
schools as determined annually by the Census Bureau. In varying 
degrees, the formulas address concentrations of poverty. 20 U.S.C. 
6333-6337.
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    However, once this allocation is made, the CARES Act authorizes an 
LEA to serve all students--public and non-public--who have been 
affected by COVID-19. If the CARES Act does not limit services based on 
residence and

[[Page 39483]]

poverty, then it stands to reason that an LEA should not use residence 
and poverty to determine the proportional share of available funds for 
equitable services to non-public school students. In this context, only 
the use of enrollment data ensures that sufficient CARES Act funds are 
reserved to provide services to non-public school students and teachers 
that are equitable in comparison to their public school 
counterparts.\5\ In fact, this is the only way to give meaning to the 
phrase ``in the same manner'' consistent with section 1117(a)(3) of the 
ESEA, which requires that benefits for ``private school children shall 
be equitable in comparison to services and other benefits for public 
school children.'' In other words, if an LEA elects to use CARES Act 
funds to serve all its students, then only a calculation of 
proportional share based on all students--i.e., enrollment--satisfies 
the requirements of section 1117(a)(3).
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    \5\ About 4.9 million students or 9.1 percent of all elementary 
and secondary school students in the Nation are enrolled in non-
public schools. Broughman, S.P., Kincel, B., and Peterson, J. 
(2019). Characteristics of Private Schools in the United States: 
Results From the 2017-18 Private School Universe Survey First Look 
(NCES 2019-071), U.S. Department of Education. Using enrollment to 
determine the share of CARES Act funds for equitable services and 
assuming that every private elementary and secondary school chose to 
participate in the CARES Act programs, less than 10 percent of the 
CARES Act funding nationwide would be provided for equitable 
services for non-public school students and teachers, with more than 
90 percent of the funding directed to public school students and 
teachers nationwide.
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    To best meet its needs, an LEA may choose to use funds from one 
CARES Act program (e.g., ESSER formula-grant funds) to serve students 
and teachers only in its Title I schools and funds from another CARES 
Act program (e.g., GEER funds) to serve students and teachers in any 
school. In this case, the LEA would use the appropriate measure in 
Sec.  76.665(c)(1) to determine the proportional share under each 
program.
    In sum, the measures in Sec.  76.665(c)(1)ensure the equitable 
treatment of non-public school students and teachers compared to their 
public school counterparts. The measures are also reasonable from the 
standpoint of administrative efficiency, minimizing LEA and parent 
burden, and carrying out the CARES Act's mandate to provide funds in 
response to the COVID-19 pandemic promptly and to do so in a way 
providing for equitable treatment of all students and teachers.
Equity
    Statute: Section 18005(a) of the CARES Act requires an LEA to 
provide equitable services ``in the same manner as provided under 
section 1117 of the ESEA'' to students and teachers in non-public 
schools.
    New Regulations: Section 76.665(d)(1) implements section 1117(a)(3) 
of the ESEA, which requires educational services and other benefits for 
students and teachers in non-public schools be equitable in comparison 
to services and other benefits for public school students and teachers. 
Section 76.665(d)(2) makes clear that, irrespective of the measure an 
LEA uses to determine the proportional share under paragraph (c)(1), 
the LEA still has the obligation to afford students and teachers in any 
non-public school in the LEA the opportunity to receive CARES Act 
services.
    Reasons: As explained above, section 1117(a)(3) of the ESEA 
mandates equity in equitable services. Only if services and other 
benefits to students and teachers in non-public schools are comparable 
to those provided to public school students and teachers can they be 
equitable.
    Under Sec.  76.665(d)(2), each non-public school in an LEA may 
request CARES Act services for its students and teachers. A non-public 
school, however, is not required to accept equitable services. In fact, 
the Department particularly discourages the small number of financially 
well-resourced non-public K-12 schools from accepting CARES Act-funded 
equitable services. Such schools include non-public boarding and day 
schools with tuition and fees comparable to those charged by the most 
highly selective postsecondary institutions. These schools tend to 
serve families from the highest income brackets, although they 
sometimes offer a limited number of scholarships to low- and middle-
income students each year. The Department believes such non-public 
schools have ample resources to serve their students and teachers 
during the COVID-19 national emergency and should not rely on taxpayer 
funds to do so.
Secular, Neutral, and Nonideological
    Statute: Section 18005(a) of the CARES Act requires an LEA to 
provide equitable services ``in the same manner as provided under 
section 1117 of the ESEA'' to students and teachers in non-public 
schools. Section 1117(a)(2) of the ESEA requires educational services 
or other benefits, including materials and equipment, be secular, 
neutral, and nonideological.
    New Regulations: Section 76.665(e) implements section 1117(a)(2) of 
the ESEA.
    Reasons: Section 76.665(e) makes clear that the services and 
benefits an LEA provides under the CARES Act programs must be secular, 
neutral, and nonideological.
Public Control of Funds
    Statute: Section 18005(b) of the CARES Act requires the control of 
CARES Act funds for services and assistance to students and teachers in 
non-public schools and title to materials, equipment, and property must 
be in a public agency and a public agency must administer those funds, 
materials, equipment, and property. An LEA must provide services 
directly or contract for the provision of services with a public or 
private entity.
    New Regulations: Section 76.665(f) implements section 18005(b) of 
the CARES Act.
    Reasons: Section 76.665(f) emphasizes the importance of the 
statutory requirements that control of CARES Act funds and title to 
materials, equipment, and property for equitable services to students 
and teachers in non-public schools be in a public agency and that the 
LEA or public agency continuously administers the funds, materials, 
equipment, and property.

Waiver of Proposed Rulemaking and Delayed Effective Date

    Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the 
Department generally offers interested parties the opportunity to 
comment on a proposed rule. However, the APA provides that an agency is 
not required to conduct notice and comment rulemaking when the agency, 
for good cause, finds that the requirement is impracticable, 
unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). 
There is good cause here for waiving rulemaking. The CARES Act programs 
were enacted to address the immediate effects of COVID-19. The statute 
requires an LEA to provide services for students and teachers in non-
public schools that are equitable in comparison to services provided to 
public school students and teachers. Before an LEA makes any decision 
that affects the opportunity of non-public school students and teachers 
to participate, it must consult with appropriate non-public school 
representatives. Thus, an LEA cannot begin services for public or non-
public school students and teachers without consulting on determining 
the amount of funds available for those services. Therefore, in light 
of the current national emergency, its disruption on education in both 
public and non-public schools, and the immediate need for certainty 
regarding applicable requirements, the normal rulemaking process would 
be

[[Page 39484]]

impracticable and contrary to the public interest because time is of 
the essence. However, the Department is providing a 30-day comment 
period and invites interested persons to participate in this rulemaking 
by submitting written comments. The Department will consider the 
comments received and may conduct additional rulemaking based on the 
comments.
    The APA also generally requires that a final or interim final rule 
be published at least 30 days before its effective date, unless the 
agency has good cause to implement its regulations sooner (5 U.S.C. 
553(d)(3)). Again, this interim final rule is necessary immediately to 
address the effects of COVID-19 on both public and non-public school 
students and teachers. In response to the pressing need for States and 
LEAs to have clear guidance on the use of funds under the CARES Act 
programs so that they can help all schools address the disruption 
created by COVID-19 and ensure that learning continues for all 
students, consistent with the purposes of the CARES Act, it is 
impracticable and contrary to the public interest to delay the 
effective date. Accordingly, we make this rule effective on the day it 
is published.

Executive Orders 12866, 13563, and 13771

Regulatory Impact Analysis

    Under Executive Order 12866, the Office of Management and Budget 
(OMB) must determine whether this regulatory action is ``significant'' 
and, therefore, subject to the requirements of the Executive order and 
subject to review by 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 ``economically significant'' regulations);
    (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 stated in the 
Executive order.
    This regulatory action is an economically significant regulatory 
action subject to review by OMB under section 3(f) of Executive Order 
12866. Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as a ``major rule,'' as defined by 5 U.S.C. 804(2).
    Under Executive Order 13771, for each new regulation that the 
Department proposes for notice and comment or otherwise promulgates 
that is a significant regulatory action under Executive Order 12866 and 
that imposes total costs greater than zero, it must identify two 
deregulatory actions. For FY 2020, any new incremental costs associated 
with a new regulation must be fully offset by the elimination of 
existing costs through deregulatory actions. The designation of this 
rule under Executive Order 13771 will be informed by public comments.
    We have also reviewed these regulations 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 upon 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 providing 
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.''
    The Department has assessed the potential costs and benefits, both 
quantitative and qualitative, of this regulatory action, and we are 
issuing this interim final rule only on a reasoned determination that 
its benefits justify its costs. In choosing among alternative 
regulatory approaches, we selected those approaches that would maximize 
net benefits. Based on the analysis that follows and the reasons stated 
elsewhere in this document, the Department believes that this interim 
final rule is consistent with the principles in Executive Order 13563.
    We also have determined that this regulatory action does not unduly 
interfere with State, local, or Tribal governments in the exercise of 
their governmental functions.
    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.
    Elsewhere, under Paperwork Reduction Act of 1995, we identify and 
explain burdens specifically associated with information collection 
requirements.
1. Need for Regulatory Action and Analysis of Benefits
    The Department is issuing this interim final rule to clarify the 
provision of equitable services under section 18005 of the CARES Act. 
More specifically, this interim final rule specifies the measures that 
LEAs may use to determine the proportional share of CARES Act funds 
available for equitable services to students and teachers in non-public 
schools. This interim final rule is meant to provide flexibility and 
clarify administration for SEAs and LEAs so that the equitable services 
provisions are implemented consistent with the requirements of the 
CARES Act and that funds may be used to provide services to both public 
and non-public students and teachers in a timely manner while imposing 
as little burden and costs on program participants as possible. In 
doing so, it reconciles applicable equitable services provisions of the 
CARES Act in a manner that is reasonable, offers appropriate 
flexibility, and ensures that CARES Act programs serve public and non-
public school students equitably. In particular, the rule expands the 
options available for determining the proportional share of CARES Act 
funds that must be made available for equitable services by allowing an 
LEA to

[[Page 39485]]

select a measure based on the students and schools it will serve with 
CARES Act funds. The Department believes that these benefits outweigh 
any associated costs.
    As discussed elsewhere in this preamble, in light of the current 
national emergency and the importance of ensuring that LEAs provide 
services immediately under the CARES Act to students and teachers in 
schools--both public and non-public--consistent with the requirements 
of law, the normal rulemaking process would be impracticable and 
contrary to the public interest. Moreover, in light of clear evidence 
that a significant number of SEAs have indicated their intention to 
implement the equitable services provisions of the CARES Act in a 
manner that the Department deems contrary to statutory requirements, 
which means that thousands of LEAs in these States may be in the 
process of violating the CARES Act as it pertains to equitable 
services, it is essential to clarify those requirements as soon as 
possible.
2. Analysis of Costs
    Section 18005 of the CARES Act is intended to ensure that LEAs 
receiving funds under the GEER Fund or ESSER Fund provide equitable 
services to students and teachers in non-public schools, as determined 
in consultation with representatives of non-public schools. In 
accordance with OMB Circular A-4 (available at www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), we are 
evaluating the costs and benefits of this interim final rule compared 
to a pre-statutory baseline. This rule defines the measures that may be 
used to determine the proportional share of funds that LEAs must 
reserve for equitable services but does not interpret or otherwise 
alter other statutory requirements related to equitable services. 
Affected LEAs will likely face some administrative costs to implement 
these statutory requirements, but the Department largely lacks data to 
quantify these costs. However, the Department expects that these 
entities will largely experience benefits exceeding these 
administrative costs. Because an LEA has flexibility in the manner in 
which it provides equitable services under the CARES Act programs, 
including the extent to which it relies on processes and procedures 
previously established to consult with non-public school officials and 
provide services under ESEA programs, and because the Department lacks 
data on the extent to which non-public schools may choose to 
participate in equitable services under the CARES Act, the Department 
does not know the exact costs attributable to the statutory 
requirements. Moreover, LEAs are permitted to reserve funds, from the 
proportional share determined in accordance with this interim final 
rule, to pay the reasonable and necessary costs of administering 
equitable services under the CARES Act.
    In the following paragraphs, we estimate the costs of determining 
the proportional share in accordance with the interim final rule, while 
recognizing that those costs may be financed using CARES Act program 
funds.\6\
---------------------------------------------------------------------------

    \6\ For the purpose of this analysis, we assume that an LEA 
receiving funds under the GEER Fund and ESSER Fund will use the same 
measure to determine the proportional share for each program.
---------------------------------------------------------------------------

Implementation Costs for SEAs, LEAs, Affected Schools, and the 
Government

Costs of Determining the Proportional Share for LEAs Serving Students 
and Teachers in Both Title I and Non-Title I Schools

    For LEAs using CARES Act funds to serve students and teachers in 
both Title I and non-Title I schools, the interim final rule requires 
the use of enrollment data to determine the proportional share. For the 
majority of these LEAs, enrollment data should already be available for 
non-public schools that participate in equitable services under ESEA 
programs other than Title I. Equitable services under those programs 
are governed by section 8501 of the ESEA, which requires in determining 
expenditures for equitable services that an LEA take into account the 
number of non-public school students to be served. In complying with 
this requirement, an LEA customarily obtains enrollment data from 
participating non-public schools. For such LEAs, complying with the 
interim final rule accordingly imposes no additional burden with 
respect to those schools.
    If an LEA does not already obtain enrollment data in this manner 
from a non-public school that will participate in equitable services 
under the CARES Act programs, we expect that, in a majority of States, 
the LEA can obtain the data immediately from the SEA, particularly the 
approximately 35 SEAs that collect enrollment data from their non-
public schools on an annual basis.\7\ For LEAs in this circumstance, 
the interim final rule similarly imposes no burden, and it imposes a 
negligible burden on affected SEAs, which would merely need to share 
previously collected enrollment data through long-established means of 
communication with their LEAs.
---------------------------------------------------------------------------

    \7\ See https://www2.ed.gov/about/inits/ed/non-public-education/regulation-map/.
---------------------------------------------------------------------------

    For LEAs that do not already have enrollment data for one or more 
participating non-public schools and that cannot obtain such data from 
the SEA, complying with the interim final rule entails obtaining the 
data directly from those schools through the consultation process. The 
Department believes this will be minimally burdensome on these LEAs, 
which we estimate to include 20 percent of affected LEAs. Specifically, 
we estimate that an LEA will have on average two non-public schools for 
which enrollment data are needed and that it will take on average 0.5 
total hours to obtain the data from those schools. At $35 per hour for 
LEA staff, the average cost is an estimated $18 per LEA. Assuming that 
10,125 LEAs (or 75 percent of an estimated 13,500 LEAs with attendance 
areas) are subject to the equitable services provisions of the CARES 
Act and that 7,595 (or 75 percent) of these LEAs will choose to serve 
students and teachers in both Title I and non-Title I schools, 
approximately 1,520 LEAs (20 percent of 7,595 affected LEAs) would bear 
this cost, for a total estimated cost of $27,360.

Costs of Determining the Proportional Share for LEAs Serving Title I 
Schools Only

    For LEAs using CARES Act funds to serve students and teachers only 
in Title I schools, the interim final rule provides the option to 
determine the proportional share using one of two poverty alternatives. 
The first is simply to use as the proportional share for CARES Act 
purposes the proportional share of Title I funds available for 
equitable services under section 1117(a)(4)(A) of the ESEA, which is 
determined based on residence of students from low-income families in 
participating Title I public school attendance areas. Using this pre-
existing alternative would of course impose no additional burden on 
LEAs.
    The second alternative is to determine the proportional share for 
equitable services using data on the number of students from low-income 
families who attend participating Title I schools and participating 
non-public elementary and secondary schools in the LEA. Under this 
alternative, an LEA may choose to obtain poverty counts for students in 
non-public schools that wish to participate. We estimate that 12.5 
percent of affected LEAs will implement this alternative by obtaining 
poverty counts and that it will take an LEA on average 240 hours to 
obtain those counts. At $35 per hour for LEA staff, the average cost is 
an estimated $8,400

[[Page 39486]]

per LEA. Assuming that 2,530 LEAs (or 25 percent of the estimated 
10,125 LEAs subject to the equitable services provisions of the CARES 
Act) will choose to serve students and teachers in Title I schools 
only, approximately 315 LEAs (12.5 percent of 2,530 affected LEAs) 
would bear this cost, for a total estimated cost of $2,646,000.
    As discussed elsewhere in this document, LEAs may also implement 
this poverty alternative using a proportionality method, wherein the 
LEA applies the average poverty rate of its Title I schools to the 
enrollment in non-public schools that will participate in a CARES Act 
program to generate poverty estimates for those schools. LEAs that 
choose to implement this alternative using a proportionality method 
would accordingly need to have enrollment data from participating non-
public schools, but not poverty data--that is, the same enrollment data 
required of LEAs serving students and teachers in both Title I and non-
Title I schools to determine the proportional share. As discussed 
elsewhere in this analysis with respect to those LEAs, enrollment data 
are generally already available. We estimate that only 20 percent of 
affected LEAs would need to obtain those data from one or more 
participating non-public schools, and that it would take on average 0.5 
hours to obtain the data. At $35 per hour for LEA staff, the average 
cost is an estimated $18 per LEA. Assuming that 315 LEAs (or 12.5 
percent of the estimated 2,530 LEAs that will choose to serve students 
and teachers in Title I schools only) will choose to implement this 
poverty alternative using a proportionality method or, as permitted, 
use enrollment data to determine the proportional share, approximately 
65 LEAs (20 percent of 315 affected LEAs) would bear this cost, for a 
total estimated cost of $1,170.
3. Net Budget Impacts
    We estimate that the discretionary elements of this interim final 
rule will not have an impact on the Federal budget. This rule specifies 
the measures that LEAs may use to determine the proportional share of 
funds for equitable services under the CARES Act programs but does not 
change the amount of funding available for such programs. We anticipate 
that $16.2 billion in CARES Act funds will be disbursed in 2020, and 
therefore estimate $16.2 billion in transfers in 2020 relative to a 
pre-statutory baseline.
4. Accounting Statement
    As required by OMB Circular A-4, in the following table we have 
prepared an accounting statement showing the classification of the 
impacts associated with the provisions of these regulations in 2020. 
Impacts classified as transfers are from the Federal Government to 
LEAs.

        Accounting Statement: Classification of Estimated Impacts
                              [In millions]
------------------------------------------------------------------------
                Category                             Benefits
------------------------------------------------------------------------
Clarity and flexibility in                Not Quantified.
 administration of equitable services.
------------------------------------------------------------------------
                                          Costs
------------------------------------------------------------------------
Determining proportional share for        $2.7.
 equitable services.
------------------------------------------------------------------------
                                          Transfers
------------------------------------------------------------------------
Providing educational services in         $16,182.
 preparation for and response to COVID-
 19, including for students and teachers
 in non-public schools.
------------------------------------------------------------------------

5. Regulatory Alternatives Considered
    As an alternative to the options for determining the proportional 
share provided in this interim final rule, the Department considered 
requiring all LEAs subject to equitable services requirements in the 
CARES Act to determine the proportional share using enrollment data. 
Ultimately, we determined that such a requirement could be inequitable 
if an LEA chooses to serve only its Title I schools and therefore uses 
its Title I proportional share as the proportional share for CARES Act 
purposes.

Clarity of the Regulations

    Executive Order 12866 and the Presidential memorandum ``Plain 
Language in Government Writing'' require each agency to write 
regulations that are easy to understand.
    The Secretary invites comments on how to make these regulations 
easier to understand, including answers to questions such as the 
following:
     Are the requirements in the regulations clearly stated?
     Do the regulations contain technical terms or other 
wording that interferes with their clarity?
     Does the format of the regulations (grouping and order of 
sections, use of headings, paragraphing, etc.) aid or reduce their 
clarity?
     Would the regulations be easier to understand if we 
divided them into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec.  '' and a numbered heading; for example, 
Sec.  76.665.)
     Could the description of the regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 
making the regulations easier to understand? If so, how?
     What else could we do to make the regulations easier to 
understand?
    To send any comments that concern how the Department could make 
these regulations easier to understand, see the instructions in the 
ADDRESSES section.

Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act does not apply to this rulemaking 
because there is good cause to waive notice and comment under 5 U.S.C. 
553.
    The Secretary certifies that these interim final requirements would 
not have a significant economic impact on a substantial number of small 
entities. Under the U.S. Small Business Administration's Size 
Standards, small entities include small governmental jurisdictions such 
as cities, towns, or school districts (LEAs) with a population of less 
than 50,000. Although the majority of LEAs that receive CARES Act funds 
and are subject to CARES Act equitable services requirements would 
qualify as small entities under this definition, this rule will benefit 
small entities by providing multiple options for determining the 
proportional share of funds that must be reserved for equitable 
services and clarifying that such entities have discretion to select 
the option that

[[Page 39487]]

minimizes costs and burdens. As discussed in the Regulatory Impact 
Analysis, unless an LEA seeks to serve only Title I schools and 
determine the proportional share for equitable services by obtaining 
poverty counts based on student enrollment, the costs associated with 
the interim final rule are minimal. We estimate that the vast majority 
of LEAs (9,810 LEAs out of an estimated 10,125 LEAs subject to 
equitable services requirements) will choose to employ a minimally 
burdensome option in determining the proportional share. Moreover, for 
any small-entity LEA that chooses to serve only Title I schools and 
determine the proportional share for equitable services by obtaining 
poverty counts based on student enrollment, we presume the benefit of 
obtaining accurate poverty counts outweighs any associated costs. 
Finally, we note that all costs entailed in administering the equitable 
services provisions of the CARES Act may be paid for with funds 
received under the respective CARES Act programs; consequently, neither 
the statutory CARES Act equitable services requirements nor the 
provisions of this interim final rule impose any uncompensated costs on 
small entities.

Paperwork Reduction Act of 1995

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department provides the general 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 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Department can properly assess the impact 
of collection requirements on respondents.
    A Federal agency may not conduct or sponsor a collection of 
information unless OMB approves the collection under the PRA and the 
corresponding information collection instrument displays a currently 
valid OMB control number. Notwithstanding any other provision of the 
law, no person is required to comply with, or is subject to penalty for 
failure to comply with, a collection of information if the collection 
instrument does not display a currently valid OMB control number.
    Information collections related to the CARES Act programs are 
included in paperwork clearances OMB control numbers 1810-0741 and 
1810-0743. The Department is currently requesting public comment on 
these clearances. Those clearances do not address the information 
collection applicable to this rule. Accordingly, the Department is 
requesting a separate emergency paperwork clearance from OMB on the 
data collections associated with this interim final rule and will add 
the burden to the clearances currently out for public comment.
    As discussed in the Analysis of Costs and Benefits section of the 
Regulatory Impact Statement in these interim final regulations, for 
LEAs that do not already have enrollment data for one or more 
participating non-public schools and that cannot obtain such data from 
the SEA, complying with the interim final regulations entails obtaining 
the data directly from those schools through the consultation process. 
The Department believes this will be minimally burdensome on these 
LEAs, which we estimate to include 20 percent of affected LEAs. 
Specifically, we estimate that an LEA will have on average two non-
public schools for which enrollment data are needed and that it will 
take on average 0.5 total hours to obtain the data from those schools. 
At $35 per hour for LEA staff, the average cost is an estimated $18 per 
LEA. Assuming that 10,125 LEAs (or 75 percent of an estimated 13,500 
LEAs with attendance areas) are subject to the equitable services 
provisions of the CARES Act and that 7,595 (or 75 percent) of these 
LEAs will choose to serve students and teachers in both Title I and 
non-Title I schools, approximately 1,520 LEAs (20 percent of 7,595 
affected LEAs) would bear this cost, for a total estimated cost of 
$27,360.
    For LEAs using CARES Act funds to serve students and teachers only 
in Title I schools, the interim final regulations provide the option to 
determine the proportional share using one of two poverty alternatives; 
however, only one of these alternatives would impose additional burden. 
For the alternative that imposes additional burden, LEAs would 
determine the proportional share for equitable services using data on 
the number of students from low-income families who attend 
participating Title I schools, which are already available, and 
participating non-public elementary and secondary schools in the LEA. 
Under this alternative, an LEA may choose to obtain poverty counts for 
students in non-public schools that wish to participate. We estimate 
that 12.5 percent of affected LEAs will implement this alternative by 
obtaining poverty counts and that it will take an LEA on average 240 
hours to obtain those counts. At $35 per hour for LEA staff, the 
average cost is an estimated $8,400 per LEA. Assuming that 2,530 LEAs 
(or 25 percent of the estimated 10,125 LEAs subject to the equitable 
services provisions of the CARES Act) will choose to serve students and 
teachers in Title I schools only, approximately 315 LEAs (12.5 percent 
of 2,530 affected LEAs) would bear this cost, for a total estimated 
cost of $2,646,000.
    As discussed elsewhere in this document, LEAs may also implement 
this poverty alternative using a proportionality method, wherein the 
LEA applies the average poverty rate of its Title I schools to the 
enrollment in non-public schools that will participate in a CARES Act 
program to generate poverty estimates for those schools. LEAs that 
choose to implement this alternative using a proportionality method 
would accordingly need to have enrollment data from participating non-
public schools, but not poverty data--that is, the same enrollment data 
required of LEAs serving students and teachers in both Title I and non-
Title I schools to determine the proportional share. With respect to 
those LEAs, enrollment data are generally already available. We 
estimate that only 20 percent of affected LEAs would need to obtain 
those data from one or more participating non-public schools, and that 
it would take on average 0.5 hours to obtain the data. At $35 per hour 
for LEA staff, the average cost is an estimated $18 per LEA. Assuming 
that 315 LEAs (or 12.5 percent of the estimated 2,530 LEAs that will 
choose to serve students and teachers in Title I schools only) will 
choose to implement this poverty alternative using a proportionality 
method or, as permitted, use enrollment data to determine the 
proportional share, approximately 65 LEAs (20 percent of 315 affected 
LEAs) would bear this cost, for a total estimated cost of $1,170.

Intergovernmental Review

    The CARES Act programs covered by the interim final rule are not 
subject to Executive Order 12372 and the regulations in 34 CFR part 79.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) 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. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can

[[Page 39488]]

view this document, as well as all other documents of this Department 
published in the Federal Register, in text or portable document format 
(PDF). To use PDF you must have Adobe Acrobat Reader, which is 
available free at the 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.

List of Subjects in 34 CFR Part 76

    Accounting, Administrative practice and procedure, American Samoa, 
Education, Grant programs--education, Guam, Northern Mariana Islands, 
Pacific Islands Trust Territory,Prisons, Private schools, Reporting and 
recordkeeping requirements, Virgin Islands, Youth organizations.

Betsy DeVos,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary amends 
title 34 of the Code of Federal Regulations by revising part 76 to read 
as follows:

PART 76--STATE-ADMINISTERED PROGRAMS

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1. The authority citation for part 76 continues to read as follows:

    Authority:  20 U.S.C. 1221e-3 and 3474, unless otherwise noted.


Sec. Sec.  76.663 and 76.664  [Reserved]

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2. Add reserved Sec. Sec.  76.663 and 76.664.

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3. Add an undesignated center heading after reserved Sec.  76.664 to 
read as follows:

Equitable Services Under the CARES Act

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4. Section 76.665 is added to read as follows:


Sec.  76.665   Providing equitable services to students and teachers in 
non-public schools.

    (a) In general. (1) A local educational agency (LEA) receiving 
funds under a CARES Act program must provide equitable services to 
students and teachers in non-public elementary and secondary schools in 
the LEA ``in the same manner'' as provided under section 1117 of the 
Elementary and Secondary Education Act of 1965 (ESEA), as determined in 
consultation with representatives of non-public schools.
    (2) For purposes of this section, the CARES Act programs are the 
Governor's Emergency Education Relief (GEER) Fund (Section 18002), 
formula grants to LEAs under the Elementary and Secondary School 
Emergency Relief (ESSER) Fund (Section 18003(c)), and ESSER SEA Reserve 
(Section 18003(e)).
    (b) Consultation. (1) An LEA must promptly consult with 
representatives of non-public elementary and secondary schools during 
the design and development of the LEA's plans to spend funds from a 
CARES Act program and before the LEA makes any decision affecting the 
opportunities of students and teachers in non-public schools to benefit 
from those funds. As provided in section 1117(b)(1) of the ESEA, the 
LEA and non-public school officials shall both have the goal of 
reaching timely agreement on how to provide equitable and effective 
programs for non-public school students and teachers.
    (2) Consultation must occur in accordance with section 1117(b) of 
the ESEA, except to the extent inconsistent with the CARES Act and this 
section, such as section 1117(b)(1)(E) and (J)(ii).
    (c) Determining proportional share. (1) To determine the 
proportional share of funds for equitable services to students and 
teachers in non-public elementary and secondary schools for each CARES 
Act program, an LEA must use one of the following measures. The LEA 
need not use the same measure for each CARES Act program.
    (i) An LEA using all its funds under a CARES Act program to serve 
only students and teachers in public schools participating under Title 
I, Part A of the ESEA may calculate the proportional share in 
accordance with paragraph (c)(1)(ii) of this section or by using--
    (A) The proportional share of Title I, Part A funds it calculated 
under section 1117(a)(4)(A) of the ESEA for the 2019-2020 school year; 
or
    (B) The number of children, ages 5 through 17, who attend each non-
public school in the LEA that will participate under a CARES Act 
program and are from low-income families compared to the total number 
of children, ages 5 through 17, who are from low-income families in 
both Title I schools and participating non-public elementary and 
secondary schools in the LEA.
    (ii) Any other LEA must calculate the proportional share based on 
enrollment in participating non-public elementary and secondary schools 
in the LEA compared to the total enrollment in both public and 
participating non-public elementary and secondary schools in the LEA.
    (2) An LEA must determine the proportional share of funds available 
for services for students and teachers in non-public elementary and 
secondary schools based on the total amount of CARES Act funds received 
by the LEA under a CARES Act program prior to any allowable 
expenditures or transfers by the LEA.
    (3) An LEA using funds from a CARES Act program in Title I schools 
under paragraph (c)(1)(i) of this section must comply with the 
supplement not supplant requirement in section 1118(b) of the ESEA, 
which would prohibit the LEA from allocating CARES Act funds to Title I 
schools and then redirecting State or local funds to non-Title I 
schools, among other things.
    (d) Equity. (1) Educational services and other benefits for 
students and teachers in non-public elementary and secondary schools 
must be equitable in comparison to services and other benefits for 
public school students and teachers participating in CARES Act 
programs, and must be provided in a timely manner.
    (2) The measure an LEA uses to determine the proportional share 
under paragraph (c)(1) of this section does not limit the obligation of 
the LEA to provide the opportunity to receive services to students and 
teachers in any non-public elementary or secondary school in the LEA.
    (e) Secular, neutral, and nonideological. Educational services and 
benefits, including materials and equipment, an LEA provides to 
students and teachers in non-public elementary and secondary schools 
under the CARES Act programs must be secular, neutral, and 
nonideological.
    (f) Public control of funds. An LEA must--
    (1) Maintain control of CARES Act funds;
    (2) Keep title to and exercise continuing administrative control of 
all materials, equipment, and property purchased with CARES Act funds; 
and
    (3) Provide services with CARES Act funds directly or through a 
contract with a public or private entity.

(Authority: 20 U.S.C. 6320, 6321(b); section 18005 of the CARES Act)


Sec. Sec.  76.666 through 76.669  [Reserved]

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5. Add reserved Sec. Sec.  76.666 through 76.669.

[FR Doc. 2020-14224 Filed 6-30-20; 8:45 am]
BILLING CODE 4000-01-P