Indian Education Discretionary Grant Programs; Demonstration Grants for Indian Children and Youth Program, 43442-43452 [2020-15543]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 85, Number 138 (Friday, July 17, 2020)]
[Rules and Regulations]
[Pages 43442-43452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15543]


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DEPARTMENT OF EDUCATION

34 CFR Part 263

RIN 1810-AB54
[Docket ID ED-2019-OESE-0126]


Indian Education Discretionary Grant Programs; Demonstration 
Grants for Indian Children and Youth Program

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

ACTION: Final regulations.

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SUMMARY: The Secretary amends the regulations that govern the 
Demonstration Grants for Indian Children and Youth Program 
(Demonstration program), authorized under title VI of the Elementary 
and Secondary Education Act of 1965, as amended (ESEA), to implement 
changes to title VI resulting from the enactment of the Every Student 
Succeeds Act (ESSA). These final regulations would update, clarify, and 
improve the current regulations. These regulations also add a new 
priority, and accompanying requirements and selection criteria, for 
applicants proposing to empower Tribes and families to decide which 
education services will best support their children to succeed in 
college and careers.

DATES: These regulations are effective August 17, 2020. Publication of 
the control number notifies the public that OMB has approved these 
information collection requirements under the Paperwork Reduction Act 
of 1995. These regulations apply to applications for the Demonstration 
program for fiscal year (FY) 2020 and subsequent years.

FOR FURTHER INFORMATION CONTACT: Bianca Williams, U.S. Department of 
Education, 400 Maryland Avenue SW, Room 3W237 Washington, DC 20202-
6335. Telephone: 202-453-5671. 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: These regulations implement statutory 
changes

[[Page 43443]]

made to the Demonstration program in section 6122 of the ESEA (20 
U.S.C. 7442) by the ESSA and make other changes to better enable the 
Department and grantees to meet the objectives of the program.
    We published a notice of proposed rulemaking for this program 
(NPRM) in the Federal Register on March 31, 2020 (85 FR 17794).
    In the preamble of the NPRM, we discussed on pages 17799-17801 the 
major changes proposed in that document. These included the following:
     Amending the priority in Sec.  263.21(b)(1) that gives 
priority to Indian applicants to include schools funded by the Bureau 
of Indian Education (BIE) in the list of entities that are included in 
that priority.
     Adding a priority to Sec.  263.21(c) for entities that are 
not rural and do not meet the existing priority for rural entities to 
allow the use of the existing priority for rural entities along with 
this new priority to create separate rank orders of rural and non-rural 
applicants.
     Adding a priority as Sec.  263.21(c)(7) that would expand 
educational choice for parents and students, to enhance the ability of 
parents to choose high-quality educational opportunities to meet the 
needs of Native youth.
     Adding as new Sec.  263.22(b)(4) an application 
requirement to include a plan to oversee service providers and ensure 
students are receiving high-quality services.
     Adding as new Sec.  263.22(b)(5) an application 
requirement for non-Tribal applicants to partner with a Tribe or Indian 
organization.
     Amending renumbered Sec.  263.24 to add new selection 
criteria.
     Adding as new Sec.  263.25 program requirements relating 
to the new choice priority.
    These final regulations contain several substantive changes from 
the NPRM, which we fully explain in the Analysis of Comments and 
Changes section of this preamble, in addition to several technical 
changes.
    Public Comment: In response to our invitation in the NPRM, eight 
parties submitted comments on the proposed regulations. Although none 
of the comments received during public comment were from federally 
recognized Tribes, one commenter is an organization that includes 
several federally recognized Tribes. Tribes previously participated in 
Tribal consultation during development of the NPRM. For additional 
information on Tribal Consultation, please see the Tribal Consultation 
section of the NPRM.

Performance Measures

    Although we are not required to include our proposed performance 
measures for this program in the notice and comment rulemaking process, 
in the NPRM we invited comment on those measures in order to gain more 
insight into the impact and feasibility of these measures. We 
appreciate the feedback and we have considered that feedback in 
revising the performance measures. We will publish the revised measures 
in the notice inviting applications for the competition for FY 2020 
funding.
    Analysis of Comments and Changes: An analysis of the comments 
regarding the proposed regulations and of any changes in the 
regulations since publication of the NPRM follows. We group major 
issues according to subject. Generally, we do not address technical and 
other minor changes.

General

    Comment: One commenter objected to the inclusion of BIE-funded 
schools as eligible applicants for this program. One commenter opposed 
the addition of BIE-funded schools to the list of Tribal entities that 
receive priority under Sec.  263.21(b)(1) of the regulations.
    Discussion: Under section 6121(b) of the ESEA, BIE-funded schools 
are eligible to apply for this grant program because they meet the 
definition of a ``federally supported elementary school or secondary 
school for Indian students.'' These regulations do not constitute a 
change to the statutory eligibility of BIE-funded schools to apply for 
grants under this program.
    With regard to the regulatory priority for Tribal entities, that 
priority is required by section 6143 of the ESEA, which requires the 
Department, in awarding grants under the discretionary grant programs 
in title VI, part A, subparts 2 and 3, to give preference to ``Indian 
tribes, organizations, and institutions of higher education.'' The term 
``Indian'' modifies ``organizations'' and ``institutions of higher 
education.'' The Department has defined the term ``Indian 
organization,'' for purposes of the Demonstration program, in Sec.  
263.21 of these regulations. Schools funded by the BIE meet that 
definition, and the Office of Indian Education has treated them as 
included under the statutory priority.
    Changes: None.
    Comment: Several commenters provided input on the proposed priority 
for non-rural applicants in Sec.  263.21(c)(6). One suggested that we 
permit applicants to self-select into rural and non-rural categories to 
better ensure applications are reviewed in a fair and equitable manner. 
This commenter also suggested that we use four categories to further 
distinguish between rural and non-rural applicants based on the number 
of Tribal nations represented in the targeted student population. The 
commenter explained that in their State, the majority of Indian 
students live in urban areas, and have needs that are different from 
those in rural areas.
    Another commenter objected to including a priority for non-rural 
applicants if it means that rural applicants would receive less 
funding, due to the high needs of the rural areas. Another commenter 
stated that the change to Sec.  263.21(c)(6) to add a non-rural 
priority in combination with the rural priority in Sec.  263.21(c)(5) 
would be overly limiting to applicants.
    Discussion: We do not believe it would be reasonable for applicants 
to self-select into rural and non-rural categories, because it would 
create an arbitrary and subjective distinction. We also do not believe 
it would be reasonable to use four categories to further distinguish 
between rural and non-rural applicants based on the number of Tribal 
nations represented in the targeted student population because of the 
complexity involved. Rather than permitting applicants to arbitrarily 
choose which category they would like to belong to, we feel it is 
important to use clear, objective, and simple criteria in order to 
classify entities as rural or non-rural. To ensure applicants meet the 
priority's requirements, an applicant would indicate in its application 
whether it meets the specific requirements of the rural priority, that 
is, the entity is eligible under the Small Rural School Achievement 
(SRSA) program or the Rural and Low-Income School (RLIS) program, or is 
a BIE-funded school in an area designated by certain locale codes. 
Other applicants would apply as non-rural applicants.
    With regard to the concerns that including a non-rural priority 
would mean less funding for rural applicants, or provide a limitation, 
the text of new Sec.  263.21(c)(6) specifies that the non-rural 
priority may only be used in competitions for which the rural priority 
is also used.
    This change allows the Department the flexibility in future 
competitions to consider rural and non-rural applicants separately. For 
example, by using both priorities as absolute priorities, we can create 
separate funding slates for applicants that propose to serve rural 
communities and applicants that do not. This would provide a way for 
the Department to distribute grants fairly across high-scoring rural 
and non-rural

[[Page 43444]]

applicants, ensuring that applicants serving rural areas that may have 
fewer available resources are not disadvantaged compared to non-rural 
applicants.
    Changes: None.
    Comment: One commenter expressed support for the proposed choice 
priority for the Demonstration program in Sec.  263.21(c)(7). The 
commenter stated that this priority enables all Native students to have 
opportunities to succeed without biases or limitations in their career 
of choice, and provides the flexibility for grantees to determine which 
academic pursuits are most impactful for students in their communities, 
including students with disabilities. The commenter stated that under 
this priority, grantees can pay for the services that parents and 
students may not be able to afford otherwise, such as individual 
tutoring services or student counseling. The commenter recommended a 
requirement that services be supplemental to existing school services 
and funding sources.
    Discussion: We appreciate the support for this new priority. The 
priority already includes a requirement that services be supplemental 
to existing school services and funding sources, so no change is 
needed.
    Changes: None.
    Comment: Several commenters stated that they oppose the addition of 
the priority in Sec.  263.21(c)(7) because they believe it would fund 
private school education by creating a private school voucher funded 
with taxpayer dollars. One commenter stated that this priority would 
undermine Tribal sovereignty by creating vouchers that could be used to 
fund non-Native private entities and would also undermine the goals of 
the Demonstration program. Another commenter stated that very few 
students live near a private school that would accept vouchers, so for 
most students, vouchers would not provide a meaningful choice outside 
of their traditional public school. Another commenter stated that, 
given the history of mission-run schools on American Indian 
reservations, the majority of private schools that would accept 
vouchers under this program would probably be religious schools. This 
commenter argued that voucher programs violate the fundamental 
principle of separation of church and State, because it is impossible 
to prevent the use of voucher funds for the schools' religious 
education. The commenter and other commenters further stated that 
private schools are not required to provide students with the same 
civil rights protections as public schools, discriminate against 
students for entrance purposes, and do not provide students with 
disabilities with a free and appropriate education. The commenter noted 
that during Tribal consultation for this program, Tribal leaders 
requested a variety of service options, but did not ask for private 
school vouchers, because private schools are generally not a viable 
option for their students due to the lack of transportation and other 
concerns.
    Several of the commenters stated that voucher systems do not 
improve academic outcomes, that private schools are not subject to ESEA 
accountability requirements, and that vouchers do not guarantee 
compliance with State standards. One commenter argued that studies 
indicate that vouchers could be particularly harmful for American 
Indian children due to the effects of transitioning between schools.
    During Tribal consultation, the majority of participants supported 
inclusion of a choice priority. For information regarding Tribal input, 
see the Tribal Consultation section of the NPRM.
    Discussion: The new choice priority does not create a voucher 
system. Rather, it enables grantees to choose a service focus based on 
the needs of their own communities, and to set up a system that 
empowers parents and students to choose the specific services and 
providers that best suit their needs. By empowering Tribes to select 
the project focus that they want, this priority supports Tribal 
sovereignty; by empowering parents and students to choose their 
services and providers, this priority effectuates the goal of the 
Demonstration program, which is ``to support projects to develop, test, 
and demonstrate the effectiveness of services and programs to improve 
educational opportunities and achievement of Indian children and 
youth.''
    During Tribal consultation, we presented Tribal leaders with a list 
of possible education services that a Tribe might include if it were 
applying for a grant under a priority that would allow parents of 
eligible Indian students to choose education services for their child. 
That list included private or home education. A majority of 
consultation participants expressed general interest in the services 
discussed. Tuition for private school expenses is included in Sec.  
263.25(b) of these final regulations in the list of 12 examples of 
service options that could be offered by grantees; none of these are 
required but are examples only. We agree that in many Tribal areas, 
there are not private schools in the local vicinity; in such areas, 
applicants may not wish to choose this service option. We leave it to 
the Tribe or other grantee to decide, based on its own community needs 
and the required input of local families and Tribes, which services to 
offer.
    With regard to the argument that voucher systems do not improve 
academic outcomes, do not guarantee compliance with State standards or 
accountability systems, and could be harmful for American Indian 
children, this priority does not create or require a voucher system, as 
explained above. Therefore, we do not address the merits of these 
arguments because they are not relevant to the priority.
    Related to the argument that using these grant funds for tuition at 
a private religious school would violate the principle of separation of 
church and State, we note that Department-wide regulations prohibit 
Department funds from being used for religious instruction, including 
equipment or supplies related to such instruction (34 CFR 75.532). In 
addition, we require in Sec.  263.25(c) that grant funds be 
supplemental to the existing education program and funding sources at 
any participating school, whether public or private.
    With regard to the argument that private schools discriminate 
against certain students in their admissions, the regulations require 
that each written agreement between the grantee and a service provider 
contain a nondiscrimination clause that prohibits the provider from 
discriminating against students on the basis of race, color, national 
origin, religion, sex, or disability.
    In response to the arguments concerning civil rights and services 
for students with disabilities at private schools, the Tribe or other 
grantee chooses the service providers. Grantees do not need to enter 
into agreements with private schools, even if there are private schools 
in the vicinity. Grantees are free to enter into agreements with 
schools or other providers that contain requirements in addition to 
those required by these regulations; such additional requirements could 
include provisions relating to civil rights, services for students with 
disabilities, or any other conditions desired.
    Changes: None.
    Comment: One commenter objected to the proposed changes to the 
application requirements in Sec.  263.22(a), stating that a requirement 
for applicants to describe how the parents and families of Indian 
children and youth have been and will be involved in the planning and 
implementation of the proposed project is unnecessary because Tribes 
and Indian organizations are knowledgeable

[[Page 43445]]

intermediaries that already understand and can represent the needs of 
Indian children and youth.
    The commenter also objected to the requirement in Sec.  
263.22(a)(3) that applicants demonstrate the proposed project is 
evidence-based, where applicable, or is based on an existing program 
that has been modified to be culturally appropriate for Indian 
students. The commenter stated that this requirement does not align 
with the statutory purpose of the program, which the commenter 
describes as trying out new and different program ideas that support 
academic success for Indian children, because newly developed programs 
will not be able to show evidence of prior success. The commenter 
argued that the kinds of evidence-based programming that are successful 
in other communities are not necessarily successful in Indian 
communities, and that the programs that have been successful in Indian 
communities based on qualitative measures are not likely to meet the 
requirement for evidence-based program design.
    Discussion: The changes to Sec.  263.22(a)(1), which requires 
applicants to describe how the parents and families of Indian children 
and youth are involved in planning and implementation of the proposed 
project, are required by changes to the statute. Parent involvement has 
always been a statutory application requirement; the only change to the 
regulation reflects ESSA changes to the ESEA, which added the phrase 
``and families'' after the word ``parents'' (section 6121(d)(3)(B)(i) 
of the ESEA).
    With regard to the requirement in Sec.  263.22(a)(3) that 
applicants provide information showing that the proposed project is 
evidence-based, where applicable, or is based on an existing evidence-
based program that has been modified to be culturally appropriate for 
Indian students, this application requirement is also mandated by the 
ESEA (section 6121(d)(3)(B)(iii)). The ESSA changes removed the term 
``based on scientific research'' and instead uses ``evidence-based.'' 
We understand the commenter's concern that there may be educational 
programs used in Indian communities that have shown success at 
improving the educational outcomes for Indian students, but do not meet 
the ESEA's definition of ``evidence-based'' (see ESEA section 
8101(21)), but the language in the statute and regulations provides 
enough flexibility to address these situations, by providing that 
programs must be evidence-based ``as applicable,'' and by allowing for 
programs that ``have been modified to be culturally appropriate for 
Indian students.''
    We make no changes to proposed Sec.  263.22 for the reasons 
described above. However, as a result of the commenter's input, we have 
re-examined the proposed selection criterion in Sec.  263.24(a)(3) 
regarding the extent to which the services to be offered are evidence-
based. Rather than requiring applicants to explain how the services in 
their proposed project are evidence-based, we have determined that it 
would better align with the program goals and the application 
requirement to instead have the criterion examine the quality of the 
applicant's plan for ensuring that evidence-based services are 
provided. This will allow applicants, particularly those that propose a 
planning period and have not yet identified service providers, to 
submit a plan for identifying and monitoring service providers to 
ensure they are providing services that are evidence-based using these 
grant funds. We also add the qualifying terms that the services must be 
evidence-based ``where applicable'' and may be modified to be 
culturally appropriate.
    Changes: We have revised proposed Sec.  263.24(a)(3) (renumbered 
Sec.  263.24(b)(3) in these final regulations) to refer to a plan for 
ensuring that services are evidence-based where applicable and that 
services may be modified to be culturally appropriate.
    Comment: One commenter generally supported the proposed application 
requirement in Sec.  263.22(b)(5) that non-Tribal entities partner with 
a Tribe or Tribal organization, as this will ensure Tribes or Tribal 
organizations will be important participants in this program; however, 
the commenter objected to the specifics of the partnership requirement. 
The commenter stated that requiring non-Tribal applicants to partner 
with a Tribe or Tribal organization depending on whether the majority 
of students to be served are members of a single Tribe is not required 
by the statute. Additionally, the commenter argued that it is unclear 
whether the 50 percent requirement relates to the students to be 
served, or to the percentage of students in the school district 
applying for the grant. The commenter argued that the 50 percent 
threshold is too high because few school districts meet that threshold; 
the commenter suggested that the threshold instead be set at 15 
percent.
    Discussion: During the consultation process, Tribes advised that in 
order to support Tribal sovereignty, projects that serve Indian 
children must include a Tribal partner. The phrase ``of the student 
body to be served'' was intended to encompass the entire school or 
schools where students who might participate attend, rather than just 
the number of students that would be served by the project; for 
example, if a Tribal applicant plans to serve students from both the 
local public school and the local BIE-funded school, it would add the 
enrollment of both schools to calculate the percentage of Native 
students who could be served by the project. We have revised the 
language to more clearly express this intent by replacing ``of the 
student body to be served'' with ``of the total student population of 
the schools to be served by the project'' in Sec.  263.22(b)(5)(i).
    Regarding the commenter's concern, it was the intended result that 
relatively few applicants will meet the threshold of 50 percent 
membership from a single Tribe. A Tribe for which a local school's 
student population is 50 percent or more members of that Tribe will 
likely have a heightened interest in the project and in the services 
that will be provided to students. A public school district applicant 
whose target population for its project is located on a reservation, 
for example, would likely meet this threshold and should be required to 
partner with the local Tribe. To respect Tribal sovereignty and the 
important relationship between a Tribe and its members, this 
requirement was designed to ensure that for the relatively small number 
of applicants that meet the 50 percent student threshold, partnership 
with a specific Tribe is required.
    We also recognize that many schools, especially in urban areas, 
serve students from many different Tribes and understand that it may be 
difficult for entities to obtain accurate data on the percentages of 
students from various Tribes, which can create a burden for applicants. 
Moreover, we recognize that in some situations, such as in urban areas, 
there is no Tribe with a local presence, and that an Indian 
organization may be a more appropriate partner.
    In the situation in which the student body does not have a majority 
of students from one Tribe, the proposed language required every entity 
other than a Tribe to partner with a local Tribe, a local or national 
Tribal organization, TCU, or BIE-funded school for the project. We are 
narrowing this alternative part of the application requirement to apply 
only to local educational agency (LEA) and State educational agency 
(SEA) applicants. An applicant that meets the definition of Indian 
organization, as well as a BIE-funded school or a TCU, already has 
Tribal affiliation and it would be unduly

[[Page 43446]]

burdensome to require such entities to include documentation of 
partnership with a Tribe or other Indian organization.
    We are also changing the requirement regarding which entity an LEA 
or SEA must partner with when no single Tribe accounts for a majority 
of students in the schools to be served. Rather than allowing a 
partnership with a local Tribe, Indian organization, TCU, or BIE-funded 
school, we are changing the options to require a partnership with 
either a Tribe or an Indian organization. We are replacing the phrase 
``Tribal organization'' with ``Indian organization'' to correctly match 
the defined term in this regulation. In addition, we are removing the 
``local'' qualifier for a Tribe because we believe this could be 
ambiguous and could unduly limit the prospective partners for an 
application. In the interests of sovereignty, the preference is for the 
applicant to partner with a local Tribe if possible, but we recognize 
that this is not always possible. In addition, we are changing the 
related program requirement to require only LEAs or SEAs to include the 
Tribe or Indian organization partner in selecting services and 
providers.
    Changes: We have revised proposed Sec.  263.22(b)(5) to--(1) 
provide that a non-Tribal applicant that proposes a project serving a 
student population consisting of 50 percent or more members of one 
Tribe must submit documentation of partnership with that Tribe and (2) 
require an LEA or SEA applicant that proposes a project that will serve 
a student population where no single Tribe accounts for at least 50 
percent of the members to submit documentation of partnership with at 
least one Tribe or Indian organization. We have also revised the 
related program requirement in Sec.  263.25(a) to require only LEAs or 
SEAs to include the Tribe or Indian organization partner in selecting 
services and providers.
    Comment: One commenter stated that proposed Sec.  263.24 adds 
numerous new selection criteria to the program that would place a 
significant burden on Tribes and Tribal organizations, whether applying 
alone or as a documented partner to a non-Tribal applicant. 
Additionally, the commenter argued the regulations do not clearly state 
whether these new selection criteria will be applied to all priorities 
or only to the new priority in Sec.  263.21(c)(7).
    Discussion: Proposed Sec.  263.24 creates new selection criteria 
for evaluation of grant applications: Three factors under the criterion 
``quality of project services'' (Sec.  263.21(a)), four factors under 
the criterion ``quality of project design'' (Sec.  263.21(b)), and two 
factors under the criterion ``reasonableness of budget'' (Sec.  
262.21(c)). The Department can use these selection criteria in addition 
to the general selection criteria in 34 CFR 75.210. The expanded set of 
available selection criteria ensures a grant competition that is 
tailored to the unique needs of Tribal applicants and the students they 
serve. While the more specific selection criteria may result in a minor 
burden to applicants that choose to address those criteria, we believe 
this burden is outweighed by the benefit of being able to evaluate 
applicants using selection criteria that reflect the specific goals of 
the program. We believe this will enhance our ability to ensure we 
select applicants that will provide programs that are designed to 
improve the educational opportunities and achievement of Indian 
children and youth.
    With respect to the commenter's statement that it is unclear when 
the new selection criteria in Sec.  263.24 will be applied, it is clear 
from the language of the regulation that the specific criteria in Sec.  
263.24 as well as the general selection criteria in 34 CFR 75.210 may 
be chosen to evaluate applicants for any competition. In the NPRM we 
included a range of possible selection criteria, some of which do 
relate to the new choice priority and some that are more general, so 
that we are able to choose selection criteria that will best align with 
the program focus from year to year.
    Changes: None.
    Comment: Several commenters provided specific suggestions regarding 
the requirements in proposed Sec.  263.25 relating to the new choice 
priority.
    One commenter suggested that, to ensure accountability and 
reliability of providers, grantees should work with their SEA to pre-
approve providers. The commenter also suggested that applicants with a 
current Demonstration Grant under the absolute priority for Native 
Youth Community Partnerships (NYCP) should combine some of the 
objectives from the current NYPC project in planning a project under 
this new priority in order to sustain successful efforts and 
relationships. Finally, the commenter asked that we include in this 
program a focus on engaging and involving the parent, guardian, or 
family.
    Another commenter objected to the new choice priority if its use 
would result in a decrease in the number of students served. The 
commenter also requested that we include, among possible service 
options, assistance for helping students navigate college life. The 
commenter also requested that grantees that are not Tribes should be 
responsible for selecting service providers, and that the local Tribe 
should not have the burden of selecting or approving them. Another 
commenter provided the opposite suggestion, stating that Tribes should 
have sole responsibility for approving service providers in order to 
maintain more control over the services available to their members. 
This commenter also stated that instead of focusing on parental choice 
of services, the regulations should allow Tribes and Tribal 
organizations to be solely responsible for determining what services 
should be provided to students and approving service providers. This 
commenter argued that if Tribes and Tribal organizations have the sole 
authority to make these decisions, they will be better able to maintain 
control over funds, ensure funds are spent in accordance with spending 
requirements, hold service providers accountable, and deploy scarce 
resources in the most effective manner. The commenter recommended that 
Tribes and Tribal organizations should be permitted to continue 
providing the same programs that have proven successful in previous 
years.
    Discussion: We appreciate the suggestions on the choice priority 
requirements. We agree that it is important that grantees ensure that 
providers are high quality and have a record of success and 
reliability, and one way to ensure that could be to work with the SEA. 
However, we decline to add that as a program requirement in order to 
respect Tribal sovereignty and so as not to preclude the flexibility 
for grantees to address this in another way based on local needs and 
context.
    We also agree that applicants with a current Demonstration Grant 
under the absolute priority for NYCP could use their current objectives 
in a proposed project under the new choice priority. Such grantees 
would need to ensure that they use a variety of providers and permit 
families to choose from options, rather than using the previous model 
under which the grantee exclusively provided a specific set of 
services. Finally, we agree with the commenter that it is important 
that projects engage and involve parents and families. We believe that 
the requirements attached to this priority, specifically the parent 
involvement and feedback process that may include a parent liaison, 
will ensure that involvement.
    With regard to whether the new choice priority would prevent 
projects from increasing the number of students served, we note that 
applicants have

[[Page 43447]]

discretion in the number of students to serve in their project. The 
choice priority does not create any limitation on the number of 
students a grantee would serve; rather the scope of the project, the 
capacity of the grantee and its partners, and the availability of 
service providers in the local area all may be factors in determining 
how many students are served.
    We decline to add to the list of possible services assistance to 
college students in navigating the college experience because the 
Demonstration program is an elementary and secondary education grant 
program for Indian children and youth. Although one of the statutory 
uses of funds is college coursework for secondary students to aid in 
their transition to higher education, services to students at 
institutions of higher education are not allowable uses of funds.
    With regard to the Tribe's role in selecting or approving service 
providers, the proposed regulations require that a public school 
district applicant partner with a Tribe or Indian organization, and 
that together the applicant and the Tribal partner select service 
providers. We believe that, rather than unduly burdening the Tribe, 
this honors Tribal sovereignty and ensures the Tribe's involvement in 
the project. Importantly, this approach will help ensure that Tribal 
service providers are not omitted from consideration. In addition to 
ensuring the Tribe's role in designing projects to meet its goals and 
objectives, we believe that it is important for parents and families to 
be included in the decision-making process by providing them with a 
choice of services or service providers. We believe that this level of 
parent and family involvement is consistent with section 6121(d)(3) of 
the ESEA, which requires applicants for this grant program to describe 
how parents and families of Indian children will be involved in 
developing and implementing the activities of each project.
    Regarding the commenter's concerns about the appropriate and 
effective use of funds and the ability to hold service providers 
accountable, the eligibility for this program is not limited to Tribes 
and Indian organizations. Other entities, including public school 
districts and other entities, can be, and in the past have been, 
successful in administering grants under the Demonstration program. 
Although we have added the requirement to partner with Tribes or Indian 
organizations, the lead applicant can be an entity other than a Tribe 
or Indian organization. Finally, a Tribal grantee under the new 
priority is not prevented from offering as options for parents, 
services and programs that have proven successful in the past.
    Changes: None.
    Comment: One commenter stated that when the educational choice 
priority in proposed Sec.  263.21(c)(7) is used, the corresponding 
program requirement in proposed Sec.  263.25(h)(1)--that at least 80 
percent of grant funds are used for direct services to eligible 
students--is too limiting and does not take into consideration a Tribe 
or Indian organization's Federal indirect cost rate. The commenter 
contended that the Tribe or Tribal organization's Federal indirect cost 
rate should be used instead of the same percentage for all grantees.
    Discussion: When developing these regulations, we determined that 
when the educational choice priority in Sec.  263.21(c)(7) is used, it 
is important to have a specific minimum percentage of the grant funds 
that must be spent on direct services for eligible students. Because 
the choice priority will require the grantee to engage in activities 
other than direct services (for example, seeking out and vetting 
service providers, establishing a method for parents to select 
services, and receiving parent requests for services), we sought to 
ensure that these program requirements do not undercut the overall goal 
of the grant program. Requiring grantees to spend at least 80 percent 
of grant funds on direct services for eligible students helps ensure 
that the grant program supports services that improve the educational 
opportunities and achievement of Indian children and youth, as required 
under ESEA section 6121(a)(1). Although the 80 percent requirement may 
limit the amount of indirect costs that some grantees are otherwise 
authorized to take, most Department grantees have indirect cost rates 
well under 20 percent, and for those with higher authorized rates, the 
80 percent requirement effectuates the policy goal of ensuring that 
funds are spent on services to students.
    Although we determined that no change is needed to this program 
requirement, we also examined the related selection criterion in 
proposed Sec.  263.24(c)(1) regarding the extent to which the budget 
reflects a reasonable per-pupil amount for services. Whereas in the 
NPRM the proposed language excluded funds for ``project 
administration,'' we are clarifying that the per-pupil amount should be 
based only on costs for direct services, and should not take into 
account other costs such as the cost of the service selection method or 
parent feedback process.
    Changes: We have revised proposed Sec.  263.24(c)(1) (Sec.  
263.24(d)(1) in the final regulations) to clarify that the per-pupil 
amount should be based only on direct costs for student services.
    Comment: One commenter stated that we did not engage in Tribal 
consultation regarding several specific provisions in the regulations. 
The commenter argued that we characterized these changes as minor or 
technical but in the commenter's view they are substantive changes to 
the regulations.
    Discussion: The regulatory provisions listed by the commenter are 
either technical changes or are changes added to the proposed 
regulations as a result of the Tribal consultation sessions.
    The commenter listed, as changes to the application requirements 
that were not part of the Tribal consultation process, the addition of 
``and families'' in Sec.  263.22(a)(1) and the addition of ``evidence-
based'' in Sec.  263.22(a)(3). These changes are technical changes to 
align the regulations with the ESSA amendments to title VI of the ESEA, 
and are explained in more detail in the separate discussions of each 
regulatory provision. The commenter also objected to Sec.  
263.21(c)(5)(ii), which affects the eligibility of BIE-funded schools 
for the rural priority; this is a technical change, as BIE-funded 
schools were always eligible for the rural priority under the existing 
regulations.
    In addition, the commenter listed, as changes that were not part of 
the Tribal consultation process, Sec.  263.21(c)(6), the addition of a 
non-rural priority; Sec.  263.22(b)(4), a requirement that applicants 
plan for how they will oversee service providers; and Sec.  
263.22(b)(5), an application requirement for non-Tribal partnerships. 
Each of these changes were the result of recommendations and input from 
Tribes that occurred as part of the Tribal consultation process.
    The commenter also cited the new selection criteria in Sec.  263.24 
and new program requirements in Sec.  263.25 as further changes that 
were not part of the Tribal consultation process. While these specific 
selection criteria and requirements were not listed in the request for 
Tribal consultation, these criteria and requirements were informed by 
the totality of input and discussion we received during the Tribal 
consultation process.
    Changes: None.
    Comment: None.
    Discussion: Upon further consideration regarding the new priority 
for choice in Sec.  263.21(c)(7), and in considering that many 
applicants may propose a planning period for a portion of their 
project, it is important that we clarify the expectations for grantees 
that use a planning period. Specifically, in Sec.  263.25(i), we have 
added a

[[Page 43448]]

requirement that grantees submit to the Department prior to the end of 
the planning period the following documentation: (1) A description of 
the service selection process, which is functioning and ready for 
parent use; (2) a description of the parent involvement and feedback 
process, which is functioning and ready for parent use; (3) a sample of 
the written agreement with providers, along with a list of providers 
with whom the grantee has obtained signed written agreements; and (4) a 
description of the process to be used to select students in the case of 
excess demand.
    For applicants that do not propose a planning period, it is 
important that applicants provide a description of how they will meet 
these four program requirements; therefore, we are also adding them as 
application requirements for such grantees in Sec.  263.22(b)(7). We 
have also determined that the program requirement regarding supplement-
not-supplant in Sec.  263.25(c) should be moved to the application 
requirements in Sec.  263.22(b)(6) as an assurance. We have removed 
proposed paragraph Sec.  263.25(d)(3), which required that the service 
selection method be supplemental to existing methods to reduce 
unnecessarily duplication and burden. Finally, to provide flexibility 
for applicants that would like a planning period of less than a year in 
order to provide direct services to students more quickly, we are 
revising the relevant language of proposed Sec.  263.25(h) to permit a 
shorter planning period.
    In further consideration of the planning period and the 
relationship between grantees and service providers, we are also 
clarifying the limitations on the use of grant funds. We are not 
changing the limits proposed in Sec.  263.25(h)(1) and (2), which 
require that at least 80 percent of grants funds are used for direct 
services and not more than 15 percent of the grant funds are used for 
the service selection method. We had proposed the provision that these 
limits do not apply during a grantee's planning period in order to 
permit grantees to use funds during a planning period to establish a 
service selection method and parent feedback process. To ensure that 
grantees use funds in a way that will maximize services to students 
rather than funding a specific service opportunity, we are clarifying 
that grantees may not use grant funds to establish or develop the 
capacity of entities that are or may become service providers for the 
project. This requirement applies both during a planning period and for 
the duration of the grant.
    Changes: We have added new paragraphs (b)(6) and (7) to proposed 
Sec.  263.22, requiring that applications include assurances of non-
supplanting and, for applicants that do not propose a planning period, 
documentation of compliance with certain program requirements; deleted 
proposed paragraphs (c) and (d)(3) of Sec.  263.25; redesignated 
proposed Sec.  263.25(d) through (h) as Sec.  263.25(c) through (g); 
revised proposed Sec.  263.25(h) to permit planning periods of up to 12 
months; added new Sec.  263.25(h)(3) to restrict funds from being used 
to establish or develop entities that may become service providers; and 
added new paragraph (h) to Sec.  263.25 regarding information that must 
be submitted at the end of a planning period.

Executive Orders 12866, 13563, and 13771 Regulatory Impact Analysis

    Under Executive Order 12866, it must be determined whether this 
regulatory action is ``significant'' and, therefore, subject to the 
requirements of the Executive order and subject to review by the Office 
of Management and Budget (OMB). Section 3(f) of Executive Order 12866 
defines a ``significant regulatory action'' as an action likely to 
result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
Tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);
    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in the 
Executive order.
    This final regulatory action is not a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    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 Fiscal Year 2020, any new incremental costs 
associated with a new regulation must be fully offset by the 
elimination of existing costs through deregulatory actions. These final 
regulations are not a significant regulatory action. Therefore, the 
requirements of Executive Order 13771 do not apply.
    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 on a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing these final regulations only on a reasoned 
determination that their benefits justify their costs. In choosing 
among alternative regulatory approaches, we selected those approaches 
that maximize net benefits. Based on the analysis that follows, the 
Department believes that these final regulations are consistent with 
the principles in Executive Order 13563.
    Discussion of Costs and Benefits: The potential costs associated 
with this regulatory action are those resulting from statutory 
requirements and those we have determined as necessary for

[[Page 43449]]

administering the Department's programs and activities. The potential 
costs associated with the priorities and requirements will be minimal, 
while the potential benefits are significant. We have determined that 
these proposed regulations would impose minimal costs on eligible 
applicants. Program participation is voluntary, and the costs imposed 
on applicants by these regulations will be limited to paperwork burden 
related to preparing an application. The potential benefits of 
implementing the programs--for example, expanding the choices available 
to parents and students, improving access to services such as Native 
language programs, and providing new internship or apprenticeship 
programs--would outweigh any costs incurred by applicants, and the 
costs of carrying out activities associated with the application will 
be paid for with program funds. For these reasons, we have determined 
that the costs of implementation will be minimal for eligible 
applicants, including small entities.
    Elsewhere in this section under Paperwork Reduction Act of 1995, we 
identify and explain burdens specifically associated with information 
collection requirements.

Regulatory Flexibility Act Certification

    The Secretary certifies that these final regulations will not have 
a substantial economic impact on a substantial number of small 
entities. The U.S. Small Business Administration Size Standards define 
proprietary institutions as small businesses if they are independently 
owned and operated, are not dominant in their field of operation, and 
have total annual revenue below $7,000,000. Nonprofit institutions are 
defined as small entities if they are independently owned and operated 
and not dominant in their field of operation. Public institutions are 
defined as small organizations if they are operated by a government 
overseeing a population below 50,000.
    The small entities that will be affected by these final program 
regulations are LEAs, TCUs, Tribes, Indian organizations, and BIE-
funded schools. The final regulations will not have a significant 
economic impact on the small entities affected because the regulations 
impose only minimal regulatory burdens and do not require unnecessary 
Federal supervision. The final regulations will impose minimal 
requirements to ensure the proper expenditure of program funds. We note 
that grantees that will be subject to the minimal requirements imposed 
by these final regulations will be able to meet the costs of compliance 
using Federal funds provided through the Indian Education Discretionary 
Grant programs.

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 can 
provide the requested data in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the Department can properly assess the impact 
of collection requirements on respondents.
    Proposed Sec.  263.22 (Application Requirements) and Sec.  263.24 
(Selection Criteria) contain information collection requirements (ICR) 
for the program application package. As a result of the proposed 
revisions to these sections, under the PRA, the Department has 
submitted a copy of these sections and an Information Collection 
request to OMB for its review, 1810-0722.
    In Table 1 below, we assume 100 applicants each spend 30 hours 
preparing their applications.

                                           Table 1--Demonstration Grants Program Information Collection Status
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Previous burden       Burden under final     Action under final
          OMB Control No.             Relevant regulations         Expiration            (total hours)        rule (total hours)            rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
1810-0722..........................  Sections 263.22,        July 31, 2021.........  Applicants: 4,000....  Applicants: 3,000....  Reinstate this
                                      263.24.                                                                                       collection with
                                                                                                                                    changes.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental Review

    This competition is subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. However, under 34 CFR 79.8(a), we waive 
intergovernmental review in order to make awards by the end of FY 2020.

Assessment of Educational Impact

    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and on our review, we have 
determined that these final regulations do not require transmission of 
information that any other agency or authority of the United States 
gathers or makes available.

Federalism

    Executive Order 13132 requires us to ensure meaningful and timely 
input by State and local elected officials in the development of 
regulatory policies that have federalism implications. ``Federalism 
implications'' means substantial direct effects on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.
    In the NPRM we solicited comments on whether any sections of the 
proposed regulations could have federalism implications and encouraged 
State and local elected officials to review and provide comments on the 
proposed regulations. In the Public Comment section of this preamble, 
we discuss any comments we received on this subject.
    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 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

[[Page 43450]]

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 263

    Business and industry, Colleges and universities, Elementary and 
secondary education, Grant programs--education, Grant programs--
Indians, Indians--education, Reporting and recordkeeping requirements, 
scholarships and fellowships.

Frank T. Brogan,
Assistant Secretary for Elementary and Secondary Education.

    For the reasons discussed in the preamble, the Secretary of 
Education amends part 263 of title 34 of the Code of the Federal 
Regulations as follows:

PART 263--INDIAN EDUCATION DISCRETIONARY GRANT PROGRAMS

0
1. The authority citation for part 263 continues to read as follows:

    Authority: 20 U.S.C. 7441, unless otherwise noted.

0
2. Revise the heading to subpart B to read as follows:

Subpart B--Demonstration Grants for Indian Children and Youth 
Program

0
3. Section 263.20 is amended by:
0
a. In the section heading, adding the words ``and Youth'' after the 
word ``Children''.
0
b. Removing the definition of ``Indian institution of higher 
education''.
0
c. In paragraph (5) of the definition of ``Indian organization'', 
adding the words ``or TCU'' after ``higher education''.
0
d. In paragraph (6)(i) of the definition of ``Native Youth community 
project'', adding the words ``and Youth'' after the word ``Children''.
0
e. Adding in alphabetical order a definition of ``Parent''.
0
f. In the definition of ``Professional development activities'', adding 
the words ``and Youth'' after the word ``Children''.
0
g. Adding in alphabetical order a definition for ``Tribal College or 
University (TCU)''.

    The additions read as follows:


Sec.  263.20  What definitions apply to the Demonstration Grants for 
Indian Children and Youth program?

* * * * *
    Parent includes a legal guardian or other person standing in loco 
parentis (such as a grandparent or stepparent with whom the child 
lives, or a person who is legally responsible for the child's welfare).
* * * * *
    Tribal College or University (TCU) means an accredited college or 
university within the United States cited in section 532 of the Equity 
in Educational Land-Grant Status Act of 1994, any other institution 
that qualifies for funding under the Tribally Controlled College or 
University Assistance Act of 1978, and the Navajo Community College, 
authorized in the Navajo Community College Assistance Act of 1978.

0
4. Section 263.21 is revised to read as follows:


Sec.  263.21  What priority is given to certain projects and 
applicants?

    (a) The Secretary gives priority to an application that presents a 
plan for combining two or more of the activities described in section 
6121(c) of the Elementary and Secondary Education Act of 1965, as 
amended (ESEA), over a period of more than one year.
    (b) The Secretary gives a competitive preference priority to--
    (1) Tribal lead applicants. An application submitted by an Indian 
Tribe, Indian organization, BIE-funded school, or TCU that is eligible 
to participate in the Demonstration Grants for Indian Children and 
Youth program. A group application submitted by a consortium that meets 
the requirements of 34 CFR 75.127 through 75.129 or submitted by a 
partnership is eligible to receive the preference only if the lead 
applicant is an Indian Tribe, Indian organization, BIE-funded school, 
or TCU; or
    (2) Tribal partnership. A group application submitted by a 
consortium of eligible entities that meets the requirements of 34 CFR 
75.127 through 75.129 or submitted by a partnership if the consortium 
or partnership--
    (i) Includes an Indian Tribe, Indian organization, BIE-funded 
school, or TCU; and
    (ii) Is not eligible to receive the preference in paragraph (b)(1) 
of this section.
    (c) The Secretary may give priority to an application that meets 
any of the priorities listed in this paragraph. When inviting 
applications for a competition under the Demonstration Grants program, 
the Secretary designates the type of each priority as absolute, 
competitive preference, or invitational through a notice inviting 
applications published in the Federal Register. The effect of each type 
of priority is described in 34 CFR 75.105.
    (1) Native youth community projects. Native youth community 
projects, as defined in this subpart.
    (2) Experienced applicants. Projects in which the applicant or one 
of its partners has received a grant in the last four years under a 
Federal program selected by the Secretary and announced in a notice 
inviting applications published in the Federal Register.
    (3) Consolidated funding. Projects in which the applicant has 
Department approval to consolidate funding through a plan that complies 
with section 6116 of the ESEA or other authority designated by the 
Secretary.
    (4) Statutorily authorized activities. Projects that focus on a 
specific activity authorized in section 6116(c) of the ESEA as 
designated by the Secretary in the notice inviting applications.
    (5) Rural applicants. Projects that include either--
    (i) An LEA that is eligible under the Small Rural School 
Achievement (SRSA) program or the Rural and Low-Income School (RLIS) 
program authorized under title VI, part B of the ESEA; or
    (ii) A BIE-funded school that is located in an area designated with 
locale code of either 41, 42, or 43 as designated by the National 
Center for Education Statistics.
    (6) Non-rural applicants. Non-rural projects that do not meet the 
priority in paragraph (c)(5) of this section. This priority can only be 
used in competitions where the priority in paragraph (c)(5) of this 
section is also used.
    (7) Accessing choices in education. Projects to expand educational 
choice by enabling a Tribe, or the grantee and its Tribal partner, to 
select a project focus that meets the needs of their students and 
enabling parents of Indian students, or the students, to choose 
education services by selecting the specific service and provider 
desired.

0
5. Section 263.22 is amended by:
0
a. Revising paragraphs (a)(1) and (3).
0
b. Adding paragraphs (b)(4) through (7).

    The revisions and additions read as follows:


Sec.  263.22   What are the application requirements for these grants?

    (a) * * *
    (1) A description of how Indian Tribes and parents and families of 
Indian children and youth have been, and will be, involved in 
developing and implementing the proposed activities;
* * * * *
    (3) Information demonstrating that the proposed project is 
evidence-based,

[[Page 43451]]

where applicable, or is based on an existing evidence-based program 
that has been modified to be culturally appropriate for Indian 
students;
* * * * *
    (b) * * *
    (4) A plan for how the applicant will oversee service providers and 
ensure that students receive high-quality services under the project.
    (5) (i) For an applicant that is not a Tribe, if 50 percent or more 
of the total student population of the schools to be served by the 
project consists of members of one Tribe, documentation that that Tribe 
is a partner for the proposed project.
    (ii) For an applicant that is an LEA or SEA and is not required by 
paragraph (i) of this section to partner with a specific Tribe, 
documentation that at least one Tribe or Indian organization is a 
partner for the proposed project.
    (6) An assurance that--
    (i) Services will be supplemental to the education program provided 
by local schools attended by the students to be served;
    (ii) Funding will be supplemental to existing sources, such as 
Johnson O'Malley funding; and
    (iii) The availability of funds for supplemental special education 
and related services (i.e., services that are not part of the special 
education and related services, supplementary aids and services, and 
program modifications or supports for school personnel that are 
required to make a free appropriate public education (FAPE) available 
under Part B of the Individuals with Disabilities Education Act (IDEA) 
to a child with a disability in conformity with the child's IEP or the 
regular or special education and related aids and services required to 
make FAPE available under a Section 504 plan, if any) does not affect 
the right of the child to receive FAPE under Part B of the IDEA or 
Section 504, and the respective implementing regulations.
    (7) For an applicant that does not propose a planning period--
    (i) A description of the service selection method required in Sec.  
263.25(d).
    (ii) A description of the parent involvement and feedback process 
required in Sec.  263.25(e).
    (iii) A sample of the written agreement required in Sec.  
263.25(f).
    (iv) A description of the process to choose students to be served, 
as required in Sec.  263.25(g).

0
6. Revising the authority citation to Sec.  263.23 to read as follows:

(Authority: 25 U.S.C. 5304, 5307)

0
7. Add Sec.  263.24 to read as follows:


Sec.  263.24  How does the Secretary evaluate applications for the 
Demonstration Grants for Indian Children and Youth grants program?

    (a) In general. The Secretary uses the procedures in 34 CFR 75.200 
through 75.210 to establish the selection criteria and factors used to 
evaluate applications submitted in a grant competition for the 
Demonstration Grants for Indian Children and Youth program. The 
Secretary may also consider one or more of the criteria and factors in 
this section to evaluate applications.
    (b) Quality of project services. The Secretary may consider one or 
more of the following factors in determining the quality of project 
services:
    (1) The extent to which the project would offer high-quality 
choices of services, including culturally relevant services, and 
providers, for parents and students to select.
    (2) The extent to which the services to be offered would meet the 
needs of the local population, as demonstrated by an analysis of 
community-level data, including direct input from parents and families 
of Indian children and youth.
    (3) The quality of the plan to ensure that the services to be 
offered are evidence-based, where applicable, or are based on existing 
evidence-based programs that have been modified to be culturally 
appropriate for Indian students.
    (c) Quality of the project design. The Secretary may consider one 
or more of the following factors in determining the quality of the 
project design:
    (1) The extent to which the project is designed to improve student 
and parent satisfaction with the student's overall education 
experience, as measured by pre- and post-project data.
    (2) The extent to which the applicant proposes a fair and neutral 
process of selecting service providers that will result in high-quality 
options from which parents and students can select services.
    (3) The quality of the proposed plan to inform parents and students 
about available service choices under the project, and about the 
timeline for termination of the project.
    (4) The quality of the applicant's plan to oversee service 
providers and ensure that students receive high-quality services under 
the project.
    (d) Reasonableness of budget. The Secretary may consider one or 
more of the following factors in determining the reasonableness of the 
project budget:
    (1) The extent to which the budget reflects the number of students 
to be served and a per-pupil amount for services, based only on direct 
costs for student services, that is reasonable in relation to the 
project objectives.
    (2) The extent to which the per-pupil costs of specific services 
and per-pupil funds available are transparent to parents and other 
stakeholders.

0
8. Add Sec.  263.25 to read as follows:


Sec.  263.25  What are the program requirements when the Secretary uses 
the priority in Sec.  263.21(c)(7)?

    In any year in which the Secretary uses the priority in Sec.  
263.21(c)(7) for a competition, each project must--
    (a) Include the following, which are chosen by the grantee, or for 
LEAs and SEAs, the grantee and its partnering Tribe or Indian 
organization:
    (1) A project focus and specific services that are based on the 
needs of the local community; and
    (2) Service providers;
    (b) Include more than one education option from which parents and 
students may choose, which may include--
    (1) Native language, history, or culture courses;
    (2) Advanced, remedial, or elective courses, which may be online;
    (3) Apprenticeships or training programs that lead to industry 
certifications;
    (4) Concurrent and dual enrollment;
    (5) Tuition for private school or home education expenses;
    (6) Special education and related services that supplement, and are 
not part of, the special education and related services, supplementary 
aids and services, and program modifications or supports for school 
personnel required to make available a free appropriate public 
education (FAPE) under Part B of the IDEA to a child with a disability 
in conformity with the child's individualized education program (IEP) 
or the regular or special education and related aids and services 
required to ensure FAPE under Section 504 of the Rehabilitation Act of 
1973 (Section 504);
    (7) Books, materials, or education technology, including learning 
software or hardware, that are accessible to all children;
    (8) Tutoring;
    (9) Summer or afterschool education programs, and student 
transportation needed for those specific programs. Such programs could 
include instruction in the arts, music, or sports, to the extent that 
the applicant can demonstrate that such services are culturally related 
or are supported by evidence that suggests the services may have a 
positive effect on relevant education outcomes;
    (10) Testing preparation and application fees, including for 
private school and graduating students;

[[Page 43452]]

    (11) Supplemental counseling services, not to include psychiatric 
or medical services; or
    (12) Other education-related services that are reasonable and 
necessary for the project;
    (c) Provide a method to enable parents and students to select 
services. Such a method must--
    (1) Ensure that funds will be transferred directly from the grantee 
to the selected service provider; and
    (2) Include service providers other than the applicant, although 
the applicant may be one of the service providers;
    (d) Include a parent involvement and feedback process that--
    (1) Describes a way for parents to request services or providers 
that are not currently offered and provide input on services provided 
through the project, and describes how the grantee will provide parents 
with written responses within 30 days; and
    (2) May include a parent liaison to support the grantee in outreach 
to parents, inform parents and students of the timeline for the 
termination of the project, and assist parents and the grantee with the 
process by which a parent can request services or providers not already 
specified by the grantee;
    (e) Include a written agreement between the grantee and each 
service provider under the project. Each agreement must include--
    (1) A nondiscrimination clause that--
    (i) Requires the provider to abide by all applicable 
non[hyphen]discrimination laws with regard to students to be served, 
e.g., on the basis of race, color, national origin, religion, sex, or 
disability; and
    (ii) Prohibits the provider from discriminating among students who 
are eligible for services under this program, i.e., that meet the 
definition of ``Indian'' in section 6151 of the ESEA, on the basis of 
affiliation with a particular Tribe;
    (2) A description of how the grantee will oversee the service 
provider and hold the provider accountable for--
    (i) The terms of the written agreement; and
    (ii) The use of funds, including compliance with generally accepted 
accounting procedures and Federal cost principles;
    (3) A description of how students' progress will be measured; and
    (4) A provision for the termination of the agreement if the 
provider is unable to meet the terms of the agreement;
    (f) Include a fair and documented process to choose students to be 
served, such as a lottery or other transparent criteria (e.g., based on 
particular types of need), in the event that the number of requests 
from parents of eligible students or from students for services under 
the project exceeds the available capacity, with regard to the number 
or intensity of services offered;
    (g) Ensure that--
    (1) At least 80 percent of grant funds are used for direct services 
to eligible students, provided that, if a grantee requests and receives 
approval for a planning period, not to exceed 12 months, the 80 percent 
requirement does not apply to that planning period;
    (2) Not more than 15 percent of grant funds are used on the service 
selection method described in paragraph (d) of this section or the 
parent involvement and feedback process described in paragraph (e) of 
this section, except in an authorized planning period; and
    (3) No grant funds are used to establish or develop the capacity of 
entities or individuals that are or may become service providers under 
this project;
    (h) For a grantee that receives approval for a planning period, not 
to exceed 12 months, submit to the Department prior to the end of that 
period the following documents:
    (1) A description of the operational service selection process that 
meets the requirements of paragraph (c) of this section.
    (2) A description of the operational parent involvement and 
feedback process that meets the requirements of paragraph (d) of this 
section.
    (3) A sample of the written agreement that meets the requirements 
of paragraph (e) of this section, and a list of providers with whom the 
grantee has signed written agreements.
    (4) A description of the process that will be used to choose 
students to be served in the event that the demand for services exceeds 
the available capacity, as described in paragraph (f) of this section.
[FR Doc. 2020-15543 Filed 7-16-20; 8:45 am]
BILLING CODE 4000-01-P