Rule: Elementary and Secondary Education: State Charter School Facilities Incentive Program

Wednesday,
December 21, 2005
Part III
Department of
Education
34 CFR Part 226
State Charter School Facilities Incentive
Program; Final Rule
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75908 Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations
DEPARTMENT OF EDUCATION expenditures that are subject to the five buses using their own funds. If the State
percent cap on administrative costs. applicant demonstrated that doing so
34 CFR Part 226 Except for minor editorial revisions, increased the representation of
there are no differences between the economically disadvantaged students in
State Charter School Facilities NPRM and these final regulations. charter schools, its grant application
Incentive Program might be more competitive than other
Public Comment
AGENCY: Office of Innovation and applications that do not include that
In response to the Secretary’s type of demonstration.
Improvement, Department of Education.
invitation in the NPRM, one person Change: None.
ACTION: Final regulations.
submitted comments on the proposed
SUMMARY: The Secretary issues regulations. An analysis of the Executive Order 12866
regulations to administer the State comments follows. We have reviewed these final
Charter School Facilities Incentive Comment: The commenter thought regulations in accordance with
program. Under this program, the charter schools that bus students should
Executive Order 12866. Under the terms
Department of Education receive an incentive under the selection
of the order we have assessed the
(‘‘Department’’) provides competitive criteria. The commenter recognized that
potential costs and benefits of this
grants to States to help charter schools the grant funds cannot be used for buses
regulatory action.
meet their need for facilities. since they are not facilities. However,
the commenter noted that the The potential costs associated with
DATES: These regulations are effective the final regulations are those resulting
percentage of minority and at-risk
January 20, 2006. from statutory requirements and those
students is lower in some charter
FOR FURTHER INFORMATION CONTACT: Ann schools than it is in their communities. we have determined to be necessary for
Margaret Galiatsos or Jim Houser, U.S. In addition, minority and at-risk administering this program effectively
Department of Education, 400 Maryland students are less likely to be able to and efficiently.
Avenue, SW., Washington, DC 20202– afford their own transportation, which In assessing the potential costs and
6140. Telephone: (202) 205–9765 or via may be necessary to attend a charter benefits—both quantitative and
Internet: charter.facilities@ed.gov. school. The commenter thought that qualitative—of these final regulations,
If you use a telecommunications providing an incentive for busing could we have determined that the benefits of
device for the deaf (TDD), you may call rectify this problem. the regulations justify the costs.
the Federal Relay Service (FRS) at 1– Discussion: The Secretary shares the We have also determined that this
800–877–8339. commenter’s concern that charter regulatory action does not unduly
Individuals with disabilities may schools should serve minority and at- interfere with State, local, and tribal
obtain this document in an alternative risk students. It is our understanding governments in the exercise of their
format (e.g., Braille, large print, that charter schools in general are more governmental functions.
audiotape, or computer diskette) on likely to serve these students than We summarized the potential costs
request to the contact person listed regular public schools; however, the and benefits of these final regulations in
under FOR FURTHER INFORMATION Secretary wants to focus the the preamble to the NPRM (70 FR
CONTACT. 50258). We include additional
Department’s efforts on those charter
SUPPLEMENTARY INFORMATION: These schools that serve particularly high discussion of potential costs and
regulations implement title V, part B, levels of economically disadvantaged benefits in the section of this preamble
subpart 1 of the Elementary and students. These students have a greater titled Public Comment.
Secondary Education Act of 1965, as level of need for the public school Paperwork Reduction Act of 1995
amended by the No Child Left Behind choice that charter schools offer, since
Act of 2001 (Pub. L. 107–110, enacted economically disadvantaged students The Paperwork Reduction Act of 1995
January 8, 2002) (’’Act’’). Subpart 1, tend to lack the resources to attend does not require you to respond to a
Charter School Programs, of Part B of private schools. collection of information unless it
the Act authorizes the State Charter The regulations are designed to displays a valid OMB control number.
School Facilities Incentive program. reward States that target funds to We display the valid OMB control
These regulations apply to the State economically disadvantaged students. number assigned to the collection of
Charter School Facilities Incentive The selection criterion under § 226.11(b) information in these final regulations at
program, which assists charter schools awards points to States that target the end of the affected sections of the
in meeting their facilities needs. Under charter schools with the greatest need regulations.
this program, funds are provided on a and the highest proportions of students Intergovernmental Review
competitive basis to States to create new in poverty. Furthermore, the
or enhance existing per-pupil facilities competitive preference priority under This program is subject to the
aid programs on behalf of charter § 226.14(a) would award points to requirements of Executive Order 12372
schools. applications that target services to and the regulations in 34 CFR part 79.
On August 26, 2005, the Secretary communities with large proportions of The objective of the Executive order is
published a notice of proposed low-income students. to foster an intergovernmental
rulemaking (NPRM) for this program in While the Secretary supports the partnership and a strengthened
the Federal Register (70 FR 50257). The concept of making buses available to federalism by relying on processes
NPRM proposed selection criteria to students in order to increase the developed by State and local
implement section 5205(b) of the Act, accessibility of school choice, the more governments for coordination and
which authorizes the program. The important issue is whether review of proposed Federal financial
NPRM also proposed regulations to economically disadvantaged students assistance.

clarify that construction and the are adequately represented in charter In accordance with the order, we
purchase of real property are allowable schools. A State applicant may provide intend this document to provide early
expenditures under this program. In buses for charter schools or give an notification of the Department’s specific
addition, it proposed a description of incentive for charter schools to provide plans and actions for this program.
Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations 75909
Electronic Access to This Document application for a State Charter School (7) 34 CFR part 82 (New Restrictions
Facilities Incentive program grant? on Lobbying).
You may view this document, as well 226.13 What statutory funding priority does (8) 34 CFR part 84 (Governmentwide
as all other Department of Education the Secretary use in making a grant Requirements for Drug-Free Workplace
documents published in the Federal award?
226.14 What other funding priorities may
(Financial Assistance)).
Register, in text or Adobe Portable
the Secretary use in making a grant (9) 34 CFR part 85 (Governmentwide
Document Format (PDF) on the Internet
award? Debarment and Suspension
at the following site: http://www.ed.gov/
(Nonprocurement)).
news/fedregister. Subpart C—What Conditions Must Be Met (10) 34 CFR part 97 (Protection of
To use PDF you must have Adobe by a Grantee?
Human Subjects).
Acrobat Reader, which is available free 226.21 How may charter schools use these (11) 34 CFR part 98 (Student Rights in
at this site. If you have questions about funds? Research, Experimental Programs, and
using PDF, call the U.S. Government 226.22 May grantees use grant funds for
Testing).
Printing Office (GPO), toll free, at 1– administrative costs?
226.23 May charter schools use grant funds (12) 34 CFR part 99 (Family
888–293–6498; or in the Washington, Educational Rights and Privacy).
DC, area at (202) 512–1530. for administrative costs?
(b) The regulations in this part 226.
Authority: 20 U.S.C. 1221e–3; 7221d(b),
Note: The official version of this document unless otherwise noted. (Authority: 20 U.S.C. 1221e–3; 7221d(b))
is the document published in the Federal
Register. Free Internet access to the official Subpart A—General § 226.4 What definitions apply to the State
edition of the Federal Register and the Code Charter School Facilities Incentive
of Federal Regulations is available on GPO § 226.1 What is the State Charter School program?
Access at: http://www.gpoaccess.gov/nara/ Facilities Incentive program? (a) Definitions in the statute. The
index.html. (a) The State Charter School Facilities following term used in this part is
(Catalog of Federal Domestic Assistance Incentive program provides grants to defined in section 5210 of the
Number 84.282D State Charter School States to help charter schools pay for Elementary and Secondary Education
Facilities Incentive Program) facilities. Act of 1965, as amended (ESEA):
The Secretary of Education has (b) Grantees must use these grants Charter school
delegated authority to the Assistant to— (b) Definitions in EDGAR. The
(1) Establish new per-pupil facilities following terms used in this part are
Deputy Secretary for Innovation and
aid programs for charter schools; defined in 34 CFR 77.1:
Improvement to issue these
(2) Enhance existing per-pupil
amendments to 34 CFR Chapter II. Applicant
facilities aid programs for charter
List of Subjects in 34 CFR Part 226 schools; or Application
(3) Administer programs described Award
Charter Schools, Education, under paragraphs (b)(1) and (2) of this Department
Educational facilities, Elementary and section. EDGAR
secondary education, Grant programs- Facilities
education, Report and recordkeeping (Authority: 20 U.S.C. 7221d(b)) Grant
requirements, Schools. § 226.2 Who is eligible to receive a grant? Grantee
Dated: December 16, 2005. States are eligible to receive grants Project
Nina Shokraii Rees, under this program. Public
Assistant Deputy Secretary for Innovation and
Secretary
(Authority: 20 U.S.C. 7221(b))
Improvement. (c) Other definition. The following
§ 226.3 What regulations apply to the State definition also applies to this part:
■ For the reasons discussed in the Charter School Facilities Incentive Construction means—
preamble, the Secretary amends title 34 program? (1) Preparing drawings and
of the Code of Federal Regulations by The following regulations apply to the specifications for school facilities
adding a new part 226 to read as State Charter School Facilities Incentive projects;
follows: program: (2) Repairing, renovating, or altering
(a) The Education Department General school facilities;
PART 226—STATE CHARTER SCHOOL Administrative Regulations (EDGAR) as (3) Extending school facilities;
FACILITIES INCENTIVE PROGRAM follows: (4) Erecting or building school
Subpart A—General (1) 34 CFR part 74 (Administration of facilities; and
Grants and Agreements with Institutions (5) Inspections or supervision related
Sec.
226.1 What is the State Charter School of Higher Education, Hospitals, and to school facilities.
Facilities Incentive program? other Non-Profit Organizations). (Authority: 20 U.S.C. 7221d(b); 7221i(1))
226.2 Who is eligible to receive a grant? (2) 34 CFR part 75 (Direct Grant
226.3 What regulations apply to the State Programs). Subpart B—How Does the Secretary
Charter School Facilities Incentive (3) 34 CFR part 77 (Definitions that Award a Grant?
program? Apply to Department Regulations).
226.4 What definitions apply to the State (4) 34 CFR part 79 (Intergovernmental § 226.11 How does the Secretary evaluate
Charter School Facilities Incentive Review of Department of Education an application?
program? Programs and Activities). (a) The Secretary evaluates an
Subpart B—How Does the Secretary Award (5) 34 CFR part 80 (Uniform application on the basis of the criteria
a Grant? Administrative Requirements for Grants in § 226.12 and the competitive

226.11 How does the Secretary evaluate an and Cooperative Agreements to State preference priorities in § 226.13 and
application? and Local Governments). § 226.14.
226.12 What selection criteria does the (6) 34 CFR part 81 (General Education (b) The Secretary informs applicants
Secretary use in evaluating an Provisions Act—Enforcement). of the maximum possible score for each
75910 Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations
criterion and competitive preference percentages (which are based on the § 226.14 What other funding priorities may
priority in the application package or in percentages under section 5205(b)(2)(C) the Secretary use in making a grant award?
a notice published in the Federal of the ESEA), particularly in the initial (a) The Secretary may award points to
Register. years of the program. an application under a competitive
(Authority: 20 U.S.C. 7221d(b)) (e) State experience. The experience preference priority regarding the
of the State in addressing the facility capacity of charter schools to offer
§ 226.12 What selection criteria does the needs of charter schools through various public school choice in those
Secretary use in evaluating an application means, including providing per-pupil communities with the greatest need for
for a State Charter School Facilities aid, access to State loan or bonding this choice based on—
Incentive program grant? pools, and the use of Qualified Zone (1) The extent to which the applicant
The selection criteria for this program Academy Bonds. would target services to geographic
are as follows: areas in which a large proportion or
(Approved by the Office of Management and
(a) Need for facility funding. (1) The number of public schools have been
Budget under control number 1855–0012)
need for per-pupil charter school facility identified for improvement, corrective
(Authority: 20 U.S.C. 7221d(b))
funding in the State. action, or restructuring under title I of
(2) The extent to which the proposal § 226.13 What statutory funding priority the ESEA;
meets the need to fund charter school does the Secretary use in making a grant (2) The extent to which the applicant
facilities on a per-pupil basis. award? would target services to geographic
(b) Quality of plan. (1) The likelihood The Secretary shall award additional areas in which a large proportion of
that the proposed grant project will points under a competitive preference students perform poorly on State
result in the State either retaining a new priority regarding: academic assessments; and
per-pupil facilities aid program or (a) Periodic Review and Evaluation. (3) The extent to which the applicant
continuing to enhance such a program The State provides for periodic review would target services to communities
without the total amount of assistance and evaluation by the authorized public with large proportions of low-income
(State and Federal) declining over a five- chartering agency of each charter school students.
year period. at least once every five years unless (b) The Secretary may award points to
(2) The flexibility charter schools required more frequently by State law, an application under a competitive
have in their use of facility funds for the to determine whether the charter school preference priority for applicants that
various authorized purposes. is meeting the terms of the school’s have not previously received a grant
(3) The quality of the plan for charter and is meeting or exceeding the under the program.
identifying charter schools and student academic performance (c) The Secretary may elect to
determining their eligibility to receive requirements and goals for charter consider the points awarded under
funds. schools as set forth under State law or these priorities only for proposals that
(4) The per-pupil facilities aid the school’s charter. exhibit sufficient quality to warrant
formula’s ability to target resources to (b) Number of High-Quality Charter funding under the selection criteria in
charter schools with the greatest need Schools. The State has demonstrated § 226.12 of this part.
and the highest proportions of students progress in increasing the number of (Approved by the Office of Management and
in poverty. high-quality charter schools that are Budget under control number 1855–0012)
(5) For projects that plan to reserve
held accountable in the terms of the (Authority: 20 U.S.C. 7221d(b))
funds for evaluation, the quality of the
schools’ charters for meeting clear and
applicant’s plan to use grant funds for Subpart C—What Conditions Must Be
measurable objectives for the
this purpose. Met by a Grantee?
educational progress of the students
(6) For projects that plan to reserve
attending the schools, in the period
funds for technical assistance, § 226.21 How may charter schools use
prior to the period for which the State
dissemination, or personnel, the quality these funds?
applies for a grant under this
of the applicant’s plan to use grant (a) Charter schools that receive grant
competition.
funds for these purposes. funds through their State must use the
(c) One Authorized Public Chartering
(c) The grant project team. (1) The funds for facilities. Except as provided
Agency Other than an LEA, or an
qualifications, including relevant in paragraph (b) of this section,
Appeals Process. The State—
training and experience, of the project allowable expenditures include:
(1) Provides for one authorized public
manager and other members of the grant (1) Rent.
chartering agency that is not a local
project team, including employees not (2) Purchase of building or land.
educational agency (LEA), such as a
paid with grant funds, consultants, and (3) Construction.
State chartering board, for each
subcontractors. (4) Renovation of an existing school
(2) The adequacy and appropriateness individual or entity seeking to operate a
facility.
of the applicant’s staffing plan for the charter school pursuant to State law; or (5) Leasehold improvements.
grant project. (2) In the case of a State in which (6) Debt service on a school facility.
(d) The budget. (1) The extent to LEAs are the only authorized public (b) Charter schools may not use these
which the requested grant amount and chartering agencies, allows for an grant funds for purchasing land when
the project costs are reasonable in appeals process for the denial of an they have no immediate plans to
relation to the objectives, design, and application for a charter school. construct a building on that land.
potential significance of the proposed (d) High Degree of Autonomy. The
State ensures that each charter school (Authority: 20 U.S.C. 7221d(b))
grant project.
(2) The extent to which the costs are has a high degree of autonomy over the § 226.22 May grantees use grant funds for
reasonable in relation to the number of charter school’s budgets and administrative costs?
students served and to the anticipated expenditures. State grantees may use up to five
results and benefits. (Approved by the Office of Management and percent of their grant award for
(3) The extent to which the non- Budget under control number 1855–0012) administrative expenses that include:
Federal share exceeds the minimum (Authority: 20 U.S.C. 7221b; 7221d(b)) indirect costs, evaluation, technical
Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations 75911
assistance, dissemination, personnel administrative costs that are necessary (b) Consistent with the requirements
costs, and any other costs involved in and reasonable for the proper and in 34 CFR 75.564(c)(2), any charter
administering the State’s per-pupil efficient performance and school subgrantees that use grant funds
facilities aid program. administration of this Federal grant. for construction activities may not be
(Authority: 20 U.S.C. 7221d(b)) This use of funds, as well as indirect reimbursed for indirect costs for those
costs and rates, must comply with activities.
§ 226.23 May charter schools use grant
EDGAR and the Office of Management (Authority: 20 U.S.C. 1221e–3; 7221d(b))
funds for administrative costs?
and Budget Circular A–87 (Cost
(a) Except as provided in paragraph [FR Doc. 05–24321 Filed 12–20–05; 8:45 am]
Principles for State, Local, and Indian
(b) of this section, charter school
Tribal Governments). BILLING CODE 4000–01–P
subgrantees may use grant funds for

Rule: Elementary and Secondary Education: State Charter School Facilities Incentive Program

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Wednesday,

December 21, 2005

NPRM also proposed regulations to economically disadvantaged students assistance.

a Grant? Administrative Requirements for Grants in § 226.12 and the competitive

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