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U.S. Department of Education: Promoting Educational Excellence for all Americans

Additional requirement--State funding mechanism (Sec. 300.114(b))

Comment: One commenter stated that Sec. 300.114(b) does not adequately address the requirements for funding mechanisms relative to the LRE requirements and requested that note 89 of the Conf. Rpt. be included in the regulations.

Discussion: Section 300.114(b) incorporates the language from section 612(a)(5)(B) of the Act and prohibits States from maintaining funding mechanisms that violate the LRE provisions. We do not believe it is necessary to provide additional clarification in the regulations. While we agree with the commenter that note 89 of the Conf. Rpt. makes clear Congress' intent that State funding mechanisms support the LRE requirements and do not provide an incentive or disincentive for certain placement decisions, we believe the requirements in Sec. 300.114(b) accurately capture the essence of the Conf. Rpt. and including additional language in this paragraph is not needed.

Changes: None.

Comment: One commenter urged the Department to impose financial sanctions on States that continue to base their funding on certain placement decisions. A few commenters suggested changing the requirement in Sec. 300.114(b)(2) for States to provide an assurance that the State will revise its funding mechanism "as soon as feasible" to "no later than the start of the 2006-2007 school year."

Discussion: Section 300.114(b)(2) incorporates the language in section 612(a)(5)(B)(ii) of the Act, and requires that if a State does not have policies and procedures to ensure that the State's funding mechanism does not violate the LRE requirements, the State must provide the Secretary an assurance that the State will revise its funding mechanism as soon as feasible. We do not believe it is necessary to include in these regulations a specific timeline for a State to revise its funding mechanism, if required to do so pursuant to 300.114(b)(2). We believe the statutory language "as soon as feasible," while providing flexibility as to how each State meets the requirement, is sufficient to ensure States' compliance with this requirement.

Further, we believe the enforcement options in Sec. 300.604 give the Secretary sufficient means to address a State's noncompliance with the requirements in Sec. 300.114(b)(2). Section 300.604 describes the enforcement options available to the Secretary if the Secretary determines that a State needs assistance or intervention implementing the requirements of Part B of the Act, or that there is a substantial failure to comply with any condition of an SEA's or LEA's eligibility under Part B of the Act. Enforcement options available to the Secretary include, among others, recovery of funds or withholding, in whole or in part, any further payments to the State under Part B of the Act.

Changes: None.