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agency is not the SEA, it would need to develop the capacity to serve older children. The intensity and type of services and settings needed for three through five year olds would be different from those that are appropriate for children ages birth through two, and the program would need to include an educational component, which is not required for preschool children being served under Part B of the Act. The Part C lead agency may also have to establish relationships with different providers or, at the very least, amend agreements or contracts with existing providers. On the other hand, Part C of the Act provides for establishment of a system of payments, which might reduce the cost to the State of providing services to children ages three through five served under Part C of the Act.

The SEA is the lead agency in 14 of the 56 State agencies. In these States, extending the age range of children served by the Part C program would primarily involve a shifting of costs among programs within the same agency. The State may incur some transition costs related to training and administration. However, these costs would not be significant.

If a State elects to provide services under Part C to children ages three through five, and the lead agency is