[Federal Register: April 2, 2010 (Volume 75, Number 63)]
[Rules and Regulations]              
[Page 16668-16670]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

Download: download files


[[Page 16668]]



34 CFR Subtitle B, Chapter II

[Docket ID ED-2010-OESE-0005]
RIN 1810-AB10

Race to the Top Fund

ACTION: Interim final requirements; request for comments.


SUMMARY: The U.S. Secretary of Education (Secretary) amends the final
requirements for the Race to the Top Fund to incorporate and make
binding for Phase 2 of the competition State budget guidance.

DATES: These requirements are effective April 2, 2010. We must receive
your comments by May 3, 2010.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments by fax or by e-mail. Please submit your comments only
one time, in order to ensure that we do not receive duplicate copies.
In addition, please include the Docket ID at the top of your comments.
     Federal eRulemaking Portal: Go to http://www.regulations.gov to 
submit your comments electronically. Information
on using Regulations.gov, including instructions for accessing agency
documents, submitting comments, and viewing the docket, is available on
the site under ``How To Use This Site.''
     Postal Mail, Commercial Delivery, or Hand Delivery: If you
mail or deliver your comments about these interim final requirements,
address them to James Butler, U.S. Department of Education, 400
Maryland Avenue, SW., room 3E108, Washington, DC 20202.
     Privacy Note: The Department's policy for comments
received from members of the public (including those comments submitted
by mail, commercial delivery, or hand delivery) is to make these
submissions available for public viewing in their entirety on the
Federal eRulemaking Portal at http://www.regulations.gov. Therefore,
commenters should be careful to include in their comments only
information that they wish to make publicly available on the Internet.

FOR FURTHER INFORMATION CONTACT: James Butler, Telephone: 202-205-3775
or by e-mail: racetothetop@ed.gov.
    If you use a telecommunications device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at 1-800-877-8339.
    Individuals with disabilities can obtain this document in an
accessible format (e.g., braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER


Invitation To Comment

    We invite you to submit comments regarding these interim final
requirements and to assist us in complying with the specific
requirements of Executive Order 12866 and its overall requirement of
reducing regulatory burden that might result from these interim final
    During and after the comment period you may inspect all public
comments about these interim final requirements by accessing
Regulations.gov. You may also inspect the comments, in person, in room
3W100, 400 Maryland Avenue, SW., Washington, DC between the hours of
8:30 a.m. and 4 p.m., Washington, DC time, Monday through Friday of
each week except Federal holidays.
    Assistance to Individuals With Disabilities in Reviewing the
Rulemaking Record: On request, we will provide an appropriate
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for this notice. If you want to schedule an
appointment for this type of accommodation or auxiliary aid, please
contact the person listed under FOR FURTHER INFORMATION CONTACT.
    Background: The Secretary published final requirements for the Race
to the Top Fund in the Federal Register on November 18, 2009 (74 FR
59688). In the same issue of the Federal Register, the Secretary also
published the Race to the Top Fund NIA for Fiscal Year (FY) 2010 (74 FR
59836). The NIA provides two application deadlines for the FY 2010 Race
to the Top Fund competition: Phase 1, due January 19, 2010, and Phase
2, due June 1, 2010.
    Through Race to the Top, the Department seeks to spur reform of the
country's education system. This mission can be met by achieving two
key goals. First, we seek to ensure that States that put forth the
highest-quality reform plans and demonstrate the capacity to implement
those plans have sufficient funding to make their plans a reality.
Second, we seek to recognize a number of States that can serve as
models of change through their Race to the Top plans. Funding for Race
to the Top is not unlimited. For this reason, the Department must
balance these competing goals to maximize the Race to the Top
investment while ensuring that the highest-quality plans can be
    In an effort to achieve these goals, in the NIA, the Department
provided direction and flexibility to States in planning their budgets.
Specifically, the NIA contained nonbinding budget ranges for each
State. The NIA provided that States could use these ranges as rough
blueprints to guide the development of their budgets, but that States
could also prepare budgets that were above or below the ranges
specified. States were encouraged to develop budgets that were
appropriate to implement the plans they outlined in their applications.
In developing the budget ranges, the Department grouped the States into
five categories by ranking every State according to its share of the
national population of children ages 5 through 17 and identifying
natural breaks in the population numbers. The Department then developed
overlapping budget ranges for each category based on the student
population data.
    The Department received 41 applications in Phase 1. States' budget
requests ranged from 90 percent to 297 percent of the suggested budget
maximums. There was significant variability in the extent to which
State budget requests conformed to the Department's suggested budget
ranges, including significant variability among the budget requests
from similarly sized States.
    Following the peer review of Phase 1 applications, we analyzed the
rank order of States based upon their scores and compared the rank
order with the extent to which the State conformed with or exceeded the
Department's suggested budget ranges. We found no relationship between
a State's rank and its budget request.
    In light of this analysis, we conclude that States can propose
high-quality Race to the Top plans within the Department's suggested
budget ranges, particularly given that, as part of their reform plans,
States are expected to coordinate, reallocate, or repurpose other
Federal, State, and local sources of funding to support their Race to
the Top goals. To ensure a robust competition in Phase 2 and to
stimulate comprehensive education reform throughout the country, we are
establishing the suggested budget ranges as mandatory funding limits
for Phase 2 of the competition.
    Race to the Top grantees will serve as models of best reform
practices across their States and the country; accordingly, we want to
ensure that the Secretary can fund, at an adequate level, a sufficient
number of high-quality applications within this finite ARRA

[[Page 16669]]

funding. Requiring States to conform to the Department's budget ranges
will allow more grants to be awarded. Accordingly, these interim final
requirements make the previously suggested budget ranges binding on
State applicants applying in Phase 2 of the competition.
    Waiver of Rulemaking and Delayed Effective Date: Under the
Administrative Procedure Act (APA) (5 U.S.C. 553), the Department is
generally required to publish a notice of proposed rulemaking and
provide the public with an opportunity to comment on proposed
regulations prior to establishing a final rule. However, we are waiving
the notice-and-comment rulemaking requirements under the APA. Section
553(b) of the APA provides that an agency is not required to conduct
notice-and-comment rulemaking when the agency for good cause finds that
notice and public procedure thereon are impracticable, unnecessary, or
contrary to the public interest. Although these requirements are
subject to the APA's notice-and-comment requirements, the Secretary has
determined that it would be impracticable and contrary to the public
interest to conduct notice-and-comment rulemaking.
    As noted above, these interim final requirements are needed to
establish mandatory budget ranges in the final Race to the Top Fund
requirements published on November 18, 2009. The Department believes
that mandatory budget ranges are necessary due, in part, to the extent
to which Phase 1 applications exceeded the recommended budget ranges.
Additionally, as previously indicated, Phase 2 Race to the Top
applications are due on June 1, 2010. We chose this date to allow
sufficient time for States to prepare their applications and for the
Department to conduct Phase 2 of the competition, so that grant awards
can be made by September 30, 2010, when all ARRA funds must be
obligated. Even on an extremely expedited timeline, it would be
impracticable for the Department to conduct notice-and-comment
rulemaking and then promulgate final requirements before the June 1,
2010 deadline for Phase 2 applications. Publishing a notice of proposed
rulemaking, reviewing the public comments, and issuing final
regulations normally takes at least four to six months. We are
concerned that, when added to the time the Department will need to
conduct Phase 2 of the competition in addition to the time that States
will need to plan and draft applications that conform to these budget
ranges, the Department might not be able to award Race to the Top
grants by the obligation deadline of September 30, 2010. With billions
of public dollars at stake, it would be impracticable and contrary to
the public interest for the Department to take this risk of not
obligating all funds by September 30.
    Accordingly, and in order to make timely grant awards with ARRA
funds, the Secretary is issuing these interim final requirements
without first publishing proposed requirements for public comment.
These interim final requirements govern Phase 2 of the Race to the Top
    Although the Department is adopting these requirements on an
interim final basis, the Department requests public comment on these
requirements. After consideration of public comments, the Secretary
will publish final requirements. The final requirements would govern
any subsequent competition conducted under the Race to the Top program.
    The APA also requires that a substantive rule be published at least
30 days before its effective date, except as otherwise provided for
good cause (5 U.S.C. 553(d)(3)). For the reasons outlined in the
preceding paragraphs, the Secretary has determined that a delayed
effective date for these interim final requirements would be
unnecessary and contrary to the public interest, and that good cause
exists to waive the requirement for a delayed effective date. As such,
this rule is effective on the date it is published.

Summary of the Interim Final Requirements

    Current final requirements: The current final requirements do not
contain any requirements related to the total amount a State may
request in its Race to the Top budget.
    Interim final requirements: The interim final requirements add a
section entitled ``Budget Requirements,'' specifying that State Race to
the Top budgets must conform to the budget ranges developed by the
    Reasons: In Phase 1 of the Race to the Top competition, States'
budget requests varied widely and almost every applicant exceeded the
budget ranges suggested in the NIA. The Department did not expect that
States would propose budgets that differed so significantly from the
suggested budget ranges, which, as indicated previously, were developed
based on current State population data. We believe that States can
propose successful Race to the Top plans within these ranges because we
did not find a relationship between States' scoring ranks and the
extent to which States exceeded the Department's suggested budget
ranges. By requiring States to conform to specific budget ranges, we
will ensure that the Secretary can fund, at an adequate level, multiple
high-quality applications.

Interim Final Requirements


For the reasons discussed previously, the Secretary amends the final
Race to the Top Fund requirements published in the Federal Register on
November 18, 2009 (74 FR 59836) to include a new section as follows:
    Budget Requirements: For Phase 2 of the Fiscal Year 2010
competition, and for any subsequent competitions, the State's budget
must conform to the following budget ranges: \1\

    \1\ The Department developed budget ranges for each State by
ranking every State according to its share of the national
population of children ages 5 through 17 based on data from
``Estimates of the Resident Population by Selected Age Groups for
the United States, States, and Puerto Rico: July 1, 2008'' released
by the Population Division of the U.S. Census Bureau. The Department
identified the natural breaks in the population data and then
developed overlapping budget ranges for each category taking into
consideration the total amount of funds available for awards.

    Category 1--$350-700 million: California, Texas, New York, Florida.
    Category 2--$200-400 million: Illinois, Pennsylvania, Ohio,
Georgia, Michigan, North Carolina, New Jersey.
    Category 3--$150-250 million: Virginia, Arizona, Indiana,
Washington, Tennessee, Massachusetts, Missouri, Maryland, Wisconsin.
    Category 4--$60-175 million: Minnesota, Colorado, Alabama,
Louisiana, South Carolina, Puerto Rico, Kentucky, Oklahoma, Oregon,
Connecticut, Utah, Mississippi, Iowa, Arkansas, Kansas, Nevada.
    Category 5--$20-75 million: New Mexico, Nebraska, Idaho, West
Virginia, New Hampshire, Maine, Hawaii, Rhode Island, Montana,
Delaware, South Dakota, Alaska, North Dakota, Vermont, Wyoming,
District of Columbia.
    The State should develop a budget that is appropriate for the plan
it outlines in its application; however we will not consider a State's
application if its request exceeds the maximum in its budget range.
    Executive Order 12866: Under Executive Order 12866, the Secretary
must determine whether a 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

[[Page 16670]]

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 local 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 set forth in the Executive order. The
Secretary has determined that this regulatory action is significant
under section 3(f) of the Executive order.

Potential Costs and Benefits

    Under Executive Order 12866, we have assessed the potential costs
and benefits of this regulatory action and have determined that this
rule will not impose additional costs to State applicants, grantees, or
the Federal government. The Department is regulating only to
incorporate mandatory budget ranges into the final Race to the Top
requirements. It may take a State applicant time to create or revise
its Race to the Top budget so that it conforms to the required budget
range contained in this regulatory action if the State had intended to
request more than the maximum in the range. We believe, however, that
the benefits of this action outweigh any potential burden that it may
cause. Additionally, the Department has determined that this regulatory
action does not unduly interfere with State, local, and Tribal
governments in the exercise of their governmental functions.
    Regulatory Flexibility Act Certification: The Secretary certifies
that these interim final requirements will not have a significant
economic impact on a substantial number of small entities. The
Secretary makes this certification because the only entities eligible
to apply for grants are States, and States are not small entities.
    Paperwork Reduction Act of 1995: The interim final requirements
contain information collection requirements that are subject to review
by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
The Department had received previously emergency approval for the
information collections in the final Race to the Top Fund requirements
published on November 18, 2009, under OMB Control Number 1810-0697. The
Department will submit to OMB a Paperwork Reduction Act Change
Worksheet for this collection that will include the changes described
in this notice.
    Intergovernmental Review: This program is subject to Executive
Order 12372 and the regulations in 34 CFR 79. One of the objectives of
the Executive Order is to foster an intergovernmental partnership and a
strengthened federalism. The Executive Order relies on processes
developed by State and local governments for coordination and review of
proposed Federal financial assistance.
    This document provides notification of our specific plans regarding
budget requirements for this program.
    Electronic Access to This Document: You may view this document, as
well as all other documents of this Department published in the Federal
Register, in text or Adobe Portable Document Format (PDF) on the
Internet at the following site: http://www.ed.gov/news/fedregister.
    To use PDF, you must have Adobe Acrobat Reader, which is available
free at this site.

    Note:  The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: 

    Dated: March 29, 2010.
Arne Duncan,
Secretary of Education.
[FR Doc. 2010-7409 Filed 4-1-10; 8:45 am]