2011-269. Investing in Innovation Fund; Catalog of Federal Domestic Assistance (CFDA) Numbers: 84.396A, 84.396B and 84.396C

AGENCY:

Office of Innovation and Improvement, Department of Education.

ACTION:

Notice of proposed revisions to priorities, requirements, and selection criteria.

SUMMARY:

The Assistant Deputy Secretary for Innovation and Improvement proposes to amend the final priorities, requirements, and selection criteria under the Investing in Innovation Fund (i3) program as established in the notice of final priorities, requirements, definitions, and selection criteria (2010 NFP) that was published in the Federal Register on March 12, 2010 (75 FR 12004-12071). The 2010 NFP established specific priorities, requirements, and selection criteria to be used in evaluating grant applications for the i3 program. The changes proposed in this notice reflect lessons learned from the first i3 competition and would provide the Secretary with additional flexibility in using priorities, requirements, and selection criteria for i3 competitions in fiscal year (FY) 2011 and subsequent years.

DATES:

We must receive your comments on or before February 9, 2011.

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 and the term “Investing in Innovation” 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.” A direct link to the docket page is also available at http://www.ed.gov/​programs/​innovation/​index.html.
• Postal Mail, Commercial Delivery, or Hand Delivery. If you mail or deliver your comments about these proposed revisions to priorities, requirements, and selection criteria, address them to Office of Innovation and Improvement (Attention: Investing in Innovation Comments), U.S. Department of Education, 400 Maryland Avenue, SW., room 4W321, 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:

Erin McHugh. Telephone: [phone]. Or by e-mail: [e-mail]. Note that we will not accept comments by e-mail.

If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service, toll free, at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Invitation to Comment: We invite you to submit comments regarding this notice. To ensure that your comments have maximum effect in developing the notice of final revisions to the priorities, requirements, and selection criteria, we urge you to identify clearly the specific proposed revisions your comment addresses.

We invite you 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 the proposed revisions to the priorities, requirements, and selection criteria. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

During and after the comment period, you may inspect all public comments about this notice by accessing Regulations.gov. You may also inspect the comments in person, in room 4W335, 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.

Purpose of the Program: The purpose of the i3 program is to provide competitive grants to applicants with a record of improving student achievement and attainment in order to expand the implementation of, and investment in, innovative practices that have the required level of evidence documenting their impact ^[1] on improving student achievement or student growth (as defined in the 2010 NFP), closing achievement gaps, decreasing dropout rates, increasing high school graduation rates, or increasing college enrollment and completion rates.

Under this program, the Department awards three types of grants: “Scale-up” grants, “Validation” grants, and “Development” grants. The use of three categories of grants supports the development of promising yet relatively untested ideas as well as the growth and “scaling” of practices that have made demonstrable improvements in student achievement and attainment outcomes.

Program Authority: American Recovery and Reinvestment Act of 2009, Division A, Section 14007, Pub. L. 111-5. Summary of Proposed Changes: The changes we are proposing in this notice would provide the Secretary the flexibility to select among the priorities established in the 2010 NFP for an i3 competition in FY 2011 and in subsequent fiscal years. We are also proposing in this notice to modify two requirements that were established in the 2010 NFP: First, the requirement on the “Limits on Grant Awards” to clarify that the limit on the number of awards a grantee may receive under this program applies only to a single year's competition under the i3 program; and second, the requirement on “Cost Sharing or Matching” to provide the Secretary the flexibility to determine the required amount of private-sector matching funds or in-kind donations that an eligible applicant must obtain for an i3 competition in FY 2011 and in subsequent fiscal years. Additionally, we are proposing changes that would permit the Department, in establishing selection criteria used in grant competitions conducted under the i3 program, to choose selection criteria and factors—(i) from those established in the 2010 NFP for the i3 program, (ii) from the menu of general selection criteria in the Education Department General Administrative Regulations (EDGAR) in 34 CFR 75.210, (iii) based on statutory provisions in accordance with 34 CFR 75.209, or (iv) from any combination of (i) through (iii) for competitions in FY 2011 and in subsequent years. Additionally, the revisions proposed in this notice would allow the Secretary to choose one or more of the selection criteria for use in conducting a pre-application process in accordance with 34 CFR 75.103. These proposed changes are responsive to specific lessons learned from the first competition of the i3 program in FY 2010 and would allow the Department to simplify and improve the design of the i3 program to better achieve its purposes and goals, including improving student achievement and growth, closing achievement gaps, decreasing dropout rates, increasing high school graduation rates, and increasing college enrollment and completion rates. Specifically, the Department would have the flexibility to use the most appropriate priorities, requirements, and selection criteria, for each type of grant (Scale-up, Validation, or Development) under this program in any year in which this program is in effect, ensuring that the i3 program can adapt to evolving needs of the American education system.

Priorities

Background

In the 2010 NFP for the i3 program, the Department established specific absolute and competitive preference priorities. The absolute priorities are: Innovations that Support Effective Teachers and Principals; Innovations that Improve the Use of Data; Innovations that Complement the Implementation of High Standards and High-Quality Assessments; and Innovations that Turn Around Persistently Low-Performing Schools. The competitive preference priorities are: Innovations for Improving Early Learning Outcomes; Innovations that Support College Access and Success; Innovations to Address the Unique Learning Needs of Students with Disabilities and Limited English Proficient Students; and Innovations that Serve Schools in Rural Local Educational Agencies (LEAs). The 2010 NFP provided that the Department would use all of these priorities in conducting a grant competition. After using these specific priorities for the FY 2010 competition, we have concluded that greater flexibility in selecting priorities will enable the i3 program to focus on the most critical needs for education in a given year. Accordingly, we are proposing in this notice that the Secretary may select among the absolute and competitive preference priorities established in the 2010 NFP for competitions in FY 2011 and in subsequent years. We note that although this proposed action would provide the Secretary with the flexibility to choose from one or more of the priorities in any particular year's competition, it is currently our intention to use all of the competitive preference priorities in any competition we conduct for FY 2011.

Proposed Revision to Priorities

The Department proposes that the Secretary may use any of the priorities established in the 2010 NFP when establishing the priorities for a particular i3 competition. We may apply one or more of these priorities in any year in which this program is in effect.

Requirements

Background

The 2010 NFP established specific requirements for the i3 program. One of those requirements was the “Limits on Grant Awards.” Specifically, the 2010 NFP stated that “[N]o grantee may receive more than two awards under this program. In addition, no grantee may receive more than $55 million in grant awards under this program in a single year's competition.”

The Department intended that the “Limits on Grant Awards” requirement would apply to awards made under a single year's competition rather than under the program generally. Accordingly, we are proposing in this notice to modify this requirement in order to clarify that the limit on the number of awards a grantee may receive under this program applies only to a single year's competition.^[2]

We believe that this proposed change will not only allow us to clarify our intent but also better support the growth and “scaling” of practices that have made demonstrable improvements in student achievement and attainment outcomes.

Additionally, the 2010 NFP established a “Cost Sharing or Matching” requirement for the i3 program. Specifically, this requirement stated that in order to be eligible for an i3 award, an eligible applicant must submit evidence of private-sector matching funds or in-kind donations equal to at least 20 percent of its grant award.

After using this specific requirement for the FY 2010 competition, we have concluded that a single established match amount across the three types of grants is burdensome on both applicants and matching funders, and that greater flexibility in determining the amount of the private-sector match would enable the i3 program to better accommodate the needs of the field in a given year while still fulfilling the program's statutory requirements. Accordingly, we are proposing to modify the “Cost Sharing or Matching” requirement to provide the Secretary the flexibility to determine and specify in the notice inviting applications the required amount of private-sector matching funds or in-kind donations that an eligible applicant must obtain for an i3 grant in FY 2011 and in subsequent fiscal years.

Proposed Revision to Requirements

The Department proposes to revise the “Limits on Grant Awards” requirement to state that “[N]o grantee may receive more than two awards under this program in a single year's competition. In addition, no grantee may receive more than $55 million in grant awards under this program in a single year's competition.”

Additionally, the Department proposes to revise the “Cost Sharing or Matching” requirement as follows:

Cost Sharing or Matching: To be eligible for an award, an eligible applicant must demonstrate that it has established one or more partnerships with an entity or organization in the private sector, which may include philanthropic organizations, and that the entity or organization in the private sector will provide matching funds in order to help bring project results to scale. An eligible applicant must obtain matching funds or in-kind donations equal to an amount that the Secretary will specify in the notice inviting applications for the specific i3 competition. Selected eligible applicants must submit evidence of the full amount of private-sector matching funds following the peer review of applications. An award will not be made unless the applicant provides adequate evidence that the full amount of the private-sector match has been committed or the Secretary approves the eligible applicant's request to reduce the matching-level requirement.

The Secretary may consider decreasing the matching requirement in the most exceptional circumstances, on a case-by-case basis. An eligible applicant that anticipates being unable to meet the full amount of the private-sector matching requirement must include in its application a request to the Secretary to reduce the matching-level requirement, along with a statement of the basis for the request.

Selection Criteria

Background

The 2010 NFP established specific selection criteria for each of the three types of i3 grants and that the Department would use to evaluate i3 applications. For Scale-up and Validation grants, these are: Need for the Project and Quality of the Project Design; Strength of Research, Significance of Effect, and Magnitude of Effect; Experience of the Eligible Applicant; Quality of the Project Evaluation; Strategy and Capacity to Bring to Scale; Sustainability; and Quality of the Management Plan and Personnel. For Development grants, these are: Need for the Project and Quality of the Project Design; Strength of Research, Significant of Effect, and Magnitude of Effect; Experience of the Eligible Applicant; Quality of the Project Evaluation; Strategy and Capacity to Further Develop and Scale; Sustainability; and Quality of the Management Plan and Personnel. The 2010 NFP provided that the Department would use all of the criteria for a specific type of grant in evaluating applications for that grant.

After using these selection criteria for the FY 2010 competition, we have concluded that greater flexibility is needed for choosing selection criteria, and the factors included under each criterion, in order to enable the i3 program to focus on the most critical needs for education in a given year. Such flexibility would also allow the Department to simplify the selection criteria, as appropriate, for a particular competition. Accordingly, we are proposing in this notice that, when establishing selection criteria for an i3 competition, the Secretary may choose one or more of the selection criteria established for the i3 program in the 2010 NFP, may use selection criteria from the menu of general selection criteria in 34 CFR 75.210, may use selection criteria based on statutory provisions in accordance with 34 CFR 75.209, or may use any combination of these criteria for the purpose of evaluating grant applications under the i3 program.^[3]

We believe that the proposed change will enable the Department to administer this program more effectively, simplify the application and review processes, better align the selection criteria used for the different types of grants under this program with the critical aims of that specific grant type, and better ensure that i3 projects address the most critical needs of education in a given year.

Proposed Revision to Selection Criteria

The Department proposes that the Secretary may use one or more of the selection criteria established in the 2010 NFP, any of the selection criteria in 34 CFR 75.210, criteria based on the statutory requirements for the i3 program in accordance with 34 CFR 75.209, or any combination of these when establishing selection criteria for each particular type of grant (Scale-up, Validation, and Development) in an i3 competition. This would include the authority to reduce the number of selection criteria. Within each criterion from these sources, the Secretary would further define each criterion by selecting one or more specific factors within a criterion or assigning factors from one criterion, from any of those sources, to another criterion, in any of those sources. The Secretary may apply one or more of these criteria in any year in which this program is in effect. The Secretary may also select one or more of these selection criteria to review pre-applications, if the Secretary decides to invite pre-applications in accordance with 34 CFR 75.103. In the notice inviting applications, the application package, or both, we would announce the maximum possible points assigned to each criterion.

Note:

This notice does not solicit applications. In any year in which we choose to use these priorities, requirements, and selection criteria, we invite applications through a notice in the Federal Register.^[4]

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. 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 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 not significant under section 3(f) of the Executive order.

This notice has been reviewed in accordance with Executive Order 12866. Under the terms of the order, we have assessed the potential costs and benefits of this proposed regulatory action.

The potential costs associated with this proposed regulatory action are those resulting from statutory requirements and those we have determined as necessary for administering the Department's discretionary grant programs effectively and efficiently.

In assessing the potential costs and benefits—both quantitative and qualitative—of this proposed regulatory action, we have determined that the benefits of the proposed priorities and definitions justify the costs.

We have determined, also, that this proposed regulatory action does not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

Summary of Potential Costs and Benefits

This proposed regulatory action affects only LEAs and nonprofit organizations that are applying for assistance under the i3 program. This regulatory action creates flexibility for the Department to (a) select from among the priorities and selection criteria that were established in the 2010 NFP specific priorities and criteria to use in the FY 2011 i3 grant competition and those in subsequent years, and (b) select other selection criteria under 34 CFR 75.209 and 75.210. We believe that any priority or criterion that would be used in a future grant competition would not impose a financial burden that LEAs and nonprofit organizations would not otherwise incur in the development and submission of a grant application under the i3 program, and under some circumstances (for example, if the Department elected to use fewer criteria or factors in a given competition) the proposed changes could reduce the financial burden of preparing an i3 grant application by a modest amount.

Additionally, although the “Limits on Grant Awards” and “Cost Sharing or Matching” requirements are i3 program requirements, both requirements affect only the highest-rated applications from the peer review process that are also determined to be eligible for an i3 grant award. Therefore, we believe that the proposed modifications to the requirements would not impose a financial burden that LEAs and nonprofit organizations would not otherwise incur in the development and submission of a grant application under the i3 program.

Paperwork Reduction Act of 1995

This notice contains information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The burden associated with CFDA Nos. 84.396A/B/C was approved by OMB under OMB Control Number 1855-0021, which expires on October 31, 2013. These proposed revisions to priorities, requirements, and selection criteria would allow the Department to improve the design of the i3 program to better achieve its purposes and goals by (a) establishing the flexibility to select priorities and selection criteria and (b) modifying the “Limits on Grant Awards” and “Cost Sharing or Matching” requirements. However, the revisions do not change the number of applications an organization may submit or the burden that an applicant would otherwise incur in the development and submission of a grant application under the i3 program. Therefore, the Department expects that this proposed regulatory action will not affect the total burden of 150,000 hours.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 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 early notification of our specific plans and actions for this program.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or computer diskette) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

Electronic Access to This Document: You can 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. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at [phone].

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: http://www.gpoaccess.gov/​nara/​index.html.

Dated: January 5, 2011.

James H. Shelton, III,

Assistant Deputy Secretary for Innovation and Improvement.

Footnotes

1.  To be eligible for an award, an application for a Scale-up grant must be supported by strong evidence (as defined in the 2010 NFP), an application for a Validation grant must be supported by moderate evidence (as defined in the 2010 NFP), and an application for a Development grant must be supported by a reasonable hypothesis.

2.  Although the Department can award three types of grants under the i3 program, the Department, for purposes of calculating the “Limit on Grant Awards,” considers the competition for i3 funding in any particular year as a single competition.

3.  The Department's regulations in EDGAR govern, among other things, the use of selection criteria to evaluate discretionary grant applications. Under 34 CFR 75.200, the Secretary may use selection criteria based on statutory provisions in accordance with 34 CFR 75.209, selection criteria in program-specific regulations, selection criteria established under 34 CFR 75.210, or any combination of these. The Secretary may select from the menu one or more criteria that best enable the Department to select the highest-quality applications, consistent with the program purpose, statutory requirements, and any priorities established for a competition. For additional information on 34 CFR 75.209 and 34 CFR 75.270, see http://www2.ed.gov/​policy/​fund/​reg/​edgarReg/​edgar.html.

4.  Availability of funds for the i3 program in FY 2011 and in subsequent years is contingent upon an appropriation of funds for the program by the Congress.