2010-23922. Teacher Incentive Fund

ACTION:

Interim final requirements; request for comments.

SUMMARY:

The Secretary of Education (Secretary) amends the final requirements for the Teacher Incentive Fund program to authorize the Department to select more than sixteen high-need schools per local educational agency (LEA) for participation in the Congressionally mandated TIF national evaluation.

DATES:

These interim final requirements are effective September 23, 2010. We must receive your comments by October 25, 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 Office of Elementary and Secondary Education (Attention: Teacher Incentive Fund Comments), U.S. Department of Education, 400 Maryland Avenue, SW., room 3E120, 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:

April Lee. 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 (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 INFORMATION CONTACT .

SUPPLEMENTARY INFORMATION:

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 requirements.

During and after the comment period you may inspect all public comments about these interim final requirements by accessing http://www.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 and Summary of Interim Final Requirements: On May 21, 2010, the Secretary published a notice of final priorities, requirements, definitions, and selection criteria (NFP) for the TIF program in the Federal Register (75 FR 28713). The purpose of the TIF program is to support projects that develop and implement performance-based compensation systems for teachers, principals, and other personnel in high-need schools in order to increase educator effectiveness and student achievement, measured in significant part by student growth.

The NFP announced priorities, requirements, definitions, and selection criteria that would govern two separate TIF competitions, the Main TIF competition and the TIF Evaluation competition. In the same issue of the Federal Register , the Secretary also published a notice inviting applications (NIA) for both TIF competitions for FY 2010 (75 FR 28740).

The TIF Evaluation competition responds to a requirement in the American Recovery and Reinvestment Act of 2009, Division A, Title VIII, Public Law 111-5 (the ARRA), that the Secretary use a portion of the funds appropriated in the ARRA to conduct a national evaluation of the TIF program. Specifically, along with authorizing TIF funds to be used to support projects that implement performance-based compensation systems (PBCSs), the ARRA also requires the Department to use the appropriated funds to conduct a “rigorous national evaluation . . . utilizing randomized controlled methodology to the extent feasible, that assesses the impact of performance-based teacher and principal compensation systems supported by the funds provided in this Act on teacher and principal recruitment and retention in high-need schools and subjects.” The ARRA thus requires the Department to conduct a national evaluation that will ensure adequate participation of both a treatment group and a control group.

In response to Congress' mandate, the Department developed a study methodology that relies on a sufficient number of high-need schools—both “treatment schools” in which teachers would be eligible for performance-based compensation that is one element of the LEA's PBCS, and “control schools” in which teachers would be part of the PBCS but would not be eligible to receive performance-based compensation that would be spread across a sufficient number of LEAs to yield sufficiently meaningful and generally applicable results. The Department announced in the NFP that each applicant for the TIF Evaluation competition had to identify eight or more high-need schools to be included in the TIF Evaluation. Based on our projections that 20 applicants would submit sufficiently high-quality applications for the TIF Evaluation competition, and the number of high-need schools that those applicants would propose to be included in the TIF Evaluation competition, the Department announced in the NFP that applicants could select up to 16 high-need schools per LEA to participate in the TIF Evaluation. See 75 FR 28735.

As an incentive for applicants to identify high-need schools for inclusion in the TIF Evaluation, the Department also announced in the NFP (75 FR 28734) that applicants whose schools were selected for inclusion in the evaluation would receive additional funding of up to $2 million to be used for TIF-related activities as specified in the NFP—$1 million for inclusion of up to eight high-need schools (four pairs), and an additional $250,000 for each additional pair of high-need schools up to a maximum of 16 schools.

After non-Federal readers reviewed and scored applications for the TIF Evaluation competition, the Department determined that the number of applicants that submitted high-quality applications for the TIF Evaluation competition, and the number of high-need schools those applicants identified for inclusion in the evaluation, were lower than the Department wanted for a study that has the desired statistical power. Even after extending an opportunity to applicants that had submitted high-quality applications for the TIF Evaluation competition to identify additional schools, up to 16 per LEA, for inclusion in the national TIF Evaluation, the number of high-need schools identified for inclusion was still lower than the Department desired for its study sample size.

The Department's decision to cap at 16 the number of an LEA's high-need schools that could be included in the evaluation (and the number of high-need schools for which the Department would provide successful applicants with incentive funding under the TIF Evaluation competition) was intended to enable the evaluation to look at the impact of performance-based compensation in a substantial number of geographically diverse LEAs. And, at the time it adopted the requirement, the Department had every reason to believe that it would receive a sufficient number of high-quality applications such that a 16-school cap would not limit the effectiveness of the evaluation. However, based on the number of applications deemed of sufficiently high quality to warrant funding, the Department has determined that including more than 16 high-need schools per LEA in the evaluation is necessary if the Department is to use a strong design to conduct the Congressionally mandated study. Accordingly, the Secretary has decided to revise the requirements announced in the NFP by removing the cap of 16 high-need schools per LEA that may be included in the TIF Evaluation, and by removing the cap of $2,000,000 on the incentive payments that may be provided to grantees identifying additional pairs of schools, beyond the minimum required four pairs of such schools.

We recognize that implementation of this new requirement has budgetary implications for applicants that choose to offer more than 16 schools per LEA for inclusion in the evaluation. In addition to the additional incentive payments and funding for the other costs of implementing the PBCS, as stated in the NFP, the Department will provide to grantees with schools participating in the evaluation: (a) A one-percent across-the-board supplemental bonus payment for teachers, principals, and other personnel (at those sites in which the grantee has chosen to expand its PBCS to include these additional staff) in all control schools, and (b) funds necessary to meet the costs of implementing the supplemental differentiated effectiveness incentive component of the PBCS in all treatment schools. However, the Department has determined that, given the amount of available TIF funding and the limited number of high-quality applications, inclusion of additional schools beyond 16 per LEA and the award of the additional funds for inclusion of such schools will have no adverse impact on the number of grantees or the size of the TIF award that any grantee—under either the Main TIF competition or the TIF Evaluation competition—would otherwise receive.

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 permit the Department to include in the Congressionally mandated evaluation of the TIF program a sufficient number of high-need schools to yield study results in which one may have great confidence. The prior requirements, which limited the number of high-need schools to be included in the TIF Evaluation and the Department's award of an incentive for inclusion of such schools, to 16 per LEA and $2,000,000 in incentive payments, respectively, were based on our assumptions about numbers of high-quality applications the Department would receive, assumptions that were not correct. Additionally, we have determined that imposition of those prior requirements may prevent the TIF Evaluation from achieving its intended purpose.

As also noted in the discussion in the preceding section, this change in the TIF Evaluation competition requirements will have no financial impact on any applicant. No applicant will be denied or receive decreased TIF funding because of a decision to permit other applicants to increase the number of high-need schools participating in the evaluation and to provide greater incentive payments to them for doing so. Moreover, the Department's authority to make TIF awards under both the Main TIF competition and the TIF Evaluation competition expires on October 1, 2010. Waiver of rulemaking and the delayed effective date are needed to permit these requirements to become effective, and to make TIF awards by September 30, 2010. Even on the most expedited timeline, it would be impossible for the Department to conduct notice-and-comment rulemaking and then promulgate final requirements before the October 1, 2010 deadline as this process normally takes six months. With the Department's ability to conduct the required evaluation at stake, and with so much interest in the results of the study as they apply to performance-based compensation systems, it would be impracticable and contrary to the public interest for the Department to take this risk of not obligating funds available under the TIF Evaluation competition by September 30, 2010.

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 only the selection of schools for the TIF Evaluation.

Although the Department is adopting these requirements on an interim final basis, the Department requests public comment on the requirements. After consideration of public comments, the Secretary will publish final requirements.

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, these interim final requirements are effective on the date of publication.

Interim Final Requirements

For the reasons discussed previously, the Secretary amends the final priorities, requirements, definitions, and selection criteria for the TIF program, published in the Federal Register on May 21, 2010 (75 FR 28714), by revising—

(a) The Budget Information section (75 FR 28734):

Budget Information

In paragraph one, the last sentence is revised to read as follows: “For each additional pair of schools participating in the evaluation, a successful applicant will receive an additional $250,000.”

(b) The Scope of Schools section (75 FR 28735-28736):

Scope of Schools

1. In paragraph one, the last sentence, “In addition, no LEA will have more than 16 high-need schools (as defined in this notice) selected for the TIF Evaluation.”, is removed.

2. In paragraph two, the last sentence, “The Department will use the number of eligible schools, up to 16 per LEA, that a successful applicant makes available for the TIF Evaluation.”, is removed.

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 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 these interim final requirements will not impose additional costs to grantees or the Federal government. The Department is regulating only to permit, at the discretion of each applicant that submits an application of sufficient quality, more schools per LEA to be included in the national evaluation. 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 small entities affected by this regulatory action are (1) small LEAs, and (2) nonprofit organizations applying for and receiving funds under this program in partnership with an LEA or a State educational agency (SEA). For the reasons stated in the NFP, 75 FR 28738-28739, the Secretary certifies that this regulatory action will not have a significant economic impact on a substantial number of small entities.

Paperwork Reduction Act of 1995

These interim final requirements contain no new information collection requirements that are subject to review by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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 notification of our specific plans regarding the TIF Evaluation competition 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: http://www.gpoaccess.gov/​nara/​index.html.

Dated: September 21, 2010.

Thelma Meléndez de Santa Ana,

Assistant Secretary for Elementary and Secondary Education.