Ms. DORSETT. Well, we are participating.

Mr. NATCHER. Well, that is good. I am glad you are. That is proper in every respect. The subcommittee will need to mark up the 1989 appropriations bill some time during the month of May. Assuming now, a reauthorization bill passes in the next several weeks, do you plan to amend your budget request?

Ms. DORSETT. No, we will not make any major changes.

FORMAL REQUEST TO BE TRANSMITTED AFTER CONFERENCE ACTION

Ms. CHRISTENSEN. Yes, Mr. Chairman, we do plan to submit a formal request with the language based on what comes out of conference on H.R. 5.

Mr. NATCHER. What comes out of the conference.

Ms. CHRISTENSEN. What you have before you shows estimates of what we had assumed prior to final enactment.

Mr. NATCHER. All right. How quickly will you be able to revise your budget documents? Will it take a week, two weeks? How long? Ms. CHRISTENSEN. I think it would depend on what kind of changes there are. I think that based on what we are seeing in conference now, it should not take more than a week at most. We have to work this out with OMB. But we will be up very, very quickly with the revised budget.

Mr. NATCHER. The total amount, as you know, shown in the budget for Chapter 1 is $4,566,000,000. Will your revised budget change this figure? Do you know?

Ms. CHRISTENSEN. We would have to wait until we see all of the programs reauthorized. But we would assume at this point that it would be very close.

IMPROVED TARGETING OF CHAPTER 1 FUNDS

Mr. NATCHER. Your statement refers to an improved targeting of Chapter 1 funds. How do you plan to achieve this goal?

MS. DORSETT. Well, what we plan to do is set aside $154,000,000 for the concentration grants. And where there are the greatest number of deprived students, initial funds will be going into those communities.

CONCENTRATION GRANTS BUDGET REQUEST

Mr. NATCHER. How did you derive the figure of $154,000,000, which you are now showing for concentration grants?

Mr. CORWIN. We wanted to put a healthy increase in for Chapter 1, including some increase for the basic grant. We came out at the 2-percent increase for the basic grants, so that all the communities that participate in Chapter 1 would get essentially a current services increase.

Then we had additional funds remaining within our overall increase that we could put into concentration grants to get that program going again.

CONCENTRATION GRANT FORMULA

Mr. NATCHER. Has your office developed a new formula for allocating concentration grants under Chapter 1?

Mr. CORWIN. A year ago, we sent up a proposal as part of our reauthorization. At this point, the House and Senate have acted. We are waiting to see what we come up with through the conference on H.R. 5.

Mr. NATCHER. The House and Senate reauthorization bills include different formulas for concentration grants. Which one is the Administration supporting? Can you tell us?

Mr. CORWIN. For the most part, we are supporting the formula that came out of the House because it does a good job of getting additional funds to the communities with the heaviest concentration of poor children. It also is an improvement on the current formula because it does better by the rural districts who did not tend to do well in the current Concentration Grant Formula.

The Senate allocated half the funds under the basic grant formula. This does not seem nearly as good to us. So, we are on record as supporting the House.

REAUTHORIZATION COULD MANDATE CONCENTRATION GRANT FUNDING

Mr. NATCHER. Do you expect that funding for concentration grants will be mandated in the reauthorization of Chapter 1? Mr. CORWIN. Yes, we do.

TARGETING MORE CONCENTRATION FUNDING TO RURAL AREAS

Mr. NATCHER. One of the past problems with concentration grants, as you know, is that most of the funds go to the big cities. Rural areas of the country don't seem to benefit much from concentration grants. Is there some way this program can be structured to recognize the needs of children from rural areas?

Mr. CORWIN. We think the House formula would take care of that. They changed the thresholds of funding from 20 percent poor children to 15 percent, and also the method by which the funds would go out.

If you look at some rural areas of the country, for instance in your District, we think it does well. If you were to put the $154,000,000 into concentration grants under the House formula rather than basic grants, Allen County, Kentucky would get about $14,000 rather than $10,000. Barren County would get $32,000 rather than $23,000.

As you go down the list, most of the counties in the Second District of Kentucky do quite well.

OTHER CHAPTER 1 LEGISLATIVE CHANGES

Mr. NATCHER. In addition to concentration grants, what major changes does the Department have in mind for the reauthorization of Chapter 1 basic grants to local school districts?

Mr. CORWIN. A year ago, we submitted a proposal to include an absorption provision in the basic grant formula. That was not included in the House or Senate bills. At this point, we are not pursuing that any further.

SCHOOL-WIDE PROJECTS

Mr. NATCHER. Both versions of the pending reauthorization legislation have provisions intended to encourage the use of Chapter 1

funds under "school-wide plans". Do you favor the use of Chapter 1 funds in this manner? What would you say about it?

Mr. LOBOSCO. Yes, we do. We believe that where there are heavy concentrations of poor children, where the school building has extra burdens placed upon it, it needs the flexibility to improve the education of all the children in that building.

And we think that the school-wide provisions will help those schools. In fact, both bills in conference now have adopted the Administration's position of eliminating the matching requirement, which was a hindrance for schools in the past.

Mr. NATCHER. All right.

What is the advantage of "school-wide plans" over existing Chapter 1 projects?

Ms. DORSETT. One thing is that it will supplement the education in a total fashion and it will avoid the pull out situation at the school. The principal would have an opportunity to look at the total structure of educational services to the school.

PRIVATE SCHOOL PARTICIPATION

Mr. NATCHER. Is the Department supporting any changes in the delivery of Chapter 1 services to private schoolchildren?

Mr. CORWIN. We had a proposal a year ago for districts that were having trouble meeting the requirements for private school participation, because of the Felton decision, to permit them to use what we called compensatory education certificates. That has not been picked up in the reauthorization bills.

Instead, they have a proposal to appropriate funds for the capital costs of purchasing vans, leasing neutral sites, or other capital costs. We think that is an inferior way to go about it. We have not included any funding in our budget for that.

INCREASE IN PARTICIPATION OF PRIVATE SCHOOLCHILDREN

Mr. NATCHER. Has the number of private schoolchildren served by Chapter 1 declined in recent years?

Ms. DORSETT. No, it has increased.

Mr. NATCHER. Has increased?

Mr. LOBOSCO. Well, there was an initial decline right after Aguilar v. Felson. There was about a 50,000 decline in the number of participants. That has changed over the past two years. We see an upward trend. Those districts that had problems with the Felton decision have largely overcome those problems, and we see an increase each year now in the number of private schoolchildren participating since that case.

NATIONAL EVALUATION STANDARDS

Mr. NATCHER. Have you given any consideration to developing plans to assist States in preparing Chapter 1 performance standards that will be required by the reauthorization bills?

Ms. DORSETT. We have the technical assistance centers, and those centers are there to give the kind of support and information needed for evaluating Chapter 1 programs.

Mr. LOBOSCO. In addition, we plan a series of regional meetings immediately upon enactment of the new legislation. The primary

purpose of those meetings is to seek the consultation of the States, local school districts, and all those who are interested in Chapter 1. We want to get their thoughts on the kind of evaluation standards they believe are reasonable and that would meet the requirements of the statute, before we set to paper some of the final regulations that we can make.

We also intend to convene, as suggested in the legislation, a panel of individuals to comply with the negotiated rulemaking provisions. One of the items we will ask that panel to address is the evaluation standards that we must set.

PARENTAL INVOLVEMENT

Mr. NATCHER. What changes are being proposed to increase parental involvement in Chapter 1 programs, if any?

Ms. DORSETT. What we are recommending is that the parents have a choice to send their children to schools that they feel would best fit their academic needs, and also to support any particular parent endeavor so that we get more parents involved in education with their children.

Mr. CORWIN. Both of the reauthorization bills codify some of the things we put in regulations in the past couple of years to ensure the local districts have a parent involvement plan, and to spell out recommended activities that the districts can undertake with par

ents.

In addition, the reauthorization bill may require the districts to evaluate their parent involvement activity, I believe, every two years.

CARRY OVER OF CHAPTER 1 FUNDS

Mr. NATCHER. From time to time, as you know, we receive reports that States are not using all of their Chapter 1 funds and are showing large balances at the end of the year. Has this become a serious problem?

Mr. CORWIN. We have seen the press reports, too, and had staff take a look at it. We didn't really think it was a big problem. The law, and with the Tydings amendment under GEPA, permits the districts to carry over funds. Sometimes because of Continuing Resolutions or supplementals districts do not find out how much they are going to get until late in the fiscal year, and have had a significant amount to carry over.

It has been permissible and we have not seen big problems with it.

Mr. LOBOSCO. We may add that the new legislation addresses this issue as well; in that, in a period of two years, LEAs would not be permitted to carry over more than 15 percent without exceptional circumstances existing.

Mr. NATCHER. Do you think there should be a limit on the amount of funds carried over from year to year? Shouldn't there be a limit?

Mr. CORWIN. We didn't propose that, and we see that it could actually cause problems for the districts to have that kind of limit.

REAUTHORIZATION OR STATE AGENCY PROGRAMS

Mr. NATCHER. Under your State agency programs, what are the major changes being proposed in the reauthorization of the three State agency programs under Chapter 1? Any changes proposed?

Mr. LOBOSCO. In the neglected and delinquent program, new legislation would permit the State to withhold-and we would support this a percentage of the funds allocated to be used for follow-up services for those youngsters, so when they leave the State institutions and return to their local school districts, they stay in school. The State could withhold a portion of the funds allocated to it to provide transitional services to those children.

Ms. DORSETT. We are also asking for an additional amount of $64,000 for that program.

Mr. NATCHER. All right.

Mr. STAEHLE. I think the basic change in the Migrant Education program is in the ages of the children counted for payment. That will now be 3 to 21 rather than 5 to 17. Ages 3 to 21 are all within the current range of children being served. But the formula only counts 5 to 17 years olds. It becomes a matter of State and local choices as to exactly where the money is used.

The major effect of this we do not exactly know how to anticipate. Unless the money increases, there will probably not be a significant effect on the distribution. States that will most likely benefit from the change from 5 to 17 to 3 to 21 are those that are already doing a good job of identifying youngsters in the lower and upper age ranges.

Mr. TYRELL. There are no major changes at all in the handicapped program, sir.

IMPACT OF INFLATION

Mr. NATCHER. All right. Funding levels for the three State agency programs have remained fairly constant over the past five years, as you know. Has inflation over that period had any effect on the programs?

Has it had any effect?

Mr. CORWIN. We haven't found an appreciable effect.

Mr. NATCHER. All right.

Mr. STAEHLE. There is a bit of an increase from last year to this year. Then we are holding level.

CHILDREN SERVED BY STATE AGENCY PROGRAMS

Mr. NATCHER. Generally, are the number of eligible children served by the State agency programs remaining about the same, or are they declining?

MS. DORSETT. About the same.

PROGRAM SERVICE OVERLAP

Mr. NATCHER. To what extent are children served by the Chapter 1 Migrant program also served by other Chapter 1 programs such as a basic grant program?

Mr. STAEHLE. I think there is always some overlap. And a high proportion of our migrant children are actually former migrants.