no dispute exists as to a material fact the resolution of which would be materially assisted by oral testimony, the hearing officer or panel shall afford each party to the proceeding an opportunity for presenting its case at the option of the hearing officer or panel (i) in whole or in part in writing or (ii) in an informal conference which shall afford each party sufficient notice of the issues to be considered (where such notice has not previously been afforded).

(2) With respect to hearings involving a dispute as to a material fact the resolution of which would be materially assisted by oral testimony, the hearing officer or panel shall afford each party, in addition to the notice of issues required by paragraph (f)(1)(ii) of this section, the following:

(i) An opportunity for a record of the proceedings;

(ii) An opportunity to present witnesses on the party's behalf; and

(iii) An opportunity to cross-examine other witnesses either orally or through written interrogatories.

(g) Decisions. When a hearing officer or panel is designated to consider the matter, the officer or panel shall make an initial decision based upon written findings, which shall be forwarded to the Commissioner. The Commissioner may, by appropriate notification to the parties, determine to review it or certify it as the final decision of the Commissioner without further proceedings. Written notice of the initial decision shall be sent to all parties. In any case in which the Commissioner modifies or reverses the initial decision, a notice of that action shall be accompanied by a written statement of the grounds for the reversal or modification. Notice of the final decision of the Commissioner shall be served upon all parties to the hearing, the hearing panel and any local educational agency which may be adversely affected thereby.

(h) Effect on payments. (1) When an appropriate request for a hearing under this section has been made the Commissioner will not suspend or ter

minate payments to a local educational agency under the Act on the basis of section 5(d)(1) of the Act until a final decision with respect to the matter in controversy has been made under this subpart.

(2) If a State has been finally determined, after notice and opportunity for hearing, to have been taking into consideration payments under the Act in violation of sections 5(d) (1) and (2) of the Act, the Commissioner shall terminate payments under the Act to all local educational agencies in that State unless the State provides satisfactory assurances within thirty (30) days after receiving notice of a final decision, that it will restore to all affected local agencies any State aid which was denied the agencies because of those payments.

(3) If a State has been finally determined, after notice and opportunity for a hearing, to have been taking into consideration payments under the Act in excess of the proportion computed under § 115.66 of this subpart, the Commissioner shall terminate payments under the Act to all local educational agencies in that State, unless the State provides satisfactory assurances, within thirty (30) days after receiving notice of a final decision, that it will reimburse all affected local educational agencies for the excess amount of payments taken into consideration in the allocation of State aid and that thereafter it will only take into consideration payments under the Act in the proportion permitted.

(4) During the thirty days provided under paragraphs (h) (2) and (3) for a State to provide satisfactory assurances, the Commissioner will suspend payments under the Act to all local educational agencies in the State. However, if during that time the State does provide the assurances required, the Commissioner will lift the suspension of payments.

(20 U.S.C. 240(d), 242(b); S. Rep. No. 1026, 93d Cong., 2d Sess. 163 (1974.))

APPENDIX

[Pub. L. 81-874, Section 5(d)]

ASSISTANCE FOR LOCAL EDUCATIONAL AGENCIES IN AREAS AFFECTED BY FEDERAL ACTIVITIES; METHODS OF CALCULATIONS FOR TREATMENT OF PAYMENT UNDER STATE EQUALIZATION PROGRAMS

The following paragraphs described the methods for making certain calculations in conjunction with determinations made under various requirements of the regulations set forth in this subpart. These methods shall be the only methods used in making these calculations.

1. Determinations of disparity standard compliance under § 115.63(b)(1).

The determination of disparity in current expenditures or revenue per pupil is made

by:

(a) Ranking all local educational agencies having similar grade levels within the State on the basis of current expenditures or revenues per pupil with respect to the fiscal year for which data has been submitted in accordance with these regulations;

(b) Identifying those local agencies in each ranking which fall at the 95th and 5th percentiles of the total number of pupils in attendance in the schools of these agencies; and

(c) Subtracting the lower current expenditure or revenue per pupil figure from the higher for those agencies identified in paragraph (b) and dividing the difference by the lower figure.

Example: In State X, after ranking all local educational agencies organized on a grade 9-12 basis in order of the expenditures per pupil for the fiscal year in question, it is ascertained by counting the number of pupils in attendance in these agencies in ascending order of expenditure that the 5th percentile of student population is reached at LEA A with a per pupil expenditure of $820, and that the 95th percentile of student population is reached at LEA B with a per pupil expenditure of $1000. The percentage disparity between the 95th and 5th local educational agencies is 22 percent ($1000 - $820-$180÷$820). The program would be deemed to qualify.

(d) In cases under § 115.63(b), where separate computations are made for different groups of local educational agencies, the disparity percentage for each group is obtained in the manner described in paragraphs (a), (b) and (c) above. Then the weighted average disparity percentage as for the State as a whole is deterinined by:

(i) Multiplying the disparity percentage for each group by the total number of pupils receiving free public education in the schools in that group;

(ii) Summing the figures obtained in (i);

and

(iii) Dividing the sum obtained in (ii) by the total number of pupils for all the groups.

Example: For State Y three groups of local educational agencies were considered. Group No. 1 (grades 1-6) had a disparity percentage of 18 percent and 80,000 pupils. Group No. 2 (grades 7-12) had a disparity percentage of 22 percent and 100,000 pupils. Group No. 3 (grades 1-12) had a disparity percentage of 35 percent and 20,000 pupils. The figure obtained under (i) is 14,400 for group No. 1, 22,000 for group No. 2, and 7000 for group No. 3. The sum of these figures under (ii) is 43,400. Dividing that number by the total number of pupils for all three groups (200,000) gives a weighted average percentage of 21.7 percent. State Y meets the requirement of § 115.63(b).

2. Determination under § 115.63(b) as to maximum proportion of Pub. L. 81-874 payments that may be taken into consideration by a State under an equalization program. The proportion that local revenues covered under a State equalization program are of total local revenues for a particular local educational agency shall be obtained by dividing: (a) the amount of local revenues covered under the equalization program by (b) the total local revenues attributable to current education within the agency.

Examples.

Example 1. State A has an equalization program under which each LEA is guaranteed $900 per pupil less the LEA contribution based on a uniform tax levy. LEA X contributes $700 per pupil and the State contributes the $200 difference. No other local revenues are applied to current expenditures for education by LEA X. The percentage of funds under the Act which may be taken into consideration by State A for LEA X is 100% (700/700). If LEA X receives $100 per pupil in Public Law 81-874 funds, $100 per pupil may be taken into consideration by State A in determining LEA X's relative financial resources and needs under the program. LEA X is regarded as contributing $800 and State A would now contribute the $100 difference.

Example 2. The initial facts are the same as in Example 1, except that LEA X, under a permissible additional levy outside the equalization program, raises an additional $100 per pupil. The percentage of Pub. L. 81-874 funds which may be taken into consideration is 87.5% (700/800). If LEA X receives $100 per pupil in Pub. L. 81-874 funds, $87.50 per pupil may be taken into consideration. LEA X is now regarded as contributing $787.50 per pupil under the program and State A would now contribute $112.50 per pupil as the difference.

Example 3. State B has an equalization program in which each participating LEA is guaranteed a certain per pupil revenue at various levels of tax rates. For an 8 mill rate

the guarantee is $500, for 9 mills $550, for 10 mills $600. LEA Y levies a 10 mill rate and realizes $300 per pupil. Furthermore, it levies an additional 10 mills under a local leeway option, realizing another $300 per pupil. The percentage of Pub. L. 81-874 which may be taken into consideration is 50% (300/600). If LEA Y receives $100 per pupil in Pub. L. 81-874 funds, $50 per pupil may be taken into consideration. LEA Y may be regarded as contributing $350 per pupil under the program and State B would not contribute $250 as the difference.

Example 4. The initial facts are the same as in Example 3, except that LEA Z in State B, while taxing at the same 10 mill rate for both the equalization program and leeway allowance as LEA Y, realizes $550 per pupil for each tax. As with LEA Y, the percentage of Pub. L. 81-874 funds which may be taken into consideration for LEA Z is 50% (550/ 1100). If LEA Z receives $150 per pupil in Pub. L. 81-874 funds, then up to $75 per pupil normally could be taken into consideration. However, since LEA Z would have received only $50 per pupil in State aid, only $50 on the allowable $75 could be taken into consideration. Thus, LEA Z may be regarded as contributing $600 per pupil under the program and State B would not contribute any State aid.

Example 5. The initial facts are the same as in Example 4, except that LEA Z realizes $600 per pupil from each of the 10 mill taxes. Since LEA Z is regarded as contributing $600 to the equalization program and receives no State aid, no Pub. L. 81-874 funds are taken into consideration under the program.

116.43 Measurement

of educational achievement and evaluation of programs.

116.44 Dissemination and utilization of results of educational research and demonstrations.

116.45

Public information.

116.46 Reports by applicant agencies. 116.47 Individualized educational plans. 116.48 Operational responsibilities. AUTHORITY: Sec. 2, Pub. L. 89-10, 79 Stat. 27, as amended, (20 U.S.C. 241a-241m, 242, 244), unless otherwise noted.

SOURCE: 41 FR 42903, Sept. 28, 1976, unless otherwise noted.

Subpart A-Scope

§ 116.1 Applicability.

(a) Other Title I regulations. The regulations in this part are applicable to all programs conducted under Title I of the Elementary and Secondary Education Act of 1965, for which regulations are contained in Parts 116a, 116b, 116c, and 116d of this chapter.

"Child or children" except where otherwise specified means a person or persons not above 21 years of age who, under State law, are entitled to free public education which is provided as elementary and secondary education, not above grade 12. The term also includes a person or persons who are of preschool age.

(20 U.S.C. 241c-2, 241e(a)(1))

(b) As used in this part, and in Parts 116a, 116b, 116c, and 116d (except as otherwise indicated in those parts) the following terms have the meaning given to them in section 403 of Pub. L. 81-874 (20 U.S.C. 244) which is set forth in the appendix to this part:

Average daily attendance
Average per pupil expenditure

Commissioner

Construction

County

Current expenditures
Elementary school
Equipment
Excess costs

Federal property

Free public education
Local educational agency
Parent

School facilities
Secondary school
State

State educational agency (20 U.S.C. 241a, 244)

Subpart B-Duties and Functions of State Educational Agencies

§ 116.3 Participation of States.

(a) Required submissions. Any State desiring to participate under Title I shall submit through its State educational agency to the Commissioner a general application and an annual program plan as set forth in section 434(b)(1)(A) and 434(b)(1)(B) of the General Education Provisions Act and the regulations in Part 100b of this chapter. However, with respect to the program described in Part 116d relating to migratory children of migratory agricultural workers or fishermen, paragraph (a)(1) does not apply. The annual program plan shall include: (1) The assurances required by Section 142(a) (1) and (3) of Title I;

(2) An assurance that the State educational agency will comply with Title I and the regulations in this part and the applicable provisions of Parts 116a, 116b, 116c, and 116d of this chapter;

(3) A statement describing the purposes for which Federal funds will be expended under Title I during the fiscal year for which the annual program plan is submitted; and

(4) A certificate by the appropriate State legal officer to the effect that the agency submitting the plan has the authority under State law to perform the duties and functions of a State educational agency under Title I and the applicable regulations, including those arising from the assurances given.

(b) Approval by the Commissioner— (1) Determinations of the Commissioner. The Commissioner will approve each annual program plan to partici

pate in the grant program under Title I, submitted by a State through its State educational agency, if the Commissioner determines that the plan meets the requirements of the applicable provisions of Title I and the regulations in this part and Parts 116a, 116b, 116c, and 116d. The Commissioner will not finally disapprove (in whole or in part) such State program plan with regard to Title I except after reasonable notice and opportunity for a hearing.

(20 U.S.C. 241f(b), 1232c)

§116.4 State administration and technical assistance.

(a) General. The State educational agency for a State for which the Commissioner has approved a plan, as specified in § 116.3(b), shall be responsible for the proper and efficient performance of the duties of such agency under Title I including compliance with its assurances to the Commissioner and the provision of technical assistance to local and State agencies with respect to the measurements and evaluations such agencies are required to submit pursuant to such Title.

(b) Amount available for administration. Each State educational agency is entitled to receive for each fiscal year an amount equal to the amount expended by it for performance of its duties under this section but not to exceed the amounts set forth in section 143(b) of Title I.

(20 U.S.C. 241g, 1232c)

§ 116.5 Approval by State educational agency of applications from applicant agencies.

(a) Review by State educational agency. The State educational agency shall review all applications by applicant agencies except for an applicant agency under Part 116d. The State educational agency shall not approve an application (1) for an amount which together with amounts of other approved applications by that agency, exceeds the amount available for grants to that agency determined in accordance with Title I or (2) unless it has determined that the application meets all of the applicable requirements of Title I and the regulations.

(b) Effective date of approved application. Projects approved pursuant to paragraph (a) of this section shall be considered to be in effect as of the date on which the application was submitted in substantially approvable form. In no event shall such date be earlier than the first day on which the funds being applied for become available for obligation, or the effective date of the State educational agency's annual program plan.

(c) Notice and opportunity for hearing. The State educational agency shall not finally disapprove any application in whole or in part without first affording the applicant agency reasonable notice and opportunity for a hearing with respect to such action in accordance with the requirements of section 425 of the General Education Provisions Act. Such notice shall include the reasons for the proposed disapproval. A hearing shall be held by the State agency 30 days after it receives a request from the applicant agency. If the State educational agency decides not to rescind its final action, it shall give notice of the decision to the applicant agency in writing, stating its reasons and indicating the right to appeal to the Commissioner within twenty days of the receipt of the notice.

(d) Appeal. An applicant agency aggrieved by the final action of a State educational agency shall be given the opportunity for an appeal to the Commissioner as set forth in section 425 of the General Education Provisions Act.

(e) Availability to the public. Each application of a local educational agency or a State agency for a grant under Title I; the related documents referred to in Parts 116a, 116b, 116c, and 116d; and the evaluation and other reports referred to in such parts, shall be made available to the public by the State educational agency in the manner prescribed by § 116.35.

(20 U.S.C. 241e(c), 241f, 1231b-2, 1231d)

§ 116.6 Review and complaint procedures.

The State educational agency shall establish procedures for investigating complaints alleging violations of Title I or the regulations for that Title including: