In this notice, we propose additional specific priorities, requirements, definitions, and selection criteria regarding the applications that individual States submit for approximately $4 billion of Race to the Top funds. At a later date, we may announce a separate Race to the Top Standards and Assessment competition, for approximately $350 million, to support the development of assessments by consortia of States.

Structure of Race to the Top

Race to the Top will reward States for having created the conditions for reform (as measured through the State Reform Conditions Criteria proposed in this notice) and for increasing student achievement. Race to the Top will also provide incentives for States to develop and implement comprehensive reform strategies that are integrated across the four ARRA education reform areas and lead to improved student outcomes (as measured through the Reform Plan Criteria proposed herein). The Department expects successful applicants to clear a high bar on both State Reform Conditions and Reform Plan Criteria. Proposed State Reform Conditions and Reform Plan Criteria are described in detail in the Proposed Selection Criteria section of this notice.

To ensure that the State's Race to the Top plans (which the State will describe in its application in response to the Reform Plan Criteria) are comprehensive, coherent, and measurable, we propose that States describe their approaches and, where appropriate, set annual targets for each of the Reform Plan Criteria.

Note: The proposed annual targets are set forth in the Appendix to this notice. These targets are specific to Race to the Top, and they are in addition to, not a replacement for, the existing annual requirements under the ESEA.) The annual targets should be achievable but sufficiently ambitious to support a successful Race to the Top grant application.

Under the statute, at least 50 percent of the funds under a State's Race to the Top grant must be provided to LEAs based on LEAs' relative shares of funding under part A of Title I of the ESEA. The remaining funds are available to the State for Statelevel activities and for disbursements to LEAs and other eligible entities under such formulas, competitive processes, or other mechanisms as the State may propose in its plan. We propose that a State incorporate into its plan the activities that LEAs will undertake to advance the four education reform areas.

Timing of Applications and Awards

The Department plans to make Race to the Top grants in two phases. States that are ready to apply may do so in Phase 1, which will open in late calendar year 2009. States that need more timefor example, to engage in planning with and secure commitments from superintendents, school boards, principals, teachers, union leaders, and community supporters, or othersmay apply in Phase 2, which will open in late Spring of calendar year 2010. States that apply in Phase 1 but are not awarded grants may reapply for funding in Phase 2, together with States that are applying for the first time in Phase 2. Phase 1 grantees may not apply for additional funding in Phase 2. We will announce specific deadlines for both Phase 1 and Phase 2 in subsequent notice(s) inviting applications for funds under this program.

I. Proposed Priorities

Background: The Secretary proposes five priorities for the Race to the Top competition. We are proposing to designate Proposed Priority 1 as an absolute priority, Proposed Priority 2 as a competitive preference priority, and Proposed Priorities 3 through 5 as invitational priorities. We may choose, in the notice of final priorities, requirements, definitions, and selection criteria, to change the designation of any of these priorities to absolute, competitive preference, or invitational priorities, or to include the substance of these priorities in the selection criteria.

Under an absolute priority, as specified by 34 CFR 75.105(c)(3), we would consider only applications that meet the priority. Under a competitive preference priority, we would give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)). With an invitational priority, we would signal our interest in receiving applications that meet the priority; however, consistent with 34 CFR 75.105(c)(1), we would not give an application that meets an invitational priority preference over other applications.
Proposed Priority 1: Absolute PriorityComprehensive Approach to the Four Education Reform Areas

To meet this priority, the State's application must comprehensively address each of the four education reform areas specified in the ARRA to demonstrate that the State and its participating LEAs are taking a systemic approach to education reform. The State's application must describe how the State and participating LEAs intend to use Race to the Top and other funds to implement comprehensive and coherent policies and practices in the four education reform areas, and how these are designed to increase student achievement, reduce the achievement gap across student subgroups (as described in section 303(b)(2)(G) of the National Assessment of Educational Progress Authorization Act (NAEP) \1\), and increase the rates at which students
[[Page 37806]]
graduate from high school prepared for college and careers. \1\ This statute, rather than relevant sections of the ESEA, is referenced because it provides the most recent listing of NAEP subgroups. We propose using the NAEP to monitor overall increases in student achievement and decreases in the achievement gap over the course of this grant because the NAEP provides a way to report consistently across Race to the Top grantees as well as within a State over time as the State transitions from its current
assessments to the highquality assessments (as defined in this notice).
Proposed Priority 2: Competitive Preference PriorityEmphasis on Science, Technology, Engineering, and Mathematics (STEM)

To meet this priority, the State's application must describe plans to address the need to (i) offer a rigorous course of study in mathematics, sciences, technology, and engineering; (ii) cooperate with industry experts, museums, universities, research centers, or other STEMcapable community partners to prepare and assist teachers in integrating STEM content across grades and disciplines, in promoting effective and relevant instruction, and in offering applied learning opportunities for students; and (iii) prepare more students for advanced study and careers in the sciences, technology, engineering, and mathematics, including addressing the needs of underrepresented groups and of women and girls in the areas of science, technology, engineering and mathematics.
Proposed Priorities 3 Through 5: Proposed Priority 3Invitational Priority Expansion and Adaptation of Statewide Longitudinal Data Systems

The Secretary is particularly interested in applications in which the State plans to expand statewide longitudinal data systems to include or integrate data from special education programs, limited English proficiency programs, early childhood programs, human resources, finance, health, postsecondary, and other relevant areas, with the purpose of allowing important questions related to policy or practice to be asked and answered.

The Secretary is also particularly interested in applications in which States propose working together to adapt one State's statewide longitudinal data system so that it may be used, in whole or in part, by other State(s), rather than having each State build or continue building such system(s) independently.
Proposed Priority 4Invitational PriorityP20 Coordination and Vertical Alignment

The Secretary is particularly interested in applications in which the State plans to address how early childhood programs, K12 schools, postsecondary institutions, and workforce organizations will coordinate to improve all parts of the education system and create a more seamless P20 route for students. Vertical alignment across P20 is particularly critical at each point where a transition occurs (e.g., between early childhood and K12, or between K12 and post secondary) to ensure that students exiting one level are prepared for success, without remediation, in the next.
Proposed Priority 5Invitational PrioritySchoolLevel Conditions for Reform and Innovation

The Secretary is particularly interested in applications in which the State's participating LEAs provide schools, where appropriate, with flexibilities and autonomies conducive to reform and innovation, such as
(i) Selecting staff;
(ii) Implementing new structures and formats for the school day or year that expand learning time;
(iii) Placing budgets under the schools' control;
(iv) Awarding credit to students based on student performance instead of instructional time; and
(v) Providing comprehensive services to highneed students (e.g., through local partnerships, internal staffing, and contracts with outside providers).

II. Requirements

The Secretary proposes the following requirements for this program. We may apply these requirements in any year in which this program is in effect.

A. Eligibility Requirements

Background: We are proposing two eligibility requirements for Race to the Top applicants. First, we propose that a State must have an approved application under both Phase 1 and Phase 2 of the State Fiscal Stabilization Fund (Stabilization) program of the ARRA in order to be eligible to receive an award from the Race to the Top competition. Section 14005(d) of the ARRA requires a State that receives funds under the Stabilization program to provide assurances in the same four education reform areas that will be advanced by the Race to the Top grant. We therefore believe that it would be inconsistent to award a Race to the Top grant, which requires a determination that a State has made significant progress in the four education reform areas, to a State that has not met requirements for receiving funds under the Stabilization program.

Second, we propose that to be eligible under this program, a State must not have any legal, statutory, or regulatory barriers to linking student achievement or student growth data to teachers for the purpose of teacher and principal evaluation. Research indicates that teacher quality is a critical contributor to student learning and that there is dramatic variation in teacher quality.\2\ Yet it is difficult to predict teacher quality based on the qualifications that teachers bring to the job. Indeed, measures such as certification, master's degrees, and years of teaching experience have limited predictive power on this point.\3\ Therefore, one of the most effective ways to accurately assess teacher quality is to measure the growth in achievement of a teacher's students;\4\ \5\ and by aggregating the performance of students across teachers within a school, to assess principal quality. Current law in a number of States presents an obstacle to efforts to improve teacher quality by prohibiting data regarding student achievement from being tied to teachers for the purposes of evaluation. This capability is fundamental to Race to the Top reforms and to the requirement in section 14005(d)(2) of the ARRA that States take actions to improve teacher effectiveness. Without this legal authority, States would not be able to execute reform plans relating to several selection criteria in this notice (see Selection Criteria (C)(2) through (C)(5)), because these plans must require LEAs and schools to determine which [[Page 37807]]
teachers and principals are effective using student achievement data. \2\ See, e.g. Kane, Thomas J., Jonah E. Rockoff, and Douglas O. Staiger (2006), ``What Does Certification Tell Us About Teacher Effectiveness? Evidence from New York City,'' NBER Working Paper No. 12155; Rivkin, Steven G., Eric A. Hanushek, and John F. Kain (2005), ``Teachers, Schools, and Academic Achievement,'' Econometrica, 73(2), 417458; Rockoff, Jonah. E. (2004), ``The Impact of
Individual Teachers on Students' Achievement: Evidence from Panel Data,'' American Economic Review 94(2), 24752; Organisation for Economic Cooperation and Development (2004), ``Teachers Matter: Attracting, Developing and Retaining Effective Teachers'', p. 3; Leithwood, Kenneth, Karen Seashore Louis, Stephen Anderson, and Kyla Wahlstrom (2004), ``How Leadership Influences Student Learning,'' Wallace Foundation Learning from Leadership Project; Aaronson, Daniel, Lisa Barrow, and William Sander (2003), ``Teacher and Student Achievement in the Chicago Public High Schools,'' Federal Reserve Bank of Chicago Working Paper 200228.
\3\ Rivkin, Hanushek, and Kain (2005). Kane, Rockoff, and Staiger (2006). Aaronson, Barrow, and Sander (2003).
\4\ For example, Rockoff et al. find that even using a detailed data set on incoming teacher characteristics allows them to predict only about 12 percent of the variance of the expected distribution of teacher effectiveness. Jonah E. Rockoff, Brian A. Jacob, Thomas J. Kane, and Douglas O. Staiger (2008), ``Can You Recognize an Effective Teacher When You Recruit One?'' NBER Working Paper No. 14485. Similarly, Goldhaber et al. show that the variance in student achievement due to unobservable teacher variables is 40 times greater than the variance due to observable teacher variables. Dan Goldhaber, Dominic Brewer, and Deborah J. Anderson (1999), ``A threeway error components analysis of educational productivity,'' Education Economics 7 (3): 199208.
\5\ Kane, Rockoff, and Staiger (2006). Aaronson, Barrow, and Sander (2003).

Proposed Eligibility Requirements: We propose the following requirements that a State must meet in order to be eligible to receive funds under this program.
(a) In order for the State to be eligible for the Race to the Top Phase 1 competition, the State's applications for funding under Phase 1 and Phase 2 of the Stabilization program must be approved by the Department by December 31, 2009. In order for the State to be eligible for the Race to the Top Phase 2 competition, the State's application for funding under Phase 1 and Phase 2 of the Stabilization program must be approved by the Department prior to the State submitting its Race to the Top Phase 2 application.
(b) The State does not have any legal, statutory, or regulatory barriers to linking data on student achievement (as defined in this notice) or student growth (as defined in this notice) to teachers and principals for the purpose of teacher and principal evaluation. B. Application Requirements

Background: Section 14005(c) of the ARRA requires that certain information (as discussed earlier in this notice) be included in States' Race to the Top applications. Consistent with those requirements and the need for additional information that will ensure a fair and accurate peer review of the grant applications, we propose the following requirements for the application a State would submit to the Department for funding under this program.

The Department recognizes that requests for data and information should reflect an integrated and coordinated approach among the various ARRA programs, particularly the State Fiscal Stabilization, Race to the Top, School Improvement Grants, and Statewide Longitudinal Data Systems grant programs. Accordingly, the Department will continue to evaluate our requests for data and information under this program in context with the other ARRA programs.
Proposed Application Requirements
(a) The State's application must be signed by the Governor, the State's chief school officer, and the president of the State board of education.
(b) The State must describe the progress it has made to date in each of the four education reform areas, including how the State has used ARRA and other Federal and State funding over the last several years to pursue reforms in these areas (as described in Overall Selection Criterion (E)(1)).
(c) The State must provide financial data to show whether and to what extent the percentage of the total revenues available to the State (as defined in this notice) that were used to support elementary, secondary, and public higher education for FY 2009 increased, decreased, or remained the same compared to FY 2008 (as described in Overall Selection Criterion (E)(2)).
(d) The State must describe its statewide support from stakeholders and LEAs, including public charter schools identified as LEAs under State law (as described in Overall Selection Criterion (E)(3)). (e) The State must include a budget that details how it will use grant funds and other resources to meet targets and perform related functions, including how it will use funds awarded under this program to
(1) Achieve its targets for improving student achievement and graduation rates and for closing achievement gaps (as described in Overall Selection Criterion (E)(4)); and
(2) Give priority to highneed LEAs (as defined in this notice), in addition to providing 50 percent of the grant to participating LEAs based on their relative shares of funding under part A of Title I of the ESEA as required under section 14006(c) of the ARRA.
(f) The State must provide, for each State Reform Conditions Criterion (listed later in this notice), a description of the State's current status in meeting that Criterion, and at a minimum, the information requested as supporting evidence for the Criterion. The Appendix to this notice contains a table listing the proposed evidence. (g) The State must provide, for each Reform Plan Criterion (listed later in this notice) a detailed plan for use of grant funds that includes, but need not be limited to
(1) The key activities to be undertaken;
(2) The goals and rationale for the activities, which may include but need not be limited to evidence of the past effectiveness of those activities, as documented in research or through the effective implementation of an activity in one or more States, LEAs, or schools (which may include charter schools);
(3) The timeline for implementing the activities;
(4) The party or parties responsible for implementing the activities;
(5) The resources the State will use to support the activities (e.g., funding, personnel, systems);
(6) The State's annual targets, where applicable, with respect to the performance measures aligned to the Criterion for the four school years beginning with the 20102011 school year. The Appendix to this notice contains a table listing the proposed performance measures. Where plans are proposed for reform efforts not covered by a performance measure specified by the Department, States are encouraged to propose performance measures and annual targets for those efforts; and
(7) The information requested as supporting evidence, if any (as described in the Appendix), for the Criterion, together with any additional information the State believes will be helpful to peer reviewers.
(h) The State must submit a certification from the State Attorney General, or other chief State legal officer, that the State's description of, and statements and conclusions concerning, State law (for example, with respect to the Eligibility Requirement regarding teacher effectiveness or any of the applicable Selection Criteria) in its application are complete, accurate, and constitute a reasonable interpretation of State law.

C. Annual Report and Performance Measures

The Secretary proposes core performance measures for evaluating the performance of States receiving funds under this program. See the Appendix to this notice for the proposed performance measures.

In addition, a State receiving funds under this program must submit to the Department an annual report which may include, in addition to the standard elements, a description of the State's and its LEAs' progress to date on their goals, timelines, and budgets, as well as actual performance compared to the annual targets the State established in its application with respect to each performance measure.

Further, a State receiving funds under this program and its participating LEA are accountable for meeting the goals, timelines, budget, and annual targets established in the application; adhering to an annual fund drawdown schedule that is tied to meeting these goals, timelines, budget, and annual targets; and fulfilling and maintaining all other conditions for the conduct of the project.

The Department will monitor a State's and its participating LEAs' progress in meeting its goals, timelines, budget, and annual targets and in fulfilling other applicable requirements. To support a collaborative process between the State and the Department, the Department may require that applicants who are selected to receive an award enter into a written performance or cooperative
[[Page 37808]]
agreement with the Department. If the Department determines that a State is not meeting its goals, timelines, budget, or annual targets or is not fulfilling other applicable requirements, the Department will take appropriate action, which could include a collaborative process between the Department and the State, or enforcement measures with respect to this grant such as placing the State in highrisk status, putting the State on reimbursement payment status, or delaying or withholding funds.

D. Other Program Requirements

We propose the following additional requirements for States receiving funds under this program:
(a) The State and its participating LEAs must use funds under this program to participate in a national evaluation of the program, if the Department chooses to conduct one. In addition, the Department is seeking comment on whether a State should, instead of or in addition to a national evaluation, be required to conduct its own evaluation of its program activities using funds under this program. The Department will announce in the notice inviting applications the evaluation approach(es) that will be required.
(b) The State must participate in all applicable technical assistance activities that may be conducted by the Department or its designees.
(c) The State must make freely available all of the outputs (e.g., materials, tools, processes, systems) that it or its designated partners produce related to its grant, including by posting the outputs on any Web site identified or sponsored by the Department.

III. Selection Criteria

The Secretary proposes the following criteria for reviewing applications submitted under this program. We may apply one or more of these criteria in any year in which this program is in effect. In the notice inviting applications, the application package, or both, we will announce the maximum number of points assigned to each criterion.

As discussed elsewhere in this notice, we propose using two types of selection criteriaState Reform Conditions Criteria and Reform Plan Criteriato rate a State's application for Race to the Top funds. State Reform Conditions Criteria will be used to assess a State's past progress and its success in creating conditions for reform in specific areas related to the four ARRA education reform areas. The Reform Plan Criteria will be used to assess States' plans for future efforts in the four ARRA education reform areas.

In the Appendix, we list both the minimum evidence, if any, that the State must provide to assist the Department and peer reviewers in determining whether a State's application meets each Criterion, and the performance measures, if any, for each Reform Plan Criterion. States may submit additional information if they deem it to be relevant and useful. In addition, States that have submitted the requested information to the Department for other programs are welcome to indicate that they would like a specific previous submission to be used as evidence, or they may provide an updated submission.

For each Reform Plan Criterion, peer reviewers will also consider the extent to which States, where applicable, set ambitious yet achievable annual targets against the performance measure, to support the State's plan. Grantees will report their progress with respect to these performance measures and annual targets as part of their annual reports.
Proposed Selection Criteria

A. Standards and Assessments

Note: Under this reform area, we are proposing several Criteria that will be different for applications submitted under Phase 1 and Phase 2. Where the Criteria are different, we have so indicated. State Reform Conditions Criteria
(A)(1) Developing and adopting common standards: \6\
\6\ A State's responses to proposed Indicator (c)(2) and Descriptor (c)(1) in its Stabilization program Phase 2 application may contain information responsive, in part, to this State Reform Conditions Criterion, to which the State may refer and incorporate in its Race to the Top application.
(i) For Phase 1 applications: The extent to which the State has demonstrated commitment to improving the quality of its standards by participating in a consortium of States that is working toward jointly developing and adopting, by June 2010, a common set of K12 standards (as defined in this notice) that are internationally benchmarked and that build toward college and career readiness by the time of high school graduation, and the extent to which this consortium includes a significant number of States.
(ii) For Phase 2 applications: Whether the State has demonstrated commitment to improving the quality of its standards by adopting, as part of a multiState consortium, a common set of K12 standards (as defined in this notice) that are internationally benchmarked and that build toward college and career readiness by the time of high school graduation, and the extent to which this consortium includes a significant number of States.
(A)(2) Developing and implementing common, highquality assessments: \7\ Whether the State has demonstrated a commitment to improving the quality of its assessments by participating in a consortium of States that is working toward jointly developing and implementing common, highquality assessments (as defined in this notice) aligned with the consortium's common set of K12 standards (as defined in this notice) that are internationally benchmarked and that build toward college and career readiness by the time of high school graduation, and the extent to which this consortium includes a significant number of States.
\7\ A State's responses to proposed Indicator (c)(2) and Descriptor (c)(1) in its Stabilization program Phase 2 application may contain information responsive, in part, to this State Reform Conditions Criterion, to which the State may refer and incorporate in its Race to the Top application.
Reform Plan Criteria
(A)(3) Supporting transition to enhanced standards and highquality assessments: \8\ The extent to which the State, in collaboration with its participating LEAs, has a highquality plan for supporting a statewide transition to and implementation of (a) internationally benchmarked K12 standards that build toward college and career readiness by the time of high school graduation, and (b) highquality assessments (as defined in this notice) tied to these standards. State or LEA activities might include: Aligning high school exit criteria and college entrance requirements with the new assessments; developing, disseminating, and implementing curricular frameworks and materials, formative and interim assessments (as defined in this notice), and professional development materials; and engaging in other strategies that translate the standards and information from assessments into classroom practice.
\8\ A State's responses to proposed Indicators (c)(1)(c)(13) and Descriptor (c)(1) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.
B. Data Systems to Support Instruction
State Reform Conditions Criteria
(B)(1) Fully implementing a statewide longitudinal data system: \9\ The extent to
[[Page 37809]]
which the State has a statewide longitudinal data system that includes all of the elements specified in section 6401(e)(2)(D) of the America COMPETES Act (as defined in this notice).
\9\ The State's responses to proposed Indicator (b)(1) and requirements II.c.1.A and II.c.1.B.(iiii) in its Stabilization program Phase 2 application may contain information responsive, in part, to this State Reform Conditions Criterion, to which the State can refer and build upon in its Race to the Top application. Reform Plan Criteria
(B)(2) Accessing and using State data: \10\ The extent to which the State has a highquality plan to ensure that data from the State's statewide longitudinal data system are accessible to, and used to inform and engage, as appropriate, key stakeholders (e.g., parents, students, teachers, principals, LEA leaders, community members, unions, researchers, and policymakers); that the data support decisionmakers in the continuous improvement of instruction, operations, management, and resource allocation; and that they comply with the applicable requirements of the Family Educational Rights and Privacy Act (FERPA). \10\ A State's responses to proposed Indicator (b)(2) and requirements II.c.2.A and II.c.2.B(iiii) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.
(B)(3) Using data to improve instruction: \11\ The extent to which the State, in collaboration with its participating LEAs, has a high quality plan to
\11\ A State's responses to proposed Indicator (b)(2) and requirements II.c.2.A and II.c.2.B(iiii) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criteria, to which the State can refer and build upon in its Race to the Top application.
(i) Increase the use of instructional improvement systems (as defined in this notice) that provide teachers, principals, and administrators with the information they need to inform and improve their instructional practices, decisionmaking, and overall effectiveness; and
(ii) Make these data, together with statewide longitudinal data system data, available and accessible to researchers so that they have detailed information with which to evaluate the effectiveness of instructional materials, strategies, and approaches for educating different types of students (e.g., students with disabilities, limited English proficient students, students whose achievement is well below or above grade level), in a manner that complies with the applicable requirements of FERPA.
C. Great Teachers and Leaders
State Reform Conditions Criteria
(C)(1) Providing alternative pathways for aspiring teachers and principals: The extent to which the State has in place legal, statutory, or regulatory provisions that allow alternative routes to certification (as defined in this notice) for teachers and principals, particularly routes that allow for providers in addition to institutions of higher education; and the extent to which these routes are in use.
Reform Plan Criteria
(C)(2) Differentiating teacher and principal effectiveness based on performance: \12\ The extent to which the State, in collaboration with its participating LEAs, has a highquality plan and ambitious yet achievable annual targets to (a) Determine an approach to measuring student growth (as defined in this notice); (b) employ rigorous, transparent, and equitable processes for differentiating the effectiveness of teachers and principals using multiple rating categories that take into account data on student growth (as defined in this notice) as a significant factor; (c) provide to each teacher and principal his or her own data and rating; and (d) use this information when making decisions regarding
\12\ A State's responses to proposed Indicators (a)(2) and (a)(5) and Descriptors (a)(1) and (a)(2) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.
(i) Evaluating annually and developing teachers and principals, including by providing timely and constructive feedback and targeted professional development;
(ii) Compensating and promoting teachers and principals, including by providing opportunities for teachers and principals who are highly effective (as defined in this notice) to obtain additional compensation and responsibilities; and
(iii) Granting tenure to and dismissing teachers and principals based on rigorous and transparent procedures for awarding tenure (where applicable) and for removing tenured and untenured teachers and principals after they have had ample opportunities to improve but have not done so.
(C)(3) Ensuring equitable distribution of effective teachers and principals: \13\ The extent to which the State has a highquality plan and ambitious yet achievable annual targets to increase the number and percentage of highly effective teachers and principals (as defined in this notice) in highpoverty schools (as defined in this notice), and to increase the number and percentage of effective teachers (as defined in this notice) teaching hardtostaff subjects including mathematics, science, special education, English language proficiency, and other hardtostaff subjects identified by the State or LEA. Plans may include, but are not limited to, the implementation of incentives and strategies in areas such as recruitment, compensation, career development, and human resources practices and processes.
\13\ A State's response to proposed Indicator (a)(1) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.
(C)(4) Reporting the effectiveness of teacher and principal preparation programs: The extent to which the State has a highquality plan and ambitious yet achievable annual targets to link a student's achievement data to the student's teachers and principals, to link this information to the programs where each of those teachers and principals was prepared for credentialing, and to publicly report the findings for each credentialing program that has twenty or more graduates annually. (C)(5) Providing effective support to teachers and principals: The extent to which the State, in collaboration with its participating LEAs, has a highquality plan to use rapidtime (as defined in this notice) student data to inform and guide the support provided to teachers and principals (e.g., professional development, time for common planning and collaboration) in order to improve the overall effectiveness of instruction; and to continuously measure and improve both the effectiveness and efficiency of those supports.
D. Turning Around Struggling Schools
State Reform Conditions Criteria
(D)(1) Intervening in the lowestperforming schools and LEAs: The extent to which the State has the legal, statutory, or regulatory authority to intervene directly in the State's persistently lowest performing schools (as defined in this notice) and in LEAs that are in improvement and corrective action status.
(D)(2) Increasing the supply of highquality charter schools: \14\ \14\ A State's responses to proposed Indicator (d)(6) in its Stabilization program Phase 2 application may contain information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.
(i) The extent to which the State has a charter school law that does not prohibit or effectively inhibit increasing the number of charter schools in the State (as measured by the percentage of total schools in the State that are allowed to be charter schools) or otherwise restrict student enrollment in charter schools.
[[Page 37810]]
(ii) The extent to which the State has statutes and guidelines regarding how charter school authorizers approve, monitor, hold accountable, reauthorize, and close charter schools, including the extent to which such statutes or guidelines require that student academic achievement be a factor in such activities and decisions, and the extent to which charter school authorizers in the State have closed or not renewed ineffective charter schools.
(iii) The extent to which the State's charter schools receive equitable funding, compared to traditional public schools, and a commensurate share of local, State, and Federal program and revenue sources.
(iv) The extent to which the State provides charter schools with facilities funding (for leasing facilities, purchasing facilities, or making tenant improvements), assistance with facilities acquisition, access to public facilities, the ability to share in bonds and mill levies, or other supports; and the extent to which the State does not impose any facilityrelated requirements on charter schools that are stricter than those applied to traditional public schools.
Reform Plan Criteria
(D)(3) Turning around struggling schools: \15\ The extent to which the State has a highquality plan and ambitious yet achievable annual targets to (i) identify at least the lowestachieving five percent of the persistently lowestperforming schools (as defined in this notice) or the lowestachieving five schools, whichever is larger; and (ii) support its LEAs in turning around these schools by
\15\ A State's responses to proposed Indicators (d)(3)(d)(5) in its Stabilization program Phase 2 application may contain
information related to this Reform Plan Criterion, to which the State can refer and build upon in its Race to the Top application.

IV. Definitions

The Secretary proposes the following definitions for terms not defined in the ARRA (or, by reference, in the ESEA). We may apply these definitions in any year in which this program is in effect. Proposed Definitions

Alternative certification routes means pathways to certification that are authorized under the State's laws or regulations that allow the establishment and operation of teacher and administrator preparation programs in the State that have the following
characteristics: (a) Can be provided by various types of qualified providers, including both institutions of higher education and other providers; (b) provide a clinical/student teaching experience; (c) significantly limit the amount of coursework required or have options to testout of courses; and (d) award the level of certification that permits a candidate who successfully completes the program to teach or lead in public schools within the State.

Common set of K12 standards means a set of content standards that define what students must know and be able to do, and that are identical across all States in a consortium. Notwithstanding this, a State may supplement the common standards with additional standards, provided that the additional standards do not exceed 15 percent of the State's total standards for that content area.

Effective principal means a principal whose students, overall and for each subgroup (described in section 1111(b)(2)(C)(v)(II) of the ESEA), demonstrate acceptable rates (e.g., at least one grade level in an academic year) of student growth (as defined in this notice). States may supplement this definition as they see fit so long as principal effectiveness is judged, in significant measure, by student growth (as defined in this notice).

Effective teacher means a teacher whose students achieve acceptable rates (e.g., at least one grade level in an academic year) of student growth (as defined in this notice). States may supplement this definition as they see fit so long as teacher effectiveness is judged, in significant measure, by student growth (as defined in this notice).

Formative assessment means an assessment process that is embedded in instruction and is used by teachers and students to provide instant feedback on student understanding and to adjust ongoing teaching and learning accordingly.

Graduation rate means the fouryear adjusted cohort graduation rate as defined by 34 CFR 200.19(b)(1)(i). A State may also use, as a supplement to this rate, extended adjusted cohort graduation rates (consistent with 34 CFR 200.19(b)(1)(v)) that are approved by the Secretary.

Highly effective principal means a principal whose students, overall and for each subgroup (described in section
1111(b)(2)(C)(v)(II) of the ESEA), demonstrate high rates (e.g., more than one grade level in an academic year) of student growth (as defined in this notice). States may supplement this definition as they see fit so long as principal effectiveness is judged, in significant measure, by student growth (as defined in this notice).

Highly effective teacher means a teacher whose students achieve high rates (e.g., more than one grade level in an academic year) of student growth (as defined in this notice). States may supplement this definition as they see fit so long as teacher effectiveness is judged, in significant measure, by student growth (as defined in this notice).

Highneed LEA means an LEA with one or more highpoverty schools (as defined in this notice).

Highpoverty school means, consistent with section 1111(h)(1)(C)(viii) of the ESEA, a school in the highest quartile of schools in the State with respect to poverty level, using a measure of poverty determined by the State.

Highquality assessment means an assessment designed to measure a student's understanding of, and ability to apply, critical concepts through the use of a variety of item types, formats, and administration conditions (e.g., openended responses, performancebased tasks, use of technology). Such assessments are structured to enable measurement of student achievement (as defined in this notice) and student growth (as defined in this notice); are of high technical quality (e.g., are valid, reliable, and aligned to standards); and include the assessment of students with disabilities and limited English proficient students.

Instructional improvement systems means tools that provide teachers, principals, and administrators with meaningful support for a cycle of continuous instructional improvement, including activities such as: instructional planning; gathering information (e.g., through formative assessments (as defined in this notice), interim assessments (as defined in this notice), and looking at student work); analyzing information with the support of rapidtime (as defined in this notice) reporting; using this information to inform decisions on appropriate next steps; and evaluating the effectiveness of the actions taken.

Interim assessment means an assessment given at regular and specified intervals throughout the school year, and designed to evaluate students' knowledge and skills relative to a specific set of academic standards, and the results of which can be aggregated (e.g., by course, grade level, school, or LEA) in order to inform teachers and administrators at the student, classroom, school, and LEA levels.

Persistently lowestperforming schools means Title I schools in improvement, corrective action, or restructuring in the State and the secondary schools (both middle and high schools) in the State that are equally as lowachieving as these Title I schools and are eligible for, but do not receive, Title I funds. When considering which schools are the lowestachieving, the State must consider both the absolute performance of schools on the State assessments in reading/language arts and mathematics and whether schools have made progress on those assessments.

Rapidtime, in reference to reporting and availability of school and LEAlevel data, means that data is available quickly enough to inform current lessons, instruction, and related supports; in most cases, this will be within 72 hours of an assessment or data gathering in classrooms, schools, and LEAs.

Student achievement means, at a minimum
(a) For tested grades and subjects: A student's score on the State's assessment under section 1111(b)(3) of the ESEA; and (b) For nontested grades and subjects: An alternative measure of student performance (e.g., student performance on interim assessments (as defined in this notice), rates at which students are on track to graduate from high school, percentage of students enrolled in Advanced Placement courses who take Advanced Placement exams, rates at which students meet goals in individualized education programs, student scores on endofcourse exams).

Student growth means the change in achievement data for an individual student between two points in time. Growth may be measured by a variety of approaches, but any approach used must be statistically rigorous and based on student achievement (as defined in this notice) data, and may also include other measures of student learning in [[Page 37812]]
order to increase the construct validity and generalizability of the information.

Total revenues available to the State means either (a) projected or actual total State revenues for education and other purposes for the relevant year; or (b) projected or actual total State appropriations for education and other purposes for the relevant year.

America COMPETES Act elements (as specified in section 6401(e)(2)(D)) means: (1) A unique statewide student identifier that does not permit a student to be individually identified by users of the system; (2) studentlevel enrollment, demographic, and program participation information; (3) studentlevel information about the points at which students exit, transfer in, transfer out, drop out, or complete P16 education programs; (4) the capacity to communicate with higher education data systems; (5) a State data audit system assessing data quality, validity, and reliability; (6) yearly test records of individual students with respect to assessments under section 1111(b) of the ESEA (20 U.S.C. 6311(b)); (7) information on students not tested by grade and subject; (8) a teacher identifier system with the ability to match teachers to students; (9) studentlevel transcript information, including information on courses completed and grades earned; (10) studentlevel college readiness test scores; (11) information regarding the extent to which students transition successfully from secondary school to postsecondary education, including whether students enroll in remedial coursework; and (12) other information determined necessary to address alignment and adequate preparation for success in postsecondary education. Final Priorities, Requirements, Definitions, and Selection Criteria

We will announce the final priorities, requirements definitions, and selection criteria, in a notice in the Federal Register. We will determine the final priorities, requirements, definitions, and selection criteria after considering responses to this notice and other information available to the Department. This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Note: This notice does not solicit applications. In any year in which we choose to use one or more of these priorities,
requirements, definitions, and selection criteria, we invite applications through a notice in the Federal Register.

Executive Order 12866

Under Executive Order 12866, the Secretary must determine whether this regulatory action is ``significant'' and therefore subject to the requirements of the Executive Order and subject to review by 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 loan 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. Pursuant to the Executive order, it has been determined that this regulatory action will have an annual effect on the economy of more than $100 million because the amount of government transfers provided through the Race to the Top Fund will exceed that amount. Therefore, this action is ``economically significant'' and subject to OMB review under section 3(f)(1) of the Executive order.

The potential costs associated with this proposed regulatory action are those resulting from statutory requirements and those we have determined as necessary for administering this program effectively and efficiently.

In assessing the potential costs and benefitsboth quantitative and qualitativeof this proposed regulatory action, we have determined that the benefits of the proposed priorities, requirements, definitions, and selection criteria 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.

Need for Federal Regulatory Action

These proposed priorities, requirements, definitions, and selection criteria are needed to implement the Race to the Top program. The Secretary does not believe that the statute, by itself, provides a sufficient level of detail to ensure that Race to the Top truly serves as a mechanism for driving significant education reform in the States. The authorizing language is very brief, and we believe the Congress likely expected the Secretary to augment this language, through rulemaking, in order to give greater meaning to the statutory provisions. Additionally, the statute expressly provides the Secretary the authority to require States to include in their application such information as the Secretary may reasonably require and to determine which States receive grants on the basis of other criteria as the Secretary determines appropriate.

In the absence of specific selection criteria for Race to the Top grants, the Department would use the general selection criteria in 34 CFR 75.210 of the Education Department General Administrative Regulations in selecting States to receive grants. The Secretary does not believe the use of those general criteria would be appropriate for the Race to the Top competitions, because they do not focus on the educational reforms that States must be implementing in order to receive a Race to the Top grant, on the specific uses of funds under Race to the Top, or on the plans that the Secretary believes States should develop for their Race to the Top grants.

Regulatory Alternatives Considered

The Department considered a variety of possible priorities, requirements, definitions, and selection criteria before deciding to propose those included in this notice. The proposed priorities, requirements, definitions, and selection criteria are those that best embody the Secretary's concept of how the Race to the Top program should operate. The proposals would provide States (and their LEAs) receiving Race to the Top grants with broad flexibility in the expenditure of those grants, while creating clear criteria for the selection of applications and providing greater clarity (than is provided in the legislation itself) on what must be included in a State application and what progress States would have to make in the four education reform areas in order to receive a grant. The Secretary believes that the proposals, thus, appropriately balance a limited degree of Federal prescription with broad flexibility in State and local implementation. We seek public comment on whether we have achieved the optimal balance.

Summary of Costs and Benefits

The Department believes that the proposed priorities, requirements, definitions, and selection criteria will not impose significant costs on States,
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or on the LEAs and other entities that will receive assistance through the Race to the Top Fund. As discussed elsewhere, the proposals are intended to create a framework for the award of approximately $4 billion in support of State and local efforts to implement critical educational reforms and to making substantial

FOR FURTHER INFORMATION CONTACT

Beth Yeh, U.S. Department of Education, 400 Maryland Avenue, SW., Room 6W219, Washington, DC 20202. Telephone: 2022053775 or by email: racetothetop@ed.gov. Note that we will not accept comments by email.

If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll free, at 18008778339.