FR Doc 2010-23922[Federal Register: September 23, 2010 (Volume 75, Number 184)]
[Page 57907-57910]
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[Docket ID ED-2010-OESE-0016]
RIN 1810-AB08

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 
to submit your comments electronically. Information 
on using, 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.

[[Page 57908]]

     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 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: (202) 205-5224, 
or by e-mail: Note that we will not accept comments by e-
    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 


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 
    During and after the comment period you may inspect all public 
comments about these interim final requirements by accessing 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

[[Page 57909]]

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 
    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 

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

[[Page 57910]]

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:
    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:

    Dated: September 21, 2010.
Thelma Mel[eacute]ndez de Santa Ana,
Assistant Secretary for Elementary and Secondary Education.
[FR Doc. 2010-23922 Filed 9-22-10; 8:45 am]