§ 300.704 State-level activities.

Plain English summary

This section governs how states may reserve and spend Part B IDEA funds at the state level, including caps on administrative reservations, allowable uses for other state-level activities, and an optional high cost fund to assist LEAs in educating high-need children with disabilities. States must certify current interagency service responsibility arrangements before spending administrative funds and must develop a state plan for the high cost fund within 90 days of reserving such funds. The section also addresses flexibility provisions allowing certain funds to be used for Part C early intervention services and waives certain commingling and supplanting prohibitions for reserved funds.

Key requirements

• Each State may reserve for each fiscal year not more than the maximum amount the State was eligible to reserve for State administration under section 611 of the Act for fiscal year 2004 or $800,000 (adjusted in accordance with paragraph (a)(2) of this section), whichever is greater.
• Each outlying area may reserve for each fiscal year not more than five percent of the amount the outlying area receives under § 300.701(a) for the fiscal year or $35,000, whichever is greater.
• Prior to expenditure of funds under paragraph (a) of this section, the State must certify to the Secretary that the arrangements to establish responsibility for services pursuant to section 612(a)(12)(A) of the Act are current.
• Some portion of the funds reserved under paragraph (b)(1) of this section must be used for monitoring, enforcement, and complaint investigation; and to establish and implement the mediation process required by section 615(e) of the Act.
• The SEA must develop, not later than 90 days after the State reserves funds under paragraph (c)(1)(i) of this section, annually review, and amend as necessary, a State plan for the high cost fund.
• The State plan must establish a definition of a high need child with a disability that ensures that the cost of the high need child with a disability is greater than 3 times the average per pupil expenditure (as defined in section 8101 of the ESEA) in that State.
• The State must make its final State plan available to the public not less than 30 days before the beginning of the school year, including dissemination of such information on the State Web site.
• A State must not use any of the funds the State reserves pursuant to paragraph (c)(1)(i) of this section, which are solely for disbursement to LEAs, for costs associated with establishing, supporting, and otherwise administering the fund.
• A State must not use more than 5 percent of the funds the State reserves pursuant to paragraph (c)(1)(i) of this section for each fiscal year to support innovative and effective ways of cost sharing among consortia of LEAs.
• The disbursements under paragraph (c)(4) of this section must not be used to support legal fees, court costs, or other costs associated with a cause of action brought on behalf of a child with a disability to ensure FAPE for such child.
• Disbursements provided under paragraph (c) of this section must not be used to pay costs that otherwise would be reimbursed as medical assistance for a child with a disability under the State Medicaid program under Title XIX of the Social Security Act.
• Nothing in paragraph (c) of this section limits or conditions the right of a child with a disability who is assisted under Part B of the Act to receive FAPE pursuant to section 612(a)(1) of the Act in the least restrictive environment pursuant to section 612(a)(5) of the Act.
• Nothing in paragraph (c) of this section authorizes an SEA or LEA to establish a limit on what may be spent on the education of a child with a disability.
• Funds reserved under paragraph (c)(1)(i) of this section from the appropriation for any fiscal year, but not expended pursuant to paragraph (c)(4) of this section before the beginning of their last year of availability for obligation, must be allocated to LEAs in the same manner as other funds from the appropriation for that fiscal year are allocated to LEAs under § 300.705 during their final year of availability.
• A State may use funds the State reserves under paragraphs (a) and (b) of this section without regard to the prohibition on commingling of funds in § 300.162(b) and the prohibition on supplanting other funds in § 300.162(c).

Affected parties

• State Educational Agencies (SEAs)
• Local Educational Agencies (LEAs)
• Charter schools that are LEAs
• Consortia of LEAs
• Children with disabilities
• High need children with disabilities
• Outlying areas
• The Secretary of Education
• Lead agencies under Part C of the Act
• State Medicaid programs

Official source

https://www.ecfr.gov/current/title-34/part-300/section-300.704