Since the 2001-02 school year, the accountability provisions of the No Child Left Behind Act (NCLB) have shaped much of the work of public school teachers and administrators in the United States. NCLB explicitly prohibits schools from excluding students with disabilities from the accountability system and requires not only participation of "all" students in statewide accountability assessments but also reporting of the results for students with disabilities along with other students and as a disaggregated group. From the beginning of these requirements, lawmakers recognized that there would be a small group of students with disabilities for whom the regular assessment, even with accommodations, would not be appropriate and they authorized states to develop an alternate assessment based on alternate achievement standards (AA-AAS) for this group of students. More recently, responding to pressures from the field, additional flexibility has been granted to develop an additional alternate assessment based on modified grade-level achievement standards (AA-MAS) for students with disabilities who present with persistent academic difficulties. It is expected that approximately 2% of the total student population might be included in this new alternate assessment. This article examines the decisions that need to be made by individual states to determine the target population for this new alternate assessment and the policy implications of these decisions. (Contains 5 tables, 3 figures and 1 footnote.)