Presented are August 23, 1977 regulations for Part B of the Education of the Handicapped Act (as required by the Education for all Handicapped Children Act of 1975, P.L. 94-142). Regulations are noted to amend the existing regulations governing assistance to states for education of handicapped children, to add a new part on incentive grants programs for handicapped children aged 3 through 5 years, and to make certain conforming amendments to the general provisions for state-administered programs. Included are provisions which are designed to assure that all handicapped children have available to them a free appropriate public education, to assure that the rights of handicapped children and their parents are protected, to assist states and localities in providing for the education of handicapped children, and to assess and assure the effectiveness of educational efforts to handicapped children. (SBH)