The document presents Kentucky Department of Education guidelines for developing programs to meet the needs of gifted students. The educational philosophy states that educational programs for the gifted should be designed so they are significantly different from those provided in the regular classroom. Gifted students are defined as those who have demonstrated achievement or potential ablity in intellectual and/or academic areas, in creativity, and/or in the visual and performing arts. Among program guidelines are that the program must include specific identification and selection procedures, instructional resources in the gifted program should be used to accommodate the differences in student abilities and interests, and the school district must provide adequate ongoing staff development and training for the gifted education coordinator and teachers selected to implement the program. Identification of gifted students for the state funded gifted education program must include the use of multiple criteria such as tests and measurements (standardized or observable), demonstrated or potential abilities as determined by qualified individuals, and other valid means (e.g., school records and nominations). Responsibilities must be specified for the coordinator, teachers, and support services personnel. In evaluating gifted education programs, it is important to utilize subjective, naturalistic, and objective statistical data. The Education Department requires that each local district board of education receiving state monies adopt and record into the minutes a policy in support of district wide gifted education for grades 1 through 12. Budgetary considerations for state funding include that districts can identify no more than 5% of the total pupil enrollment in any grade served by the gifted program when applying for state funds. The appendix, which makes up more than half the document, contains "An Identification Model" by C. Tongue and C. Sperling. Suggested tests/instruments are listed; sample checklists are given; and other instruments, forms, and guidelines for screening, assessment, and placement are offered. (SW)