After a review of the legal foundations of school governance and specific protection offered handicapped students by federal legislation, this report focuses on Oregon regulations and practices and outlines recommendations for appropriate disciplinary procedures for students categorized as handicapped. Since the Education for All Handicapped Children Act of 1975 precludes changing a handicapped student's educational placement without due process and Section 504 of the Rehabilitation Act of 1973 prohibits discrimination solely by reason of handicap, the absence of clear federal or state guidelines renders suspension and expulsion of handicapped children legally problematical. Although litigation has not yet resulted, experts observe that Oregon public school officials often do not know and observe legal procedures for disciplining handicapped students, failing, for example, to determine whether a child's problem behavior is related directly to the handicap. Concluding the discussion are suggested guidelines for disciplining handicapped students, including exercising caution in the use of suspension, determining whether a revised individualized education program (IEP) would be more appropriate for a child with recurrent behavior problems, convening the multidisciplinary team to consider further assessment, continuously providing alternative instructional services in the case of repeated suspension or expulsion, and calling for a new IEP before expulsion. (MJL)