A paper on the Education for All Handicapped Children Act of 1975 (P.L. 94-142) provides information to state legislators on requirements and application procedures and speculates on significance of compliance for rural New Mexico school districts (New Mexico has never implemented P.L. 94-142). The five purposes of the paper are to describe major provisions of the law, describe financial considerations, speculate on benefits of implementation for rural districts, describe start-up requirements for rural local education agencies (LEAs), and speculate on requirements for continued compliance. Ten major provisions of the law, referenced to sections of the 1982 New Mexico Standards for Special Education, are covered: congressional intent, entitlements and allocations, state plans and local applications, procedural safeguards and due process procedures, least restrictive environment, pupil assessment evaluation, Individualized Education Programs, comprehensive system of personnel development, cooperation with other agencies, and working with parents. Funding formulas for New Mexico and uses of funds are discussed. Benefits of implementation in 14 major areas are listed. Similarity of P.L. 94-142 to existing New Mexico standards is noted. Six areas which require attention so that rural LEAs could comply with P.L. 94-142 requirements and receive continued funding are given. The question of the level of state entitlement for New Mexico is raised. (MH)