This report responds to Delaware state legislation requiring the development of proposed revised regulations for the classification of students as learning disabled (LD). The report first describes the current system, noting that in 1997 15 percent of the student population were served under the Individuals with Disabilities Education Act and over 61 percent of these children are categorized as having specific learning disabilities. This section also provides the state's current definition of "learning disability" and a chart showing the numbers of students identified as LD. Barriers and problems as well as strengths/assets of the current system are identified. A major conclusion of the report is that without changes to the funding formula and the allocation of resources, the impact of any other changes will be short lived. A section on proposed changes in the overall system addresses guiding principles, a problem-solving model, a formative intervention process, formal assessment procedures, and the development of intervention strategies. Specific recommendations are offered concerning: (1) a proposed learning disability definition and eligibility criteria; (2) a proposed developmental delay definition and eligibility criteria; (3) preschool services for children with disabilities; (4) K-3 services; (4) 4-12 services; and (5) other recommendations. A list of work group members is appended. (DB)