School systems are perpetuating racial segregation within integrated schools through intelligence tests and special education classes. Disproportionate numbers of blacks, American Indians, Mexican Americans and Puerto Rican Americans have been placed in classes for the emotionally disturbed or mentally retarded. Suits have been brought against the California and Boston school systems, charging that culturally biased or otherwise unfair tests were used to place poor and/or minority students with average intelligence in classes for the mentally retarded. It is suggested that this problem can be alleviated by adopting a program involving: (1) abolishment of the use of all current measures of psychological functioning; (2) abolishment of all forms of ability grouping in the public schools; and (3) assessment through observation of children in the natural environment (the classroom) and restructuring of that environment to bring about desired behavioral changes. (For related documents, see TM 002 548, 550-559.) (KM)