The second of three documents on Project SEARCH (Search for Exceptional Abilities Reachable among Children with Handicaps) describes the development of a systematic procedure for assessing the gifts and/or creative talent potential of handicapped students. It is explained that of 278 special education students evaluated by an adaptation of the Torrance Tests of Creativity and an arts assessment composed of activities in visual arts, theater movement, and music, 12% were found to possess creative talent potential. Appended are Adapted Torrance Tests of Originality, Fluency, Flexibility, and Elaboration, as well as the Assessment of Creative Potential in the Arts. (CL)