The document reviews Iowa's 3-year state plan for physical education for handicapped students. An introductory section covers legislative action, program development, areas of concern, goals and subgoals, actions to be undertaken, recommendations to the state board of public instruction, and definitions. A second section addresses federal and state laws and regulations, with emphasis on P.L. 94-142 (Education for All Handicapped Children Act) and Section 504 of the Rehabilitation Act. The bulk of the report charts out the overall and specific planning objectives, program responsibilities, expected implementation dates, and measures of accomplishment for seven areas of concern: attitudes, leadership at the state and local levels, inservice training, preservice training, administrative leadership, consumer advocacy, and research and evaluation. (SBH)