This report provides the technical details of an alternate assessment design that has resulted from a long-term research and development effort at AIR. The methodology is currently in use in two states, South Carolina and New Mexico. The design overcomes many of the inaccuracies and inefficiencies of current methods used by most states. The AIR design is more accurate because: (1) the test is adaptive, i.e., the difficulty of the items is adapted to the ability of the students, and (2) the design puts the psychometrics of alternate assessment on par with regular assessments, allowing states to measure growth across years and grades for special education students. The design is more efficient because it costs less than most other alternate assessments and requires less testing time from students and teachers. The design has been approved under No Child Left Behind (NCLB) for New Mexico and is expected to be approved for South Carolina.