Washington ? The Bush administration is signaling that it may give states a break on the reading and math tests they are supposed to begin giving to all students in grades three through eight.

Draft regulations released Wednesday by the Education Department suggest that the administration is open to allowing different kinds of tests, as long as they meet high standards.

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State education officials and legislators have said that developing, giving and grading new state tests could cost billions of dollars at a time when they are struggling to balance state budgets.

The National Governors Assn. last week asked the Education Department to let states opt out of using uniform, statewide math and reading tests each year. The governors asked that states be given the chance to show that a combination of state and local tests show student progress.

They also asked to be allowed to use both their own customized tests and off-the-shelf, standardized tests not tied to state curricula.

Draft regulations posted Wednesday on the Education Department’s Web site say states may use a combination of state and local tests, as well as customized and off-the-shelf tests, if states also add questions to address their own content standards.

States that use a combination of state and local tests would have to demonstrate that the system “has a rational and coherent design,” the guidelines say.

Developing and administering the statewide systems envisioned by Bush could cost states as much as $7 billion during the next seven years, according to the National Association of State Boards of Education.

Education Department spokesman Dan Langan said the draft guidelines will serve as a starting point for negotiations slated to take place during the next several weeks.

“The goal was to provide some flexibility,” he said. “There will be, obviously, much more discussion on this particular provision during the rule-making sessions.”

A group of teachers, federal, state and local administrators, parents, students and business people will meet over the next few weeks to develop federal regulations on testing and other matters.

During the past decade, nearly every state has begun testing students in reading and math in at least a few grades. Several states would need to add merely a few tests to fulfill Bush’s requirements, but others would have to redo their entire systems or start from scratch.

The tests must be in place by the 2005-06 school year.

Annual state testing for all students in grades three through eight is a basic principle of Bush’s education plan, which ties test scores to schools’ federal funding for the first time. Passed by Congress, the plan was signed by Bush Jan. 8.