B.B.
I am unfamilar with the second question you have, but I can tell you that on STAAR there are very few students that qualify to have the reading passages read to them aloud. I work in a school of 2,700 + and there are less than 15 students who qualify for this, they are all Special Education students, they all have very strict IEP's in place, and many of whom have severe learning disabilities. The reason is that reading revolves around reading comprehension, not listening comprehension. The passages at the 3rd grade level are not too bad for reading, I would concentrate on working with her to read longer passages and then talk with her about their meaning to help her to prepare.
I'm not sure if that answers your question completely, but I hope it helps to explain the reasonsoning behind their logic.