THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY STURLA, McILVAINE SMITH, ROEBUCK, McCALL, KOTIK, BRENNAN, BRIGGS, BUXTON, CALTAGIRONE, CARROLL, D. COSTA, DALEY, DeLUCA, DePASQUALE, DeWEESE, J. EVANS, FABRIZIO, FREEMAN, GIBBONS, GINGRICH, HALUSKA, HARKINS, HORNAMAN, JOSEPHS, KIRKLAND, KORTZ, KULA, LEVDANSKY, MAHONEY, MANDERINO, MANN, MATZIE, MILLARD, MILNE, MURPHY, MUSTIO, M. O'BRIEN, PARKER, PASHINSKI, PAYNE, PAYTON, READSHAW, SANTONI, SIPTROTH, K. SMITH, SONNEY, SWANGER, WANSACZ, YOUNGBLOOD, LENTZ, CURRY, COHEN, HESS, JOHNSON, WAGNER, M. SMITH, MURT, MICOZZIE, GRUCELA, D. O'BRIEN, HOUGHTON, BROOKS, WALKO, GALLOWAY, YUDICHAK AND DEASY, APRIL 27, 2009

AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 24, 2010   

AN ACT

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

act relating to the public school system, including certain

provisions applicable as well to private and parochial

schools; amending, revising, consolidating and changing the

laws relating thereto," in reimbursement by Commonwealth and

between school districts, further providing for definitions;

and providing for special education funding for student

achievement and instruction of eligible students in regular

classrooms and for special education accountability to

Commonwealth taxpayers.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2501(29) of the act of March 10, 1949

(P.L.30, No.14), known as the Public School Code of 1949, added

July 9, 2008 (P.L.846, No.61), is amended and the section is

amended by adding clauses to read:

Section 2501.  Definitions.--For the purposes of this article

the following terms shall have the following meanings:

* * *

(29)  "Location Cost Metric." An index of geographic cost

differences for each county as published by the department on

its publicly accessible Internet website [on February 5, 2008] 

in February of each year. The index shall be published in the

Pennsylvania Bulletin no later than thirty (30) days after the

effective date of this clause.

* * *

(31)  "Special Education Average Daily Membership." Shall be

computed to determine the number of eligible students in each

school district in accordance with rules of procedure as

established by the Secretary of Education. For the purpose of

calculating the special education funding allocation under

section 2509.13, the computation shall be adjusted for each

level of instruction for eligible students as follows:

(i)  Half-time prekindergarten and half-time kindergarten:

0.50.

(ii)  Full-time prekindergarten, full-time kindergarten and

prekindergarten or kindergarten level totaling full-time through

multiple placements: 1.00.

(iii)  Elementary and secondary: 1.00.

(32)  "Actual Special Education Spending." An amount equal to

a school district’s total annual expenditures for special

education in all functional classifications for students with

disabilities, as designated in the Manual of Accounting and

Related Financial Procedures for Pennsylvania School Systems.

(33)  "Base Cost per Student." The cost of educating an

average student in Pennsylvania without special needs to meet

State performance expectations as originally determined in the

final revised Statewide Costing-out Study of 2007 performed

pursuant to section 2599.3 and as adjusted annually for the

fiscal year in the formula for basic education funding.

(34)  "Eligible Student." A student with a disability

eligible for special education under Federal and State law.

(35)  "Modified Special Education Average Daily Membership"

or "Modified SEADM." The sum of the following products:

(i)  fifty-two one-hundredths (0.52) and the school

district’s special education average daily membership in the

funding year;

(ii)  twenty-six one-hundredths (0.26) and the school

district’s special education average daily membership in the

school year prior to the funding year;

(iii)  thirteen one-hundredths (0.13) and the school

district’s special education average daily membership two (2)

school years prior to the funding year;

(iv)  six one-hundredths (0.06) and the school district's

special education average daily membership three (3) school

years prior to the funding year; and

(v)  three one-hundredths (0.03) and the school district's

special education average daily membership four (4) years prior

to the funding year.

(36)  "Performance Indicators." Measurable annual objectives

established by the Department of Education pursuant to section

612(a)(15) of the Individuals with Disabilities Education Act

(Public Law 91-230, 20 U.S.C. § 1412(a)(15)), to assess progress

toward achieving State goals for the performance of eligible

students.

(37)  "Public Notice." Full and timely release of information

and documents for public access at a minimum through publication

by the Department of Education:

(i)  in the Pennsylvania Bulletin;

(ii)  on its publicly accessible Internet website for no less

than a duration of twelve (12) months; and

(iii)  through its timely issuance of a related Statewide

press release.

(38)  "Regular Classroom." A classroom in a regular school

operated primarily for students who are not eligible for special

education.

(39)  "Regular School." A neighborhood school, magnet school,  

or other public school operated for all students, not solely

eligible students, in a school district.

(40)  "Special Education Plan." A comprehensive plan as well

as revisions, updates and amendments for all special education

personnel, programs, services and supports provided by each

school district for eligible students, filed by each district

with the Department of Education under this act and other

applicable Federal and State law, including 22 Pa. Code 14.104

(relating to special education plans).

(41)  "Student Achievement." Outcomes for eligible students

as measured by academic performance whenever possible in the

general education curriculum, acquisition of knowledge and

skills, progress toward graduation, accomplishment of

individualized education program goals, including appropriate

functional skills, and other factors.

Section 2.  The act is amended by adding sections to read:

Section 2509.13.  Special Education Funding for Student

Achievement and Instruction of Eligible Students in Regular

Classrooms.--(a)  The Department of Education shall determine a

special education adequacy target for each school district by

calculating the sum of the following:

(1)  A special education supplement determined by calculating

the product of:

(i)  the base cost per student;

(ii)  the school district's Modified SEADM; and

(iii)  one and thirty one-hundredths (1.3).

(2)  An adjustment for geographic price differences

calculated as follows:

(i)  Multiply the amount under clause (1) by the school

district's location cost metric or one (1), whichever is

greater.

(ii)  Subtract the amount under clause (1) from the product

under subclause (i).

(b)  The Department of Education shall determine a State

special education funding target for each school district by

calculating the product of:

(1)  the difference between the school district's special

education adequacy target determined under subsection (a) and

its actual special education spending for the funding year, or

zero, whichever is greater;

(2)  the school district's market value/personal income aid

ratio for the school year in which funding occurs;

(3)  the lesser of one (1) and the school district's funding

year equalized millage divided by the equalized millage that

represents the seventy-fifth percentile of the equalized millage

of all school districts in the funding year; and 

(4)  one and fifteen one-hundredths (1.15) for school

districts meeting the following criteria:

(i)  either providing instruction within the regular

classroom at least eighty percent (80%) of the school day for at

least sixty-five percent (65%) of eligible students, as averaged

for the two (2) most recent school years for which data is

available, or increasing the number of eligible students

receiving instruction within the regular classroom by at least

fifteen percent (15%) in the most recent school year for which

data is available; and

(ii)  in the most recent school year for which data is

available, performance by eligible students on State academic

assessments in reading and math, averaged for the entire

district, meeting State standards for adequate yearly progress

by any method approved by the Federal and State governments,

including, but not limited to, meeting the annual target, the

confidence interval, the safe harbor target, or by appeal.

Nothing in this subsection or any other provision of this act

alters Federal or State law regarding the right of an eligible

student to receive education in the least restrictive

environment or alters the legal authority of Individualized

Education Program (IEP) teams to make appropriate program and

placement decisions for eligible students in accordance with the

IEP developed for each eligible student.

(c)  The Department of Education shall submit a report to the

Governor and General Assembly recommending increased standards

for the criteria in subsection (b)(4), and the General Assembly

shall consider legislation revising the criteria, in any year in

which seventy-five percent (75%) of all school districts meet

the criteria and qualify for the one and fifteen one-hundredths

(1.15) factor for funding.

(d)  In furtherance of the General Assembly's commitment to

provide adequate special education funding that will ensure

equitable State and local investments in special education in

public schools, and in order to enable eligible students to

attain applicable Federal and State academic standards and to be

educated in regular classrooms when appropriate, it is the goal

of the Commonwealth to review and meet State special education

funding targets by fiscal year 2014-2015.

(e)  The Commonwealth shall pay to each school district a

special education funding allocation for the 2009-2010 2010-2011 

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school year which shall consist of the sum of the following:

(1)  an amount equal to the district's special education

funding allocation for the 2008-2009 school year under section

2509.5; and

(2)  (i)  For a school district with 2007-2008 equalized

millage that is greater than or equal to twenty-four (24), which

represents the eightieth percentile of the equalized millage of

all school districts as of the effective date of this section,

for the 2008-2009 school year, sixteen and seventy-five one-

hundredths percent (16.75%) of the State special education

funding target determined under subsection (b).

(ii)  For a school district with 2007-2008 equalized millage

that is less than twenty-four (24), which represents the

eightieth percentile of the equalized millage of all school

districts as of the effective date of this section, for the

2008-2009 school year, ten percent (10%) of the State special

education funding target determined under subsection (b).

(f)  The Department of Education shall provide additional

funding for the 2009-2010 2010-2011 school year to any school

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district where the amount under subsection (e)(2) provides an

amount less than the percentage increase in the school

district's special education funding allocation for the

2008-2009 school year under section 2509.5. The amount of the

additional funding shall be the amount required so that the sum

of subsection (e)(2) and this subsection is at least equal to

the percentage increase in the school district's special

education funding allocation for the 2008-2009 school year under

section 2509.5.

(g)  (1)  The Commonwealth shall appropriate additional

funding in each year for extraordinary special education program

expenses under section 2509.8. The appropriation for the fund

shall be at one and fifty one-hundredths percent (1.50%) of the

total of special education appropriations made pursuant to

subsection (e) and shall be made in addition to such total.

(2)  The Department of Education shall utilize the fund to

provide resources needed:

(i)  to partially meet extraordinary special education

expenses not anticipated through the special education funding

formula in this section for eligible students within the first

three (3) school years of eligibility for special education or

enrollment in a school district or charter school; and

(ii)  to the extent that the resources of the fund are not

issued to meet the needs determined by subclause (i), to provide

resources for school districts or charter schools implementing

programs or services that serve as a model of excellence for

meeting high standards for student achievement through quality

special education.

(3)  At least three-quarters of the fund shall be used for

the purposes under clause (2)(i) and no more than one-quarter

shall be used for the purposes under clause (2)(ii).

(4)  School districts or charter schools may apply for

resources through the fund pursuant to procedures established by

the Department of Education. The Department of Education shall

issue resources from the fund only in response to such

applications. The Department of Education shall give priority to

districts or charter schools with a relatively high percentage

of students in poverty, annually setting these criteria and

granting a higher percentage of the resources requested by such

districts or charter schools.

(5)  The Department of Education shall issue a comprehensive

annual report documenting use of the fund to the Governor and

all members of the General Assembly, and shall give public

notice about such report.

(6)  As used in this subsection, "extraordinary special

education expenses" are expenses that result from needs and

circumstances of an eligible student with significant

disabilities which are not ordinarily present in a typical

special education service and program delivery system and which

have costs exceeding the school district funding for special

education, in order to provide the student with an appropriate

education in the least restrictive environment.

(h)  Notwithstanding any other provision of this section, if

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insufficient funds are appropriated for purposes of this section

for the 2010-2011 school year, each school district shall be

paid the amount it received during the 2008-2009 school year

under section 2509.5(zz).

Section 2509.14.  Special Education Accountability to

Commonwealth Taxpayers.--(a)  (1)  The Department of Education

shall determine the form and manner in which school districts

shall submit a special education plan and revisions, updates and

amendments to the special education plan pursuant to this

section. The special education plan shall be consistent with

other existing plans and reports required by the Department of

Education to the greatest extent possible, including those

required under 22 Pa. Code § 14.104 (relating to special

education plans). Special education plans shall be written in a

manner that is easy to use and understand by parents and the

public, including a general summary.

(2)  The Department of Education shall:

(i)  review the special education plans and revisions,

updates and amendments;

(ii)  provide recommendations and technical assistance to

school districts;

(iii)  approve or disapprove the plan within ninety (90)

calendar days of receipt; and

(iv)  provide a written explanation when disapproving a plan.

(3)  The Department of Education shall approve a special

education plan and revisions, updates and amendments that in the

determination of the department:

(i)  meet the requirements of this section;

(ii)  address the academic and developmental challenges for

eligible students identified in the school district's most

recent student achievement results and pursuant to performance

indicators, with specific focus on individual schools, grade

levels and populations of students that demonstrate inadequate

levels of student outcomes; and

(iii)  describe programs and strategies that are most likely

to improve student outcomes in the school district.

(4)  Upon disapproving a school district's special education

plan, update or revision submitted pursuant to this section, the

Department of Education shall withhold the portion of the annual

State increase in special education funding which exceeds the

index until such a time as a written special education plan,

update or revision is approved.

(5)  The Secretary of Education shall involve as appropriate

in special education monitoring, support, intervention,

technical assistance and special education plan review by the

Department of Education, the staff in relevant offices, bureaus

and divisions of the department, as well as staff in

intermediate units and consultants, and shall neither delegate

nor limit these functions solely to the Bureau of Special

Education. The Secretary of Education shall have the authority

to contract for additional assistance with intermediate units

and consultants for these purposes, so long as such contracts do

not create a conflict of interest or supplant existing service

or program obligations.

(b)  (1)  By September 15, 2009 2010, and by April 15 of each

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year thereafter, each school district receiving an increase in

its State special education funding allocation of more than the

index shall update its special education plan based on overall

circumstances, shall also revise the special education plan to

show in detail how the increase above the index will be used and

shall submit the updates and revisions to the Department of

Education for approval pursuant to subsection (a). Unless a

school district decides to amend its special education plan more

broadly to reflect the receipt of new funding or for other

reasons, the guidelines and regulations developed by the

Department of Education pursuant to this section for plan

updates or revisions shall allow a district to meet the

requirements of this section by adding the mandated information

as an appendix to the existing plan. The special education plan,

update or revision shall document the challenges remaining and

progress made in addressing student needs and improving student

outcomes, shall be accompanied by a budget, timeline and

benchmarks for implementation, and shall incorporate other

existing plans and reports required by the Department of

Education to the greatest extent possible. The budget required

by this subsection shall be considered by the Department of

Education in evaluating the special education plan but is not

itself subject to approval or disapproval by the department.

(2)  (i)  Each school district receiving an increased

allocation above the index shall use these funds for one or more

research-based programs and supports that meet the following

basic criteria:

(A)  expressly benefit eligible students educated in the

least restrictive environment in accordance with Federal and

State law;

(B)  contribute to achievement of performance indicators; and

(C)  are approved by the Department of Education in

guidelines issued by August 15, 2009 2010, and by February 15 of

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each year thereafter.

(ii)  Department of Education guidelines for research-based

programs and supports meeting these basic criteria shall address

at least the following:

(A)  curricula adaptation;

(B)  co-teaching;

(C)  assistive technology;

(D)  school-wide positive behavior supports;

(E)  supplementary aids and services;

(F)  professional development;

(G)  reading specialist services and supports;

(H)  reducing caseloads for special education teachers and

related services personnel; and

(I)  placing and serving eligible students in regular

classrooms with supports in accordance with the Individualized

Education Program (IEP) developed for each eligible student.

(3)  According to standards established by the Department of

Education, the special education plan, update or revision shall

document that the increased allocation above the index is used:

(i)  for the purposes approved under clause (2);

(ii)  to supplement and not supplant other resources; and

(iii)  in ways that allow the school district to maintain its

effort for special education expenditures.

(c)  Accountability for the effective use of resources to

meet student needs shall be provided in the following ways:

(1)  The Department of Education shall issue to the General

Assembly a comprehensive annual report on special education

funding, special education plans, the implementation of 22 Pa.

Code § 14.104 and other special education accountability issues

for public school entities serving eligible students and this

Commonwealth.

(2)  Upon disapproving a school district's special education

plan, update or revision, the Department of Education shall

withhold the portion of the annual State increase in special

education funding which exceeds the index until such a time as a

written special education plan, update or revision is approved

or conditionally approved.

(3)  (i)  The Department of Education shall:

(A)  review and monitor implementation of all special

education plans, including, but not limited to, compliance with

subsection (b) and 22 Pa. Code § 14.104;

(B)  provide support, intervention and technical assistance

in school districts failing to meet student needs based on

performance indicators or failing to comply with subsection (b);

(C)  identify at any time and at least annually all school

districts failing to adequately implement their special

education plans in compliance with Federal and State law,

failing to comply with subsection (b) or not making annual

progress to meet student needs based on performance indicators;

and

(D)  determine whether to withhold up to five percent (5%) of

all State special education funding for school districts

identified pursuant to this clause while the identified problems

remain unresolved.

(ii)  If the Department of Education determines that a school

district is making substantial progress toward resolving the

identified problems, it shall restore the withheld funding

retroactively and continue to monitor the district for an

additional two (2) years.

(4)  To discourage the inappropriate over-identification of

children for special education, the Department of Education

shall automatically conduct a thorough review of the special

education plan of any school district where the ratio of its

special education average daily membership to its average daily

membership for all students in the most recent school year for

which data is available has increased by more than ten percent

(10%) over the previous year or of any district where the ratio

has increased by an annual average of more than five percent

(5%) during the most recent five (5) year period. Appropriate

remedial action, including withholding up to five percent (5%)

of all State special education funding, may be taken, unless the

increase is determined to be justified by the Department of

Education after consultation with the school district.

(d)  The Department of Education shall issue to any affected

school district a notice specifying the department's decisions

and actions pursuant to this section and the rationale for such

decisions and actions. A school district may file a written

complaint with the Secretary of Education about the Department

of Education's decisions and actions regarding that district

made pursuant to this section. The complaint must be submitted

to the Secretary of Education's office within thirty (30)

calendar days of the Department of Education's decision or

action or within thirty (30) calendar days of receiving the

notice, whichever is greater. The Secretary of Education shall

consider the complaint, consult with the school district and,

within thirty (30) calendar days after receiving the complaint,

issue a written decision addressing the concerns and claims made

in the complaint, explaining the judgment of the Department of

Education in response to these concerns and claims, and

specifying the opportunity for a subsequent hearing under 2

Pa.C.S. Chs. 5 Subch. A (relating to practice and procedure of

Commonwealth agencies) and 7 Subch. A (relating to judicial

review of Commonwealth agency action) and 1 Pa. Code Part II

(relating to general rules of administrative practice and

procedure). If requested, the Department of Education shall then

convene a hearing within thirty (30) calendar days after the

receipt of a school district's hearing request following its

written complaint decision. The Department of Education shall

render a written hearing decision within thirty (30) calendar

days following the hearing.

(e)  The Department of Education shall give public notice of

the decisions, actions and reports made pursuant to this

section.

(f)  Nothing in this section shall supersede or preempt any

provisions of a collective bargaining agreement between a school

entity and an employee organization in effect on the effective

date of this section.

(g)  Notwithstanding any other provision of this section, if

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insufficient funds are appropriated for purposes of section

2509.13 for the 2010-2011 school year, the requirements of this

section are waived.

Section 3.  Within 60 calendar days following the effective

date of this act, or within a different time period if otherwise

specified in this act, the Secretary of Education shall propose

regulations for promulgation by the State Board of Education

which implement this act.

Section 4.  This act shall take effect immediately.