PRINTER'S NO. 1269
No. 1107 Session of 2005
INTRODUCED BY RUBLEY, ARGALL, BARRAR, BASTIAN, BOYD, BROWNE,
CALTAGIRONE, CIVERA, CLYMER, CRAHALLA, FRANKEL, FREEMAN,
GINGRICH, GODSHALL, JAMES, KILLION, LEACH, MACKERETH, MAHER,
MANDERINO, MUSTIO, O'NEILL, PALLONE, PETRI, PETRONE,
PHILLIPS, SAYLOR, SCHRODER, STABACK, E. Z. TAYLOR, TIGUE,
TRUE, WATSON AND YOUNGBLOOD, MARCH 24, 2005
REFERRED TO COMMITTEE ON EDUCATION, MARCH 24, 2005
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto," changing the name of approved special
6 education schools.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 1376 of the act of March 10, 1949
10 (P.L.30, No.14), known as the Public School Code of 1949,
11 amended July 4, 2004 (P.L.536, No.70), is amended to read:
12 Section 1376. Cost of Tuition and Maintenance of Certain
13 Exceptional Children in Approved Institutions.--(a) When any
14 child between school entry age and twenty-one (21) years of age
15 and resident in this Commonwealth, who is blind or deaf, or has
16 cerebral palsy and/or neurological impairment and/or muscular
17 dystrophy and/or is mentally retarded and/or has a serious
18 emotional disturbance and/or has autism/pervasive developmental
1 disorder and is enrolled, with the approval of the Department of
2 Education, as a pupil in an approved [private] special education
3 school approved by the Department of Education, in accordance
4 with standards and regulations promulgated by the State Board of
5 Education, the school district in which such child is resident
6 or, for students placed by a charter school, the charter school
7 in which the student was enrolled shall pay the greater of
8 either twenty per centum (20%) of the actual audited cost of
9 tuition and maintenance of such child in such school, as
10 determined by the Department of Education, or its "tuition
11 charge per elementary pupil" or its "tuition charge per high
12 school pupil," as calculated pursuant to section 2561, and the
13 Commonwealth shall pay, out of funds appropriated to the
14 department for special education, the balance due for the costs
15 of such child's tuition and maintenance, as determined by the
16 department. For the school years 1989-1990, 1990-1991 and 1991-
17 1992, the school district payment shall be no greater than forty
18 percent (40%) of the actual audited costs of tuition and
19 maintenance of such child in such school. For the 1992-1993
20 school year through the 2003-2004 school year, the school
21 district or charter school payment shall be the greater of forty
22 percent (40%) of the actual audited costs of tuition and
23 maintenance of such child in such school, as determined by the
24 Department of Education, or its "tuition charge per elementary
25 pupil" or its "tuition charge per high school pupil," as
26 calculated pursuant to section 2561, and the Commonwealth shall
27 pay, out of funds appropriated to the department for approved
28 [private] special education schools, the balance due for the
29 costs of such child's tuition and maintenance, as determined by
30 the department. For the 2004-2005 school year and each school
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1 year thereafter, the school district or charter school payment
2 shall be the greater of forty percent (40%) of the approved
3 tuition rate as established pursuant to subsection (c.3) or
4 (c.5) or the school district or charter school's "tuition
5 charges per elementary pupil" or "tuition charges per secondary
6 pupil" as calculated under section 2561, and the Commonwealth
7 shall pay out of funds appropriated to the department for
8 approved [private] special education schools the balance of the
9 approved tuition rate due for the cost of such child's tuition
10 and maintenance. The department will credit the district of
11 residence with average daily membership for such child
12 consistent with the rules of procedure developed in accordance
13 with section 2501. If the residence of such child in a
14 particular school district cannot be determined, the
15 Commonwealth shall pay the whole cost of tuition and maintenance
16 of such child as established under subsection (c.3) or (c.5).
17 (a.1) For the 2004-2005 school year, the following shall
18 apply:
19 (1) The Department of Education shall determine the payment
20 amount for each approved [private] special education school for
21 all students enrolled in an approved [private] special education
22 school for the 2003-2004 school year based on the average of:
23 (i) The preliminary budget submitted to the Department of
24 Education by the approved [private] special education school for
25 the 2004-2005 school year.
26 (ii) The midyear budget submitted to the Department of
27 Education by the approved [private] special education school for
28 the 2003-2004 school year.
29 (iii) The audit issued by the Governor's Office of the
30 Budget for the 2002-2003 school year, excluding questioned
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1 costs.
2 (2) Where the 2002-2003 audit is not available, the
3 Department of Education shall use the claim form submitted to it
4 by the approved [private] special education school for the 2002-
5 2003 school year. In the event that an approved [private]
6 special education school has not submitted a claim form for the
7 2002-2003 school year, the Department of Education shall use the
8 audit or, where the audit is not available, the claim form for
9 the 2001-2002 school year.
10 (3) For the purposes of determining the payment under
11 paragraph (1) for an approved [private] special education school
12 that was not in operation for the 2002-2003 school year, the
13 Department of Education shall utilize the approved [private]
14 special education school's preliminary budget for the 2004-2005
15 school year instead of the audit identified under paragraph
16 (1)(iii).
17 (4) No later than August 10, 2004, the Department of
18 Education shall notify each school district of residence or
19 charter school of a child enrolled in an approved [private]
20 special education school of its payment amount under subsection
21 (a).
22 (5) The Department of Education shall pay each approved
23 [private] special education school the total amount calculated
24 pursuant to this subsection divided into twelve (12) monthly
25 payments. The Department of Education shall withhold the school
26 district or charter school payment amount calculated under
27 subsection (a) from the amount of any and all State payments
28 made to the school district or charter school. In no event shall
29 the sum of the Commonwealth's share of payments to approved
30 [private] special education schools under this subsection exceed
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1 the appropriation for approved [private] special education
2 schools.
3 (a.2) For the 2005-2006 school year and each school year
4 thereafter, the Department of Education shall determine the
5 payment amount for each approved [private] special education
6 school for all students enrolled in [an] its predecessor
7 approved private school for the prior school year as follows:
8 (1) (i) Multiply the payment determined for the immediate
9 preceding school year by one hundred and twenty-five percent
10 (125%) of the percentage increase in the appropriation for
11 special education for the fiscal year prior to the fiscal year
12 in which payments under this subsection are made.
13 (ii) Add the product from subparagraph (i) to the payment
14 determined for the immediate preceding school year.
15 (2) No later than May 10, 2005, and no later than May 10 of
16 each year thereafter, the Department of Education shall notify
17 each school district of residence or charter school of a child
18 enrolled in an approved [private] special education school of
19 its payment amount under subsection (a).
20 (3) The Department of Education shall pay each approved
21 [private] special education school the total amount calculated
22 pursuant to this subsection divided into twelve (12) monthly
23 payments. The Department of Education shall withhold the school
24 district or charter school payment amount calculated under
25 subsection (a) from the amount of any and all State payments
26 made to the school district or charter school. In no event shall
27 the sum of the Commonwealth's share of payments to approved
28 [private] special education schools under this subsection exceed
29 the appropriation for approved [private] special education
30 schools.
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1 (b) When any person less than school entry age or more than
2 twenty-one (21) years of age and resident in this Commonwealth,
3 who is blind or deaf, or has cerebral palsy and/or has
4 neurological impairment and/or has muscular dystrophy, or has
5 autism/pervasive developmental delay, and is enrolled, with the
6 approval of the Department of Education, as a pupil in [an
7 approved private school] a special education school approved by
8 the Department of Education, the Commonwealth shall pay to such
9 school the approved tuition rate for such child's tuition and
10 maintenance, and in addition, in the case of any child less than
11 school entry age, who is blind, the cost, as determined by the
12 Department of Education of instructing the parent of such blind
13 child in caring for such child.
14 (c.1) Any funds remaining from the appropriation line items
15 "for special education - approved private schools" or for
16 Pennsylvania Charter Schools for the Deaf and Blind from the
17 general appropriations acts for fiscal years 1978-1979 [and each
18 fiscal year thereafter] through 2004-2005 and "for special
19 education schools" for fiscal year 2005-2006 and each fiscal
20 year thereafter shall be transferred by the State Treasurer into
21 a restricted account (continuing appropriation) for audit
22 resolution which is hereby established. The Department of
23 Education shall also deposit into this restricted account any
24 funds returned to or recovered by the department from approved
25 [private] special education schools or chartered schools for
26 overpayments during fiscal years 1978-1979 [and each fiscal year
27 thereafter]. The funds in the restricted account are hereby
28 appropriated upon approval of the Governor to the Department of
29 Education for payments to approved [private] special education
30 schools for audit resolutions for fiscal years 1978-1979 through
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1 2003-2004. During the 1995-1996 fiscal year and during each
2 fiscal year thereafter, the Department of Education shall review
3 the activity in the restricted account and may recommend that
4 the Governor authorize the lapsing into the General Fund of any
5 funds that are estimated not to be needed for audit resolution.
6 (c.2) Beginning with payments made in the 2004-2005 school
7 year and each school year thereafter, the Department of
8 Education shall establish procedures and audit standards to
9 govern the scope of reportable costs, the format of the audit
10 and the standards and methods used by the Commonwealth to audit
11 attendance. Each approved [private] special education school
12 shall submit a cost report of its expenditures for the prior
13 fiscal year to the Department of Education no later than August
14 1, [2004, and] 2005. Each special education school shall submit
15 this required cost report no later than August 1 of each year
16 thereafter. Audit reports of expenditures for the prior fiscal
17 year prepared by an independent certified public accountant
18 shall be prepared in accordance with the established procedures
19 and audit standards and submitted by the approved [private]
20 special education school to the Department of Education by
21 November 1, 2005, and by special education schools no later than
22 November 1 of each year thereafter. For payments in the 2004-
23 2005 school year, the Department of Education shall issue
24 guidelines for budget and audit standards no later than October
25 15, 2004. For payments in the 2005-2006 school year and each
26 school year thereafter, the Department of Education shall
27 annually issue guidelines for budget and audit standards at
28 least three (3) months prior to the date that the approved
29 [private] special education schools must submit their budget
30 information pursuant to subsection (c.4). These guidelines shall
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1 include provisions for audit methodology and a definition of
2 allowable administrative expenditures. Allowable administrative
3 expenditures shall not exceed ten percent (10%) of each approved
4 [private] special education school's budget. Each audit shall
5 identify expenditures and include all spending on students for
6 whom payment is made pursuant to subsection (a) or (b) and shall
7 identify the source and amount of all revenue used to educate
8 students for whom payment is made pursuant to subsection (a) or
9 (b). Work papers pertaining to the audit of an approved
10 [private] special education school by an independent certified
11 public accountant shall be made available to the Department of
12 Education upon request. Audits of cost reports submitted for
13 school years prior to the 2004-2005 school year shall be
14 completed in a manner consistent with prior audit practices. An
15 approved [private] special education school may submit an audit
16 for the 2003-2004 school year prepared by an independent
17 certified public accountant provided the following have
18 occurred:
19 (1) The Department of Education has failed to process and
20 settle the cost reports within twelve (12) months from
21 submission by the approved [private] special education school.
22 (2) The Department of Education has failed to settle any
23 appeals or postsettlement resolution within fifteen (15) months
24 from submission by the approved [private] special education
25 school.
26 (3) The approved [private] special education school has
27 responded to reasonable requests for information and documents
28 by the Department of Education.
29 Upon receipt of the independent audit for the 2003-2004 school
30 year, the Department of Education shall have three (3) months to
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1 review the audit and settle any outstanding payments due to or
2 from the approved [private] special education school.
3 (c.3) For payments made during the 2004-2005 school year,
4 the Department of Education shall establish an approved tuition
5 rate for each approved [private] special education school by
6 dividing the amount calculated under subsection (a.1) by the
7 full-time equivalent enrollment for the approved [private]
8 special education school for the 2003-2004 school year. This
9 calculation shall be adjusted for residential and non-
10 residential students. The approved tuition rate multiplied by
11 the full-time equivalent enrollment shall not exceed the amount
12 calculated under subsection (a.1).
13 (c.4) Beginning August 15, 2004, and no later than August 15
14 of each year thereafter, each approved private school and
15 special education school shall submit budget information for the
16 current school year on forms and in a manner determined by the
17 Department of Education. The budget information shall include a
18 proposed tuition rate or rates and projected full-time
19 equivalent enrollment for the current year. An approved
20 [private] special education school may submit separate proposed
21 tuition rates for up to three levels of services and for day and
22 residential students, pursuant to the guidelines established
23 under subsection (c.7).
24 (c.5) For payments made during the 2005-2006 school year and
25 each school year thereafter, beginning January 15, 2005, and no
26 later than January 15 of each year thereafter, the Department of
27 Education shall establish an approved tuition rate or rates and
28 full-time equivalent enrollment for each approved [private]
29 special education school for the current school year. Where an
30 approved [private] special education school has submitted one
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1 tuition rate, the approved tuition rate shall be determined by
2 dividing the amount calculated under subsection (a.2) by the
3 full-time equivalent enrollment for the approved [private]
4 special education school for the prior school year. Where an
5 approved [private] special education school has submitted more
6 than one tuition rate, the sum of the products of each approved
7 tuition rate and corresponding full-time equivalent enrollment
8 for the approved [private] special education school for the
9 prior school year shall equal the amount calculated under
10 subsection (a.2). An approved [private] special education school
11 may enroll students in excess of the approved full-time
12 equivalent enrollment. Where an approved [private] special
13 education school enrolls students in excess of the approved
14 full-time equivalent enrollment, it must show a corresponding
15 decrease in its approved tuition rate.
16 (c.6) No later than May 1, 2005, and May 1 of each school
17 year thereafter, the department shall annually publish a report
18 on the department's publicly accessible World Wide Web site that
19 shall include, but not be limited to:
20 (1) The approved tuition rate or rates for each approved
21 [private] special education school for the current school year.
22 (2) A description of the exceptionalities each approved
23 [private] special education school is approved to serve.
24 (3) A description of all programs and services offered by
25 each approved [private] special education school.
26 (c.7) No later than November 1, 2004, the Department of
27 Education shall issue guidelines establishing the levels of
28 services to assist each approved [private] special education
29 school in determining its proposed tuition rate or rates. The
30 guidelines shall allow an approved [private] special education
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1 school to establish approved tuition rates for up to three
2 levels of services and for day and residential students.
3 (d) No private institution receiving payment in accordance
4 with this section shall impose any charge on the student and/or
5 parents who are Pennsylvania approved reimbursable residents for
6 a program of individualized instruction and maintenance
7 appropriate to the child's needs; except that charges for
8 services not part of such program may be made if agreed to by
9 the parents.
10 (e) The following words and phrases as used in this section
11 shall have the meanings given to them in this subsection unless
12 the context clearly indicates otherwise:
13 "Approved full-time equivalent enrollment" means the full-
14 time equivalent enrollment set by the Department of Education
15 pursuant to the provisions of subsection (c.3) or (c.5).
16 "Approved tuition rate" means the final tuition rate set by
17 the Department of Education pursuant to the provisions of
18 subsection (c.3) or (c.5).
19 "Audit," for the purpose of subsection (a.1), means the
20 fiscal audit issued by the Governor's Office of the Budget,
21 excluding questioned costs.
22 "Claim form," for the purpose of subsection (a.1), means the
23 form that each approved [private] special education school
24 submitted following the end of the fiscal year showing the final
25 costs claimed for the fiscal year.
26 "Current school year" means the year in which payment is
27 being made.
28 "Full-time equivalent enrollment" means the number of
29 students enrolled in an approved private school or special
30 education school pursuant to subsection (a) or (b).
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1 "Independent certified public accountant" means a member of
2 the American Institute of Certified Public Accountants that has
3 a minimum of five (5) years' verifiable experience in performing
4 audits of government funds for nonprofit organizations with a
5 comparable or larger annual budget.
6 "Midyear budget," for the purpose of subsection (a.1), means
7 the adjusted budget for the 2003-2004 school year submitted by
8 each approved [private] special education school in January
9 2004.
10 "Preliminary budget," for the purpose of subsection (a.1),
11 means the budget for the 2004-2005 school year submitted by each
12 approved [private] special education school in June 2004.
13 "Prior school year" means the year for which payment is made
14 during the current year.
15 "Proposed tuition rate" means the amount submitted by each
16 approved private school or special education school to the
17 Department of Education to be used in establishing the cost that
18 the approved private school or special education school incurred
19 to provide instructional and residential services for each full-
20 time equivalent student. An approved private school or special
21 education school may submit information to establish costs for
22 up to three (3) levels of services and for day and residential
23 students.
24 Section 2. Section 1377(c) and (d) of the act, amended or
25 added May 31, 1979 (P.L.33, No.11) and December 17, 1982
26 (P.L.1378, No.316), are amended to read:
27 Section 1377. Payment of Cost of Tuition and Maintenance of
28 Certain Exceptional Children.--* * *
29 (c) For the purpose of enabling the Department of Education
30 to determine from time to time what amounts are due to schools
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1 for the blind or for the deaf or for the cerebral palsied and/or
2 brain damaged and/or muscular dystrophied or for the socially
3 and emotionally disturbed and/or mentally retarded hereunder,
4 such schools shall forward to the department, at such times and
5 in such form as the department shall prescribe, sworn statements
6 setting forth the names, ages, and residences of all pupils
7 enrolled hereunder, specifying the school districts liable for a
8 part of the cost of tuition and maintenance of any such pupils,
9 the per capita cost of and maintenance of pupils, and such other
10 information as the department shall require.
11 For the purpose of providing adequate administration of the
12 program and to carry out the preaudit functions authorized in
13 section 1376(a), one-half of one percent (.50%) of the total
14 appropriations for approved [private] special education schools
15 from all funds shall be allocated to the Department of
16 Education.
17 (d) When, during the course of the 1982-1983 school year,
18 programs for exceptional children are caused to be transferred
19 from schools or institutions for the blind or deaf, or cerebral
20 palsied or brain damaged or muscular dystrophied or mentally
21 retarded, or socially and emotionally disturbed, as provided for
22 in sections 1376 and 1376.1, to school districts or intermediate
23 units, as provided for in sections 2509 and 2509.1, under
24 unanticipated or emergency circumstances, and when such
25 transfers necessitate the transfer of funds from the
26 appropriation to the Department of Education for special
27 education for approved [private] special education schools to
28 the appropriation to the Department of Education for payments on
29 account of special education of exceptional children in public
30 schools, the Secretary of Education shall be empowered so to
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1 transfer such funds, upon approval of the Secretary of the
2 Budget and written notification to the State Treasurer and the
3 chairmen of the House and Senate Appropriations and Education
4 Committees.
5 Section 3. Section 1377.1 of the act, added December 20,
6 1983 (P.L.267, No.73), is amended to read:
7 Section 1377.1. Transfer of Funds for Transferal Programs.--
8 When, during the course of a school year or after the end of a
9 school year, programs for exceptional children are caused to be
10 transferred from schools or institutions for the blind or deaf,
11 or cerebral palsied or brain damaged or muscular dystrophied or
12 mentally retarded, or socially and emotionally disturbed, as
13 provided for in sections 1376 and 1376.1, to school districts or
14 intermediate units, as provided for in sections 2509 and 2509.1,
15 and when such transfers necessitate the transfer of funds from
16 the appropriation to the Department of Education for special
17 education for approved [private] special education schools to
18 the appropriation to the Department of Education for payments on
19 account of special education of exceptional children in public
20 schools, the Secretary of Education shall be empowered to
21 transfer such funds, upon approval of the Secretary of the
22 Budget and written notification to the State Treasurer and the
23 chairmen of the House and Senate Appropriations and Education
24 Committees.
25 Section 4. Section 2509.5(f) of the act, amended July 11,
26 1996 (P.L.633, No.107), is amended to read:
27 Section 2509.5. Special Education Payments to School
28 Districts.--* * *
29 (f) The Secretary of Education shall develop a definition of
30 severely classified exceptional students by September 20, 1996.
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1 This definition may include the primary exceptionality, level of
2 intervention, type of support and related services requirements
3 elements currently collected through the PennData system. This
4 definition shall not include students who are institutionalized,
5 in approved [private] special education school placements, in
6 detention home programs, in mentally gifted programs or in early
7 intervention programs operated under the provisions of the act
8 of December 19, 1990 (P.L.1372, No.212), known as the "Early
9 Intervention Services System Act." This definition shall be
10 submitted to the majority chairman and the minority chairman of
11 the Appropriations Committee and the Education Committee of the
12 Senate and the majority chairman and the minority chairman of
13 the Appropriations Committee and the Education Committee of the
14 House of Representatives for review and comment no later than
15 September 20, 1996. No sooner than fifteen (15) days and not
16 later than thirty (30) days after submission of the proposed
17 definition to the committees, the Secretary of Education shall
18 approve a definition of severely classified exceptional
19 students.
20 * * *
21 Section 5. Section 2561(8) of the act, added June 22, 2001
22 (P.L.530, No.35), is amended to read:
23 Section 2561. Tuition Charges for Pupils of Other
24 Districts.--A school district or vocational school district
25 receiving elementary or high school pupils or vocational or
26 other extension education pupils who are residents of another
27 school district or another vocational school district shall
28 compute the tuition charges as follows:
29 * * *
30 (8) Charter School Tuition Charge. When a charter school
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1 established pursuant to Article XVII-A enrolls any eligible
2 student in an approved [private] special education school
3 pursuant to section 1376, its "tuition charge per elementary
4 pupil" or its "tuition charge per secondary pupil" shall be
5 calculated in accordance with clauses (1) through (3).
6 Section 6. A reference in any act or regulation or part of
7 an act or regulation to an approved private school shall be
8 deemed to be a reference to an approved special education
9 school.
10 Section 7. This act shall take effect in 60 days.
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