THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY O'NEILL, STURLA, BARRAR, BRADFORD, BRIGGS, CALTAGIRONE, CARROLL, DALEY, DeLUCA, FARRY, FLECK, FRANKEL, GEIST, GINGRICH, GRELL, GROVE, HARHAI, HORNAMAN, JOSEPHS, KILLION, KOTIK, MANN, MICOZZIE, MIRABITO, MURPHY, MURT, PETRI, QUIGLEY, QUINN, REICHLEY, ROSS, SANTONI, SCAVELLO, THOMAS, TOEPEL, TOOHIL, VULAKOVICH AND WATSON, JUNE 8, 2011

REFERRED TO COMMITTEE ON EDUCATION, JUNE 8, 2011  

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," further providing for definitions;

and providing for the distribution of special education

funding for student achievement and instruction of eligible

students and for special education accountability.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2501(26) 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:

* * *

(26)  "Actual Spending." An amount equal to a school

district's total expenditures to include General Fund

expenditures in all functional classifications, as designated in

the Manual of Accounting and Related Financial Procedures for

Pennsylvania School Systems, except for:

(i)  actual special education spending;

(ii)  adult education;

(iii)  higher education;

(iv)  student transportation;

(v)  community services;

(vi)  scholarships and awards;

(vii)  facilities acquisition;

(viii)  construction and improvement services; and

[(ix)  other expenditures and financing uses; and]

(x)  tuition from patrons revenue.

* * *

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

a school district's total annual expenditures for special

education as established by the Department of Education and

designated in the Manual of Accounting and Related Financial

Procedures for Pennsylvania School Systems. The amount shall not

include expenditures that are exclusively for gifted students

who do not receive special education pursuant to an

individualized education program.

(32)  "Base Cost Per Student." As determined under section

2502.48.

(33)  "Eligible Student." A student who has been identified

as a student with a disability who is in need of special

education under Federal and State law.

(34)  "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.

(35)  "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 the department's publicly accessible Internet

website for no less than a duration of twelve (12) months; and

(iii)  through the department's timely issuance of a related

Statewide press release.

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

operated primarily for students who have not been identified as

students with disabilities who are in need of special education.

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

or other public school operated for all students, not solely

eligible students, in a school district.

(38)  "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.

(39)  "Commission." The Legislative Commission on Special

Education Funding.

(40)  "Base Year." Fiscal year 2008-2009 or another year

designated by statute.

(41)  "Special Education Allocation." The amount of special

education funding received by a school district from the

Commonwealth.

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.--(a)  The

General Assembly shall, through the annual appropriations

process, determine the level of State funding for special

education and the amount of any change in funding. The

calculations under this section shall determine only the

distribution of any increase in the funding among the school

districts of this Commonwealth and shall not be used for any

other purpose.

(b)  The Department of Education shall determine a special

education allocation for each school district in the year for

which funds are being appropriated by calculating the sum of the

following:

(1)  the special education allocation in the base year for

the school district;

(2)  the absolute value of the difference between the special

education allocation in the base year for the school district

and the highest annual level of the special education allocation

for the school district in the years subsequent to the base year

except for the year for which funds are being appropriated; and

(3)  the special education increase in the year for which

funds are being appropriated for the school district as

determined under subsection (c).

(c)  The Department of Education shall determine the special

education increase in the year for which funds are being

appropriated for each school district by calculating the product

of:

(1)  the difference between the total State appropriation for

special education aggregated for all school districts in the

year for which funds are being appropriated and the total State

appropriation for special education aggregated for all school

districts in the immediately preceding year, or zero, whichever

is greater; and

(2)  the special education distribution factor for the school

district determined under subsection (d).

(d)  The Department of Education shall determine the special

education distribution factor for each school district by

dividing the distribution subfactor for each school district

determined under subsection (e) by the sum of distribution

subfactors for all school districts.

(e)  The Department of Education shall determine the

distribution subfactor for each school district by calculating

the product of:

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

quantity determined under subsection (f) and its actual special

education spending averaged for the three (3) most recent years,

or zero, whichever is greater;

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

ratio averaged for the three (3) most recent years; and

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

equalized millage averaged for the three (3) most recent years

divided by the equalized millage that represents the seventy-

fifth percentile of the equalized millage of all school

districts averaged for the three (3) most recent years.

(f)  The Department of Education shall determine the

subfactor quantity for each school district by calculating the

sum of:

(1)  An amount for student cost categories determined by

calculating the sum of:

(i)  An amount on behalf of eligible students with category 3

disabilities determined by calculating the product of:

(A)  the number of eligible students, averaged for the three

(3) most recent years, residing or enrolled in the school

district classified as having category 3 disabilities as

provided under subsection (g), except that the number of

eligible students included in this calculation who are placed by

the school district and served in public or private separate

schools, residential placements or homebound or hospital

placements shall not exceed three and one-half percent (3.5%) of

all eligible students with individualized education programs

residing or enrolled in the school district or the target

established in the Part B State Annual Performance Plan filed by

the Department of Education under the Individuals with

Disabilities Education Act (Public Law 91-230, 20 U.S.C. § 1400

et seq.), whichever is less;

(B)  the weighting factor for students with category 3

disabilities as provided under subsection (g); and

(C)  the base cost per student.

(ii)  An amount on behalf of eligible students with category

2 disabilities determined by calculating the product of:

(A)  the number of eligible students in the school district,

averaged for the three (3) most recent years;

(B)  the Statewide percentage of eligible students designated

for category 2 disabilities as provided under subsection (g);

(C)  the weighting factor for eligible students with category

2 disabilities as provided under subsection (g); and

(D)  the base cost per student.

(iii)  An amount on behalf of eligible students with category

1 disabilities determined by calculating the product of:

(A)  the school district's modified average daily membership,

averaged for the three (3) most recent years;

(B)  the Statewide percentage of modified average daily

membership designated for category 1 disabilities as provided

under subsection (g);

(C)  the weighting factor for eligible students with category

1 disabilities as provided under subsection (g); and

(D)  the base cost per student.

(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).

(g)  The Legislative Commission on Special Education Funding

is established and shall develop special education formula

components as follows:

(1)  The Statewide percentages of modified average daily

membership which shall be designated as category 1 and of

eligible students which shall be designated as category 2 for

purposes of subsection (f)(1), except that the designated

percentage for each category shall not exceed the actual

proportion of students in this Commonwealth classified as having

such disabilities in the most recent year for which data is

available.

(2)  The weighting factors for students with category 1,

category 2 and category 3 disabilities for purposes of

subsection (f)(1).

(3)  A description of and parameters for category 1, category

2 and category 3 disabilities for purposes of subsection (f)(1),

except that the categories shall be established such that

disabilities typically requiring the least intensive range of

services be categorized in category 1 and disabilities typically

requiring the most intensive range of services be categorized in

category 3.

(h)  Prior to the development of the special education

formula components specified under subsection (g) by the

commission:

(1)  The commission shall consider nationally accepted

accounting and budgeting standards in determining the special

education formula components specified under subsection (g).

(2)  The commission shall, in a timely manner, hold no fewer

than three (3) public hearings in different regions of this

Commonwealth to receive input and testimony from stakeholders,

which may include the Secretary of Education and other

individuals representing the Department of Education, parents of

eligible students, teachers, school administrators, school board

members, higher education faculty and existing State committees,

advisory panels and task forces established under Federal or

State law, regulations or court orders.

(3)  Membership of the commission shall include three (3)

legislators from each of the four (4) legislative caucuses, to

be determined by the leadership of each caucus and to be

replaced at the discretion of the leadership of each caucus. The

commission may perform its duties regardless of whether all four

(4) legislative caucuses have actually appointed members to the

commission. The commission shall choose a chairperson and

utilize legislative staff for assistance in developing special

education formula components. The Department of Education shall

provide the commission with data, research and other relevant

information, upon request by the commission.

(4)  Members of the commission shall be appointed within

forty-five (45) days of the effective date of this section. The

commission shall hold its first meeting within ninety (90) days

of the effective date of this section. The commission shall

develop the special education formula components specified under

subsection (g) within one hundred twenty (120) days of the

effective date of this section, and shall issue a report of its

findings to the Governor, the President pro tempore of the

Senate and Minority Leader of the Senate, the Speaker of the

House of Representatives and the Minority Leader of the House of

Representatives, the chairman and minority chairman of the

Education Committee of the Senate and the chairman and minority

chairman of the Education Committee of the House of

Representatives, the Secretary of Education and the State Board

of Education.

(5)  Upon completion of the commission's report, the State

Board of Education shall draft proposed regulations to implement

the special education funding provisions of this section using,

without alteration, the special education formula components

specified under subsection (g) as developed by the commission.

If the commission does not issue the required report within the

required time period or if the commission's report does not

designate the special education formula components specified

under subsection (g), the State Board of Education shall in a

timely manner promulgate proposed regulations to designate the

special education formula components specified under subsection

(g) through the regulatory review process.

(6)  In every fifth year subsequent to the initial

promulgation of the regulations implementing the formula

components, the commission shall meet and hold public hearings

to review the operation of the special education funding

provisions of this section, shall make a further report and

shall issue the report to the bodies and individuals listed

under clause (4). When in receipt of a further report

recommending changes to the special education formula components

specified under subsection (g), the State Board of Education

shall promulgate proposed regulations through the regulatory

review process to implement, without alteration, any changes

developed by the commission in the special education formula

components specified under subsection (g).

(7)  The commission shall receive input and gather

information on cyber school funding reimbursements regarding

special education students. The commission shall draft proposed

regulations and proposed legislation based on their findings.

(i)  The provisions of this section represent the General

Assembly's commitment to provide adequate special education

funding that will ensure equitable Federal, State and local

investments in special education in public schools in order to

enable eligible students to attain applicable Federal and State

academic standards.

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

insufficient funds are appropriated for purposes of this section

for the 2011-2012 school year, each school district shall be

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

under section 2509.5(zz).

(k)  (1)  The Department of Education shall set aside one

percent (1%) of the total State special education appropriation

in each year for extraordinary special education program

expenses under section 2509.8. The department shall utilize the

funds under section 2509.8(e) in order to meet, to the extent

that funds are available, extraordinary special education

expenses not anticipated through the special education funding

formula. School districts and charter schools may apply for

resources through the fund under procedures established by the

department. The department shall make payments from the fund in

response to the applications.

(2)  The Department of Education shall issue a comprehensive

annual report documenting use of the fund to the General

Assembly and shall give public notice about the report.

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

education expenses" shall mean 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 or charter school

funding for special education, in order to provide the student

with an appropriate education in the least restrictive

environment.

(l)  To the extent that funds are appropriated by the General

Assembly, the Department of Education shall establish a

competitive grant program for school districts or charter

schools meeting the following criteria:

(1)  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 are 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 are available.

(2)  In the most recent school year for which data are

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,

such as meeting the annual target, the confidence interval, the

safe harbor target or by appeal.

(3)  Implementing programs or services that serve as a model

of excellence for meeting high standards for inclusion and

student achievement through quality special education.

(m)  The Department of Education shall develop guidelines for

the administration of the grant program, which shall be

allocated to school districts on a competitive basis.

(n)  The Department of Education shall issue an annual report

to the General Assembly documenting use of the grants issued

under subsection (l) and shall give public notice about the

report.

(o)  Nothing under subsection (l) or any other provision of

this act shall alter Federal or State law regarding the right of

an eligible student to receive education in the least

restrictive environment or shall alter the legal authority of

individualized education program teams to make appropriate

program and placement decisions for eligible students in

accordance with the individualized education program developed

for each eligible student.

Section 2509.14.  Special Education Accountability.--(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 under this section. The special education plan shall be

consistent with other existing plans and reports required by the

department to the greatest extent possible. 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 with student achievement 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;

(iii)  describe programs and strategies that are most likely

to improve student outcomes in the school district;

(iv)  describe any programs offered by the school district

and strategies of the school district for children from birth

through five (5) years of age and five (5) years of age through

seven (7) years of age designed to reduce the need for special

education services; and

(v)  describe policies of the school district to ensure that

a student identified as having a disability is no longer

identified as such if the student no longer qualifies under 22

Pa. Code Ch. 14 (relating to special education services and

programs), or any successor regulation.

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

plan, update or revision submitted under this section, the

Department of Education shall withhold the portion of the annual

State increase in special education funding which exceeds the

index until 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, if the contracts do not

create a conflict of interest or supplant existing service or

program obligations.

(b)  (1)  By April 15, 2012, and by April 15 of each 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 under subsection (a). Unless a school

district decides to amend its special education plan more

broadly to reflect the receipt of new funding, the department

shall allow a district to meet the requirements of this section

by adding the mandated information as an appendix to the

existing plan.

(2)  School districts shall use State funds for programs and

supports that expressly benefit eligible students educated in

the least restrictive environment in accordance with Federal and

State law and contribute to achievement of performance

indicators.

(3)  The Department of Education shall issue guidelines for

the suggested use of State funds for programs and supports that

benefit eligible students and contribute to achievement of

performance indicators and address the following areas or

related areas:

(i)  curricula adaptation;

(ii)  coteaching;

(iii)  assistive technology;

(iv)  school-wide positive behavior supports;

(v)  supplementary aids and services;

(vi)  professional development;

(vii)  reading specialist services and supports;

(viii)  reducing caseloads for special education teachers and

related services personnel; and

(ix)  placing and serving eligible students in regular

classrooms with supports in accordance with the individualized

education program developed for each eligible student.

(4)  Nothing under this subsection shall be construed to

require school districts to implement only the programs and

supports included in the guidelines issued by the Department of

Education.

(c)  Accountability for the effective use of resources to

meet student needs shall also 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 (relating to special education plans) 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 a written

special education plan, update or revision is approved.

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

(A)  review and monitor implementation of all special

education plans, such as 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 under 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 with a substantially

higher ratio of eligible students in the district to its average

daily membership for all students than the State average, as

established by the department and of any district where the

ratio of eligible students in the school district 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-year period.

Appropriate remedial action, including withholding up to five

percent (5%) of all State special education funding, may be

taken, unless the ratio or increase is determined to be

justified by the department 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 under this section and the rationale for the

decisions and actions. A school district may file a written

response to the department about the department's decisions and

actions regarding the district made under this section. The

written response must be submitted to the department within

thirty (30) calendar days of the department's notice or within

thirty (30) calendar days of receiving the notice, whichever is

greater. The department shall consider the written response,

consult with the school district and, within thirty (30)

calendar days after receiving the written response, issue a

written decision addressing the concerns and claims made in the

written response, explaining the judgment of the department in

response to these concerns and claims, and specifying the

opportunity to appeal this matter to the Secretary of Education

for a 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 Pt. II (relating to general rules of administrative

practice and procedure). If requested, the Secretary of

Education shall convene a hearing within thirty (30) calendar

days after receipt of a school district's hearing request. The

Secretary 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 under this section.

(f)  Nothing under this section shall supersede or preempt

any provisions of a collective bargaining agreement between a

school entity and an employe organization in effect on the

effective date of this section.

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

insufficient funds are appropriated for purposes of section

2509.13 for the 2011-2012 school year, the requirements of this

section shall be waived.

Section 3.  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.