Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0211.02 Nicole Hoffman HOUSE BILL 06-1034 HOUSE SPONSORSHIP King, and Benefield SENATE SPONSORSHIP Bacon, Windels, and Williams House Committees House Committees Education A BILL FOR AN ACT Concerning special education funding. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Interim Committee on School Finance. For the 2006-07 through 2010-11 budget years, directs the department of education (department) to incrementally implement per pupil funding for special education services for children with disabilities (special education funding) in order to achieve a statewide per-pupil special education funding amount by the 2011-12 budget year without causing an administrative unit, during the incremental implementation period, to receive a lesser amount of state special education funding than it received in the 2005-06 budget year. Directs the department annually to report to the education committees of the general assembly, or any successor committees, its progress in implementing the statewide per pupil special education funding mechanism. For the 2011-12 budget year and for budget years thereafter, provides for the distribution of a portion of the special education funding through a statewide per pupil amount. Directs the department annually to calculate the statewide per pupil special education funding amount by dividing the amount appropriated for special education funding, minus the amount designated for reimbursements, by the total number of children with disabilities enrolled in all administrative units in the state. For the 2006-07 budget year and for budget years thereafter, directs the general assembly annually to designate a portion of the amount appropriated for special education funding to be distributed as reimbursement for:  Tuition costs incurred by administrative units for children with disabilities who are placed in eligible facilities by court order or by a public agency (tuition costs); and  Costs incurred above a threshold amount in providing special education services for children with disabilities (high costs). Allows an administrative unit to receive, in addition to the per pupil special education funding amount, reimbursement of up to 50% of the tuition costs incurred and up to 50% of the high costs incurred. If the amount designated is insufficient to allow reimbursement of 50% for all applying and qualifying administrative units, instructs the department to prorate the reimbursements based on the administrative unit's percentage of the statewide aggregate tuition costs and the administrative unit's percentage of the statewide aggregate high costs. To offset the costs incurred in implementing reimbursement provisions of the act, authorizes the department to withhold up to a specified percentage of the amount designated for reimbursements. Repeals the provisions specifying distribution of special education moneys for orphans who are placed in eligible facilities. For the 2006-07 budget year, requires 100% of the amount designated for reimbursements to be distributed for reimbursements for tuition costs. For the 2007-08 budget year, authorizes the state board of education (board) to specify the percentages of the amount designated for reimbursements that will be used for reimbursement of tuition costs and reimbursements of high costs. After the 2007-08 budget year, requires the board to specify the percentages of the amounts designated for reimbursement that will be used for reimbursement of tuition costs and reimbursement of high costs. In any year in which the board specifies the amount designated for reimbursement of tuition costs and for reimbursement of high costs, prohibits either purpose from receiving less than 1/3 of the total amount designated for reimbursements. Gives the board rule-making authority as necessary for implementation of the act. Makes conforming amendments. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 22-20-114 (1) (b.7), (1) (b.8), (1) (c), and (3), Colorado Revised Statutes, are amended, and the said 22-20-114 is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read: 22-20-114. Funding of programs. (1) (b.7) (I) For the 1997-98 budget year and budget years thereafter and for each budget year through the 2005-06 budget year, forty-nine million eight hundred thousand seven hundred fifty-six dollars shall be distributed to each administrative unit that maintains and operates special education programs in proportion to the amount of state funding the administrative unit received for the 1994-95 budget year divided by the appropriation for the 1994-95 budget year. (II) For the 1997-98 budget year and budget years thereafter and for each budget year through the 2005-06 budget year, any increase in the appropriation made to the department over the amount distributed in accordance with subparagraph (I) of this paragraph (b.7) shall be distributed to a school district or the state charter school institute in proportion to the number of children with disabilities residing in the district or the number of children with disabilities enrolled in institute charter schools, divided by the total number of children with disabilities in the state. The increase in the appropriation to be distributed to school districts and the state charter school institute pursuant to this paragraph (b.7) shall be distributed as soon as practicable after the beginning of the fiscal year. For purposes of this paragraph (b.7), the number of children with disabilities shall be based upon the count taken in December of the immediately preceding budget year. (b.8) (I) For the 2000-01 budget year and each budget year thereafter, in addition to any other moneys received pursuant to this subsection (1), five hundred thousand dollars shall be distributed to administrative units that have children with disabilities: (A) For whom tuition is paid by the administrative units for such children to receive educational services at facilities approved by the state board pursuant to section 22-2-107 (1) (p); and (B) For whom parental rights have been relinquished by the parents or terminated by a court, the parents of whom are incarcerated, the parents of whom cannot be located, the parents of whom reside out of the state but the department of human services has placed such children within the administrative unit, or who are legally emancipated. (II) Said moneys shall be distributed in each budget year to administrative units based upon each administrative unit's share of the aggregate number of children with disabilities who are specified in subparagraph (I) of this paragraph (b.8); except that no administrative unit shall receive an amount that exceeds the aggregate amount of tuition paid by that administrative unit for such specified children with disabilities to receive educational services at facilities approved by the state board pursuant to section 22-2-107 (1) (p) during the immediately preceding budget year. For purposes of this paragraph (b.8), the number of children with disabilities that are specified in subparagraph (I) of this paragraph (b.8) shall be based upon the count taken in December of the immediately preceding budget year. (c) No administrative unit shall receive the amount of funding to which it is entitled under the provisions of this subsection (1) unless the administrative unit has provided the department with the data collected concerning special education programs, as required by subsection (3) of this section, including the count of assessed special education students. (1.5) (a) The provisions of this subsection (1.5) shall apply to the distribution of the total amount of state moneys annually appropriated to fund special education for the 2006-07 budget year and for each budget year through the 2010-11 budget year, minus the amount annually designated by the general assembly in said budget years for distribution pursuant to subsection (1.7) of this section, plus any amount that may be added as provided in paragraph (d) of subsection (1.7) of this section. (b) Beginning in the 2006-07 budget year, and continuing through the 2010-11 budget year, the department shall incrementally implement the per pupil funding method described in subsection (1.6) of this section for distributing the amount described in paragraph (a) of this subsection (1.5) of the state moneys appropriated to fund special education to administrative units that maintain and operate special education programs. The department shall incrementally implement the distribution of state moneys as described in subsection (1.6) of this section so as to ensure that: (I) By the 2011-12 budget year, each administrative unit receives a statewide per pupil amount of funding for special education for each child with disabilities who is enrolled in the administrative unit; and (II) In each of the five budget years of incremental implementation, each administrative unit receives an amount of funding for special education pursuant to this subsection (1.5) that equals or exceeds the amount of funding for special education received by the administrative unit pursuant to subsection (1) of this section for the 2005-06 budget year. (c) The department shall annually submit to the education committees of the house of representatives and the senate, or any successor committees, a report concerning the department's progress in incrementally implementing the method described in subsection (1.6) of this section for distributing a portion of the funding for special education. (1.6) (a) The provisions of this subsection (1.6) shall apply to the distribution of the total amount of state moneys annually appropriated to fund special education for the 2011-12 budget year and for each budget year thereafter, minus the amount annually designated by the general assembly for distribution pursuant to subsection (1.7) of this section, plus any amount that may be added as provided in paragraph (d) of subsection (1.7) of this section. (b) For the 2011-12 budget year and for each budget year thereafter, the department shall distribute to each administrative unit the statewide per pupil funding amount for special education for each child with disabilities who is enrolled in the administrative unit. The department shall annually calculate the statewide per pupil funding amount for special education by dividing the amount of state moneys to be distributed pursuant to this subsection (1.6) by the total number of children with disabilities enrolled in administrative units in the state. The number of children with disabilities enrolled in an administrative unit shall be based upon the count taken in December of the immediately preceding budget year. (1.7) (a) (I) For the 2006-07 budget year and for each budget year thereafter, the general assembly shall, by bill, designate either a dollar amount or a percentage of the total amount of state moneys appropriated in the annual general appropriation bill for that budget year to be distributed as reimbursements to administrative units in the manner specified in paragraphs (b) and (c) of this subsection (1.7). The moneys appropriated for the purposes of this subsection (1.7) shall be appropriated from the general fund exempt account created in section 24-77-103.6 (2), C.R.S. Any amount received by an administrative unit as reimbursement pursuant to this subsection (1.7) shall be in addition to the amount received by the administrative unit pursuant to subsection (1.5) or (1.6) of this section. (II) For the 2006-07 budget year, _____ of the total amount of state moneys appropriated in the annual general appropriation bill for special education funding for children with disabilities shall be distributed pursuant to this subsection (1.7). (b) (I) The department shall distribute a percentage specified in or determined pursuant to subsection (4) of this section as reimbursement to administrative units that paid tuition pursuant to section 22-20-109 in the immediately preceding budget year for children with disabilities who are placed in facilities approved by the state board pursuant to section 22-2-107 (1) (p) by order of a court or by a public agency and not by an administrative unit. To receive reimbursement pursuant to this paragraph (b), an administrative unit shall apply to the department and provide such information as may be required by rule of the state board. An administrative unit shall not receive reimbursement under both this paragraph (b) and paragraph (c) of this subsection (1.7) for the same costs. (II) Each administrative unit that applies and qualifies for reimbursement pursuant to this paragraph (b) shall receive reimbursement of fifty percent of the tuition costs described in subparagraph (I) of this paragraph (b); except that, if the amount available for distribution pursuant to this paragraph (b) is insufficient to pay each applying and qualifying administrative unit fifty percent of said tuition costs, each applying and qualifying administrative unit shall receive a prorated amount based on the administrative unit's share of the total aggregate amount of said tuition costs incurred by all applying and qualifying administrative units in the state in the preceding budget year. (c) (I) For budget years beginning on or after July 1, 2007, the department shall distribute a percentage determined pursuant to subsection (4) of this section as reimbursement to administrative units for costs, in excess of a threshold amount, incurred in providing, either directly or by contract, special education services to children with disabilities. The state board shall establish the threshold amount as provided in subsection (4) of this section. To receive reimbursement pursuant to this paragraph (c), an administrative unit shall apply to the department and provide such information as may be required by rule of the state board. An administrative unit shall not receive reimbursement under both this paragraph (c) and paragraph (b) of this subsection (1.7) for the same costs. (II) Each administrative unit that applies and qualifies for reimbursement pursuant to this paragraph (c) shall receive reimbursement of fifty percent of the costs incurred in excess of the threshold amount as described in subparagraph (I) of this paragraph (c); except that, if the amount available for distribution pursuant to this paragraph (c) is insufficient to pay each applying and qualifying administrative unit fifty percent of said costs in excess of the threshold amount, each applying and qualifying administrative unit shall receive a prorated amount based on the administrative unit's share of the total aggregate amount of said costs in excess of the threshold amount incurred by all applying and qualifying administrative units in the state in the preceding budget year. (d) If the amount of moneys designated for distribution pursuant to this subsection (1.7) is greater than the amount of moneys necessary for the purposes specified this subsection (1.7), any unexpended moneys shall be added to the moneys distributed pursuant to subsection (1.5) or (1.6) of this section. (e) Notwithstanding any provision of this subsection (1.7) to the contrary, the department annually may withhold a portion of the moneys designated for distribution pursuant to this subsection (1.7) to offset the direct costs incurred in implementing this subsection (1.7). The amount withheld by the department shall not exceed ___ percent of the amount designated for distribution pursuant to this subsection (1.7) in any budget year. (3) (a) An administrative unit shall not receive the amount of funding to which it is entitled under the provisions of this section unless the administrative unit has provided the department with the data collected concerning special education programs, as required by paragraph (b) of this subsection (3), including the count of assessed special education students. (b) Each administrative unit shall be required to collect only the data required by the federal government concerning special education programs. The data collected concerning special education programs must be provided to the department for an administrative unit to receive the amount of funding to which it is entitled under the provisions of subsection (1) of this section. (4) (a) (I) For the 2006-07 budget year, one hundred percent of the moneys designated pursuant to paragraph (a) of subsection (1.7) of this section shall be available for distribution by the department for the purposes specified in paragraph (b) of subsection (1.7) of this section, and the department shall not distribute any percentage of such moneys for the purposes specified in paragraph (c) of subsection (1.7) of this section. (II) Subject to the provisions of subparagraph (IV) of this paragraph (a), for the 2007-08 budget year, the state board may, by resolution, establish the percentage of the moneys designated pursuant to subsection (1.7) of this section that shall be available for distribution for the purposes specified in paragraph (b) of subsection (1.7) of this section and that shall be available for distribution for the purposes specified in paragraph (c) of subsection (1.7) of this section. If the state board does not establish such percentages pursuant to this subparagraph (II) for the 2007-08 budget year, the department shall distribute the moneys in the same manner in which the moneys were distributed in the 2006-07 budget year. (III) Subject to the provisions of subparagraph (IV) of this paragraph (a), for the 2008-09 budget year and for each budget year thereafter, the state board shall, by resolution, establish the percentage of the moneys designated pursuant to subsection (1.7) of this section that shall be available for distribution for the purposes specified in paragraph (b) of subsection (1.7) of this section and that shall be available for distribution for the purposes specified in paragraph (c) of subsection (1.7) of this section. (IV) In establishing the percentage of the moneys that shall be available for distribution for the purposes specified in paragraphs (b) and (c) of subsection (1.7) of this section, the state board shall ensure that: (A) One hundred percent of the moneys designated for distribution pursuant to subsection (1.7) of this section is allocated between the purposes specified in paragraphs (b) and (c) of subsection (1.7) of this section; and (B) The percentage established for distribution pursuant to each of paragraphs (b) and (c) of subsection (1.7) of this section is at least one-third of the amount designated pursuant to paragraph (a) of subsection (1.7) of this section. (b) The state board annually by resolution shall determine the threshold amount of costs incurred in providing educational services to a child with disabilities above which an administrative unit may receive reimbursement as provided in paragraph (c) of subsection (1.7) of this section. (c) The state board, in accordance with article 4 of title 24, C.R.S., shall promulgate rules as necessary for the implementation of this section. SECTION 2. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.