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NO. 117. AN ACT TO STRENGTHEN THE CAPACITY OF VERMONT’S EDUCATION SYSTEM TO MEET THE EDUCATIONAL NEEDS OF ALL VERMONT STUDENTS.

(H.629)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. FINDINGS AND PURPOSE

(a) The general assembly finds that:

(1) School districts are working hard to control special education costs while continuing to provide appropriate services that meet the needs of all Vermont students.

(2) Nevertheless, special education costs are increasing more rapidly than general education costs and this rate of increase should be moderated to an extent consistent with meeting the educational needs of students. The increase in special education costs is due to many complex factors, including an increase in the percentage of students found eligible for special education services as well as an increase in the proportion of those special education students who need very expensive services.

(3) The blue ribbon commission on special education costs and the fiscal review panel found that strengthening the educational support systems across the state, improving the consistency of the delivery of special education throughout the state, improving the recruitment, training and retention of special education teachers and administrators, and improving the ability of all teachers and administrators to meet the educational needs of all students could help districts to control special education costs.

(4) Early prevention and intervention services targeted to children who are at risk of becoming special education eligible can reduce the number of students who will eventually need special education services.

(5) Early prevention and intervention services are often less expensive than special education services, and may only be necessary for a short time in order to enable a student to succeed in the general education environment.

(6) The department of education should provide more technical and legal assistance to help school districts control special education costs and improve educational outcomes for students.

(7) In its work with school districts, the department of education should emphasize effective and efficient management of delivering special education services statewide.

(b) Therefore, it is the intent of the general assembly to provide services that will help school districts to contain increases in total special education spending in Vermont, while continuing to deliver appropriate services that meet the needs of Vermont’s students.

Sec. 2. 16 V.S.A. § 2902(a) is amended to read:

(a) Within each school district's comprehensive system of educational services, each public school shall develop and maintain an educational support system for children who require additional assistance in order to succeed or be challenged in the general education environment. For each school it maintains, a school district board shall assign responsibility for developing and maintaining the educational support system to the superintendent pursuant to a contract entered into under section 267 of this title, or to the principal. The educational support system shall, at a minimum, include an educational support team and a range of support and remedial services, including instructional and behavioral interventions and accommodations.

Sec. 3. 16 V.S.A. § 2904 is added to read:

§ 2904. REPORTS

Annually, each superintendent shall report to the commissioner in a form prescribed by the commissioner, on the status of the educational support systems in each school in the supervisory union. The report shall describe the services and supports that are a part of the education support system, how they are funded, and how building the capacity of the educational support system has been addressed in the school action plans. The report shall include a description and justification of how the following funds were used:

(1) as required under subsection 2959a(e) of this title, funds received due to Medicaid reimbursement;

(2) for a school district required to provide learning readiness experiences for preschool age children or early reading and math experiences for school age children pursuant to subsection 4011(d) of this title, funds attributable to an increase in student count due to the poverty ratio of the district and the number of students with limited English proficiency.

Sec. 4. 16 V.S.A. § 2942(2) is amended to read:

(2) "Special education" means, to the extent required by federal law, specially designed instruction, at no cost to parents or guardian, to meet the unique educational needs of a child with a disability, including classroom instruction, instruction in physical education, home instruction, and instruction in hospitals and institutions. The term includes "related services" as defined in federal law.

Sec. 5. 16 V.S.A. § 2959b is added to read:

§ 2959b. INDIVIDUALIZED EDUCATION PLANS

A school district or supervisory union responsible for developing an individualized education plan for a child with a disability may consider the cost of the provision of special education or related services to the child if:

(1) the district or supervisory union has developed the individualized education plan in accordance with federal law through an individualized plan team that included the parents;

(2) the individualized education plan team has determined that the child’s placement contained in the plan is appropriate for the child as that term is defined in federal law; and

(3) all the options under consideration by the district or supervisory union for fulfilling the requirements of the child’s individualized education plan would constitute a free appropriate public education in the least restrictive environment for the child, as those terms are defined in federal law.

Sec. 6. 16 V.S.A. § 2974(a) is amended to read:

(a) Annually, the commissioner shall report on:

(1) special education expenditures by school districts;

(2) the rate of growth or decrease in special education costs;

(3) outcomes for special education students;

(4) the availability of special education staff;

(5) the consistency of special education program implementation statewide; and

(6) the status of the education support systems in school districts.

Sec. 7. COMMISSIONER OF EDUCATION; PLAN TO CONTAIN SPECIAL EDUCATION COSTS WHILE CONTINUING TO MEET THE NEEDS OF ALL VERMONT STUDENTS

(a) During the next two school years, the commissioner of education and the state board of education shall develop and implement a plan which shall include the elements described in this section. The goals of the plan shall be to help:

(1) reduce statewide increases in special education costs while continuing to meet the needs of all Vermont students;

(2) increase the capacity of general education, especially the educational support system, to meet the needs of more students outside special education;

(3) use cost-effective practices; and

(4) operate special education programs consistently and within state and federal requirements across the state.

(b) The commissioner shall help to increase the capacity of general education to meet the needs of more students outside special education by forming a partnership with higher education to accomplish the goals of this subsection. The plan shall also describe how the commissioner and higher education will each contribute to accomplishing the goals. The goals are to:

(1) provide increased and improved training opportunities for general education teachers, administrators and para-educators, on techniques for meeting the instructional needs of all students; and

(2) improve the preparation of all teachers to be effective in an inclusive classroom.

(c) The commissioner shall help to increase the capacity of the educational support system to meet the needs of more students outside special education by focusing department resources and time on strengthening the educational support system in Vermont public schools, and working with higher education, superintendents, principals, teachers, school boards and other interested groups to seek and use federal and other funds, including Medicaid reimbursements for students served under Section 504 of the Rehabilitation Act of 1973 as amended, to accomplish this purpose. The commissioner shall focus on strengthening the following components of each educational support system:

(1) preschool through fourth grade literacy;

(2) prevention and intervention for emotional and behavioral difficulties;

(3) other prevention and intervention components.

(d) The commissioner shall provide support for special education teachers and administrators, and help in using cost-effective practices by:

(1) forming a partnership with higher education and school districts to develop and implement a plan to build the capacity to increase the availability of qualified staff in critical need areas, including special education teachers, speech pathologists, related services providers and administrators by improving their recruitment and retention, and developing additional training opportunities and incentives in these areas. The plan shall also include training opportunities for staff, including para-educators, currently working in school districts and describe how higher education institutions, the department of education and school districts will each contribute to meeting these critical needs;

(2) providing legal support, information and training to avoid conflict and assist in making cost-effective legal and procedural decisions;

(3) hiring staff or consultants, or both, who are experts in provision of special education services, including experts in particular disability areas, and making them available to provide technical assistance and training;

(4) providing guidance to school districts on reducing the rate of increase in special education costs to a sustainable level during the preparation of district special education service plans; and

(5) working with the University of Vermont to develop a decision-making model for individualized education program teams to use, and working with higher education to ensure that pre-service training and professional development opportunities are available to teach special educators and others who serve on individualized education program teams to use the decision-making model.

(e) The commissioner shall help to ensure that special education programs are being operated consistently and in a cost-effective manner across the state by:

(1) studying the individualized education plans of most common disability areas, and by June 30, 2001, providing schools with data on the types and range of services provided statewide and associated costs;

(2) increasing departmental capacity to audit and monitor special education programs in Vermont public schools, and auditing every supervisory union and district by December 31, 2002. The commissioner shall provide school districts with more specific guidance regarding cost allocation to special education, and what documentation and data needs to be maintained to complete an audit;

(3) providing training to school district leaders who shall advise and train school staff on cost-effective practices in special education, and how to ensure that eligibility decisions and development of individualized education plans are more consistent across the state; and

(4) working with the state board of education to adopt rules which more clearly define eligibility criteria for special education, and to provide guidelines on the implementation of eligibility criteria which emphasize cost containment and consistent application of eligibility criteria. Following adoption of the rules, the commissioner shall provide training and materials to school district staff on the rule revisions and guidelines. The rule revisions and guidelines shall, at a minimum, address the adverse effect criterion used to identify when a disability has a negative effect on a child’s academic progress, and the following:

(A) Emotional disability.

(B) Learning disability.

(C) Developmental delay.

(D) Other health impairment.

(E) Attention deficit disorder.

(f) The commissioner and state board of education shall work with the general assembly, the education coalition and school districts to:

(1) develop recommendations regarding changes to the special education funding formula that do not shift a greater burden onto the local level. On or before January 15, 2004, the commissioner shall recommend to the governor and the general assembly a fiscally sustainable formula for funding special education; and

(2) address additional areas that require attention in order to contain costs and strengthen the special education system, including the residential placement review process, third party billing for special education medical services and cost effectiveness of regional programs for children with special needs.

Sec. 8. COMMISSIONER OF EDUCATION; REPORTS

(a) On or before January 15 in years 2001 and 2002, the commissioner shall report to the Senate and House committees on education concerning the progress made toward strengthening the educational support system in Vermont public schools, containing special education costs and improving outcomes for students with disabilities.

(1) In year 2001, the report shall include:

(A) an update on the activities carried out under the plan made pursuant to Sec. 7 of this act;

(B) an examination of the equity of the core staff rules adopted under 16 V.S.A. § 2961 regarding calculation of state aid for special education, including proposed changes that would make the rules more equitable, and actions that have been taken or contemplated to make the rules more equitable;

(C) recommendations for additional steps to ensure that Vermont will achieve a sustainable level of growth in special education costs by fiscal year 2003; and

(D) recommendations, including the potential for the use of technology, to reduce the overly burdensome paperwork associated with the provision of special education and related services.

(2) In year 2002, the report shall include:

(A) a final report on all applicable items in the year 2001 report;

(B) recommendations for statutory change that would enable further strengthening of the educational support system, including the most effective funding mechanism for achieving this end;

(C) a plan to increase consistency of delivery of special education statewide; and

(D) a plan for future actions that will continue to contain special education costs, and a projection of special education cost increases through fiscal year 2007.

(b) The commissioner of education shall monitor external factors, outside the control of the school district and the department of education, which affect the cost of providing special education services. Annually through the year 2007, on or before January 15, the commissioner shall report to the governor and the general assembly on external factors that have contributed to cost increases and quantify the amount of increase directly attributable to these factors.

Sec. 9. ASSISTANCE TO SCHOOL DISTRICTS WITH UNUSUAL SPECIAL EDUCATION COSTS

(a) In fiscal years 2002 through 2004, the commissioner may use up to two percent of the funds appropriated for special education expenditures as that term is defined in subsection 2967(b) of Title 16 for the purpose of directly assisting school districts with special education expenditures of an unusual or unexpected nature. These funds shall not be used for exceptional circumstances which are funded under section 2963a of Title 16. A decision of the commissioner as to eligibility for assistance and amount of assistance received shall be final.

(b) In order to be eligible for assistance under this subsection, during at least two of the quarters of the prior fiscal year, a school district shall have submitted Medicaid bills for services reimbursement for at least 85 percent of its Medicaid eligible students who received medically-related special education services. However, the commissioner may provide assistance to a school district which does not reach the 85 percent target if the district made a reasonable attempt to reach the target but was prevented from reaching it by extraordinary circumstances.

(c) The state board of education shall adopt rules necessary to establish standards and procedures for implementation of this section.

(d) Annually, on or before January 15, the commissioner shall report to the general assembly on the amount and use of funds expended under this subsection.

Sec. 10. TARGETS FOR INCREASES IN STATEWIDE TOTAL SPECIAL EDUCATION EXPENDITURES

(a) The general assembly hereby establishes the following targets for limiting increases in statewide total education expenditures as that term is used in 16 V.S.A. § 2967(b):

(1) in fiscal year 2002, the average annual change in the actual nominal Vermont State Domestic Product for the preceding five years as published by the United States Department of Commerce, plus four percentage points;

(2) in fiscal year 2003, the average annual change in the actual nominal Vermont State Domestic Product for the preceding five years as published by the United States Department of Commerce, plus three percentage points;

(3) in fiscal year 2004, the average annual change in the actual nominal Vermont State Domestic Product for the preceding five years as published by the United States Department of Commerce, plus two percentage points.

(b) Notwithstanding the provisions of chapter 101 of Title 16, in fiscal years 2002 through 2004, the amount appropriated by the general assembly to provide state aid for special education shall be no more than the amount that would be appropriated if statewide total special education expenditures grew by the target amounts.

(c) If, in any fiscal year, the actual increase in special education costs is less than the target amount, an amount equal to the state share, if spending had increased at the target amount, shall be appropriated from the education fund to be paid for support of special education in accordance with subsection 2967(b) of Title 16.

Sec. 11. REPEAL

In order to enable the commissioner of education to use the tools provided in this act to strengthen the educational support system and reduce the rate of increase in special education costs to a sustainable level, and in order to give the general assembly time to assess the cost saving effects of the provisions of this act, implementation of the caps imposed in Sec. 120(a) of No. 71 of the Acts of 1998, relating to limits to state aid for special education, is repealed.

Sec. 12. SPECIAL EDUCATION SERVICES PROVISIONS; STUDY

The secretary of administration and the Joint Fiscal Office in consultation with the secretary of the agency of human services, the commissioners of the department of education and the department of employment and training, the Vermont Superintendents' Association, the Vermont School Board Association and other members of the education community shall study how the agency of human services, the department of education and the department of employment and training should provide for special education services for eligible persons under 22 years of age in school or out of school. They shall also:

(1) assess the extent to which school districts have absorbed service costs for special needs children that were historically paid by other service providers including the extent to which:

(A) children formerly admitted to institutional care are now being provided services through special education;

(B) costs now found in school budgets historically were part of the budgets of non-school agencies; and

(C) costs now found in school budgets would be attributable to nonschool agencies;

(2) examine whether the upper limit of age eligibility should be 21 or 22 years of age;

(3) examine the interagency agreement regarding coordination of special education services entered into pursuant to 20 U.S.C. § 1412(a)(12) to determine if services are currently provided and paid for in the most appropriate and cost-effective way; and

(4) report their findings and recommendations to the genera1 assembly by January 15, 2001.

Approved: May 18, 2000