Makes various changes to school funding law and Educational Adequacy Report; establishes Special Education Funding Review Task Force.

A2284

ASSEMBLY, No. 2284

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman MARGIE DONLON, M.D.

District 11 (Monmouth)

Assemblywoman LUANNE M. PETERPAUL

District 11 (Monmouth)

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Co-Sponsored by:

Assemblymen Schnall, Karabinchak, Assemblywoman Bagolie,
Assemblymen Stanley and Scharfenberger

SYNOPSIS

���� Makes various changes to school funding law and
Educational Adequacy Report; establishes Special Education Funding Review Task
Force.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning school financing, amending P.L.2018, c.67, and amending and
supplementing P.L.1996, c.138 and P.L.2007, c.260.

����
Be It Enacted

by the Senate and General Assembly of the State of New Jersey:

���� 1.� Section 5 of P.L.1996,
c.138 (C.18A:7F-5) is amended to read as follows:

���� 5.��� As used in this section,
"cost of living" means the CPI as defined in section 3 of P.L.2007,
c.260 (C.18A:7F-45).

���� a.���� Within 30 days
following the approval of the Educational Adequacy Report, the commissioner
shall notify each district of the base per pupil amount, the per pupil amounts
for full-day preschool, the weights for grade level, county vocational school
districts, at-risk pupils, bilingual pupils, and combination pupils, the cost
coefficients for security aid and for transportation aid,
[
the State
average classification rate and
]

the excess cost for general special education services pupils,
[
the State
average classification rate and
]

the excess cost for speech-only pupils, and the geographic cost adjustment for
each of the school years to which the report is applicable.

���� Annually, within two days
following the transmittal of the State budget message to the Legislature by the
Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), the
commissioner shall notify each district of the maximum amount of aid payable to
the district in the succeeding school year pursuant to the provisions of
P.L.2007, c.260 (C.18A:7F-43 et al.), and shall notify each district of the
district's adequacy budget for the succeeding school year.

���� For the 2008-2009 school year
and thereafter, unless otherwise specified within P.L.2007, c.260 (C.18A:7F-43
et al.), aid amounts payable for the budget year shall be based on budget year
pupil counts, which shall be projected by the commissioner using data from
prior years.� Adjustments for the actual pupil counts of the budget year shall
be made to State aid amounts payable during the school year succeeding the
budget year.� Additional amounts payable shall be reflected as revenue and an
account receivable for the budget year.

���� Notwithstanding any other
provision of this act to the contrary, each district's State aid payable for
the 2008-2009 school year, with the exception of aid for school facilities
projects, shall be based on simulations employing the various formulas and State
aid amounts contained in P.L.2007, c.260 (C.18A:7F-43 et al.).� The
commissioner shall prepare a report dated December 12, 2007 reflecting the
State aid amounts payable by category for each district and shall submit the
report to the Legislature prior to the adoption of P.L.2007, c.260 (C.18A:7F-43
et al.).� Except as otherwise provided pursuant to this subsection and
paragraph (3) of subsection d. of section 5 of P.L.2007, c.260 (C.18A:7F-47),
the amounts contained in the commissioner's report shall be the final amounts
payable and shall not be subsequently adjusted other than to reflect the
phase-in of the required general fund local levy pursuant to paragraph (4) of
subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58) and to reflect
school choice aid to which a district may be entitled pursuant to section 20 of
that act. The projected pupil counts and equalized valuations used for the
calculation of State aid shall also be used for the calculation of adequacy
budget, local share, and required local share.� For 2008-2009, extraordinary
special education State aid shall be included as a projected amount in the
commissioner's report dated December 12, 2007 pending the final approval of
applications for the aid.� If the actual award of extraordinary special
education State aid is greater than the projected amount, the district shall
receive the increase in the aid payable in the subsequent school year pursuant
to the provisions of subsection c. of section 13 of P.L.2007, c.260
(C.18A:7F-55).� If the actual award of extraordinary special education State
aid is less than the projected amount, other State aid categories shall be
adjusted accordingly so that the district shall not receive less State aid than
as provided in accordance with the provisions of sections 5 and 16 of P.L.2007,
c.260 (C.18A:7F-47 and C.18A:7F-58).

���� In the event that the
commissioner determines, following the enactment of P.L.2007, c.260
(C.18A:7F-43 et al.) but prior to the issuance of State aid notices for the
2008-2009 school year, that a significant district-specific change in data
warrants an increase in State aid for that district, the commissioner may
adjust the State aid amount provided for the district in the December 12, 2007
report to reflect the increase.

���� b.��� Each district shall have
a required local share.� For districts that receive educational adequacy aid
pursuant to subsection b. of section 16 of P.L.2007, c.260 (C.18A:7F-58), the
required local share shall be calculated in accordance with the provisions of
that subsection.

���� For all other districts, the
required local share shall equal the lesser of the local share calculated at
the district's adequacy budget pursuant to section 9 of P.L.2007, c.260
(C.18A:7F-51), or the district's budgeted local share for the prebudget year.

���� In order to meet this
requirement, each district shall raise a general fund tax levy which equals its
required local share.

���� No municipal governing body or
bodies or board of school estimate, as appropriate, shall certify a general
fund tax levy which does not meet the required local share provisions of this
section.

���� c.���� Annually, on or before
March 4, or on or before March 20 in the case of a school district with an
annual school election in November, each district board of education shall
adopt, and submit to the commissioner for approval, together with such
supporting documentation as the commissioner may prescribe, a budget that
provides for a thorough and efficient education. Notwithstanding the provisions
of this subsection to the contrary, the commissioner may adjust the date for
the submission of district budgets if the commissioner determines that the
availability of preliminary aid numbers for the subsequent school year warrants
such adjustment.

���� Notwithstanding any provision
of this section to the contrary, for the 2005-2006 school year each district
board of education shall submit a proposed budget in which the advertised per
pupil administrative costs do not exceed the lower of the following:

���� (1)�� the district's
advertised per pupil administrative costs for the 2004-2005 school year
inflated by the cost of living or 2.5 percent, whichever is greater; or

���� (2)�� the per pupil
administrative cost limits for the district's region as determined by the
commissioner based on audited expenditures for the 2003-2004 school year.

���� The executive county
superintendent of schools may disapprove the school district's 2005-2006
proposed budget if he determines that the district has not implemented all
potential efficiencies in the administrative operations of the district.� The
executive county superintendent shall work with each school district in the
county during the 2004-2005 school year to identify administrative
inefficiencies in the operations of the district that might cause the
superintendent to reject the district's proposed 2005-2006 school year budget.

���� For the 2006-2007 school year
and each school year thereafter, each district board of education shall submit
a proposed budget in which the advertised per pupil administrative costs do not
exceed the lower of the following:

���� (1)�� the district's prior
year per pupil administrative costs; except that the district may submit a
request to the commissioner for approval to exceed the district's prior year
per pupil administrative costs due to increases in enrollment, administrative
positions necessary as a result of mandated programs, administrative vacancies,
nondiscretionary fixed costs, and such other items as defined in accordance
with regulations adopted pursuant to section 7 of P.L.2004, c.73.� In the event
that the commissioner approves a district's request to exceed its prior year
per pupil administrative costs, the increase authorized by the commissioner
shall not exceed the cost of living or 2.5 percent, whichever is greater; or

���� (2)�� the prior year per pupil
administrative cost limits for the district's region inflated by the cost of
living or 2.5 percent, whichever is greater.

���� d.��� (1) A district's general
fund tax levy shall not exceed the district's adjusted tax levy as calculated
pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39).

���� (2)�� (Deleted by amendment,
P.L.2007, c.260).

���� (3)�� (Deleted by amendment,
P.L.2007, c.260).

���� (4)�� Any debt service payment
made by a school district during the budget year shall not be included in the
calculation of the district's adjusted tax levy.

���� (5)�� (Deleted by amendment,
P.L.2007, c.260).

���� (6)�� (Deleted by amendment,
P.L.2007, c.260).

���� (7)�� (Deleted by amendment,
P.L.2004, c.73).

���� (8)�� (Deleted by amendment,
P.L.2010, c.44)

���� (9)�� Any district may submit
at the annual school budget election, in accordance with subsection c. of
section 4 of P.L.2007, c.62 (C.18A:7F-39), a separate proposal or proposals for
additional funds, including interpretive statements, specifically identifying
the program purposes for which the proposed funds shall be used, to the voters,
who may, by voter approval, authorize the raising of an additional general fund
tax levy for such purposes.� In the case of a district with a board of school
estimate, one proposal for the additional spending shall be submitted to the
board of school estimate. Any proposal or proposals submitted to the voters or
the board of school estimate shall not: include any programs and services that
were included in the district's prebudget year net budget unless the proposal
is approved by the commissioner upon submission by the district of sufficient
reason for an exemption to this requirement; or include any new programs and
services necessary for students to achieve the thoroughness standards
established pursuant to subsection a. of section 4 of P.L.2007, c.260
(C.18A:7F-46).

���� A district without a board of
school estimate may also submit to the voters at a special election authorized
pursuant to section 2 of P.L.1995, c.278 (C.19:60-2), a separate proposal or
proposals for additional funds for the subsequent budget year, including
interpretive statements, specifically identifying the program purposes for
which the proposed funds shall be used.� A proposal submitted at a special
election shall comply with the requirements of this paragraph and section 4 of
P.L.2007, c.62 (C.18A:7F-39).� A separate proposal or proposals for additional
funds may only be submitted on a date of a special election once during a
school year.� Nothing in this paragraph shall be construed to prohibit the
submission to the voters of a question or questions for the approval of a
capital project or projects on the same special election date as the submission
of a separate proposal or proposals for additional funds.

���� The executive county
superintendent of schools may prohibit the submission of a separate proposal or
proposals to the voters or board of school estimate if he determines that the
district has not implemented all potential efficiencies in the administrative
operations of the district, which efficiencies would eliminate the need for the
raising of an additional general fund tax levy.

���� (10) Notwithstanding any
provision of law to the contrary, if a district proposes a budget with a
general fund tax levy and equalization aid which exceed the adequacy budget,
the following statement shall be published in the legal notice of public hearing
on the budget pursuant to N.J.S.18A:22-28, and posted at the public hearing
held on the budget pursuant to N.J.S.18A:22-29:

���� "Your school district has
proposed programs and services in addition to the core curriculum content
standards adopted by the State Board of Education.� Information on this budget
and the programs and services it provides is available from your local school
district."

���� (11) Any reduction that may be
required to be made to programs and services included in a district's prebudget
year net budget in order for the district to limit the growth in its budget
between the prebudget and budget years by its tax levy growth limitation as
calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and
18A:7F-39), shall only include reductions to excessive administration or
programs and services that are inefficient or ineffective.

���� e. (1)� In the case of a
district having a board of school estimate, other than a Type II district with
a board of school estimate, which has a proposed budget that includes a general
fund tax levy and equalization aid in excess of the adequacy budget, the
general fund tax levy shall be submitted to the board for determination of the
amount that should be expended.� If the board of school estimate reduces the
district's proposed budget, the district may appeal any of the reductions to
the commissioner on the grounds that the reductions will negatively impact on
the stability of the district given the need for long term planning and
budgeting.� In considering the appeal, the commissioner shall consider
enrollment increases or decreases within the district; the impact on the local
levy; and whether the reductions will impact on the ability of the district to
fulfill its contractual obligations.� A district may not appeal any reductions
on the grounds that the amount is necessary for a thorough and efficient education.

���� (2)�� � In the case of a
district having a board of school estimate, other than a Type II district with
a board of school estimate, which has a proposed budget that includes a general
fund tax levy and equalization aid at or below the adequacy budget, the general
fund tax levy shall be submitted to the board for determination.� Any
reductions may be appealed to the commissioner on the grounds that the amount
is necessary for a thorough and efficient education or that the reductions will
negatively impact on the stability of the district given the need for long term
planning and budgeting.� In considering the appeal, the commissioner shall also
consider the factors outlined in paragraph (1) of this subsection.

���� In addition, the board of
school estimate shall be required to demonstrate clearly to the commissioner
that the proposed budget reductions shall not adversely affect the ability of
the school district to provide a thorough and efficient education or the stability
of the district given the need for long term planning and budgeting.

���� (3)�� In lieu of any budget
reduction appeal provided for pursuant to paragraphs (1) and (2) of this
subsection, the State board may establish pursuant to the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), an expedited budget
review process based on a district's application to the commissioner for an
order to restore a budget reduction.

���� (4)�� When the board of
education or the board of school estimate authorize the general fund tax levy,
the district shall submit the resulting budget to the commissioner within 15
days of the authorization.

���� f.���� (Deleted by amendment,
P.L.2007, c.260).

���� g.��� (Deleted by amendment,
P.L.2007, c.260).

(cf: P.L.2024, c.60, s.1)

���� 2.��� (New section) Beginning
with the first full school year following the date of enactment of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill) and each
school year thereafter, the Department of Education shall annually, within two
days following the transmittal of the State budget message to the Legislature
by the Governor pursuant to section 11 of P.L.1944, c.112 (C.52:27B-20), make
publicly available on the department�s Internet website the calculation of each
category of aid payable to each school district in the succeeding year pursuant
to the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.).� The calculations
shall be written in a user-friendly manner and shall include, at a minimum,
explanations of the variables used to determine the district�s aid.

�����
3.� Section 2 of
P.L.2007, c.260 (C.18A:7F-44) is amended to read as follows:

���� 2.��� The Legislature finds
and declares that:

���� a.���� The Constitution of the
State of New Jersey states that the Legislature shall provide for the
maintenance and support of a thorough and efficient system of free public
schools for the instruction of all children in the State between the ages of
five and eighteen years.� (N.J. Const. art. VIII, sec. 4, par.1).

���� b.��� The State, in addition
to any constitutional mandates, has a moral obligation to ensure that New
Jersey's children, wherever they reside, are provided the skills and knowledge
necessary to succeed.� Any school funding formula should provide resources in a
manner that optimizes the likelihood that children will receive an education
that will make them productive members of society.

���� c.���� Although the Supreme
Court of New Jersey has held that prior school funding statutes did not
establish a system of public education that was thorough and efficient as to
certain districts, the Court has consistently held that the Legislature has the
responsibility to substantively define what constitutes a thorough and
efficient system of education responsive to that constitutional requirement.

���� d.��� Every child in New
Jersey must have an opportunity for an education based on academic standards
that satisfy constitutional requirements regardless of where the child resides,
and public funds allocated to this purpose must be expended to support schools
that are thorough and efficient in delivering those educational standards.� In
turn, school districts must be assured the financial support necessary to
provide those constitutionally compelled educational standards.� Any school
funding formula should provide State aid for every school district based on the
characteristics of the student population and up-to-date measures of the
individual district's ability to pay.

���� e.���� New Jersey's current
public school funding formula, established under the provisions of the
"Comprehensive Educational Improvement and Financing Act of 1996,"
(CEIFA) P.L.1996, c.138, has not been used to calculate State aid for public
schools since the 2001-02 school year.� Any new school funding formula should
account for changes in enrollment and other significant developments, providing
relief to those districts that have experienced substantial enrollment
increases.

���� f.���� The decisions in the
Abbott cases have resulted in frequent litigation and a fragmented system of
funding under which limited resources cannot be distributed equitably to all
districts where at-risk children reside, instead dividing the districts sharply
into Abbott and non-Abbott categories for funding purposes without regard to a
district's particular pupil characteristics and leading to needlessly
adversarial relationships among school districts and between districts and the
State.�

���� g.��� In the absence of a
clear, unitary, enforceable statutory formula to govern appropriations for
education, crucial funding decisions are made annually, in competition for
limited State resources with other needs and requirements as part of the annual
budget negotiation process, utilizing many different classes and categories of
aid, leading to an uncertain, unpredictable, and untenable funding situation
for the State and school districts alike.�

���� h.��� This act represents the
culmination of five years of diligent efforts by both the Executive and
Legislative branches of State government to develop an equitable and
predictable way to distribute State aid that addresses the deficiencies found
in past formulas as identified by the Supreme Court.� Working together toward
this common goal, the Department of Education and the Legislature engaged
nationally recognized experts in education funding and provided significant
opportunities for stakeholder involvement and public input to assist in
formulating and refining a comprehensive school funding model that has been
validated by experts.� The formula accounts for the individual characteristics
of school districts and the realities of their surroundings, including the need
for additional resources to address the increased disadvantages created by high
concentrations of children at-risk.

���� i.���� The formula established
under this act is the product of a careful and deliberative process that first
involved determining the educational inputs necessary to provide a high-quality
education, including specifically addressing the supplemental needs of at-risk
students and those with limited English proficiency (LEP), and a determination
of the actual cost of providing those programs.� The formula provides adequate
funding that is realistically geared to the core curriculum content standards,
thus linking those standards to the actual funding needed to deliver that
content.

���� j.���� In recognition of the
unique problems and cost disadvantages faced by districts with high
concentrations of at-risk students, it is appropriate to reflect in the formula
a greater weight as the district's proportion of at-risk students increases.�
In addition, the new formula recognizes the disadvantages of an expanded group
of students by including in the definition of at-risk those students who
qualify for free or reduced-price lunch.� Expanding the definition of at-risk
students in this manner will significantly increase the resources flowing to
districts with high concentrations of these low-income students.

���� k.��� In light of the
demonstrable, beneficial results and success of the current Abbott preschool
program, it is appropriate to build upon this success by incorporating in the
formula an expanded high-quality preschool program for all children who qualify
for free and reduced price meals in all districts.� It is appropriate for the
formula to acknowledge that at-risk children do not always receive the same
educational exposure at an early age as their peers and to provide the
additional resources necessary through high-quality preschool to prepare every
child to learn and succeed.

���� l.���� It is appropriate to
reflect in this formula the inherent value of educating a child in the least
restrictive environment and, whenever possible, in that child's neighborhood
school alongside his peers.� The new funding formula should provide incentives for
keeping classified students in district.

���� m.�� It is also appropriate to
recognize in the formula the need for all schools to incorporate effective
security measures, which may vary from district to district depending upon the
at-risk student population and other factors, and to provide categorical funding
to address these important requirements.

���� n.���
[
In recognition
of the potentially wide variability in special education costs, even for the
same category of disability, from district to district, it is appropriate for
the new funding formula to mitigate the impact of that variability by
establishing a census model based on the actual Statewide average excess cost
of educating special education students and by providing for an increase in
State aid for extraordinary costs incurred by districts.
]

(Deleted
by amendment, P.L.��� , c.�� ) (pending before the Legislature as this bill)

���� o.��� It is imperative that
any new school funding formula work in conjunction with the key school
accountability measures that have been enacted in recent years to promote
greater oversight, transparency, and efficiency in the delivery of educational
services.� These accountability measures include the New Jersey Quality Single
Accountability Continuum, the "School District Fiscal Accountability
Act," P.L.2006, c.15 (C.18A:7A-54 et seq.), P.L.2007, c.63 (C.40A:65-1 et
al.) which established the duties and responsibilities of the executive county
superintendent of schools, and P.L.2007, c.53 (C.18A:55-3 et al.).

���� p.��� Together with a renewed
legislative focus on and commitment to providing sufficient means to maintain
and support a high-quality system of free public schools in the State, a new
funding formula supported by significantly increased State resources will ensure
compliance with all statutory and constitutional mandates.� Districts that were
formerly designated as Abbott districts will be provided sufficient resources
to continue those Court-identified programs, positions, and services that have
proven effective while being provided the flexibility to shift resources and
programmatic focus based on the needs of their students and current research.�

���� q.��� The time has come for
the State to resolve the question of the level of funding required to provide a
thorough and efficient system of education for all New Jersey school children.�
The development and implementation of an equitable and adequate school funding
formula will not only ensure that the State's students have access to a
constitutional education as defined by the core curriculum content standards,
but also may help to reduce property taxes and assist communities in planning
to meet their educational expenses.� The development of a predictable,
transparent school funding formula is essential for school districts to plan
effectively and deliver the quality education that our citizens expect and our
Constitution requires.

(cf: P.L.2007, c.260, s.2)

���� 4.��� Section 4 of P.L.2007,
c.260 (C.18A:7F-46) is amended to read as follows:

���� 4.��� a.� The State Board of
Education shall review and update the core curriculum content standards every
five years.� The standards shall ensure that all children are provided the
educational opportunity needed to equip them for the role of citizen and labor
market competitor.

���� The Commissioner of Education
shall develop and establish, through the report issued pursuant to subsection
b. of this section, efficiency standards which define the types of programs,
services, activities, and materials necessary to achieve a thorough and
efficient education.

���� b.��� By September 1 of 2010
and by September 1 every three years thereafter, the Governor, after
consultation with the commissioner, shall recommend to the Legislature through
the issuance of the Educational Adequacy Report for the three school years to
which the report is applicable
revisions to
:

���� (1)�� the base per pupil
amount based upon the core curriculum content standards established pursuant to
subsection a. of this section;

���� (2)�� the per pupil amounts
for full-day preschool;

���� (3)�� the weights for grade
level, county vocational school districts, at-risk pupils, bilingual pupils,
and combination pupils;

���� (4)�� the cost coefficients
for security aid and transportation aid;

���� (5)��
[
the State
average classification rate for general special education services pupils and
for speech-only pupils;
]

(Deleted by amendment, P.L.��� , c.�� )�� (pending before the Legislature as
this bill)

���� (6)�� the excess cost for
general special education services pupils and for speech-only pupils;
[
and
]

���� (7)�� the extraordinary
special education aid thresholds
established pursuant to subsection b. of
section 13 of P.L.2007, c.260 (C.18A:7F-55);

����
(8)�� the equalized total
tax rate and adequacy spending thresholds to be used for the purposes of
determining whether� a school district shall be exempt from a reduction in
State school aid pursuant to section 10 of P.L.��� , c.���� (C.������� )
(pending before the Legislature as this bill); and

����
(9)�� if deemed
appropriate, the use of inflationary measures, other than the CPI, to adjust
the base per pupil amount, the per pupil amounts for full-day preschool, the
excess costs for general special education services pupils and for speech-only
pupils, or the cost-coefficients for security aid and transportation aid,
provided that the recommended inflationary measures are equal to or greater
than the CPI, are recognized, evidence-based measures of cost change for the
type of good or service, and have been disclosed in the Educational Adequacy
Report
.

���� The base per pupil amount, the
per pupil amounts for full-day preschool, the excess costs for general special
education services pupils and for speech-only pupils, and the cost-coefficients
for security aid and transportation aid shall be adjusted by the CPI
, or
other inflationary measures disclosed in the most recently issued Educational
Adequacy Report,
for each of the two school years following the first
school year to which the report is applicable.

���� The amounts
published in
the final version of the Educational Adequacy Report issued pursuant to this
subsection
shall be deemed approved for the three successive fiscal years
beginning from the subsequent July 1, unless between the date of transmittal
and the subsequent November 30, the Legislature adopts a concurrent resolution
stating that the Legislature is not in agreement with all or any specific part
of the report.� The concurrent resolution shall advise the Governor of the
Legislature's specific objections to the report and shall direct the
commissioner to submit to the Legislature a revised report which responds to
those objections by January 1.

����
c.���� The Educational
Adequacy Report issued pursuant to subsection b. of this section may also
include a commissioner-initiated review of any other element, variable, or
metric used to determine allocations of State school aid pursuant to P.L.2007,
c.260 (C.18A:7F-43 et al.).� The commissioner shall publicly announce the
intent to conduct a review pursuant to this subsection at the time that the
decision to conduct the review is made and prior to initiating the review.� An
element, variable, or metric that is the subject of a commissioner-initiated
review pursuant to this subsection shall not be decreased pursuant to the
review.

����
During a year in which the
report required pursuant subsection b. of this section is to be issued, the
commissioner shall make a draft of the report available for public comment for a
period of no less than 30 days.�

����
During the public comment
period, the commissioner shall ensure that members of the public are afforded
the opportunity to provide remarks on, and recommend revisions to, the draft
report at public hearings to be held at various locations across the State, as
well as through the submission of written and electronic testimony.���

����
After consideration of
comments received through the public comment period, the commissioner shall
issue a final version of the report.
�

(cf: P.L.2007, c.260, s.4)

�����
5. �� Section 9 of
P.L.2007, c.260 (C.18A:7F-51) is amended to read as follows:

���� 9.��� a.� The adequacy budget
for each school district and county vocational school district shall be
calculated as follows:

���� AB = (BC + AR Cost + LEP Cost
+ COMB Cost +
[
SE
Census
]
SE
Cost
) x GCA

where

���� BC is the district's or county
vocational school district's base cost as calculated pursuant to section 8 of
this act;

���� AR Cost is the cost of
providing educational and other services for at-risk pupils as calculated
pursuant to subsection b. of this section;

���� LEP Cost is the cost of
providing educational and other services for bilingual education pupils as
calculated pursuant to subsection c. of this section;

���� COMB Cost is the cost of
providing educational and other services for pupils who are both at-risk and
bilingual as calculated pursuant to subsection d. of this section;

����
[
SE Census
]

SE Cost

is the cost of providing programs and services to general special education
services pupils and speech-only pupils as calculated pursuant to subsection e.
of this section; and

���� GCA is geographic cost
adjustment.

���� The GCA shall be the
geographic cost adjustment developed by the commissioner and revised by the
commissioner every five years in accordance with receipt of census data.

���� b.��� AR Cost shall be
calculated as follows:

���� AR Cost = BPA x ARWENR x AR
Weight

where�

���� BPA is the base per pupil
amount;

���� ARWENR is the weighted
enrollment for at-risk pupils of the school district or county vocational
school district, which shall not include combination pupils; and

���� AR Weight is the at-risk
weight.

���� For the 2008-2009 through
2010-2011 school years the at-risk weight shall be as follows:

���� for a district in which the
concentration of at-risk pupils is less than
[
20%
]

20 percent

of resident enrollment, the at-risk weight shall equal 0.47;

���� for a district in which the
concentration of at-risk pupils is equal to
[
20%
]

20 percent

but less than
[
60%
]

60 percent

of resident enrollment, the at-risk weight shall equal the district's ((at-risk
% - 0.20) x 0.25)) + 0.47; and

���� for a district in which the
concentration of at-risk pupils is equal to or greater than
[
60%
]

60 percent

of resident enrollment, the at-risk weight shall equal 0.57.

���� For subsequent school years,
the AR weight shall be established in the Educational Adequacy Report.

���� c.���� LEP Cost shall be
calculated as follows:

���� LEP Cost = BPA x LWENR x LEP
Weight

where

���� BPA is the base per pupil
amount;

���� LWENR is the weighted
enrollment for the bilingual education pupils of the school district or county
vocational school district, which shall not include combination pupils; and

���� LEP Weight is the bilingual
pupil weight.

For the 2008-2009 through 2010-2011
school years the LEP weight shall be 0.5.� For subsequent school years, the LEP
weight shall be established in the Educational Adequacy Report.

���� d.��� COMB Cost shall be
calculated as follows:

���� COMB Cost = BPA x CWENR x (AR
Weight + COMB Weight)

where

���� BPA is the base per pupil
amount;

���� CWENR is the weighted
enrollment for pupils who are both at-risk and bilingual;

���� AR Weight is the at-risk
weight; and

���� COMB Weight is the combination
pupil weight.

���� For the 2008-2009 through
2010-2011 school years the COMB weight shall be 0.125.� For subsequent school
years, the COMB weight shall be established in the Educational Adequacy Report.

���� e.����
[
SE Census
]

SE Cost

shall be calculated as follows:

����
[
SE Census
]

SE Cost

= (
[
RE
x SEACR
]

SEENR
x AEC x 2/3) + (
[
RE
x SACR
]

SPEONLY
x SEC)

where

����
[
RE is the resident enrollment of
the school district or county vocational school district;

���� SEACR is the State average
classification rate for general special education services pupils
]

����
SEENR is the number of
general special education services pupils included in the school district�s or
county vocational school district�s resident enrollment
;

���� AEC is the excess cost for
general special education services pupils;

����
[
SACR is the State average
classification rate for speech-only pupils
]

����
SPEONLY is the number of
speech-only pupils included in the school district�s or county vocational
school district�s resident enrollment
; and

���� SEC is the excess cost for
speech-only pupils.

����
[
For the 2008-2009 through
2010-2011 school years the State average classification rate shall be 14.69%
for general special education services pupils and 1.897% for speech-only
pupils.� For subsequent school years, the State average classification rates shall
be established in the Educational Adequacy Report.
]

���� For the 2008-2009 school year
the excess cost shall be $10,898 for general special education services pupils
and $1,082 for speech-only pupils.� The excess cost amounts shall be adjusted
by the CPI in the 2009-2010 and 2010-2011 school years as required pursuant to
subsection b. of section 4 of this act.� For subsequent school years, the
excess cost amounts shall be established in the Educational Adequacy Report,
with the amounts adjusted by the CPI for each of the two school years following
the first school year to which the report is applicable.

(cf: P.L.2007, c.260, s.9)

���� 6.��� Section 13 of P.L.2007,
c.260 (C.18A:7F-55) is amended to read as follows:

���� 13.� a.� Special education
categorical aid for each school district and county vocational school district
shall be calculated as follows:�

���� SE = (
[
RE x SEACR
]

SEENR

x AEC x 1/3) x GCA

where

����
[
RE is the resident enrollment of
the school district or county vocational school district;

���� SEACR is the State average
classification rate for general special education services pupils
]

����
SEENR is the number of
general special education services pupils included in the school district�s or
county vocational school district�s resident enrollment
;

���� AEC is the excess cost for
general special education services pupils; and

���� GCA is the geographic cost
adjustment as developed by the commissioner.

For the 2008-2009 school year the
excess cost shall be $10,898 for general special education services pupils.�
The excess cost amount shall be adjusted by the CPI in the 2009-2010 and
2010-2011 school years as required pursuant to subsection b. of section 4 of
[
this act
]

P.L.2007,
c.260 (C.18A:7F-46)
.� For subsequent school years, the excess cost amount
shall be established in the Educational Adequacy Report, with the amount
adjusted by the CPI for each of the two school years following the first school
year to which the report is applicable.

���� b.��� Extraordinary special
education aid for an individual classified pupil shall be available when the
student is educated in a general education classroom, special education
program, including but not limited to a resource program or special class
program, or any combination of general education and special education programs
and services, subject to the requirements and thresholds set forth in this
section.

���� (1)�� In those instances in
which a pupil is educated in an in-district public school program with
non-disabled peers, whether run by a public school or by a private school for
the disabled, and the cost of providing direct instructional and support
services for an individual classified pupil exceeds $40,000, for those direct
instructional and support services costs in excess of $40,000 a district shall
receive extraordinary special education State aid equal to
[
90%
]

90 percent

of the amount of that excess in accordance with the provisions of paragraph (4)
of this subsection.

���� (2)�� In those instances in
which a pupil is educated in a separate public school program for students with
disabilities and the cost of providing direct instructional and support
services for an individual classified pupil exceeds $40,000, for those direct
instructional and support services costs in excess of $40,000 a district shall
receive extraordinary special education State aid equal to
[
75%
]

75 percent

of the amount of that excess in accordance with the provisions of paragraph (4)
of this subsection.

���� (3)�� In those instances in
which a pupil is educated in a separate private school for students with
disabilities and the tuition for an individual classified pupil exceeds
$55,000, for tuition costs in excess of $55,000 a district shall receive
extraordinary special education State aid equal to
[
75%
]

75 percent
of the amount
of that excess in accordance with the provisions of paragraph (4) of this
subsection.

���� (4)�� Extraordinary special
education State aid for an individual classified pupil shall be calculated as
follows:

���� EA = ((ADC -

$40,000) x
.90) + (((AIC - $40,000) + (ASC - $55,000)) x .75)

where

���� ADC equals the district's
actual cost for the direct instructional and support services in an in-district
public school program as set forth in paragraph (1) of this subsection;

���� AIC equals the district's
actual cost for direct instructional and support services in a separate public
school program as set forth in paragraph (2) of this subsection; and

���� ASC equals the district's
actual cost for tuition paid to a separate private school as set forth in
paragraph (3) of this subsection.

���� (5)�� The receipt of
extraordinary special education State aid for an individual classified pupil
shall be conditioned upon a demonstration by the district that the pupil's
Individualized Education Plan requires the provision of intensive services,
pursuant to factors determined by the commissioner.

���� c.���� In order to receive
funding pursuant to this section, a district shall file an application with the
department that details the expenses incurred on behalf of the particular
classified pupil for which the district is seeking reimbursement.� Additional
State aid awarded for extraordinary special education costs shall be recorded
by the district as revenue in the current school year and paid to the district
in the subsequent school year.

���� d.��� A school district may
apply to the commissioner to receive emergency special education aid for any
classified pupil who enrolls in the district prior to March of the budget year
and who is in a placement with a cost in excess of
[
$40,000 or $55,000, as applicable
]
the
applicable extraordinary special education aid thresholds enumerated in
subsection b. of this section
.� The commissioner may debit from the
student's former district of residence any special education aid which was paid
to that district on behalf of the student.

���� e.���� The department shall
review expenditures of federal and State special education aid by a district in
every instance in which special education monitoring identifies a failure on
the part of the district to provide services consistent with a pupil's Individualized
Education Plan.

���� f.����
[
The
commissioner shall commission an independent study of the special education
census funding methodology to determine if adjustments in the special education
funding formulas are needed in future years to address the variations in
incidence of students with severe disabilities requiring high cost programs and
to make recommendations for any such adjustments.� The study and
recommendations shall be completed by June 30, 2010.
]

(Deleted by amendment,
P.L.��� , c.���� ) (pending before the Legislature as this bill)

���� g.���
[
A school
district may apply to the commissioner to receive additional special education
categorical aid if the district has an unusually high rate of low-incidence
disabilities, such as autism, deaf/blindness, severe cognitive impairment, and
medically fragile.� In applying for the aid the district shall: demonstrate the
impact of the unusually high rate of low-incidence disabilities on the school
district budget and the extent to which the costs to the district are not
sufficiently addressed through special education aid and extraordinary special
education aid; and provide details of all special education expenditures,
including details on the use of federal funds to support those expenditures.
]

(Deleted
by amendment, P.L.��� , c.���� ) (pending before the Legislature as this bill)

����
h.��� Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, the amount of
extraordinary special education aid appropriated in the annual appropriations
act shall increase compared to the amount appropriated in the previous fiscal year
or otherwise be appropriated in a manner to ensure that the percentage of a
school district�s costs reimbursed through extraordinary special education aid
increases compared to the previous fiscal year.

����
i.���� Notwithstanding the
provisions of any law, rule, or regulation to the contrary, the amount of
extraordinary special education aid received by a district pursuant to this
section shall not be included in the calculation of a district�s tax levy
growth limitation pursuant to section 3 of P.L.2007, c.62 (C.18A:7F-38).

(cf: P.L.2007, c.260, s.13)

���� 7.� Section 4 of P.L.2018,
c.67 (C.18A:7F-68) is amended to read as follows:

���� 4.� a.� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the
contrary, in the 2019-2020 through 2024-2025 school years, a school district or
county vocational school district in which the State aid differential calculated
is negative shall receive State school aid in an amount equal to the sum of the
district's State aid in the prior school year plus the district's proportionate
share of the sum of any increase in State aid included in the annual
appropriations act for that fiscal year and the total State aid reduction
pursuant to subsection b. of this section based on the district's State aid
differential as a percent of the Statewide total State aid differential among
all school districts and county vocational school districts for which the State
aid differential is negative.� Any increase in State aid pursuant to this
subsection shall first be allocated to equalization aid, followed by special
education categorical aid, security categorical aid, and transportation aid,
except that no category shall exceed the total amount as calculated in
accordance with the provisions of sections 11, 13, 14, and 15 of P.L.2007,
c.260 (C.18A:7F-53, C.18A:7F-55, C.18A:7F-56, and C.18A:7F-57), respectively.

���� b.��� Except as provided
pursuant to subsection c. of this section, and notwithstanding the provisions
of P.L.2007, c.260 (C.18A:7F-43 et al.) or any other law to the contrary, in
the 2019-2020 through 2024-2025 school years, a school district or county
vocational school district in which the State aid differential is positive
shall receive State school aid in an amount equal to the district's State aid
in the prior school year minus a percent of the State aid differential
according to the following schedule:

���� (1)� 13 percent in the 2019-2020 school year;

���� (2)� 23 percent in the
2020-2021 school year;

���� (3)� 37 percent in the
2021-2022 school year;

���� (4)� 55 percent in the
2022-2023 school year;

���� (5)� 76 percent in the
2023-2024 school year; and

���� (6)� 100 percent in the
2024-2025 school year.

���� c.� (1)� An SDA district that
is located in a municipality in which the equalized total tax rate is greater
than the Statewide average equalized total tax rate for the most recent
available calendar year and is spending below adequacy as calculated pursuant
to section 1 of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a
reduction in State aid pursuant to subsection b. of this section.

���� (2)� An SDA district that is
located in a municipality in which the equalized total tax rate is greater than
the Statewide average equalized total tax rate for the most recent available
calendar year and is spending above adequacy as calculated pursuant to section
1 of P.L.2018, c.67 (C.18A:7F-70) shall be subject to a reduction not to exceed
the amount by which the district is spending above adequacy multiplied by the
corresponding percentage included in subsection b. of this section.

���� (3)� A school district, other
than an SDA district, that is located in a municipality in which the equalized
total tax rate is at least 10 percent greater than the Statewide average
equalized total tax rate for the most recent available calendar year and is
spending at least 10 percent below adequacy as calculated pursuant to section 1
of P.L.2018, c.67 (C.18A:7F-70) shall not be subject to a reduction in State
aid pursuant to subsection b. of this section.

���� (4)�
[
A
]

Except as
provided in section 8 of
P.L. , c. (C. )
(pending before the Legislature as this bill), a
school district that is a
participating district under an application that is approved for a grant
pursuant to subsection a. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) or a
school district that is a participating district under an application that receives
preliminary approval pursuant to subsection b. of section 4 of P.L.2021, c.402
(C.18A:13-47.4) and that has a State aid differential that is positive may
elect to receive State school aid in an amount equal to the district's State
aid in the prior school year minus a percent of the State aid differential
according to the following schedule:

���� (a)� 30 percent in the
2021-2022 school year;

���� (b)� 37 percent in the
2022-2023 school year;

���� (c)� 46 percent in the
2023-2024 school year;

���� (d)� 55 percent in the
2024-2025 school year;

���� (e)� 65.5 percent in the
2025-2026 school year;

���� (f)� 76 percent in the
2026-2027 school year;

���� (g)� 88 percent in the
2027-2028 school year; and

���� (h)� 100 percent in the
2028-2029 school year.

���� A school district with a State
aid differential that is positive, which is a participating district under an
application that is approved for a grant pursuant to subsection a. of section 4
of P.L.2021, c.402 (C.18A:13-47.4) or that receives preliminary approval under
subsection b. of section 4 of P.L.2021, c.402 (C.18A:13-47.4) but has not
created or joined a limited purpose or all purpose regional school district
within two years following the grant application approval or preliminary
approval shall not be eligible to receive State aid according to the schedule
enumerated in this paragraph.

���� As used in this paragraph,
"participating district" means a school district whose board of
education by resolution certifies a commitment to participate in a feasibility
study submitted as part of an application under the grant program established
pursuant to section 2 of P.L.2021, c.402 (C.18A:13-47.2).

���� (5)� Notwithstanding the
provisions of section 32 of P.L.1996, c.138 (C.18A:7F-32) or any other law,
rule, or regulation to the contrary, a school district that is a regional
school district created following the approval of a grant application pursuant to
section 4 of P.L.2021, c.402 (C.18A:13-47.4) shall, from the first full school
year following the creation of the regional school district through the
2028-2029 school year, receive State school aid in an amount that is the
greater of:

���� (a)� the amount of State
school aid that the newly created regional school district would receive as a
regional school district; or

���� (b)� the sum of the amount of
State school aid received by each school district constituting the newly
created regional school district prior to the creation of such regional school
district.

���� (6)� A school district shall
not be not be subject to a reduction in State aid pursuant to this section
provided that:

���� (a)� the district is a
regional school district consisting of at least five constituent school
districts;

���� (b)� the district has
mitigated costs of regionalization, as determined by the Commissioner of
Education;

���� (c)� for the most recent
school year for which data is available, the district's administrative costs
per pupil are 15 percent lower than the Statewide average administrative costs
per pupil for regional school districts; and

���� (d)� the district's general
fund tax levy has been increased by the maximum amount permitted pursuant to
section 3 of P.L.2007, c.62 (C.18A:7F-38) in each of the last five school
years.

���� A school district that is
exempt from a reduction in State aid pursuant to paragraph (6) of subsection c.
of this section shall provide courtesy busing to pupils who reside in the
district, provided that the district was providing courtesy busing prior to the
school year in which it is exempt from a reduction in State aid.

���� d.��� Any decrease in State
aid pursuant to subsection b. or c. of this section shall first be deducted
from a school district's or county vocational school district's allotment of
adjustment aid.� Any additional reduction shall be deducted from the school district's
or county vocational school district's allotment of non-SFRA aids, followed by
equalization aid, special education categorical aid, security aid, and
transportation aid.

���� e.���� Any remaining
adjustment aid or non-SFRA aids shall be reallocated to other State aid
categories in a manner to be determined by the commissioner.

(cf: P.L.2023, c.140, s.1)

�����
8.� (New section)� a.�
As used in this section, �total operating budget� means the sum of a district�s
general fund revenues from local sources, State sources, federal sources, and
other sources.� Total operating budget shall not include withdrawals made by
the district from any reserve account established pursuant to section 6 of
P.L.2007, c.62 (C.18A:7F-41) or reimbursements paid to the district for
extraordinary special education aid pursuant to section 13 of P.L.2007, c.260
(C.18A:7F-55).�

���� b.� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67
et al.), or any other provision of law, rule, or regulation to the contrary,
and beginning with the first full school year following the date of enactment
of P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill)
and each school year thereafter, a school district shall receive an allocation
of reduction adjustment aid to ensure that the amount of State school aid
provided to a school district shall not be decreased by more than two percent
of the district�s prebudget year total operating budget. In no school year
shall a school district receive an amount of State school aid that has been
reduced from the amount of aid disbursed in the prebudget year by an amount
that exceeds two percent of the district�s prebudget year total operating
budget.

�����
9.� Section 5 of
P.L.2018, c.67 (C.18A:7F-69) is amended to read as follows:

���� 5.���
a.
� In the
2019-2020 school year, and in each school year thereafter, a county vocational
school district shall receive vocational expansion stabilization aid in such an
amount to ensure that the district receives the greater of the amount of State
aid calculated pursuant to the provisions of P.L.2018, c.67 (C.18A:7F-67 et
al.) or the sum of the district's State aid received in the 2017-2018 school
year.

����
b.� In the first full
school year following the date of enactment of P.L.��� , c.���� (C.������� )
(pending before the Legislature as this bill) and each school year thereafter,
the amount of vocational expansion stabilization aid (VESA) received by a
county vocational school district shall be adjusted to accommodate growth in
resident enrollment.� Provided that the difference between the projected
resident enrollment for the budget year and the resident enrollment in the
prebudget year is positive, the adjustment for resident enrollment shall be
calculated as follows:

����
VESA adjustment = ENRG x VA
x GCA

where

����
ENRG means the difference
between the projected resident enrollment for the budget year and the resident
enrollment in the prebudget year;

����
VA means the base per pupil
amount established pursuant to section 7 of P.L.2007, c.260 (C.18A:7F-49)
multiplied by 0.31; and

����
GCA is the geographic cost
adjustment as developed by the commissioner.

A county vocational school
district for which the difference between the projected resident enrollment for
the budget year and the resident enrollment in the prebudget year is less than
or equal to zero shall receive the amount of vocational expansion stabilization
aid determined pursuant to subsection a. of this section.� Nothing in this
section shall be construed as allowing a district�s allocation of vocational
expansion stabilization aid to be decreased from the amount of vocational
expansion stabilization aid received in the prebudget year.

(cf: P.L.2018, c.67, s.5)

���� 10.� (New section) a.
Notwithstanding the provisions of P.L.2007, c.260 (C.18A:7F-43 et al.),
P.L.2018, c.67 (C.18A:7F-67 et al.), or any other law, rule, or regulation to
the contrary, a school district, other than a regional school district, shall
not be subject to a reduction in State school aid in any school year, beginning
with the first full school year following the date of enactment of
P.L. , c. (C. )
(pending before the Legislature as this bill) and each school year thereafter,
if:

���� (1)�� in the case of an SDA
district, the district is located in a municipality in which the equalized
total tax rate is greater than the Statewide average equalized total tax rate
for the most recent available calendar year and the district is spending below adequacy
as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

���� (2)�� in the case of a school
district other than an SDA district, the district is located in a municipality
in which the equalized total tax rate is at least 10 percent greater than the
Statewide average equalized total tax rate for the most recent available calendar
year and is spending at least 10 percent below adequacy as calculated pursuant
to section 1 of P.L.2018, c.67 (C.18A:7F-70).

���� b.��� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67
et al.), or any other law, rule, or regulation to the contrary, a regional
school district shall not be subject to a reduction in State school aid in any school
year, beginning with the first full school year following the date of enactment
of P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill)
and each school year thereafter, if 50 percent or more of the constituent
districts or municipalities of the regional school district meet either of the
following criteria:

���� (1)�� in the case of an SDA
district, the district is located in a municipality in which the equalized
total tax rate is greater than the Statewide average equalized total tax rate
for the most recent available calendar year and the district is spending below adequacy
as calculated pursuant to section 1 of P.L.2018, c.67 (C.18A:7F-70); or

���� (2)�� in the case of a school
district other than an SDA district, the district is located in a municipality
in which the equalized total tax rate is at least 10 percent greater than the
Statewide average equalized total tax rate for the most recent available calendar
year and is spending at least 10 percent below adequacy as calculated pursuant
to section 1 of P.L.2018, c.67 (C.18A:7F-70).

���� c.���� Notwithstanding the
provisions of P.L.2007, c.260 (C.18A:7F-43 et al.), P.L.2018, c.67 (C.18A:7F-67
et al.), or any other law, rule, or regulation to the contrary, an SDA district
that is spending above adequacy as calculated pursuant to section 1 of P.L.2018,
c.67 (C.18A:7F-70) shall not be subject to a reduction in State aid that
exceeds the amount by which the district is spending above adequacy.

���� 11.� (New section)� In
developing the Educational Adequacy Report to be issued next following the date
of enactment of
P.L. , c. (C. )
(pending before the Legislature as this bill), the Commissioner of Education
shall engage a diverse group of stakeholders to review:

���� a.���� the calculation of
local share pursuant to section 10 of P.L.2007, c.260 (C.18A:7F-52) and whether
the metrics used in that calculation are best able to estimate a district�s
ability to pay for the costs of education through local revenue, in addition to
ensuring that the calculation of local share accurately assesses a district�s
ability to levy funds on the basis of residents� purchasing power;

���� b.��� the abilities of the
Department of Education and school districts to predict and anticipate State
school aid amounts from year to year;

���� c.���� possible methods of
improving upon the existing preschool funding methodology; and

���� d.��� possible adjustments to
deadlines pertaining to the development, submission, and adoption of school
district budgets.

���� The commissioner shall publish
a summary of the findings and recommendations resulting from the reviews in the
Educational Adequacy Report.

���� 12.� (New section)� a.� There
is established the Special Education Funding Review Task Force.� The purpose of
the task force shall be to assess the effectiveness of State aid provided to
support special education costs, examine the possibility of a tier-based model
for special education funding, make recommendations regarding the
implementation of a tier-based funding model, and provide recommendations for
responses to changes in revenues for special education purposes, including
federal revenues.

���� b.��� The task force shall
consist of 11 members, each of whom shall have a background in, or special
knowledge of, the legal, policy, and administrative aspects of special
education in New Jersey, as follows:

���� (1)�� one member appointed by
the President of the Senate;

���� (2)�� one member appointed by
the Speaker of the General Assembly;

���� (3)�� one member appointed by
the Governor;

���� (4)�� one representative from
the New Jersey Education Association;

���� (5)�� one representative from
the New Jersey Principals and Supervisors Association;

���� (6)�� one representative from
the New Jersey School Boards Association;

���� (7)�� one representative from
the New Jersey Association of School Administrators;

���� (8)�� one representative from
the Garden State Coalition of Schools;

���� (9)�� one representative from
the American Federation of Teachers;

���� (10)� one representative from
Great Schools of New Jersey; and

���� (11)� one representative from
the New Jersey Association of School Business Officials.

���� c.���� The appointments to the
task force shall be made within 30 days of the effective date of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill).� Vacancies
in the membership of the task force shall be filled in the same manner as the
original appointments were made.� Members of the task force shall serve without
compensation but shall be reimbursed for necessary expenditures incurred in the
performance of their duties as members of the task force within the limits of
funds appropriated or otherwise made available to the task force for its
purposes.

���� d.��� The task force shall
organize as soon as practicable, but no later than 30 days following the
appointment of its members.� The task force shall choose a chairperson from
among its members and shall appoint a secretary who need not be a member of the
task force.

���� e.���� The task force shall
hold meetings at the request of the chairperson and shall hold a minimum of
three public meetings, which shall each be held in the northern, central, and
southern regions of the State.� The meetings may take place in-person or through
remote means.� It shall be the purpose of the public meetings to seek input and
gather testimony on the effects of the State�s current method of funding the
costs of special education from education stakeholders including, but not
limited to, education finance experts, special education experts, school
leaders, school business officials, school board members, and members of the
public.

���� f.���� The Department of
Education shall provide stenographic, clerical, and other administrative
assistants, and such professional staff as the task force requires to carry out
its work.� The task force also shall be entitled to call to its assistance and
avail itself of the services of the employees of any State, county, or
municipal department, board, bureau, commission, or agency as it may require
and as may be available for its purposes.

���� 13.� (New section)� The
Special Education Funding Review Task Force established pursuant to section 12
of P.L.���� c.��� (C.������� ) (pending before the Legislature as this bill)
shall issue a final report detailing its findings and recommendations to the
Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), no later than one year after the organization of the task
force.� The report shall be posted in a prominent location on the Internet
website of the Department of Education.

���� 14.� Sections 1, 3, 5 through
7, and 10 of this act shall take effect immediately and shall first apply to
the first full school year following the date of enactment.� Sections 2, 8, 9,
and 11 through 13 of this act shall take effect immediately.� Section 4 of this
act shall take effect immediately and shall first apply to the Educational
Adequacy Report to be issued next following the date of enactment.� The Special
Education Funding Review Task Force shall expire 30 days after the issuance of
the report required pursuant to section 13 of this act.

STATEMENT

����� This bill makes various changes to special education
aid and the Educational Adequacy Report. The bill also establishes the Special
Education Funding Review Task Force.

����� The bill requires the Department of Education to make
available on the department�s Internet website the calculation of aid payable
to each school district in the succeeding year in a user-friendly manner,
including explanations of the variables used to determine the district�s aid.
The information is required to be posted each year within two days of the
Governor�s Budget Message.

����� Additionally, the bill makes certain changes to the
Educational Adequacy Report, which is submitted to the Legislature every three
years to update the various parameters used to calculate State aid to school
districts.� Pursuant to the bill, the Commissioner of Education may initiate a
review of certain elements of the school funding formula, including the metrics
for adjusting costs in intervening years between reports.� Additionally, the
bill requires that a draft of the Educational Adequacy Report be made available
for public comment for at least 30 days, during which time members of the
public may provide remarks on the draft report at public hearings to be held at
various locations across the State and through the submission of written and
electronic testimony.

����� During the development of the next Educational
Adequacy Report following enactment of this bill, the commissioner is required
to engage a diverse group of stakeholders to review and make recommendations
concerning: the calculation of a district�s local share and whether the metrics
used are best able to estimate a district�s potential adjusted tax levy; the
abilities of the Department of Education and school districts to predict and
anticipate State school aid amounts from year to year; possible methods of
improving upon the existing preschool funding methodology; and possible
adjustments to deadlines pertaining to the development, submission, and
adoption of school district budgets.� The bill requires the commissioner to
publish a summary of the findings and recommendations in the Educational
Adequacy Report.

����� Additionally, the bill establishes reduction
adjustment aid to ensure that the amount of State school aid provided to a
school district is not decreased by more than two percent of the district�s
prebudget year total operating budget. The total operating budget is defined as
the sum of a district�s general fund revenues from local sources, State
sources, federal sources, and other sources, less any withdrawals from reserve
accounts and reimbursements for extraordinary special education aid.

����� The bill also establishes certain municipal
overburden protections to prevent a school district from receiving a reduction
in State school aid.� Pursuant to the bill, an SDA district would not be
subject to a reduction in State school aid if it is located in a municipality
in which the equalized total tax rate is greater than the Statewide average
equalized total tax rate for the most recently available calendar year and if
the district is spending below adequacy.� In the case of a school district
other than an SDA district, the district would not be subject to a reduction in
State school aid if it is located in a municipality in which the equalized
total tax rate is at least 10 percent greater than the Statewide average
equalized total tax rate for the most recently available calendar year and is
spending at least 10 percent below adequacy.� These municipal overburden
protections would also apply to a regional school district if 50 percent or
more of the district�s constituent districts or municipalities met either of
the aforementioned qualifying criteria.� An SDA district that is spending above
adequacy would not be subject to a reduction in State school aid that exceeds
the amount by which the district is spending above adequacy.

����� Additionally, the bill provides that the amount of
vocational expansion stabilization aid received by a county vocational school
district would be adjusted to allow for increases in resident enrollment. The
adjustment would equal the number of additional students enrolled in the
district multiplied by the additional cost per pupil for county vocational
school districts and the geographic cost adjustment.

����� The bill also changes how special education aid to
school districts is calculated. Under the provisions of the �School Funding
Reform Act of 2008,� the State provides special education aid to school
districts using the census-based method. Under this method, districts receive
funding for special education based on the assumption that a fixed percent of
the total student population requires special education services, rather than
using the actual number of special education students to determine the amount of
State aid that school districts will receive. This bill eliminates the use of
the census-based methodology and calculates State aid for special education
based on the actual number of special education students included in the
district�s resident enrollment.

����� Under current law, a school district is reimbursed
for certain special education costs in the form of extraordinary special
education aid.� However, in recent years the State�s appropriation for
extraordinary special education aid has covered only a portion of eligible
costs provided in state, with the percentage covered fluctuating from year to
year.� The bill requires the State to increase the appropriation from year to
year, or otherwise ensure that the percentage of a school district�s costs
reimbursed through extraordinary special education aid increases compared to
the previous fiscal year.

����� Finally, the bill establishes the Special Education
Funding Review Task Force for the purpose of assessing the effectiveness of
State aid provided to support special education costs, examining the
possibility of a tier-based model for special education funding, making
recommendations regarding the implementation of a tier-based funding model, and
providing recommendations for responses to changes in special education
revenues, including federal revenues.� The task force would consist of 11
members, each of whom is to have a background in, or special knowledge of, the
legal, policy, and administrative aspects of special education in New Jersey.�
The task force is to issue a final report detailing its findings and
recommendations to the Governor and the Legislature no later than one year
after the organization of the task force.