Requires extraordinary special education aid to school districts for students with costs over $55,000 to be assessed and levied by county in which school district is located.

S3824

SENATE, No. 3824

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 10, 2026

Sponsored by:

Senator� PAUL A. SARLO

District 36 (Bergen and Passaic)

Co-Sponsored by:

Senator Henry

SYNOPSIS

���� Requires extraordinary special education aid to
school districts for students with costs over $55,000 to be assessed and levied
by county in which school district is located.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning extraordinary special education costs and
amending P.L.2007, c.260, P.L.2007, c.62, and R.S.54:4-65.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� 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 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;

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

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

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

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

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

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

���� (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.
]

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

���� (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.
]

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

����
(6)��� In those instances
in which the cost of providing direct instructional and support services for an
individual classified pupil exceeds $40,000 but is no more than $55,000, a
school district shall receive 100 percent of the amount of the excess through
extraordinary special education State aid paid directly by the department to
the school district.

����
(7)�� In those instances in
which the cost of providing direct instructional and support services for an
individual classified pupil exceeds $55,000, a school district shall receive
100 percent of the amount of the excess through extraordinary special education
aid paid directly to the school district by the county in which the school
district is located.� Upon certification by the department pursuant to
subsection c. of this section of the amount of extraordinary special education
aid to be paid by the county to school districts pursuant to this paragraph,
the board of county commissioners shall appropriate, in the same manner as
other appropriations are made by it, the amount so certified, and the amount
shall be assessed, levied, and collected in the same manner as moneys
appropriated for other purposes in the county are assessed, levied, and
collected.� The resulting tax rate and tax amount shall be printed on property
tax bills under the explanation of taxes as a separate line item entitled
�Extraordinary Special Education Aid.�

����
(8)�� The receipt of
extraordinary special education State aid and the receipt of extraordinary
special education aid paid by the county for an individual classified pupil
shall be conditioned upon a demonstration by the district that the pupil's individualized
education program 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.�
Upon
review and approval of the applications, the department shall certify to each
county the amount of extraordinary special education aid to be paid by the
county to school districts located in the county pursuant to paragraph (7) of
subsection b. of this section.

���� Additional
[
State
]
aid awarded
by
the department or the county
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 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.

���� 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.

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

���� 2.��� Section 10 of P.L.2007,
c.62 (C.40A:4-45.45) is amended to read as follows:

���� 10. a. (1) In the preparation
of its budget the amount to be raised by taxation by a local unit shall not
exceed, except as provided in paragraph (2) of this subsection, the sum of new
ratables, the adjusted tax levy, and the total of waivers approved pursuant to
section 11 of P.L.2007, c.62 (C.40A:4-45.46); provided, however, that in the
case of a county, the amount to be raised by taxation shall not exceed the
amount permitted by section 4 of P.L.1976, c.68 (C.40A:4-45.4).

���� (2) A local unit that has not
been granted approval for a waiver pursuant to section 11 of P.L.2007, c.62
(C.40A:4-45.46), may add to its adjusted tax levy in any one of the next three
succeeding years, the amount of the difference between the maximum allowable
amount to be raised by taxation or county purposes tax, as applicable, for the
current local budget year pursuant to paragraph (1) of this subsection and the
actual amount to be raised by taxation or county purposes tax, as applicable,
for the current local budget year.

���� (3) Notwithstanding any
provision to the contrary, a county may add to its adjusted tax levy the
greater of the amount authorized pursuant to paragraph (2) of subsection a. of
this section or the amount of the difference between the amount of its county tax
levy and the 3.5% percentage rate accumulated pursuant to subsection b. of
section 2 of P.L.1994, c.100 (C.40A:4-45.15b).�

���� b.��� The following exclusions
shall be added to the calculation of the adjusted tax levy:

���� increases in amounts required
to be raised by taxation for capital expenditures, including debt service as
defined by law; increases in pension contributions and accrued liability for
pension contributions in excess of 2.0%; increases in health care costs equal
to that portion of the actual increase in total health care costs for the
budget year that is in excess of 2.0% of the total health care costs in the
prior year, but is not in excess of the product of the total health care costs
in the prior year and the average percentage increase of the State Health
Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually
determined by the Division of Pensions and Benefits in the Department of the
Treasury;
[
and
]
extraordinary
costs incurred by a local unit directly related to a declared emergency, as
defined by regulation promulgated by the Commissioner of the Department of
Community Affairs, in consultation with the Commissioner of Education, as
appropriate
; and increases in costs incurred by a county for the payment of
extraordinary special education aid pursuant to the provisions of paragraph (7)
of subsection b. of section 13 of P.L.2007, c.260 (C.18A:7F-55). In the first
budget year that the county assumes the payment of extraordinary special
education aid, the amount of the exclusion shall equal the total amount of the
budget year payment. In each subsequent budget year, the exclusion shall equal
that portion of the actual increase in extraordinary special education aid
payments for the budget year that is in excess of 2.0 percent of the total
extraordinary special education aid payments in the prior year
.

���� If there are no exclusions,
then the amount of the difference shall reduce the adjusted tax levy by that
amount.� Any cancelled or unexpended appropriation for any exclusion pursuant
to this subsection or waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46),
also shall be deducted from the sum of the exclusions listed in this subsection
or directly reduce the adjusted tax levy if there are no exclusions.

(cf: P.L.2024, c.8, s.3)

���� 3.��� R.S.54:4-65 is amended
to read as follows:

� �� 54:4-65. a. The Director of
the Division of Local Government Services in the Department of Community
Affairs shall approve the form and content of property tax bills.

���� b. (1) Each tax bill shall
have printed thereon a brief tabulation showing the distribution of the amount
raised by taxation in the taxing district, in such form as to disclose the rate
per $100.00 of assessed valuation or the number of cents in each dollar paid by
the taxpayer which is to be used for the payment of State school taxes, other
State taxes, county taxes, local school expenditures,
extraordinary special
education aid,
free public library taxes, and other local expenditures.�
The last named item may be further subdivided so as to show the amount for each
of the several departments of the municipal government.� In lieu of printing
such information on the tax bill, any municipality may furnish the tabulation
required hereunder and any other pertinent information in a statement
accompanying the mailing or delivery of the tax bill.

���� (2)�� When a parcel receives a
homestead property tax credit pursuant to the provisions of P.L.2007, c.62
(C.18A:7F-37 et al.), the amount of the credit shall be included with the tax
calculation as a reduction in the total tax calculation for the year.� One-half
of the amount of the credit shall be deducted from taxes otherwise due for the
third installment and the remaining one-half shall be deducted from taxes
otherwise due for the fourth installment.

���� (3)�� There shall be included
on or with the tax bill the delinquent interest rate or rates to be charged and
any end of year penalty that is authorized and any other such information that
the director may require from time to time.

���� (4)�� In municipalities
wherein a property tax reward program is operational, there shall be included
on or with the tax bill the amount of the property tax reward as a credit
against property taxes due and payable by a property owner who participates in
the program.� The property tax reward program shall be identified on the tax
bill as the source of the property tax credit.

���� �c.��� The tax bill shall also
include a statement about the availability, on the Internet website of the
Department of Community Affairs, of the amounts of State aid and assistance
received by the municipality, school districts, special districts, free public libraries,

and
county governments
, including for extraordinary special education
aid,
� that offset property taxes that are otherwise due on each parcel,
along with a statement about the availability, on the Internet website of the
Division of Taxation in the Department of the Treasury, of a listing of, and
eligibility requirements for, the various State property tax relief programs.�
The tax bill shall also include the links to the Internet websites of the
Department of Community Affairs and the Division of Taxation containing this
information.� The director shall cause the amounts of said State aid and
assistance that shall serve as the basis for the calculation for each parcel to
be displayed on the Internet website of the Department of Community Affairs.�
The director shall set standards for the display of the statement on the tax
bill.�

���� �d.�� The tax bill or form
mailed with the tax bill shall include thereon the date upon which each
installment is due.

���� �e.��� If a property tax bill
includes in its calculation a homestead property tax credit, the bill shall, in
addition to the calculation showing taxes due, either display a notice
concerning the credit on the face of the property tax bill or with a separate
notice, with the content and wording as the director provides.

���� �f. (1) At the sole discretion
of the municipality, the tax bill may also include a statement listing the
number and type of shared services entered into by the municipality, the dollar
value of the savings to the municipality from each of those shared services,
and a total amount of municipal savings resulting from those shared services.�
The statement shall be in a format promulgated by the Director of the Division
of Local Government Services in the Department of Community Affairs pursuant to
paragraph (2) of this subsection.

���� (2)�� On or before the first
day of the third month next following the enactment of P.L.2019, c.393, the
Director of the Division of Local Government Services in the Department of
Community Affairs shall promulgate the format for the shared services statement
permitted to be placed on the tax bill by a municipality pursuant to paragraph
(1) of this subsection.

(cf: P.L.2021, c.99, s.3)

���� 4.��� This act shall take
effect immediately and shall first apply to the first full school year
following the date of enactment.

STATEMENT

���� Under current law, a school
district is eligible to receive extraordinary special education State aid when
the cost of providing direct instructional and support services for an
individual classified pupil exceeds $40,000 or $55,000 depending on the pupil�s
placement. A school district submits an application to the Department of
Education detailing those costs and, upon approval of its application, is
reimbursed for either 90 percent or 75 percent of the amount that exceeds those
thresholds, again depending on the nature of the placement.

���� This bill provides that in
those instances in which the cost of providing direct instructional and support
services to an individual classified pupil exceeds $40,000, but is no more than
$55,000, a school district will receive 100 percent of the amount of the excess
paid to it directly by the State.� In those instances in which the cost of
providing direct instructional and support services for an individual
classified pupil exceeds $55,000, a school district will receive 100 percent of
the amount of the excess paid to it directly by the county in which the school
district is located.�

���� The bill establishes a county
tax levy cap exclusion in order to accommodate the payment by the county of
extraordinary special education aid to school districts.� The bill also
requires that all property tax bills include a separate line that indicates the
amount of tax levy being raised to support extraordinary special education aid.