An Act concerning the provision of State school aid and amending and supplementing P.L.2007, c.260.

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

1. Section 3 of P.L.2007, c.260 (C.18A:7F-45) is amended to read as follows:

3. As used in this act and P.L.1996, c.138, unless the context clearly requires a different meaning:

"At-risk pupils" means those resident pupils from households with a household income at or below the most recent federal poverty guidelines available on October 15 of the prebudget year multiplied by 1.85;

"Base per pupil amount" means the cost per elementary pupil of delivering the core curriculum content standards and extracurricular and cocurricular activities necessary for a thorough and efficient education;

"Bilingual education pupil" means a resident pupil enrolled in a program of bilingual education or in an English as a second language program approved by the State Board of Education;

"Budgeted local share" means the district's local tax levy contained in the budget certified for taxation purposes;

"Capital outlay" means capital outlay as defined in GAAP;

"Combination pupil" means a resident pupil who is both an at-risk pupil and a bilingual education pupil;

"Commissioner" means the Commissioner of Education;

"Concentration of at-risk pupils" shall be based on prebudget year pupil data and means, for a school district or a county vocational school district, the number of at-risk pupils among those counted in resident enrollment, divided by resident enrollment;

"County special services school district" means any entity established pursuant to article 8 of chapter 46 of Title 18A of the New Jersey Statutes;

"County vocational school district" means any entity established pursuant to article 3 of chapter 54 of Title 18A of the New Jersey Statutes;

"CPI" means the increase, expressed as a decimal, in the average annualized consumer price index for the New York City and Philadelphia areas in the fiscal year preceding the prebudget year relative to the previous fiscal year as reported by the United States Department of Labor;

"Debt service" means payments of principal and interest upon school bonds and other obligations issued to finance the purchase or construction of school facilities, additions to school facilities, or the reconstruction, remodeling, alteration, modernization, renovation or repair of school facilities, including furnishings, equipment, architect fees, and the costs of issuance of such obligations and shall include payments of principal and interest upon bonds heretofore issued to fund or refund such obligations, and upon municipal bonds and other obligations which the commissioner approves as having been issued for such purposes;

"District attendance adjustment rate" means the lesser of 100% or the sum of the district's average daily attendance rate for the three most recent school years, as reported in the School Register Summary, and four percentage points;

"District income" means the aggregate income of the residents of the taxing district or taxing districts, based upon data provided by the Division of Taxation in the New Jersey Department of the Treasury and contained on the New Jersey State Income Tax forms for the calendar year ending two years prior to the prebudget year. The commissioner may supplement data contained on the State Income Tax forms with data available from other State or federal agencies in order to better correlate the data to that collected on the federal census. With respect to regional districts and their constituent districts, however, the district income as described above shall be allocated among the regional and constituent districts in proportion to the number of pupils resident in each of them;

"Equalized valuation" means the equalized valuation of the taxing district or taxing districts, as certified by the Director of the Division of Taxation on October 1, or subsequently revised by the tax court by January 15, of the prebudget year. With respect to regional districts and their constituent districts, however, the equalized valuations as described above shall be allocated among the regional and constituent districts in proportion to the number of pupils resident in each of them. In the event that the equalized table certified by the director shall be revised by the tax court after January 15 of the prebudget year, the revised valuations shall be used in the recomputation of aid for an individual school district filing an appeal, but shall have no effect upon the calculation of the property value rate, Statewide average equalized school tax rate, or Statewide equalized total tax rate;

"Full-day preschool" means a preschool day consisting of a six-hour comprehensive educational program in accordance with the district's kindergarten through grade 12 school calendar;

"GAAP" means the generally accepted accounting principles established by the Governmental Accounting Standards Board as prescribed by the State board pursuant to N.J.S.18A:4-14;

"General special education services pupil" means a pupil receiving specific services pursuant to chapter 46 of Title 18A of the New Jersey Statutes;

"Geographic cost adjustment" means an adjustment that reflects county differences in the cost of providing educational services that are outside the control of the district;

"Household income" means income as defined in 7 CFR ss.245.2 and 245.6 or any subsequent superseding federal law or regulation;

"Net budget" means the sum of the district's general fund tax levy, State aid received pursuant to the provisions of this act other than preschool education aid, miscellaneous revenue estimated pursuant to GAAP, and designated general fund balance;

"Prebudget year" means the school fiscal year preceding the year in which the school budget is implemented;

"Nonpreschool ECPA" means the amount of early childhood program aid, excluding prior year carry-forward amounts, included in a district's 2007-2008 school year budget certified for taxes that was allocated to grades K through 3;

"Report" means the Educational Adequacy Report issued by the commissioner pursuant to section 4 of this act;

"Resident enrollment" means the number of pupils other than preschool pupils, post-graduate pupils, and post-secondary vocational pupils who, on the last school day prior to October 16 of the current school year, are residents of the district and are enrolled in: (1) the public schools of the district, excluding evening schools, (2) another school district, other than a county vocational school district in the same county on a full-time basis, or a State college demonstration school or private school to which the district of residence pays tuition, or (3) a State facility in which they are placed by the district; or are residents of the district and are: (1) receiving home instruction, or (2) in a shared-time vocational program and are regularly attending a school in the district and a county vocational school district. In addition, resident enrollment shall include the number of pupils who, on the last school day prior to October 16 of the prebudget year, are residents of the district and in a State facility in which they were placed by the State. Pupils in a shared-time vocational program shall be counted on an equated full-time basis in accordance with procedures to be established by the commissioner. Resident enrollment shall include regardless of nonresidence, the enrolled children of teaching staff members of the school district or county vocational school district who are permitted, by contract or local district policy, to enroll their children in the educational program of the school district or county vocational school district without payment of tuition. Disabled children between three and five years of age and receiving programs and services pursuant to N.J.S.18A:46-6 shall be included in the resident enrollment of the district;

"School district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes;

"State facility" means a State developmental center, a State Division of Youth and Family Services' residential center, a State residential mental health center, a Department of Children and Families Regional Day School, a State training school/secure care facility, a State juvenile community program, a juvenile detention center or a boot camp under the supervisional authority of the Juvenile Justice Commission pursuant to P.L.1995, c.284 (C.52:17B-169 et seq.), or an institution operated by or under contract with the Department of Corrections, Children and Families or Human Services, or the Juvenile Justice Commission;

"Statewide equalized school tax rate" means the amount calculated by dividing the general fund tax levy for all school districts, which excludes county vocational school districts and county special services school districts as defined pursuant to this section, in the State for the prebudget year by the equalized valuations certified in the year prior to the prebudget year of all taxing districts in the State except taxing districts for which there are not school tax levies;

"Tax levy growth limitation" means the permitted annual increase in the adjusted tax levy for a school district as calculated pursuant to sections 3 and 4 of P.L.2007, c.62 (C.18A:7F-38 and 18A:7F-39).

(cf: P.L.2010, c.44, s.6)

2. Section 7 of P.L.2007, c.260 (C.18A:7F-49) is amended to read as follows:

7. The commissioner shall determine, based on the standards established pursuant to section 4 of this act, a base per pupil amount, and shall develop appropriate weights reflecting the differing costs of providing education at the kindergarten, elementary, middle school, and high school levels, which weights shall be applied in determining a district's base cost as set forth in section 8 of this act. The base per pupil amount for the 2008-2009 school year shall be $9,649. The weight for kindergarten shall be 0.5 in the case of a pupil enrolled in a half-day kindergarten program and 1.0 in the case of a pupil enrolled in a full-day kindergarten program, and shall be 1.0 for the elementary (grades 1-5) level, 1.04 for the middle school (grades 6-8) level, and 1.17 for the high school (grades 9-12) level.

The base per pupil 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 base per pupil amount and the grade level weights shall be established in the Educational Adequacy Report, with the base per pupil amount adjusted by the CPI for each of the two school years following the first school year to which the report is applicable.

Notwithstanding the provisions of this section to the contrary, the base per pupil amount for the 2012-2013 school year shall be $10,555, and the weight for the high school (grades 9-12) level shall be 1.16.

(cf: P.L.2007, c.260, s.7)

3. Section 8 of P.L.2007, c.260 (C.18A:7F-50) is amended to read as follows:

8. a. The weighted enrollment for each school district and county vocational school district shall be calculated as follows:

[WENR = (PW x PENR) + (EW x EENR) + (MW x MENR) + (HW x HENR)] WENR = DAAR x ((PW x PENR) + (EW x EENR) + (MW x MENR) + (HW x HENR))

where

DAAR is the district attendance adjustment rate;

PW is the applicable weight for kindergarten enrollment;

EW is the weight for elementary enrollment;

MW is the weight for middle school enrollment;

HW is the weight for high school enrollment;

PENR is the resident enrollment for kindergarten;

EENR is the resident enrollment for grades 1 - 5;

MENR is the resident enrollment for grades 6 - 8; and

HENR is the resident enrollment for grades 9 - 12.

For the purposes of this section, ungraded pupils shall be counted in their age-equivalent grade.

b. The base cost for each school district shall be calculated as follows:

BC = BPA x WENR; and

the base cost for each county vocational school district shall be calculated as follows:

BC = BPA x WENR x 1.31

where

BPA is the base per pupil amount; and

WENR is the weighted enrollment of the school district or county vocational school district.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the base cost for each county vocational school district shall be calculated as follows:

BC = BPA x WENR x 1.26

where

BPA is the base per pupil amount; and

WENR is the weighted enrollment of the school district or county vocational school district.

(cf: P.L.2007, c.260, s.8)

4. 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) 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 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 DAAR 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;

DAAR is the district attendance adjustment rate; 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% 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% but less than 60% 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% 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.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the at-risk weight shall be as follows:

for a district in which the concentration of at-risk pupils is less than 20% of the resident enrollment, the at-risk weight shall equal 0.42;

for a district in which the concentration of at-risk pupils is equal to 20% but less than 40% of the resident enrollment, the at-risk weight shall equal the district's ((at-risk % - 0.20) x 0.20)) + 0.42; and

for a district in which the concentration of at-risk pupils is equal to or greater than 40% of the resident enrollment, the at-risk weight shall equal 0.46.

c. LEP Cost shall be calculated as follows:

LEP Cost = BPA x LWENR x DAAR 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;

DAAR is the district attendance adjustment rate; 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.

Notwithstanding the provisions of this subsection to the contrary, for 2012-2013 school year, the LEP weight shall be 0.47.

d. COMB Cost shall be calculated as follows:

COMB Cost = BPA x CWENR x DAAR 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;

DAAR is the district attendance adjustment rate;

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.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the COMB weight shall be 0.1052.

e. SE Census shall be calculated as follows:

SE Census = (RE x DAAR x SEACR x AEC x 2/3) + (RE x DAAR x SACR x SEC)

where

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

DAAR is the district attendance adjustment rate;

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

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

SACR is the State average classification rate for speech-only pupils; 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.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the State average classification rate shall be 14.7% for general special education services pupils and 1.77% for speech-only pupils.

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.

Notwithstanding any provision of this subsection to the contrary, for the 2012-2013 school year, the excess cost shall be $14,929 for general special education services pupils and $1,187 for speech-only pupils.

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

5. Section 12 of P.L.2007, c.260 (C.18A:7F-54) is amended to read as follows:

12. a. District factor group A and B school districts, and district factor group CD school districts with a concentration of at-risk pupils equal to or greater than 40%, shall provide free access to full-day preschool for all three- and four-year old pupils. All other school districts shall provide free access to full-day preschool for at-risk pupils. Preschool education aid shall reflect the cost of the pupil's placement in either a district program, a licensed child care provider program, or a Head Start Program.

(1) Preschool education aid shall be calculated for district factor group A and B school districts, and for district factor group CD school districts with a concentration of at-risk pupils equal to or greater than 40%, as follows:

Aid = (IDE x IDA) + (PRE x PRA) + (HSE x HSA)

where

IDE is the number of district pupils, other than preschool disabled pupils, in an in-district preschool program;

IDA is the per pupil aid amount for an in-district preschool program;

PRE is the number of district pupils, other than preschool disabled pupils, in a preschool program operated by a licensed child care provider;

PRA is the per pupil aid amount for a preschool program operated by a licensed child care provider;

HSE is the number of district pupils, other than preschool disabled pupils, in a Head Start Program; and

HSA is the per pupil aid amount for a Head Start Program.

A CD school district with a concentration of at-risk pupils equal to or greater than 40% shall be eligible to receive preschool education aid pursuant to the provisions of this paragraph for a minimum of three school years from the time of initial determination of eligibility even if the district's concentration of at-risk pupils falls below a 40% concentration of at-risk pupils. In the event that the district falls below a 40% concentration of at-risk pupils for two consecutive school years, in the third school year the district shall receive preschool education aid for each at-risk pupil and for any four-year old pupil for whom the district received preschool education aid in the prior school year, and that pupil shall receive free preschool education.

(2) Preschool education aid shall be calculated for all other districts as follows:

Aid = (ARID x IDA) + (ARP x PRA) + (ARHS x HSA)

where

ARID is the number of at-risk district pupils, other than preschool disabled pupils, in an in-district preschool program;

IDA is the per pupil aid amount for an in-district preschool program;

ARP is the number of at-risk district pupils, other than preschool disabled pupils, in a preschool program operated by a licensed child care provider;

PRA is the per pupil aid amount for a preschool program operated by a licensed child care provider;

ARHS is the number of at-risk district pupils, other than preschool disabled pupils, in a Head Start Program; and

HSA is the per pupil aid amount for a Head Start Program.

b. In accordance with regulations adopted by the commissioner, all districts shall submit a five-year plan that provides for the full implementation of full-day preschool for all eligible three- and four-year olds by the 2013-2014 school year. For the purposes of this section, "full implementation" means serving 90% of eligible pupils in accordance with the preschool quality standards adopted by the commissioner or such greater percentage as determined by the commissioner. A school district shall annually update the five-year plan based on actual implementation experience and shall revise its pupil projections in accordance with that experience.

c. (1) In the case of a school district that did not receive any form of preschool aid in the 2007-2008 school year, the 2008-2009 school year shall be a preschool planning year. Beginning in the 2009-2010 school year, the school district shall receive preschool education aid calculated in accordance with the provisions of subsection a. of this section based upon projected preschool enrollment.

In the 2009-2010 school year the school district may also receive start-up funds in accordance with regulations adopted by the commissioner.

(2) In the case of a school district that received Early Launch to Learning Initiative aid in the 2007-2008 school year, for the 2008-2009 school year the district shall receive preschool education aid in an amount equal to the district's allocation of Early Launch to Learning Initiative aid in the 2007-2008 school year. Beginning in the 2009-2010 school year, the school district shall receive preschool education aid calculated in accordance with the provisions of subsection a. of this section based upon projected preschool enrollment.

In the 2009-2010 school year the school district may also receive start-up funds in accordance with regulations adopted by the commissioner.

(3) In the case of a school district that received early childhood program aid in the 2007-2008 school year but did not receive preschool expansion aid or education opportunity aid in that year, for the 2008-2009 school year the district shall receive preschool education aid equal to the greater of the district's 2007-2008 amount of early childhood program aid for preschool or the district's 2007-2008 per pupil allocation of early childhood program aid as included in the district's original 2007-2008 budget certified for taxes, inflated by the CPI, and multiplied by the district's projected preschool enrollment; except that if the district is able to demonstrate in the five-year plan submitted to the commissioner that it has the capacity to offer a full-day three- or four-year-old program, or a full-day three- and four-year-old program, in the 2008-2009 school year, the commissioner may approve the funding of the full-day program calculated in accordance with the provisions of subsection a. of this section based upon projected preschool enrollment. The district shall be informed of the commissioner's determination upon approval of the five-year plan. Beginning in the 2009-2010 school year, the school district shall receive preschool education aid calculated in accordance with the provisions of subsection a. of this section based upon projected preschool enrollment.

In the 2009-2010 school year the school district may also receive start-up funds in accordance with regulations adopted by the commissioner.

(4) In the case of a school district that received preschool expansion aid or education opportunity aid in the 2007-2008 school year, for the 2008-2009 school year the district shall receive preschool education aid in an amount equal to the preschool budget approved by the commissioner for the 2008-2009 school year. Preschool education aid for the 2008-2009 school year shall be adjusted following receipt of the Application for State School Aid in October 2008. Beginning in the 2009-2010 school year, the school district shall receive preschool education aid calculated in accordance with the provisions of subsection a. of this section based upon projected preschool enrollment; except that for any school year the district shall not receive preschool aid in an amount less than either the total amount of preschool aid the district received in the 2008-2009 school year after the State aid adjustment or the district's 2008-2009 school year preschool per pupil aid amount multiplied by the projected number of preschool pupils after the State aid adjustment, whichever is greater.

In the 2009-2010 school year the school district may also receive start-up funds in accordance with regulations adopted by the commissioner.

d. For the 2008-2009 school year, the preschool per pupil aid amounts shall be $11,506 for pupils enrolled in an in-district program, $12,934 for pupils enrolled in a licensed child care provider program, and $7,146 for pupils enrolled in a Head Start Program. The preschool per pupil aid 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 preschool per pupil aid 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.

Notwithstanding any provision of this subsection to the contrary, for the 2012-2013 school year, the preschool per pupil aid amounts shall be $12,460 for pupils enrolled in an in-district program, $14,007 for pupils enrolled in a licensed child care provider program, and $7,739 for pupils enrolled in a Head Start Program.

e. A district shall appropriate preschool education aid in a special revenue fund for expenditure. In the event that any preschool education aid is not expended during the budget year, the aid may be carried forward in accordance with regulations adopted by the commissioner.

f. In the event that a district has fully implemented a full-day preschool program for three- and four-year old pupils in accordance with its five-year plan and meets the preschool quality standards or has provided preschool education to the number of eligible students to be served during a school year in accordance with that plan and its annual updates and the preschool quality standards, the district may appropriate preschool education aid to support kindergarten through grade 12 or to provide preschool education for three- and four-year old pupils for whom the district is not required to provide preschool education upon the approval of the commissioner. The district shall request approval in its annual plan update and any approval granted by the commissioner shall be made during the annual school budget process.

g. A school district shall maintain the preschool quality standards as adopted by the commissioner as a condition of receipt of preschool education aid.

(cf: P.L.2007, c.260, s.12)

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 DAAR x SEACR x AEC x 1/3) x GCA

where

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

DAAR is the district attendance adjustment rate;

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.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the excess cost shall be $14,929 for general special education services pupils.

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.

(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.

(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.

(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 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)

7. Section 14 of P.L.2007, c.260 (C.18A:7F-56) is amended to read as follows:

14. Security categorical aid for each school district and county vocational school district shall be calculated as follows:

SA = DAAR x ((RE x $70) + (ARENR x ARSA)) x GCA

where

DAAR means the district attendance adjustment rate;

RE means the school district's or county vocational school district's resident enrollment;

ARENR means the district's number of at-risk pupils;

ARSA means the at-risk security amount; and

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

For the 2008-2009 through 2010-2011 school years the at-risk security amount shall be calculated as follows:

for a district in which the concentration of at-risk pupils is less than 40% of resident enrollment, the at-risk security amount shall equal the district's (AR% x $10.15 x 100); and

for a district in which the concentration of at-risk pupils is equal to or greater than 40%, the at-risk security amount shall equal $406.

The security cost coefficients, $70, $10.15 and $406, used to determine the security 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 cost coefficients shall be established in the Educational Adequacy Report, with adjustments by the CPI for each of the two school years following the first school year to which the report is applicable.

Notwithstanding the provisions of this section to the contrary, for the 2012-2013 school year, security categorical aid for each school district and county vocational school district shall be calculated as follows:

SA = DAAR x ((RE x $70) + (ARENR x ARSA)) x GCA

where

DAAR means the district attendance adjustment rate;

RE means the school district's or county vocational school district's resident enrollment;

ARENR means the district's number of at-risk pupils;

ARSA means the at-risk security amount; and

GCA is the geographic cost adjustment as developed by the commissioner,

and the at-risk security amount shall be calculated as follows:

for a district in which the concentration of at-risk pupils is less than 40% of resident enrollment, the at-risk security amount shall equal the district's (AR% x $10.05 x 100); and

for a district in which the concentration of at-risk pupils is equal to or greater than 40%, the at-risk security amount shall equal $402.

(cf: P.L.2007, c.260, s.14)

8. Section 15 of P.L.2007, c.260 (C.18A:7F-57) is amended to read as follows:

15. a. Each school district's and county vocational school district's State aid for transportation shall consist of base aid (BA) and an incentive factor (IF) determined as follows:

BA = (BA1 x IF) + BA2

where

BA1 = CP1 x P1+CD1 x P1 x D1;

BA2 = CP2 xP2 + CD2 x P2 x D2;

P1 is the total number of regular education public pupils and regular nonpublic pupils eligible for transportation pursuant to N.J.S.18A:39-1, excluding preschool pupils except pupils that qualify for free full-day preschool pursuant to section 12 of this act, and of special education pupils eligible for transportation pursuant to N.J.S.18A:46-23 with no special transportation requirements, who are resident in the district as of the last school day prior to October 16 of the prebudget year;

D1 is the average home-to-school mileage for P1 pupils;

P2 is the total number of special education pupils eligible for transportation pursuant to N.J.S.18A:46-23 with special transportation requirements who are resident in the district as of the last school day prior to October 16 of the prebudget year;

D2 is the average home-to-school mileage for P2 pupils; and

CP1, CD1, CP2 and CD2 are cost coefficients with values set forth in subsection b. of this section.

IF is the incentive factor, which modifies base aid paid for pupils transported on regular vehicles according to each district's percentile rank in regular vehicle capacity utilization. Students within the district who receive courtesy busing services shall be included in the calculation of the district's regular vehicle capacity utilization if the courtesy busing services are provided to a student who would otherwise be required to walk to and from school along a route designated as a hazardous route by the school district pursuant to section 2 of P.L.1999, c.310 (C.18A:39-1.5). For the 2008-2009 school year, IF = l. The Governor shall submit to the Legislature at least 60 days prior to the FY 2011 budget address proposed transportation incentive factors applicable to the 2010-2011 school year and thereafter along with supporting data. The incentive factors shall be deemed approved by the Legislature unless a concurrent resolution is passed within 60 days of the date of submission.

b. For the 2008-2009 school year, the cost coefficients in subsection a. of this section shall have the following values:

CP1 = $383.88;

CD1 = $10.50;

CP2 = $2,675.77; and

CD2 = $5.10.

The cost coefficients 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 cost coefficients 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.

Notwithstanding the provisions of this subsection to the contrary, for the 2012-2013 school year, the cost coefficients in subsection a. of this section shall have the following values:

CP1 = $415.72;

CD1 = $11.37;

SP2 = S2,897.6; and

CD2 = $5.52.

c. For the 2008-2009 school year each district and county vocational district shall receive State transportation aid in an amount equal to the school district's or county vocational school district's State aid entitlement calculated pursuant to subsections a. and b. of this section multiplied by 81.4876%.

d. Each executive county superintendent of schools shall complete a study of pupil transportation services in the county no later than 18 months after the effective date of P.L.2007, c.260 (C.18A:7F-43 et al.). The purpose of the study shall be to determine ways to provide pupil transportation services in a more cost-effective and efficient manner. The study shall be transmitted upon completion to the Commissioner of Education and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).

(cf: P.L.2007, c.260, s.15)

9. Section 16 of P.L.2007, c.260 (C.18A:7F-58) is amended to read as follows:

16. a. (1) For the 2008-2009 school year, each school district and county vocational school district shall receive adjustment aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated for the district pursuant to the provisions of this act or the State aid received by the district for the 2007-2008 school year multiplied by 102%. The State aid received by the district for the 2007-2008 school year shall include the following aid categories: Core Curriculum Standards Aid, Supplemental Core Curriculum Standards Aid, Education Opportunity Aid, Above Average Enrollment Growth Aid, High Expectations for Learning Proficiency Aid, Instructional Supplement Aid, Demonstrably Effective Program Aid, Stabilization Aid, Supplemental Stabilization Aid, Adult and Postsecondary Education Grants, Bilingual Education Aid, Special Education Aid, County Vocational Program Aid, Transportation Aid, School Choice Aid, Consolidated Aid, Additional Formula Aid, Full-day Kindergarten Supplemental Aid, Targeted-At-Risk Aid, Abbott-Bordered District Aid, Nonpreschool ECPA, Extraordinary Special Education Aid paid in 2006-2007, and Aid for Enrollment Adjustments, taking into consideration the June 2008 payment made in July 2008.

(2) For the 2009-2010 and 2010-2011 school years a school district or county vocational school district shall receive adjustment aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated for the district pursuant to the provisions of this act or the State aid, other than educational adequacy aid, received by the district for the 2008-2009 school year.

(3) For the 2011-2012 school year and for each school year thereafter, a school district or county vocational school district that does not have a decline in its weighted enrollment, adjusted for bilingual education pupils and at-risk pupils, between the 2008-2009 school year and the budget year that is greater than 5% shall receive adjustment aid in such amount as to ensure that the district receives the greater of the amount of State aid calculated pursuant to the provisions of this act or the State aid, other than educational adequacy aid, received by the district for the 2008-2009 school year.

(4) For the 2011-2012 school year and for each school year thereafter, a school district or county vocational school district that has a decline in its weighted enrollment, adjusted for bilingual education pupils and at-risk pupils, between the 2008-2009 school year and the budget year that is greater than 5% shall have its adjustment aid reduced in an amount equal to the district's 2008-2009 per pupil adjustment aid amount multiplied by the decline in its resident enrollment that is greater than 5%.

(5) For the 2012-2013 school year and for each school year thereafter, in the case of a school district that is spending above adequacy, the amount of adjustment aid calculated pursuant to paragraph (3) or paragraph (4) shall be reduced by an amount equal to 50% of the amount by which the district is spending above adequacy.

b. In the case of a school district that received education opportunity aid in the 2007-2008 school year and for which the sum of the district's 2007-2008 State aid under the State aid categories listed under paragraph (1) of subsection a. of this section and general fund local levy is less than the sum of the district's adequacy budget as calculated pursuant to section 9 of this act, special education categorical aid calculated pursuant to section 13 of this act, and security aid calculated pursuant to section 14 of this act, the district shall receive educational adequacy aid if it meets the following criteria:

(1) the district fails to meet educational adequacy standards as determined by the commissioner; or

(2) the district is located in a municipality with an equalized total tax rate that is greater than 130% of the Statewide average equalized total tax rate; or

(3) the district has an equalized school tax rate that is greater than 110% of the Statewide average equalized school tax rate and is located in a municipality with an equalized total tax rate that is greater than 120% of the Statewide average equalized total tax rate; and

(4) the district will not meet adequacy in the 2008-2009 school year based on the State aid increase received by the district for that school year.

An eligible district shall receive educational adequacy aid for the 2008-2009 school year in accordance with the following formula:

EA aid = ((AB + SE + SA) - (GFL + A08)) x .33) - ls - SA;

where AB is the district's adequacy budget as calculated pursuant to section 9 of this act;

SE is the district's special education categorical aid calculated pursuant to section 13 of this act;

SA is the district's security categorical aid calculated pursuant to section 14 of this act;

GFL is the district's prebudget year general fund local levy;

A08 is the sum of the district's 2007-2008 State aid under the State aid categories listed under paragraph (1) of subsection a. of this section;

ls is the district's prebudget year general fund local levy, multiplied by 4% in the case of a district which meets the criteria of paragraph (2) or paragraph (3) of this subsection, or in the case of a district which does not meet those criteria multiplied by 6%; and

SA is any increase in State aid between the prebudget and budget years.

An eligible district shall receive educational adequacy aid for the 2009-2010 school year in accordance with the following formula:

EA aid = ((AB - (GFL + PEQAID )) x .50) -ls; and

An eligible district shall receive educational adequacy aid for the 2010-2011 school year in accordance with the following formula:

EA aid = (AB - (GFL + PEQAID) -ls)

where

AB is the district's adequacy budget as calculated pursuant to section 9 of this act;

GFL is the district's prebudget year general fund local levy;

PEQAID is the district's prebudget year equalization aid calculated pursuant to section 11 of this act; and

For the 2011-2012 school year and for each school year thereafter, the district shall receive the amount of educational adequacy aid that the district received in the 2010-2011 school year.

(cf: P.L.2007, c.260, s.16)

10. (New section) For the 2012-2013 through 2015-2016 school years, the amount of equalization aid, special education categorical aid, security categorical aid, transportation aid, and adjustment aid payable to a district shall equal the sum of the amount of aid awarded to the school district in the 2011-2012 school year, and the corresponding share of the difference between the amount of aid awarded in the 2011-2012 school year and, in the case of equalization aid, special education categorical aid, security categorical aid, and transportation aid, the amount of aid calculated pursuant to section 5 of P.L.2007, c.260 (C.18A:7F-47), and, in the case of adjustment aid, the amount of aid calculated pursuant to section 16 of P.L.2007, c.260 (C.18A:7F-58).

In the 2012-2013 school year, the share of the difference shall be 20%; in the 2013-2014 school year, the share of the difference shall be 40%; in the 2014-2015 school year, the share of the difference shall be 60%; in the 2015-2016 school year, the share of the difference shall be 80%.

11. This act shall take effect immediately.

STATEMENT

This bill amends the "School Funding Reform Act of 2008" (SFRA), P.L.2007, c.260 (C.18A:7F-43 et al.) to incorporate the modifications recommended by the Department of Education in its Education Funding Report issued February 23, 2012.

The bill makes two permanent changes to the school funding law. First, in the case of a school district in which the average daily attendance rate over the most recent three school years is less than 96%, the enrollment figures used to calculate the district's aid are reduced by a percentage equal to the difference between 96% and the district's average daily attendance rate for the three most recent school years, as reported in the School Register Summary. Second, in the case of a district that is spending above its adequacy threshold, adjustment aid awarded to the district is reduced by 50% of the amount by which the district is spending above adequacy.

The bill also makes a number of changes that would only be in effect for the 2012-2013 school year:

� the base per pupil amount is set to $10,555;

� the weight for students enrolled in grades 9 through 12 is set to 1.16;

� the weight for students enrolled in a county vocational school district is set to 0.26;

� the at-risk weight:

o for a school district with an at-risk concentration of less than 20% is set to 0.42;

o for a school district with an at-risk concentration of 40% or more is set to 0.46;

� the weight for limited English proficient (LEP) students is set to 0.47;

� the weight for combination students, those who are both at-risk and LEP, is set to the sum of the at-risk weight and 0.1052;

� for special education categorical aid:

o the excess cost for general special education services students is set to $14,929, and the Statewide average classification rate is set to 14.7%;

o the excess cost for speech-only students is set to $1,187, and the Statewide average classification rate is set to 1.77%;

� for security categorical aid:

o the per pupil amount security categorical aid is set at $70;

o the per pupil amount for at-risk security categorical aid, in the case of a district in which the at-risk concentration is greater than or equal to 40%, is set at $402;

� for transportation aid:

o for general education students, the per pupil amount is set to $415.72, and the per mile amount is set to $11.37;

o for special education students requiring special transportation services, the per pupil amount is set to $2,897.69 and the per mile amount is set to $5.52;

� for preschool education aid:

o for students enrolled in an in-district program, the per pupil aid amount is set to $12,460;

o for students enrolled in a community provider program, the per pupil aid amount is set to $14,007; and

o for students enrolled in a Head Start program, the per pupil aid amount is set to $7,739.

The bill also specifies that the amount of equalization aid, special education categorical aid, security categorical aid, transportation aid, and adjustment aid awarded to a school district in the 2012-2013 school year will equal the sum of the amount awarded to the school district in the 2011-2012 school year and 20 percent of the difference between what was awarded in the 2011-2012 school year and the aid amount calculated for the 2012-2013 school year. In the 2013-2014 through 2015-2016 school years, aid will be calculated in an identical manner, except the share of the difference that is added to the 2011-2012 school year aid amount will increase by 20 percentage points in each year.