HB 1357 — Providing special education funding and support for inclusionary practices.

5.

RCW 28A.150.392 and 2024 c 127 s 2 are each amended to read as follows:

(1)(a) To the extent necessary, funds shall be made available for safety net awards for districts with demonstrated needs for special education funding beyond the amounts provided through the special education funding formula under RCW 28A.150.390.

(b) If the federal safety net awards based on the federal eligibility threshold exceed the federal appropriation in any fiscal year, then the superintendent shall expend all available federal discretionary funds necessary to meet this need.

(2) Safety net funds shall be awarded by the state safety net oversight committee subject to the following conditions and limitations:

(a) The committee shall award additional funds for districts that can convincingly demonstrate that all legitimate expenditures for special education exceed all available revenues from state funding formulas.

When determining award eligibility and amounts[,] the committee shall limit its review to relevant documentation that illustrates adherence to award criteria.

The committee shall not make determinations regarding the content of individualized education programs beyond confirming documented and quantified services and evidence of corresponding expenditures for which a school district seeks reimbursement.

(b) In the determination of need, the committee shall consider additional available revenues from federal sources.

(c) Differences in program costs attributable to district philosophy, service delivery choice, or accounting practices are not a legitimate basis for safety net awards.

(d) In the determination of need, the committee shall require that districts demonstrate that they are maximizing their eligibility for all state revenues related to services for students eligible for special education and all federal revenues from federal impact aid, medicaid, and the individuals with disabilities education act-Part B and appropriate special projects.

Awards associated with (e) and (f) p.

6 SHB 1357 of this subsection shall not exceed the total of a district's specific determination of need.

(e) The committee shall then consider the extraordinary high cost needs of one or more individual students eligible for and receiving special education.

Differences in costs attributable to district philosophy, service delivery choice, or accounting practices are not a legitimate basis for safety net awards.

(f) Using criteria developed by the committee, the committee shall then consider extraordinary costs associated with communities that draw a larger number of families with children in need of special education services, which may include consideration of proximity to group homes, military bases, and regional hospitals.

Safety net awards under this subsection (2)(f) shall be adjusted to reflect amounts awarded under (e) of this subsection.

(g) The committee shall then consider the extraordinary high cost needs of one or more individual students eligible for and receiving special education served in residential schools, programs for juveniles under the department of corrections, and programs for juveniles operated by city and county jails to the extent they are providing a secondary program of education.

(h) The maximum allowable indirect cost for calculating safety net eligibility may not exceed the federal restricted indirect cost rate for the district plus one percent.

(i) Safety net awards shall be adjusted based on the percent of potential medicaid eligible students billed as calculated by the superintendent of public instruction in accordance with chapter 318, Laws of 1999.

(j) Safety net awards must be adjusted for any unresolved audit findings or exceptions related to special education funding.

Safety net awards may only be adjusted for errors in safety net applications or individualized education programs that materially affect the demonstration of need.

(3) The superintendent of public instruction shall adopt such rules and procedures as are necessary to administer the special education funding and safety net award process.

By December 1, 2018, the superintendent shall review and revise the rules to achieve full and complete implementation of the requirements of this subsection and subsection (4) of this section including revisions to rules that provide additional flexibility to access community impact awards.

Before revising any standards, procedures, or rules, the p.

7 SHB 1357 superintendent shall consult with the office of financial management and the fiscal committees of the legislature.

In adopting and revising the rules, the superintendent shall ensure the application process to access safety net funding is streamlined, timelines for submission are not in conflict, feedback to school districts is timely and provides sufficient information to allow school districts to understand how to correct any deficiencies in a safety net application, and that there is consistency between awards approved by school district and by application period.

The office of the superintendent of public instruction shall also provide technical assistance to school districts in preparing and submitting special education safety net applications.

(4)(a) On an annual basis, the superintendent shall survey districts regarding their satisfaction with the safety net process and consider feedback from districts to improve the safety net process.

Each year by December 1st, the superintendent shall prepare and submit a report to the office of financial management and the appropriate policy and fiscal committees of the legislature that summarizes the survey results and those changes made to the safety net process as a result of the school district feedback.

(b) By December 1, 2024, the office of the superintendent of public instruction must develop a survey requesting specific feedback on the safety net application process from school districts with 3,000 or fewer students.

The survey must include, at a minimum, questions regarding the average amount of time school district staff spend gathering safety net application data, filling out application forms, and correcting application deficiencies.

The survey must also include questions to help identify which application components are the most challenging and time consuming for school districts to complete.

By December 1, 2025, the office of the superintendent of public instruction must use this feedback to implement a simplified, standardized safety net application for all school districts that reduces barriers to safety net funding.

(5) The safety net oversight committee appointed by the superintendent of public instruction shall consist of:

(a) One staff member from the office of the superintendent of public instruction;

(b) Staff of the office of the state auditor who shall be nonvoting members of the committee;

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8 SHB 1357 (c) One or more representatives from school districts or educational service districts knowledgeable of special education programs and funding.

(6) Beginning in the 2025-26 school year, the office of the superintendent of public instruction must distribute safety net awards to school districts on a quarterly basis if the following criteria are met:

(a) The safety net award is provided for a high-cost student who receives special education services from an approved nonpublic agency located outside of the state of Washington;

(b) The school district successfully applied for and received a safety net award for the high-cost student in a prior school year and the student's placement has not changed since that safety net award was granted;

and (c) The school district meets all other safety net award eligibility requirements as determined by the safety net oversight committee.

(7) Beginning in the 2025-26 school year, the office of the superintendent of public instruction must distribute safety net awards to second-class school districts on a quarterly basis.

(8)(a) Beginning in the 2019-20 school year, a high-need student is eligible for safety net awards from state funding under subsection (2)(e) and (g) of this section if the student's individualized education program costs exceed two and three-tenths times the average per-pupil expenditure as defined in Title 20 U.S.C.

Sec.

7801, the every student succeeds act of 2015.

(b) Beginning in the 2023-24 school year, a high-need student is eligible for safety net awards from state funding under subsection (2)(e) and (g) of this section if the student's individualized education program costs exceed:

(i) 2 times the average per-pupil expenditure, for school districts with fewer than 1,000 full-time equivalent students;

(ii) 2.2 times the average per-pupil expenditure, for school districts with 1,000 or more full-time equivalent students.

(c) For purposes of (b) of this subsection, "average per-pupil expenditure" has the same meaning as in 20 U.S.C.

Sec.

7801, the every student succeeds act of 2015, and excludes safety net funding provided in this section.

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9 SHB 1357 NEW SECTION.

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6.

(1)(a) The omnibus operating appropriations act, chapter 475, Laws of 2023, appropriated funding to the office of the superintendent of public instruction for two- year demonstration projects that build school-wide systems to support students in distress and prevent crisis escalation cycles that may result in restraint or isolation.

In accordance with the legislation, the office of the superintendent of public instruction established demonstration projects with demonstration sites and pilot sites.

(b) Six demonstration sites were selected to showcase best practices and to serve as learning communities and examples that would allow other school districts to observe positive practices in real-world settings.

Sixteen pilot sites were selected to engage in targeted professional development, including in inclusionary practices, through learning experiences offered by the demonstration sites and state contracted professional development providers, as well as complete other tasks to achieve the project's goal.

(c) In its progress report on the outcomes of the demonstration projects, the office of the superintendent of public instruction recommended that the projects be funded for two additional years.

(2)(a) Subject to the availability of amounts appropriated for this specific purpose, the office of the superintendent of public instruction shall provide grants to:

(i) Support inclusive teaching practices and student behavior management practices for six demonstration sites that are ready to exhibit adopted best practices and 16 pilot sites committed to adopting best practices;

and (ii) offer best practices training to the pilot sites.

Grant funding and training must be prioritized to support students with individualized education programs who spend the least amount of time in general education classrooms.

(b) The demonstration sites receiving grants under this subsection must showcase the following practices:

Staff use of inclusive teaching practices and student behavior management practices;

staff knowledge and support of district policies;

student and school needs assessments;

use of regulation spaces for students;

and data collection and reporting related to disruptive student behavioral incidents.

The demonstration sites must continue to serve as learning communities and examples that allow other school districts, not only the pilot sites, to observe positive practices in real-world settings.

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10 SHB 1357 (c) The pilot sites receiving grants under this subsection must take advantage of learning experiences provided by state contractors and demonstration sites to build school-level and district-level systems that incorporate positive, inclusive, student behavior management practices to prevent crisis escalation and reduce disruptive behavioral incidents, with particular focus on students with disabilities.

The pilot sites must improve data collection and reporting systems and complete other tasks to achieve the project's goal.

(3) By November 15, 2026, and in accordance with RCW 43.01.036, the office of the superintendent of public instruction shall provide the appropriate committees of the legislature with a final report on the demonstration projects.

The report must, to the extent possible, quantify the impact of the demonstration projects in terms of student outcomes, such as changes in disruptive student behavior, increases in the amount of time students with disabilities spend in the general education setting, or increases in assessment scores.

The report must include an estimate of the fiscal impact that use of the practices identified in subsection (2)(b) of this section might have on school district budgets if adopted statewide.

The report must also address key implementation challenges and findings, as well as include recommendations for statewide policy changes.

(4) For the purposes of this section, "student behavior management" means the knowledge and skills to:

(a) Implement proactive classroom management strategies that create a positive and safe learning environment;

(b) Recognize the emotional or behavioral distress of students and respond using evidence-based, trauma-informed behavioral health supports that are age and developmentally appropriate, are restorative, and consider any disabilities of the students;

(c) Understand and implement behavior management practices and positive behavioral supports within a multitiered system of supports;

and (d) Use evidence-based, trauma-informed, and student-centered approaches for de-escalating aggressive student behaviors that include problem solving and conflict resolution and are less restrictive than isolation or restraint.

(5) This section expires August 1, 2027.

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11 SHB 1357 Sec.

7.

RCW 28A.150.560 and 2023 c 417 s 6 are each amended to read as follows:

(1) It is the policy of the state that for purposes of state funding allocations, students eligible for and receiving special education generate the full basic education allocation under RCW 28A.150.260 and, as a class, are to receive the benefits of this allocation for the entire school day, as defined in RCW 28A.150.203, whether the student is placed in the general education setting or another setting.

(2) The superintendent of public instruction shall develop an allocation and cost accounting methodology ((that ensures state general apportionment funding for students who receive their basic education services primarily in an alternative classroom or setting are prorated and allocated to the special education program and accounted for before calculating special education excess costs)) to account for expenditures beyond amounts provided through the special education funding formula under RCW 28A.150.390.

This method of accounting must shift 25 percent of a school district's base allocation as defined in RCW 28A.150.390 for students eligible for and receiving special education to the school district's special education program for expenditure.

(3) To the extent that a school district's special education program expenditures exceed state funding in a school year provided under RCW 28A.150.390 and 28A.150.392, and redirected general apportionment revenue under subsection (2) of this section, the school district must use the remaining portion of the school district's base allocation as defined in RCW 28A.150.390 for students eligible for and receiving special education for the expenditures prior to using other funding sources.

(4) Unless otherwise prohibited by law, nothing in this section prohibits school districts from using other funding and state allocations above the amounts provided under RCW 28A.150.390 and subsections (2) and (3) of this section to serve students eligible for and receiving special education.

(5) Nothing in this section requires districts to provide services in a manner inconsistent with the student's individualized education program or other than in the least restrictive environment as determined by the individualized education program team.

(((3))) (6) The superintendent of public instruction shall provide the legislature with an accounting of prorated general p.

12 SHB 1357 apportionment allocations provided to special education programs broken down by school district by January 1, 2024, and then every January 1st of odd-numbered years thereafter.

NEW SECTION.

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8.

(1) The office of the superintendent of public instruction shall use information gathered from the demonstration projects and the technical assistance funded by section 501(4)(mm), chapter 475, Laws of 2023 to develop a strategy and with a detailed timeline to implement a prohibition on isolating students in prekindergarten through grade five.

The goal date for the prohibition should be July 1, 2032.

The plan must be reported to the appropriate committees of the legislature by December 1, 2027, in accordance with RCW 43.01.036.

(2) This section expires July 1, 2028.

NEW SECTION.

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9.

If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2025, in the omnibus appropriations act, this act is null and void.

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