This bill is reported out by the Joint Standing Committee on Education and Cultural Affairs pursuant to Resolve 2025, chapter 84. The committee has not taken a position on the substance of this bill. By reporting this bill out, the committee is not suggesting and does not intend to suggest that it agrees or disagrees with any aspect of this bill. The committee is reporting the bill out for the sole purpose of having a bill printed that can be referred to the committee for an appropriate public hearing and subsequent processing in the normal course. The committee is taking this action to ensure clarity and transparency in the legislative review of the proposals contained in the bill. The bill makes the following changes to the essential programs and services school funding formula.
1. It provides a new calculation for predicted transportation costs for school administrative units and provides that a school administrative unit's transportation costs may not exceed 105% of the most recent year's reported net transportation expenditures adjusted for inflation.
2. It provides for a variable weight for students identified as economically disadvantaged to be applied based on an index developed by a statewide education policy research institute.
3. It removes a per-pupil cost component for professional development and inserts a new per-pupil cost component for instructional staff support.
4. It increases the special education prevalence threshold from 15% to 17%, removes the additional allocation for high-cost in-district special education placements and corrects cross-references to the high-cost in-district special education allocation.
5. It updates the method of calculating the regional adjustment, to be based on a nationwide cost-of-living index, and provides that the regional adjustment must align with the salary matrix. It also corrects cross-references related to the regional adjustment calculation.
6. It inserts an income indicator into the calculation for a school administrative unit's local contribution to the cost of education.
7. It changes the eligibility requirements for a special education budgetary hardship adjustment.
8. It directs the Department of Education to implement a cap on the maintenance of effort special education expenditure adjustment based on the difference of the base allocation and the prior fiscal year's expenditures.
9. It directs the department to discontinue midyear funding adjustments for out-of- district tuition costs for special education students.

Statutes affected:
Bill Text LD 2226, HP 1503: 20-A.2413, 20-A.15672, 20-A.15675, 20-A.15676, 20-A.15680, 20-A.15681, 20-A.15682, 20-A.15688, 20-A.15689