Chapter 989 Oregon Laws 1999

Session Law

AN ACT

SB 363

Relating to children; creating new provisions; amending ORS 316.099, 327.006, 327.013, 327.023, 339.115, 339.129, 339.137, 343.035, 343.041, 343.155, 343.164, 343.165, 343.167, 343.173, 343.175, 343.177, 343.193, 343.287, 343.499, 343.507, 343.521, 343.527 and 343.565; repealing ORS 343.195 and 343.227 and section 1, chapter 639, Oregon Laws 1999 (Enrolled Senate Bill 932); and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 339.115 is amended to read:

339.115. (1) Except as provided in ORS 339.141, authorizing tuition for courses not part of the regular school program, the district school board shall admit free of charge to the schools of the district all persons between the ages of 5 and 19 residing therein. The person whose 19th birthday occurs during the school year shall continue to be eligible for a free and appropriate public education for the remainder of the school year. However, a district school board may admit other nonresident persons, determine who is not a resident of the district and may fix rates of tuition for nonresidents.

(2) A district must admit an otherwise eligible person who has not yet attained 21 years of age prior to the beginning of the current school year if the person is:

(a) Receiving special education and has not yet received a regular high school diploma; or

(b) Shown to be in need of additional education in order to receive a diploma.

(3) The obligation to make a free appropriate public education available to individuals with disabilities 18 through 21 years of age who are incarcerated in an adult correctional facility applies only to those individuals who, in their last educational placement prior to their incarceration in the adult correctional facility:

(a) Were identified as being a child with a disability as defined in ORS 343.035; or

(b) Had an individualized education program as described in section 22 of this 1999 Act.

(4) For purposes of subsection (3) of this section, "adult correctional facility" means:

(a) A local correctional facility as defined in ORS 169.005;

(b) A regional correctional facility as defined in ORS 169.620; or

(c) A Department of Corrections institution as defined in ORS 421.005.

[(3)] (5) An otherwise eligible person under subsection (2) of this section whose 21st birthday occurs during the school year shall continue to be eligible for a free appropriate public education for the remainder of the school year.

[(4)] (6) The person may apply to the board of directors of the school district of residence for admission after the 19th birthday as provided in subsection (1) of this section. A person aggrieved by a decision of the local board may appeal to the State Board of Education. The decision of the state board is final and not subject to appeal.

[(5)] (7) Notwithstanding ORS 339.133 (1), a school district shall not exclude from admission a child located in the district solely because the child does not have a fixed place of residence or solely because the child is not under the supervision of a parent, guardian or person in a parental relationship.

[(6)] (8) Notwithstanding subsection (1) of this section, a school district:

(a) May for the remaining period of an expulsion deny admission to the regular school to a resident student who is expelled from another school district; and

(b) Shall for at least one calendar year from the date of the expulsion and if the expulsion is for more than one calendar year, may for the remaining period of time deny admission to the regular school program to a student who is under expulsion from another school district for an offense that constitutes a violation of a school district policy adopted pursuant to ORS 339.250 (6).

[(7)] (9) A child entering the first grade during the fall term shall be considered to be six years of age if the sixth birthday of the child occurs on or before September 1. A child entering kindergarten during the fall term shall be considered to be five years of age if the fifth birthday of the child occurs on or before September 1. However, nothing in this section prevents a district school board from admitting free of charge a child whose needs for cognitive, social and physical development would best be met in the school program, as defined by policies of the district school board, to enter school even though the child has not attained the minimum age requirement but is a resident of the district.

SECTION 1a. (1) The amendments to ORS 339.115 by section 1 of this 1999 Act do not apply to:

(a) Individuals who, on the effective date of this 1999 Act, have not yet attained 21 years of age, are receiving special education and have received a regular high school diploma; and

(b) Individuals 18 through 21 years of age with disabilities who are incarcerated in an adult correctional facility on the effective date of this 1999 Act.

(2) This section is repealed January 1, 2006.

SECTION 2. ORS 339.129 is amended to read:

339.129. (1) A school district shall provide or cause to be provided appropriate education for children placed in a [county] local or regional correctional facility located in the school district. The education may be provided by the school district or an education service district.

(2) The school district may claim State School Fund reimbursement under ORS 327.006 to 327.133 and 327.731 for each child who is in a [county] local or regional correctional facility.

(3) A local or regional correctional facility shall notify the school district within which the facility is located of the name and date of birth of each school age child placed in the facility, including a child with a disability under the age of 22 years who may be eligible for special education. The notice shall be in writing and shall be given within five business days of the child's placement in the facility.

(4) The local or regional correctional facility shall allow the school district and education service district to have safe and reasonable access to children placed in that facility for whom the school district is required to provide education.

(5) As used in this section:

(a) "Local correctional facility" means a local correctional facility as defined in ORS 169.005.

(b) "Regional correctional facility" means a regional correctional facility as defined in ORS 169.620.

SECTION 3. Section 4 of this 1999 Act is added to and made a part of ORS chapter 339.

SECTION 4. (1) As used in this section, "child with a disability" has the meaning given that term in ORS 343.035.

(2) A child with a disability continues to be entitled to a free appropriate public education if the child has been removed for disciplinary reasons from the child's current educational placement for more than 10 school days in a school year.

(3) A disciplinary removal is considered a change in educational placement and the school district shall follow special education due process procedures under ORS 343.155 (5) if:

(a) The removal is for more than 10 consecutive school days; or

(b) The child is removed for more than 10 cumulative school days in a school year, and those removals constitute a pattern based on the length and total time of removals and the proximity of the removals to one another.

(4) A child with a disability shall not be removed for disciplinary reasons under subsection (3) of this section for misconduct that is a manifestation of the child's disability, except as provided under ORS 343.177 (2)(c) or (d).

(5) Notwithstanding ORS 339.250 (9) and (10), a school district shall provide a free appropriate public education in an alternative setting to a child with disabilities even if the basis for expulsion was a weapon violation pursuant to ORS 339.250 (6).

SECTION 5. ORS 343.035 is amended to read:

343.035. As used in this chapter unless the context requires otherwise:

(1) "Children with disabilities" means those school age children who are entitled to [an] a free appropriate public education as specified by ORS 339.115 and who require special education because they have been evaluated as having one of the following conditions as defined by rules established by the State Board of Education: Mental retardation, hearing impairment including difficulty in hearing and deafness, speech or language impairment, visual impairment, including blindness, deaf-blindness, [serious] emotional disturbance, orthopedic or other health impairment, autism, traumatic brain injury or specific learning disabilities.

(2) "Decision" means the decision of the hearing officer.

(3) "Determination" means the determination by the school district concerning the identification, evaluation or educational placement of a child with disabilities or the provision of a free appropriate public education to the child in a program paid for by the district.

(4) "Developmental delay" means:

(a) Delay, at a level of functioning and in accordance with criteria established by rules of the State Board of Education, in one or more of the following developmental areas: Cognitive development; physical development, including vision and hearing; communication development; social or emotional development or adaptive development; or

(b) A disability, in accordance with criteria established by rules of the State Board of Education, that can be expected to continue indefinitely and is likely to cause a substantial delay in a child's development and ability to function in society.

(5) "Early childhood special education" means free, appropriate, specially designed instruction to meet the unique needs of a preschool child with a disability, three years of age until the age of eligibility for kindergarten, where instruction is provided in any of the following settings: Home, hospitals, institutions, special schools, classrooms, and community child care or preschool settings, or both.

(6) "Early intervention services" means services for preschool children with disabilities from birth until three years of age that are:

(a) Designed to meet the developmental needs of children with disabilities and the needs of the family related to enhancing the child's development;

(b) Selected in collaboration with the parents; and

(A) Under public supervision;

(B) By personnel qualified in accordance with criteria established by rules of the State Board of Education; and

(7) "Individualized education program" means a written statement of an educational program for a child with a disability that is developed, reviewed and revised in a meeting in accordance with criteria established by rules of the State Board of Education for each child eligible for special education and related services under this chapter.

[(7)] (8) "Individualized family service plan" means a written plan of early childhood special education, related services, early intervention services and other services developed in accordance with criteria established by rules of the State Board of Education for each child eligible for services under this chapter.

[(8)] (9) "Instruction" means providing families with information and skills that support the achievement of the goals and outcomes in the child's individualized family service plan and working with preschool children with disabilities in one or more of the following developmental areas: Communication development, social or emotional development, physical development, including vision and hearing, adaptive development and cognitive development.

(10) "Mediation" means a voluntary process in which an impartial mediator assists and facilitates two or more parties to a controversy in reaching a mutually acceptable resolution of the controversy and includes all contacts between a mediator and any party or agent of a party, until such time as a resolution is agreed to by the parties or the mediation process is terminated.

[(9)] (11) "Order" has the meaning given that term in ORS 183.310 to 183.550.

[(10)] (12) "Other services" means those services which may be provided to preschool children with disabilities and to their families that are not early childhood special education or early intervention services and are not paid for with early childhood special education or early intervention funds.

[(11)] (13) "Parent" means the parent, person acting as a parent or a legal guardian, other than a state agency, of the child or the surrogate parent.

[(12)] (14) "Preschool children with disabilities" means all children from:

(a) Birth until three years of age who are eligible for early intervention services because they are experiencing developmental delay or have diagnosed mental or physical conditions that will result in developmental delay; or

(b) Three years of age to eligibility for entry into kindergarten who need early childhood special education services because they are experiencing developmental delay or because they have been evaluated as having one of the conditions listed for school age children under subsection (1) of this section.

[(13)] (15) "Related services" means transportation and such developmental, corrective and other supportive services as are required to assist a child with disabilities to benefit from special education, and includes speech-language [pathology] and audiology services, psychological services, physical and occupational therapy, recreation including therapeutic recreation, early identification and assessment of disabilities in children, counseling services including rehabilitation counseling, orientation and mobility services and medical services for diagnostic or evaluation purposes. "Related services" also includes school health services, social work services in schools and parent counseling and training.

[(14)] (16) "School district" means a common or union high school district or an education service district that is charged with the duty or contracted with by a public agency to educate children eligible for special education and includes the Department of Education for the purpose of carrying out the procedures required by ORS 343.165 to 343.175 for education programs under ORS 343.975.

[(15)] (17) "Service coordination" means the activities carried out by a service coordinator to assist and enable a preschool child [eligible under ORS 343.035, 343.095, 343.499, 343.521 and 343.531] with disabilities and the child's family to receive the rights, procedural safeguards and services that are authorized under the state's early intervention [program] and early childhood special education programs and to coordinate access to other services designated on the individualized family service plan.

[(16)(a)] (18)(a) "Special education" means specially designed instruction at no cost to the parents, to meet the unique needs of a child with a disability, including instruction conducted in the classroom, in the home, in hospitals and institutions and in other settings, and instruction in physical education.

(b) "Special education" also includes speech-language [pathology or vocational education] services, transition services or other related services designated by rule if it consists of specially designed instruction, at no cost to the parents, to meet the unique needs of a child with a disability.

SECTION 5a. If Senate Bill 932 becomes law, section 1, chapter 639, Oregon Laws 1999 (Enrolled Senate Bill 932) (amending ORS 343.035), is repealed.

SECTION 6. ORS 343.041 is amended to read:

343.041. (1) Pursuant to rules of the State Board of Education, the Superintendent of Public Instruction shall be responsible for the general supervision of all special education programs for children with disabilities, early childhood special education and early intervention services for preschool children with disabilities within the state, including all such programs administered by any state agency or common or union high school district or education service district.

(2) All special education programs for children with disabilities, early childhood special education and early intervention services for preschool children with disabilities within this state shall meet the standards and criteria established therefor by the State Board of Education.

(3) The State Board of Education shall adopt by rule procedures whereby the superintendent investigates and resolves complaints that the Department of Education, a local education agency or an early intervention or early childhood special education contractor has violated a federal law or statute that applies to a special education or early childhood special education program.

(4) The State Board of Education shall adopt rules relating to the establishment and maintenance of standards to [insure] ensure that personnel providing special education and early childhood special education and early intervention services are appropriately and adequately trained.

(5) The Governor shall direct that agencies affected by this section shall enter into cooperative agreements to achieve necessary uniformity in meeting the standards and criteria established by the state board under subsection (2) of this section.

(6) The Governor shall direct that each public agency obligated under federal or state law to provide or pay for any services that are also considered special education or related services necessary for ensuring a free appropriate public education to children with disabilities, including but not limited to the Office of Medical Assistance Programs, shall enter into cooperative agreements with the Department of Education concerning:

(a) Allocation among agencies of financial responsibility for providing services;

(b) Conditions, terms and procedures for reimbursement; and

(c) Policies and procedures for coordinating timely and appropriate delivery of services.

(7) All cooperative agreements entered into under subsections (5) and (6) of this section shall include procedures for resolving interagency disputes.

SECTION 7. ORS 343.095 is added to and made a part of ORS 343.455 to 343.534.

SECTION 8. Section 9 of this 1999 Act is added to and made a part of ORS 343.155 to 343.183.

SECTION 9. When a child with a disability reaches the age of majority as described in ORS 109.510 or 109.520 or is emancipated pursuant to ORS 419B.550 to 419B.558:

(1) The rights accorded to the child's parents under this chapter transfer to the child;

(2) The school district shall provide any written notice required to both the child and the parents; and

(3) The school district shall notify the child and the parents of the transfer of rights.

SECTION 10. ORS 343.155 is amended to read:

343.155. The State Board of Education shall establish by rule procedures to protect the rights of every child with a disability who is eligible for special education and every child who there is a reasonable cause to believe has a disability, including:

(1) Rules providing for the participation of the parents of a child with a disability in meetings regarding the child's identification, evaluation, individualized education program, educational placement and the provision of a free appropriate public education to the child.

[(1)] (2) Rules governing the procedures for the appointment of a surrogate for the parent and other rules necessary to protect the special educational rights of the child, which shall include, but need not be limited to, rules applicable whenever:

(a) No parent of the child can be identified or located after reasonable efforts or when there is reasonable cause to believe that the child has a disability and is a ward of the state; or

(b) The child reaches the age of majority and has been determined not to have the ability to give informed consent regarding the child's education.

[(2)] (3) Rules prescribing mediation procedures and hearings procedures if identification, evaluation, individual education program or placement is contested.

(4) Rules prescribing when notice of procedural safeguards must be given to the parents or the child with disabilities who has reached the age of majority, the content of the notice and the language of the notice.

(5) Rules prescribing standards and procedures for disciplinary actions for behavior or misconduct of a child with a disability.

(6) Other procedural safeguards as required by law.

SECTION 11. Section 12 of this 1999 Act is added to and made a part of ORS 343.155 to 343.183.

SECTION 12. (1) To receive special education, children with disabilities shall be determined eligible for special education services under a school district program approved under ORS 343.045 and as provided under ORS 343.221.

(2) Before initially providing special education, the school district shall ensure that a full and individual evaluation is conducted to determine the child's eligibility for special education and the child's special educational needs.

(3) Eligibility for special education shall be determined pursuant to rules adopted by the State Board of Education.

(4) Under rules adopted by the State Board of Education, each school district shall conduct an evaluation every three years, or more frequently if conditions warrant or if the parent or teacher requests an evaluation.

(5) If a medical or vision examination or health assessment is required as part of an initial evaluation or reevaluation, the evaluation shall be given:

(a) In the case of a medical examination, by a physician licensed to practice by a state board of medical examiners;

(b) In the case of a health assessment, by a nurse licensed by a state board of nursing and specially certified as a nurse practitioner or by a licensed physician assistant; and

(c) In the case of a vision examination, by an ophthalmologist or optometrist licensed by a state board.

SECTION 13. ORS 343.164 is amended to read:

343.164. (1) A school district shall obtain informed written parental consent [must be obtained] before [a] the school district conducts a preplacement evaluation and before a child with a disability is initially placed in a program providing special education and related services.

(2) A school district shall obtain informed written parental consent before the school district conducts a reevaluation of a child with a disability.

(3) Notwithstanding subsection (2) of this section, written parental consent need not be obtained if the school district can demonstrate that it has taken reasonable measures to obtain consent and that the child's parent has failed to respond.

(4) The school district shall follow procedures prescribed in rules of the State Board of Education when necessary consent is not obtained.

[(2) Written notice that meets the requirements of subsection (3) of this section must be given to the parents of a child with a disability a reasonable time before the school district:]

[(a) Proposes to initiate or change the identification, evaluation or educational placement of the child or the provision of a free appropriate public education to the child; or]

[(b) Refuses to initiate or change the identification, evaluation or educational placement of the child or the provision of a free appropriate public education to the child.]

[(3) The written notice must include:]

[(a) A full explanation of all of the procedural safeguards available to the parents;]

[(b) A description of the action proposed or refused by the school district, an explanation of why the school district proposes or refuses to take the action and a description of any options the school district considered and the reasons why those options were rejected;]

[(c) A description of each evaluation procedure, test, record or report the school district uses as a basis for the proposal or refusal; and]

[(d) A description of any other factors that are relevant to the school district's proposal or refusal.]

[(4) The notice must be:]

[(a) Written in language understandable to the general public; and]

[(b) Provided in the native language of the parent or other mode of communication used by the parent, unless it is clearly not feasible to do so.]

[(5) If the native language or other mode of communication of the parent is not a written language, the school district shall take steps to insure:]

[(a) That the notice is translated orally or by other means to the parent in the parent's native language or other mode of communication;]

[(b) That the parent understands the content of the notice; and]

[(c) That there is written evidence that the requirements of this subsection have been met.]

SECTION 14. Section 15 of this 1999 Act is added to and made a part of ORS 343.155 to 343.183.

SECTION 15. (1) A school district shall give written notice to the parents of a child with a disability a reasonable time before the school district:

(a) Proposes to initiate or change the identification, evaluation or educational placement of the child or the provision of a free appropriate public education to the child; or

(b) Refuses to initiate or change the identification, evaluation or educational placement of the child or the provision of a free appropriate public education to the child.

(2) The written notice must comply with the rules prescribed by the State Board of Education.

(3) The written notice required under subsection (1) of this section shall be:

(a) Written in language understandable to the general public; and

(b) Provided in the native language of the parent or other mode of communication used by the parent, unless it is clearly not feasible to do so.

(4) If the native language or other mode of communication of the parent is not a written language, the school district shall take steps to ensure:

(a) That the notice is translated orally or by other means to the parent in the parent's native language or other mode of communication;

(b) That the parent understands the content of the notice; and

(c) That there is written evidence that the requirements of this subsection have been met.

SECTION 16. ORS 343.165 is amended to read:

343.165. [(1) If the parent withholds or refuses consent for the preplacement evaluation or initial placement of a child with a disability, the school district shall follow procedures prescribed in rules of the State Board of Education when consent is not obtained.]

[(2)] (1) A hearing shall be conducted pursuant to rules of the State Board of Education if [the parent requests a hearing and]:

(a) [Contests] The parent requests a hearing to contest the determination of the school district concerning the identification, evaluation, individualized education program, [or] educational placement [of] or the provision of a free appropriate public education to the child; or

[(b) Claims that the result of the determination of the district is to deny the child a free appropriate public education.]

(b) The school district requests a hearing to obtain a decision regarding whether its identification, evaluation, individualized education program or educational placement of the child is appropriate or whether the district's proposed action is necessary to provide the child with a free appropriate public education.

(2) The State Board of Education shall adopt rules that establish when a school district is obligated to initiate a contested case hearing to ensure that a student with disabilities is provided with a free appropriate public education.

(3) The board's rules in subsection [(2)] (1) of this section shall be as consistent as possible with the procedures applicable to a contested case under ORS 183.310 to 183.550. However, the board's rules [shall prohibit the introduction of any evidence at the hearing that has not been disclosed to both parties] shall provide that:

(a) Any party to a hearing has the right to prohibit the introduction of any evidence that has not been disclosed to that party at least five business days before the hearing; and

(b) The hearing officer may prohibit the introduction of any evidence regarding evaluations and recommendations based on those evaluations that a party intends to use at the hearing, if the evidence has not been disclosed to the other party at least five business days before the hearing, unless the other party consents to the introduction of the evidence.

(4) Notwithstanding subsection (3) of this section, in an expedited hearing the evidence must be disclosed to the other party not later than two business days before the hearing.

(5) The parent shall be entitled to have the child who is the subject of the hearing present at the hearing and to have the hearing open to the public.

[(4) The school district may also commence the contested case proceedings to obtain a decision regarding whether its identification, evaluation or educational placement of the child is appropriate or whether the result of the determination of the district is to provide the child with free appropriate public education. The State Board of Education shall adopt rules that establish when a school district is obligated to initiate a contested case hearing to insure that a student with disabilities is provided a free appropriate public education.]

(6) When either party requests, an expedited hearing shall be held in a dispute over a disciplinary action for a child with a disability if:

(a) The child's parent disagrees with a determination that the child's behavior was not a manifestation of the child's disability or with any decision regarding the child's educational placement; or

(b) The school district maintains that it is dangerous for the child to be in the child's current educational placement during the pendency of the hearing.

[(5)] (7) The hearing shall be conducted by an independent hearing officer appointed by the Superintendent of Public Instruction. The hearing officer shall not be:

(a) An employee of a school district involved in the education or care of the child;

(b) An employee of the Department of Education; or

(c) A person having any personal or professional interest which would conflict with the person's objectivity in the hearing.

SECTION 17. ORS 343.167 is amended to read:

343.167. (1) If the finding at the hearing held under ORS 343.165 is that the identification, evaluation and educational placement by the district are appropriate and that the child is being provided a free appropriate public education, the hearing officer shall decide in support of the determination of the district.

(2) If the finding at the hearing is that the identification, evaluation or educational placement is not appropriate or that the child is not being provided a free appropriate public education, the hearing officer shall [decide that the school district shall revise or modify its placement in order to provide the child with a free appropriate education] grant appropriate relief within the hearing officer's scope of authority.

(3) The decision shall be entered not later than 45 days after the request for hearing is filed unless an extension has been granted by the hearing officer at the request of the parent or the school district. Copies of the decision shall be sent to the parent and to the school district accompanied by a statement describing the method of appealing the decision.

(4) In expedited hearings conducted pursuant to ORS 343.165 (6), the State Board of Education shall adopt rules that require a decision within 45 days, without exceptions or extensions.

[(4)] (5) Pursuant to rules of the State Board of Education, the Superintendent of Public Instruction shall bill the school district for all reasonable costs connected with the appointment of an independent hearing officer and the conduct of a due process hearing. The district shall make payment to the Department of Education for the cost of the hearing within 30 days of receipt of the billing.

SECTION 18. ORS 343.173 is amended to read:

343.173. (1) Notwithstanding the limitation on access to records under ORS 192.410 to 192.505, 326.565, 326.575 and 336.187, the parent is entitled at any reasonable time to examine all of the records of the school district pertaining to the identification, evaluation and educational placement of the child and the provision of a free appropriate public education to the child.

[(2) Under rules adopted by the State Board of Education, each school district shall conduct an evaluation of a child with disabilities every three years or more frequently if conditions warrant or if the parent or teacher requests an evaluation.]

[(3)] (2) Any parent is entitled to obtain an independent evaluation at the expense of the school district if the parent disagrees with an evaluation obtained by the district.

[(4)] (3) If the school district disagrees with the parent's request for an independent educational evaluation, the district may initiate a hearing under ORS 343.165 to show that the district's evaluation is appropriate. If the final decision is that the district's evaluation is appropriate, the parent has the right to an independent educational evaluation, but not at the district's expense.

[(5) Each school district shall provide, on request, information about where an independent educational evaluation may be obtained.]

(4) If the parent requests an independent educational evaluation of the child, the school district shall provide information about where an independent educational evaluation may be obtained.

[(6)] (5) If a hearing officer appointed under ORS 343.165 [(5)] requests an independent educational evaluation as part of a hearing, the school district shall pay the cost of the evaluation.

[(7)] (6) For purposes of this section, "independent educational evaluation" means an evaluation conducted by a qualified examiner who is not employed by the school district responsible for the child in question.

SECTION 19. ORS 343.175 is amended to read:

343.175. (1) A decision under ORS 343.165 is final unless the parent or the school district files a civil action under subsection (2) of this section.

(2) Either party aggrieved by the finding and decision of the hearing officer may commence a civil action in any court of competent jurisdiction.

(3) In any action brought under this section, the court shall receive the records from the administrative proceeding, shall hear additional evidence at the request of a party and, basing its decision on the preponderance of the evidence, shall grant such relief as the court determines is appropriate.

(4) Any [state court] civil action brought under this section shall be commenced within 120 days of the date of the hearing officer's final order.

(5) In any action or proceeding brought under ORS 343.165 or in an appeal from any action or proceeding brought under ORS 343.165, the court, in its discretion, may award reasonable attorney fees as part of costs to the parents of a child with a disability who is the prevailing party.

(6) Attorney fees awarded under this section shall be based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished. No bonus or multiplier may be used in calculating these fees.

(7) Attorney fees may not be awarded and related costs may not be reimbursed under this section for services performed after a written offer of settlement to a parent if:

(a) The offer is made within the time prescribed by Rule 68 of the Federal Rules of Civil Procedure, or in case of an administrative hearing, more than 10 days before the hearing begins;

(b) The offer is not accepted within 10 days; and

(c) The relief finally obtained by the parents is not more favorable to the parents than the offer of settlement.

(8) Notwithstanding subsection (7) of this section, attorney fees and related costs may be awarded to a parent who is the prevailing party and who was substantially justified in rejecting the settlement offer.

(9) Attorney fees may not be awarded relating to any meeting of the individualized education program team unless the meeting is convened as a result of an administrative proceeding under ORS 343.165, or as a result of judicial action.

(10) Attorney fees may not be awarded for a mediation that is conducted before a request for a hearing under ORS 343.165.

(11) The court shall reduce the amount of attorney fees awarded under this section if:

(a) The parent unreasonably protracted the final resolution of the controversy;

(b) The amount of the attorney fees unreasonably exceeds the hourly rate prevailing in the community for similar services by attorneys of reasonably comparable skill, reputation, and experience;

(c) The time spent and legal services furnished were excessive considering the nature of the action or proceeding; or

(d) In requesting a hearing under ORS 343.165 (1)(a), the attorney representing the parent did not provide written notice to the Superintendent of Public Instruction that included:

(A) The child's name, address and school;

(B) A description of the problem and facts relating to the problem; and

(C) A proposed resolution of the problem.

(12) The court shall not reduce fees under subsection (11) of this section if:

(a) The school district unreasonably protracted the final resolution of the controversy; or

(b) The school district violated the procedural safeguards as set forth in ORS 343.155 to 343.183.

SECTION 20. ORS 343.177 is amended to read:

343.177. (1) During the pendency of any administrative or judicial proceedings concerning the identification, evaluation or educational placement of the child or the provision of a free appropriate public education to the child[:],

[(a)] the child shall remain in the then current educational program placement[; or].

(2) Notwithstanding subsection (1) of this section, the placement of a child may be changed if:

[(b)] (a) [The child shall be placed with the consent of] The parent consents to placement in a program provided or selected by the district at the district's expense until the proceedings referred to in subsection (1) of this section are completed if applying for initial admission to a public school[.];

[(2) The provisions of subsection (1)(a) and (b) of this section do not apply if]

(b) The parent and the school district agree to temporary placement in some other program[.];

(c) The school district orders a change in placement to an appropriate interim alternative educational setting for up to 45 days due to a weapon, illegal drug or controlled substance incident, pursuant to rules of the State Board of Education; or

(d) A hearing officer orders a change in placement to an appropriate interim alternative educational setting for up to 45 days due to the substantial likelihood of injurious behavior, pursuant to rules of the State Board of Education.

(3) For the purposes of subsection (2)(b) of this section, a decision of a hearing officer under ORS 343.165 that agrees with the child's parents that a change of placement is appropriate shall be treated as an agreement between the school district and the parents.

[(3)(a) A change of placement occurs if the child:]

[(A) Is suspended for a total of more than 10 cumulative school days;]

[(B) Is suspended for more than 10 consecutive school days; or]

[(C) Is expelled.]

[(b) Special education due process procedures shall be followed for any change of placement and in any contested case under ORS 343.165.]

SECTION 21. Section 22 of this 1999 Act is added to and made a part of ORS 343.155 to 343.183.

SECTION 22. (1) School districts shall ensure that an individualized education program is developed for each child with a disability as defined in ORS 343.035, pursuant to the rules of the State Board of Education.

(2) The State Board of Education shall establish by rule the contents of an individualized education program, including transition services, and the procedures for the development, review and revision of an individualized education program.

SECTION 23. ORS 343.287 is amended to read:

343.287. (1) There is created a State Advisory Council for Special Education, consisting of [no fewer than nine] members appointed by the Superintendent of Public Instruction. Members shall be representative of the geographic areas of this state.

(2) Members must include:

(a) Individuals with disabilities[,];

(b) Parents or guardians of children with disabilities[,];

(c) Educators of children with disabilities[,];

(d) State and local education officials[,];

(e) Administrators of programs for children with disabilities;

(f) Representatives of institutions of higher education that prepare personnel to work in special education and related services;

(g) Representatives of other state agencies involved in the financing or delivery of related services;

(h) Representatives of private schools and public alternative education programs that are charter schools;

(i) At least one representative of providers of transition services;

(j) Representatives from the state juvenile and adult corrections agencies; and

(k) Other persons associated with or interested in the education of children with disabilities. [Members shall be representative of the geographic areas of the state. The superintendent shall consider recommendations from the local councils in making appointments.]

(3) A majority of the members must be individuals with disabilities or parents of children with disabilities.

[(2)] (4) The State Advisory Council for Special Education shall:

(a) Review aspects of the statewide program of education of children with disabilities and advise the Superintendent of Public Instruction and the [State Board of Education] Department of Education on such programs;[. The council also shall]

(b) Advise the Superintendent of Public Instruction and the [State Board of Education] Department of Education of unmet needs in the education of children with disabilities[,];

(c) Comment publicly on any rules proposed for adoption by the [State Board of Education] Department of Education concerning special education [and the distribution of funds for special education and];

(d) Assist the state in developing and reporting data and evaluations concerning special education[.];

(e) Advise the Department of Education in developing corrective action plans to address findings identified in federal monitoring reports on special education; and

(f) Advise the Department of Education in developing and implementing policies relating to the coordination of services for children with disabilities.

[(3) Terms of office shall be three years with one-third of the members being appointed each year.]

[(4)] (5) Out of the funds appropriated to the Department of Education, the department shall reimburse members for necessary travel and other expenses under ORS 292.495 (2).

SECTION 24. ORS 343.499 is amended to read:

343.499. (1)(a) There is created the State Interagency Coordinating Council[, which shall be composed of at least 15 members but not more than 25 members].

(b) The Governor shall appoint members of the council from a list of eligible appointees provided by the council and agencies described in subsection (2) of this section and shall [insure] ensure that the membership of the council reasonably represents the population of this state.

(c) The Governor shall designate one member of the council to serve as the chairperson, or if the Governor chooses not to name a chairperson, the council may elect one of its members to serve as chairperson. However, any member of the council who represents the Department of Education may not serve as the chairperson of the council.

(2) The membership of the council shall be composed as follows:

(a) At least 20 percent of the council members shall be parents, including minority parents, of preschool children with disabilities or of children with disabilities who are 12 years of age or younger who have knowledge of or experience with programs for infants and toddlers with disabilities. At least one council member shall be a parent of an infant or toddler with a disability or of a child with a disability who is six years of age or younger.

(b) At least 20 percent of the council members shall be public or private providers of early intervention and early childhood special education services.

(d) At least one council member shall be involved in the training and preparation of personnel for employment in early intervention and early childhood special education.

(e) At least one council member shall represent each of the state agencies that are involved in the provision of or payment for services for preschool children with disabilities and their families and shall have sufficient authority to engage in policymaking and implementation on behalf of these agencies, including but not limited to the Department of Education, the Mental Health and Developmental Disability Services Division, the State Office for Services to Children and Families, the Health Division, the Alcohol and Drug Abuse Programs, the Office of Medical Assistance Programs, the Adult and Family Services Division, the Department of Consumer and Business Services, the State Commission on Children and Families and the Child Development and Rehabilitation Center of the Oregon Health Sciences University.

(f) At least one council member shall represent the federal Head Start program.

(g) At least one council member shall represent the Child Care Division of the Employment Department.

[(g)] (h) At least one council member shall be a member of the State Advisory Council for Special Education created under ORS 343.287.

[(h)] (i) The council may include other members appointed by the Governor, including but not limited to one representative from the United States Bureau of Indian Affairs or, where there is no school operated or funded by the bureau, from the Indian Health Service or the tribe or tribal council.

(3) The State Interagency Coordinating Council shall:

(a) Advise the Superintendent of Public Instruction and the State Board of Education on unmet needs in the early childhood special education and early intervention programs for preschool children with disabilities, review and comment publicly on any rules proposed by the State Board of Education and the distribution of funds for the programs and assist the state in developing and reporting data on and evaluations of the programs and services.

(b) Advise and assist the represented public agencies regarding the services and programs they provide to preschool children with disabilities and their families, including public comments on any proposed rules affecting the target population and the distribution of funds for such services, and assist each agency in developing services that reflect the overall goals for the target population as adopted by the council.

(c) Advise and assist the Department of Education and other state agencies in the development and implementation of the policies that constitute the statewide system.

(d) Assist all appropriate public agencies in achieving the full participation, coordination and cooperation for implementation of a statewide system that includes but is not limited to:

(A) Seeking information from service providers, service coordinators, parents and others about any federal, state or local policies that impede timely service delivery; and

(B) Taking steps to [insure] ensure that any policy problems identified under subparagraph (A) of this paragraph are resolved.

(e) Advise and assist the Department of Education in identifying the sources of fiscal and other support for preschool services, assigning financial responsibility to the appropriate agencies and ensuring [Insure] that the provisions of interagency agreements under ORS 343.511 are carried out.

(f) Review and comment on each agency's services and policies regarding services for preschool children with disabilities, or preschool children who are at risk of developing disabling conditions, and their families to the maximum extent possible to assure cost-effective and efficient use of resources.

(g) To the extent appropriate, assist the department in the resolution of disputes.

(h) Advise and assist the Department of Education in the preparation of applications and amendments thereto.

(i) Advise and assist the Department of Education regarding the transition of preschool children with disabilities.

(j) Prepare and submit an annual report to the Governor and to the United States Secretary of Education on the status of early intervention programs operated within this state.

(4) The council may advise appropriate agencies about integration of services for preschool children with disabilities and at-risk preschool children.

[(4)] (5) Terms of office for council members shall be three years, except that:

(a) The representative from the State Advisory Council for Special Education shall serve a one-year term; and

(b) The representatives from other state agencies and the representative from the Legislative Assembly shall serve indefinite terms.

[(5)] (6) Subject to approval by the Governor, the council may use federal funds appropriated for this purpose and available to the council to:

(a) Conduct hearings and forums;

(b) Reimburse nonagency council members pursuant to ORS 292.495 for attending council meetings, for performing council duties, and for necessary expenses, including child care for parent members;

(c) Pay compensation to a council member if the member is not employed or if the member must forfeit wages from other employment when performing official council business; [and]

(d) Hire staff; and

(e) Obtain the services of such professional, technical and clerical personnel as may be necessary to carry out its functions.

[(6)] (7) Except as provided in subsection [(5)] (6) of this section, council members shall serve without compensation.

[(7)] (8) The Department of Education shall provide clerical and administrative support, including staff, to the council to carry out the performance of the council's function as described in this section.

(9) The council shall meet at least quarterly. The meetings shall be announced publicly and, to the extent appropriate, be open and accessible to the general public.

(10) No member of the council shall cast a vote on any matter that would provide direct financial benefit to that member or otherwise give the appearance of a conflict of interest under state law.

SECTION 25. ORS 343.507 is amended to read:

343.507. (1) Each contractor for early childhood special education and early intervention services shall assist in the development of a local early intervention interagency advisory council in every county within the contractor's service area.

(2) Each local early intervention interagency advisory council shall include as members at least 20 percent parents of preschool children with disabilities, 20 percent providers of early childhood special education and early intervention services or other services to preschool children with disabilities, a representative of the State Commission on Children and Families and representatives from public and private agencies that serve young children and their families, including but not limited to Head Start and Oregon prekindergartens, community child care, the Child Care Division of the Employment Department, local school districts, [educational] education service districts, Department of Education regional special education programs, the Health Division, community Mental Health and Developmental Disability Services Division programs, the State Office for Services to Children and Families, the Adult and Family Services Division, Indian education agencies, migrant programs serving young children and community colleges.

(3) Each local early intervention interagency advisory council shall select its own chairperson and vice chairperson and fix the duties of its officers.

(4) The department shall establish procedures pursuant to rules of the State Board of Education for seeking and considering local council advice regarding the selection of contractors, coordination of services and procedures for local resolution of disputes.

SECTION 26. ORS 343.521 is amended to read:

343.521. (1) In accordance with rules of the State Board of Education, the agencies under contract with the Department of Education to provide early childhood special education or early intervention services must assure that an individualized family service plan is developed for each preschool child with a disability who is determined eligible for early childhood special education or early intervention services and for the child's family. The Department of Education or its contractors shall not be responsible for the cost of other services of the individualized family service plan that are not early childhood special education or early intervention services. The individualized family service plan must be developed in a meeting conducted within:

(a) Forty-five calendar days from the date the child is referred for early intervention services; or

(b) Thirty calendar days from the time the child is determined to be eligible for the early childhood special education services.

(2) The meeting arrangements must be made with, and written notice provided to, the parents and other participants [at least 10 days] within a reasonable time prior to the meeting date. Meetings must be conducted:

(a) In settings and at times that are convenient to the parent; and

(b) In the native language of the parent or other mode of communication used by the family.

(3)(a) A review of the individualized family service plan for a child and the child's family shall be conducted every six months or more frequently if conditions warrant or if the family requests such a review. The purpose of the periodic review is to determine:

(A) The degree to which progress toward achieving the goals and outcomes is being made; and

(B) Whether modification or revision of the goals and outcomes or services is necessary.

(b) The review may be carried out by a meeting or by another means that is acceptable to the parents and other participants.

(4) A meeting must be conducted on at least an annual basis to evaluate the individualized family service plan for a child and the child's family, and to revise its provisions as appropriate. The results of any current evaluations and other information available from the ongoing assessment of the child and family shall be used in determining what services are needed and shall be provided.

(5) A representative of the school district of the child shall participate in the annual meeting the year before the child enters school.

[(6) Each individualized family service plan shall contain:]

[(a) A statement of the child's present level of development;]

[(b) A statement of the specific early childhood special education or early intervention services necessary to meet the unique needs of the child;]

[(c) With concurrence of the family, a statement of the family's strengths, needs and major outcomes expected to be achieved as they relate to enhance the development of the child;]

[(d) A statement of the annual goals and short-term objectives expected to be achieved for the child, and the criteria, evaluation procedures and evaluation schedules for each short-term objective;]

[(e) Projected dates of initiation of services and the anticipated duration of those services;]

[(f) The name of the service coordinator who is responsible for coordinating the involvement of the family and agencies in implementing early intervention and other services;]

[(g) In the case of children making the transition from early intervention services to early childhood special education or from early childhood special education to public school, steps to be taken to support transition of the child to early childhood special education or public schooling; and]

[(h) Other services, such as medical services, that the child may need but that are not early childhood special education or early intervention services.]

(6) The State Board of Education shall establish by rule the contents of an individualized family service plan.

SECTION 27. ORS 343.527 is amended to read:

343.527. (1) A contractor or contractor's designee shall give written notice [that meets the requirements of subsections (2) and (3) of this section must be given] to the [parent] parents of a preschool child with a disability or the [parent] parents of a preschool child suspected of having a disability [within 10 days] within a reasonable time before the contractor or the contractor's designee:

(a) Proposes to initiate or change the identification, evaluation or placement of the child or the provision of early childhood special education or early intervention services to the child; or

(b) Refuses to initiate or change the identification, evaluation or placement of the child or the provision of early childhood special education or early intervention services to the child.

[(2) The notice in subsection (1) of this section must include:]

[(a) A full explanation of all procedural safeguards available to the parent under this section;]

[(b) A description of the action proposed or refused by the contractor or designee, an explanation of why the contractor or designee proposes or refuses to take the action and a description of any options considered and the reasons why those options were rejected;]

[(c) A description of each evaluation procedure, test, record or report the contractor or designee used as a basis for the proposal or refusal; and]

[(d) A description of any other factors that are relevant to the proposal or refusal.]

(2) The written notice must comply with the rules prescribed by the State Board of Education.

(3) The written notice [must] required under subsection (1) of this section shall be:

(a) Written in language understandable to the general public; and

(b) Provided in the native language of the parent or other mode of communication used by the parent, unless it is clearly not feasible to do so.

(4) If the native language or other mode of communication of the parent is not a written language, the contractor or designee shall take steps to [insure] ensure:

(a) That the notice is translated orally or by other means to the parent in the parent's native language or other mode of communication;

(b) That the parent understands the content of the notice; and

SECTION 28. ORS 343.565 is amended to read:

343.565. As used in ORS 343.565 to 343.595:

(1) "Braille" means the system of reading and writing through touch commonly known as standard English Braille.

[(2) "Individualized education program" means a written statement developed for a student eligible for special education services pursuant to section 602(a)(20) of part A of the Individuals with Disabilities Education Act, 20 U.S.C. 1401(a).]

[(3)] (2) "Student who is blind" means an individual who:

(a) Is eligible for special education due to visual impairment; or

(b) Has a medically indicated expectation of visual deterioration.

SECTION 29. ORS 316.099 is amended to read:

316.099. (1) As used in this section, unless the context requires otherwise:

(a) "Early intervention services" means programs of treatment and habilitation designed to address a child's developmental deficits in sensory, motor, communication, self-help and socialization areas.

(b) "Disabled child" means a child from the age of identification of the disability to the age of 18 who has been determined eligible for early intervention services or is diagnosed for the purposes of special education as being autistic, mentally retarded, multidisabled, visually impaired, hearing impaired, deaf-blind, orthopedically impaired or other health impaired or as having [serious] emotional disturbance or traumatic brain injury, in accordance with State Board of Education rules.

(c) "Special education" means specially designed instruction to meet the unique needs of a disabled child, including regular classroom instruction, instruction in physical education, home instruction and instruction in hospitals, institutions and special schools.

(2) The State Board of Education shall adopt rules further defining "disabled child" for purposes of this section. A diagnosis obtained for the purposes of entitlement to special education or early intervention services shall serve as the basis for a claim for the additional credit allowed under subsection (3) of this section.

(3) In addition to the personal exemption credit allowed by this chapter for state personal income tax purposes for a dependent child of the taxpayer, there shall be allowed an additional personal exemption credit for a disabled child if the child is a disabled child at the close of the tax year. The amount of the credit shall be equal to the amount allowed as the personal exemption credit for the dependent child for state personal income tax purposes for the tax year.

(4) Each taxpayer qualifying for the additional personal exemption credit allowed by this section may claim the credit on the personal income tax return. However, the claim shall be substantiated by any proof of entitlement to the credit as may be required by the state board by rule.

SECTION 30. ORS 327.006 is amended to read:

327.006. As used in ORS 327.006 to 327.133 and 327.731:

(1) "Aggregate days membership" means the sum of days present and absent, according to the rules of the State Board of Education, of all resident pupils when school is actually in session during a certain period. The aggregate days membership of kindergarten pupils shall be calculated on the basis of a half-day program.

(2) "Approved transportation costs" means those costs as defined by rule of the State Board of Education and are limited to those costs attributable to transporting or room and board provided in lieu of transporting:

(a) Elementary school students who live at least one mile from school;

(b) Secondary school students who live at least 1.5 miles from school;

(c) Any student required to be transported for health or safety reasons, according to supplemental plans from districts that have been approved by the state board identifying students who are required to be transported for health or safety reasons, including special education;

(d) Preschool children with disabilities requiring transportation for early intervention services provided pursuant to ORS 343.224 and 343.533;

(e) Students who require payment of room and board in lieu of transportation;

(f) A student transported from one school or facility to another school or facility when the student attends both schools or facilities during the day or week; and

(g) Students participating in school-sponsored field trips that are extensions of classroom learning experiences.

(3) "Average daily membership" or "ADM" means the aggregate days membership of a school during a certain period divided by the number of days the school was actually in session during the same period. However, if a district school board adopts a class schedule that operates throughout the year for all or any schools in the district, average daily membership shall be computed by the Department of Education so that the resulting average daily membership will not be higher or lower than if the board had not adopted such schedule.

(4) "Consumer Price Index" means the Consumer Price Index for All Urban Consumers of the Portland, Oregon, Standard Metropolitan Statistical Area, as compiled by the United States Department of Labor, Bureau of Labor Statistics.

(5) "Kindergarten" means a kindergarten program that conforms to the standards and rules adopted by the State Board of Education.

(6) "Net operating expenditures" means the sum of expenditures of a school district in kindergarten through grade 12 for administration, instruction, attendance and health services, operation of plant, maintenance of plant, fixed charges and tuition for resident students attending in another district, as determined in accordance with the rules of the State Board of Education, but net operating expenditures does not include transportation, food service, student body activities, community services, capital outlay, debt service or expenses incurred for nonresident students.

(7)(a) "Resident pupil" means any pupil:

(A) Whose legal school residence is within the boundaries of a school district reporting the pupil, if the district is legally responsible for the education of the pupil, except that "resident pupil" does not include a pupil who pays tuition or for whom the parent pays tuition or for whom the district does not pay tuition for placement outside the district; or

(B) Whose legal residence is not within the boundaries of the district reporting the pupil but attends school in the district with the written consent of the affected school district boards.

(b) A pupil shall not be considered to be a resident pupil under paragraph (a)(A) of this subsection if the pupil is attending school in another school district pursuant to a contract under ORS 339.125 and in the prior year was considered to be a resident pupil in another school district under paragraph (a)(B) of this subsection. The pupil shall continue to be considered a resident of another school district under paragraph (a)(B) of this subsection.

(c) A pupil shall not be considered to be a resident pupil under paragraph (a)(B) of this subsection if the pupil is attending school in a school district pursuant to an agreement with another school district under ORS 339.133 and in the prior year was considered to be a resident pupil under paragraph (a)(A) of this subsection because the pupil was attending school in another school district pursuant to a contract under ORS 339.125. The pupil shall continue to be considered a resident pupil under paragraph (a)(A) of this subsection.

(d) "Resident pupil" includes a pupil admitted to a school district under ORS 339.115 [(5)] (7).

(8) "Standard school" means a school meeting the standards set by the rules of the State Board of Education.

(9) "Tax" and "taxes" includes all taxes on property, excluding exempt bonded indebtedness, as those terms are defined in ORS 310.140.

SECTION 31. ORS 327.013 is amended to read:

327.013. The State School Fund distributions shall be computed as follows:

(1) General Purpose Grant = Funding Percentage x Target Grant x District extended ADMw.

(2) The funding percentage shall be calculated by the Superintendent of Public Instruction to distribute as nearly as practicable the total sum available for distribution of money.

(3) Target Grant = Statewide Target per ADMw Grant + Teacher Experience Factor.

(4) Statewide Target per ADMw Grant = $4,500.

(5) Teacher Experience Factor = $25 x {District average teacher experience - statewide average teacher experience}. "Average teacher experience" means the average, in years, of teaching experience of certified teachers as reported to the Department of Education.

(6) District extended ADMw = ADMw or ADMw of the prior year, whichever is greater.

(7)(a) Weighted average daily membership or ADMw = average daily membership + an additional amount computed as follows:

(A) 1.0 for each student in average daily membership eligible for special education as a child with disabilities under ORS 343.035, applicable to not to exceed 11 percent of the district's ADM without review and approval of the Department of Education. Children with disabilities eligible for special education in [county] adult local correctional facilities as defined in ORS 169.005 or adult regional correctional facilities as defined in ORS 169.620 shall not be included in the calculation of the 11 percent.

(B) 0.5 for each student in average daily membership eligible for and enrolled in an English as a Second Language program under ORS 336.079.

(C) 0.2 for each student in average daily membership enrolled in a union high school district or in an area of a unified school district where the district is only responsible for educating students in grades 9 through 12 in that area.

(D) -0.1 for each student in average daily membership enrolled in an elementary district operating kindergarten through grade 6 or kindergarten through grade 8 or in an area of a unified school district where the district is only responsible for educating students in kindergarten through grade 8.

(E) 0.25 times the sum of the following:

(i) The number of children 5 to 17 years of age in poverty families in the district, as determined by the Department of Education from a report of the federal Department of Education, as adjusted by the school district's proportion of students in the county receiving free or reduced price lunches under the United States Department of Agriculture's current Income Eligibility Guidelines if the number is higher than the number determined from census data and only if the school district had an average daily membership of 2,500 or less for the 1995-1996 school year, and as further adjusted by the number of students in average daily membership in June of the year of distribution divided by number of students in average daily membership in the district, or its predecessors, in June 1990;

(ii) The number of children in foster homes in the district as determined by the report of the Department of Human Resources to the federal Department of Education, "Annual Statistical Report on Children in Foster Homes and Children in Families Receiving AFDC Payments in Excess of the Poverty Income Level," or its successor, for October 31 of the year prior to the year of distribution; and

(iii) The number of children in the district in state-recognized facilities for neglected and delinquent children, based on information from the Department of Human Resources for October 31 of the year prior to the year of distribution.

(F) An additional amount as determined by ORS 327.077 shall be added to the ADMw for each remote small school in the district.

(G) All numbers of children used for the computation in this section must reflect any district consolidations that have occurred since the numbers were compiled.

(b) The total additional weight that shall be assigned to any student in average daily membership in a district, exclusive of students described in paragraph (a)(E) and (F) of this subsection shall not exceed 2.0.

(8) Transportation Grant = 70 percent of Approved Transportation Costs.

(9) Local Revenues are the total of the following:

(a) The amount of revenue offset against local property taxes as determined by the Department of Revenue under ORS 311.175 (3)(a)(A);

(b) The amount of property taxes actually received by the district including penalties and interest on taxes;

(d) The amount of revenue received by the district from the county school fund;

(e) The amount of revenue received by the district from the 25 percent of federal forest reserve revenues required to be distributed to schools by ORS 294.060 (1);

(f) The amount of revenue received by the district from state managed forestlands under ORS 530.115 (1)(b) and (c);

(g) The amount of revenue received under ORS 334.400 by a school district in an education service district that provides equalization under ORS 334.400;

(h) Moneys received in lieu of property taxes; and

(i) Federal funds received without specific application by the school district and which are not deemed under federal law to be nonsupplantable.

(10) Notwithstanding subsection (9) of this section, Local Revenues do not include the amount of revenue actually received by the district, including penalties and interest on taxes, that is used for payment of bonds issued to finance or refinance an unfunded obligation for prior service costs under a contract of integration pursuant to ORS 238.685 (2)(a).

(11)(a) Facility Grant = 6 percent of total construction costs of new school buildings.

(b) A school district shall receive a Facility Grant in the distribution year that a new school building is first used.

(A) "New school building" includes new school buildings, adding structures onto existing school buildings and adding premanufactured structures to a school district if those buildings or structures are to be used for instructing students.

(B) "Construction costs" does not include costs for land acquisition.

SECTION 32. The amendments to ORS 327.013 by section 31 of this 1999 Act affect State School Fund distributions commencing with the 1999-2000 distribution.

SECTION 33. ORS 327.023 is amended to read:

327.023. In addition to those moneys distributed through the State School Fund, the Department of Education shall provide from state funds appropriated therefor, grants in aid or support for special and compensatory education programs including:

(1) Special schools for children who are deaf or blind as defined in ORS 346.010.

(2) Medicaid match for administration efforts to secure Medicaid funds for services provided to children with disabilities.

(3) Hospital programs for education services to children who are hospitalized for extended periods of time or who require hospitalization due to severe disability as described in ORS 343.261.

(4) Private agency programs for education services to children who are placed by the state in long term care or treatment facilities as described in ORS 343.961.

(5) Regional services provided to children with low-incidence disabling conditions as described in ORS 343.236.

(6) Early childhood special education provided to preschool children with disabilities from age three until age of eligibility for kindergarten as described in ORS 339.185, 343.035, 343.041, 343.055, 343.065, 343.157 and 343.455 to 343.534.

(7) Early intervention services for preschool children from birth until age three as described in ORS 339.185, 343.035, 343.041, 343.055, 343.065, 343.157 and 343.455 to 343.534.

(8) Evaluation services for children with disabilities to determine program eligibility and needs as described in [ORS 343.227] section 12 of this 1999 Act.

(9) Education services to children residing at state hospitals and training centers as described in ORS 343.975.

(10) Disadvantaged children program under ORS 343.680.

(11) Early childhood education under ORS 329.215 to 329.235.

(12) Child development specialist under ORS 329.255.

(13) Youth care centers under ORS 420.885.

(14) Staff development and mentoring.

(15) Professional technical education grants.

(16) Special science education programs.

(17) Talented and Gifted children program under ORS 343.391 to 343.413.

SECTION 34. ORS 339.137 is amended to read:

339.137. (1) A student described in ORS 336.580 shall be considered a resident of the school district in which the student resides by reason of the placement under ORS 336.580 for purposes of distribution of the State School Fund.

(2) A student described in subsection (1) of this section must be admitted to the public schools of the school district where the student is placed pursuant to ORS 336.580.

(3) Except as provided in ORS 343.261, 343.961, 343.975 and 346.010, the school district shall provide or cause to be provided appropriate education to any student described in subsection (1) of this section, including the identification and evaluation of the student for purposes of determining eligibility as a child with disabilities to receive special education and related services enumerated in ORS 343.035 [and 343.195] and services related to a disadvantaged child as defined in ORS 343.650. Suspension or expulsion of a student from the regular school program does not relieve the district of the obligation to provide instruction in the residential program in which the child resides or in another appropriate facility.

SECTION 35. ORS 343.193 is amended to read:

343.193. (1) Any public or private official having reasonable cause to believe that any child with whom the official comes in contact officially is a disabled child who is eligible for but not enrolled in a special education program shall report to the Superintendent of Public Instruction the child's name and the facts leading the official to the belief.

(2) Nothing in ORS 40.225 to 40.295 shall affect the duty to report imposed by subsection (1) of this section except that a physician, licensed psychologist, clergyman or attorney shall not be required to report information communicated by an adult if such information is privileged under ORS 40.225 to 40.295.

(3) Upon receipt of a report under subsection (1) of this section, the Superintendent of Public Instruction shall verify whether the child is enrolled in a special education program and may cause an investigation, including an evaluation under [ORS 343.227] section 12 of this 1999 Act, to be made to determine whether the child is eligible for a program under ORS 343.221.

(4) As used in this section, "public or private official" has the meaning given in ORS 419B.005.

SECTION 36. ORS 343.195 and 343.227 are repealed.

SECTION 37. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect on its passage.

Approved by the Governor August 20, 1999

Filed in the office of Secretary of State August 23, 1999

Effective date August 20, 1999

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