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HB 883

Support Students with Disabilities Act.

2025-2026 Session Introduced by Dean Arp and 15 co-sponsors

A student-specific grant program reimburses 75% of extraordinary disability-related costs to LEAs, funding private placements when needed to reduce out-of-district and hospital-bas

Passed 1st Reading
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Bill Summary · HB 883

HB 883 — “Support Students with Disabilities Act”

Status: Passed 1st Reading (filed 2025); Effective date (as enacted): July 1, 2025

Purpose / Intent

Establish a recurring, student‑specific grant program to help local school administrative units (LEAs) cover ongoing extraordinary costs for students with disabilities — including tuition and services when a student is placed in an approved private (nonpublic) special education program — with the goal of reducing use of modified‑day, homebound, and hospitalized placements.

Key provisions

  • Grant program (DPI administration)

    • Began in the 2025–2026 fiscal year. Administered by the North Carolina Department of Public Instruction (DPI) using the Special State Reserve Fund (SSRF) for children with disabilities.
    • Grants are student‑specific and “follow the student” for special education and related services provided within the State.
    • Grants reimburse 75% of documented extraordinary costs and are disbursed quarterly to providers on a DPI‑approved list.
    • Funds are intended to supplement, not supplant, federal, State, or local funding.

  • Eligibility and application

    • LEAs may apply for a student when the total cost of services for that student equals or exceeds four times the State average per‑pupil expenditure for children with disabilities in the prior fiscal year.
    • Applications must include documentation supporting the cost claim and the student’s IEP must support the services/placement (including private school placement).
    • DPI requires documentation for grant renewal each school year.

  • Definition — “Extraordinary costs”

    • Included: direct costs attributable to IEP services (e.g., salaries of instructional and related‑services personnel, specialized books/materials/equipment, tuition, consultant costs directly attributable to the student).
    • Excluded: administrative/overhead costs, costs for classroom adaptations used by multiple students, evaluation, IEP development, and service coordination costs.

  • Oversight and responsibilities

    • If a grant supports placement in a private nonpublic education program, DPI must ensure that the program complies with applicable State and federal laws (including seclusion and restraint standards).
    • The LEA remains legally responsible for providing a Free Appropriate Public Education (FAPE) in the least restrictive environment and must perform annual IEP reviews (and interim reviews upon parental request).
    • Prior to renewing a grant, DPI must confirm the annual IEP review was completed and that parents/guardians received required procedural‑safeguards notice.

  • Reporting and monitoring

    • Appropriation: $1,000,000 recurring from the General Fund to the SSRF for 2025–2026 to implement the program.
    • DPI must report to the Joint Legislative Education Oversight Committee by March 15, 2026, on number of applications, amounts awarded, types of out‑of‑school placements/providers, and types of extraordinary costs reimbursed.
    • Statutory amendment to G.S. 115C‑107.5 requires DPI to monitor and include, in its annual report (due Oct. 15 each year beginning Oct. 15, 2026), monthly data per LEA on new and continued: homebound placements; modified‑day placements; home/hospital, separate school, residential placements; and psychiatric residential treatment facility placements.

Who is affected

  • Primary: students with disabilities whose IEPs require extraordinary, ongoing services or placements (including approved private placements).
  • LEAs: responsible for applying, documenting costs, maintaining legal responsibility for FAPE, and conducting IEP reviews.
  • DPI: program administration, provider approval, monitoring, reporting.
  • Approved private/nonpublic special‑education providers: potential recipients of quarterly payments for services provided under grants.

Potential fiscal and policy impacts

  • State appropriation initially set at $1,000,000 recurring for FY 2025–26 to seed program implementation. Actual ongoing fiscal exposure depends on number/size of approved grants (DPI reimburses 75% of eligible extraordinary costs).
  • Intended outcome: reduce modified‑day, homebound, and hospitalized placements by funding intensive, student‑specific services and eligible out‑of‑school placements.
  • Administrative impacts: DPI and LEAs will incur workload for eligibility review, provider approvals, monitoring, and annual reporting.

Timeline / Procedural notes

  • Program effective for FY 2025–2026.
  • DPI report to Legislative Oversight Committee due March 15, 2026 on first‑year activity.
  • Annual monitoring/reporting requirements for aggregated placement data start with the Oct. 15, 2026 report.
  • Funds require annual renewal/continuing appropriation subject to the legislative budget process.

If you’d like, I can:
- Extract sample application documentation requirements implied by the bill, or
- Draft a one‑page checklist for LEAs preparing grant applications.

Compiled from official sources — confirm details with the bill’s official record.

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