Revised 5/9/18 11:50 a.m.
* * * Education Financing; Cost Containment * * *
Sec. 1. STATEMENT OF PURPOSE AND INTENTION
This Act shall be known as the Five-Year Education Revitalization, Tax Stabilization,
and Investment Act. It is the intention of the General Assembly to set Vermont on a predictable
path to stabilize statewide education property tax rates through long-term planning. In adopting
these provisions, it is the intention of the General Assembly to close the fiscal year 2019
Education Fund gap and prevent future education property tax rate increases. By capitalizing on
projected growth in the grand list and Education Fund revenue sources, sustainable increases in
education spending can occur without education property tax rate increases. Student-to-staff
ratio increases achieved over the next five years will generate savings that can be invested in
better education outcomes, additional early and higher education opportunities, and lower tax
rates.
Sec. 2. 16 V.S.A. § 4001(6) is amended to read:
(6) “Education spending” means the amount of the school district budget, any
assessment for a joint contract school, career technical center payments made on behalf of the
district under subsection 1561(b) of this title, and any amount added to pay a deficit pursuant to
24 V.S.A. § 1523(b) that is paid for by the school district, but excluding any portion of the
school budget paid for from any other sources such as endowments, parental fund raising, federal
funds, nongovernmental grants, or other State funds such as special education funds paid under
chapter 101 of this title.
(A) [Repealed.]

1

 (B) For Subject to subdivision (C) of this subsection (6), for the purposes of
calculating excess spending pursuant to 32 V.S.A. § 5401(12), “education spending” shall not
include:
***
(C) For the purposes of calculating excess spending pursuant to 32 V.S.A. §
5401(12), the percentage of the aggregated exclusions allowed from “education spending”
provided in subdivision (B) of this subsection (6) shall be as follows:
(i) For fiscal year 2020, 90 percent.
(ii) For fiscal year 2021, 80 percent.
(iii) For fiscal year 2022, 70 percent.
(iv) For fiscal year 2023, 60 percent.
Sec. 3. 16 V.S.A. § 4001(6)(B) is amended to read:
(6) “Education spending” means the amount of the school district budget, any
assessment for a joint contract school, career technical center payments made on behalf of the
district under subsection 1561(b) of this title, and any amount added to pay a deficit pursuant to
24 V.S.A. § 1523(b) that is paid for by the school district, but excluding any portion of the
school budget paid for from any other sources such as endowments, parental fund raising, federal
funds, nongovernmental grants, or other State funds such as special education funds paid under
chapter 101 of this title.
(A) [Repealed.]
(B) Subject to subdivision (C) of this subsection (6), for For the purposes of
calculating excess spending pursuant to 32 V.S.A. § 5401(12), “education spending” shall not
include 50 percent of the following:

2

 ***
(C) For the purposes of calculating excess spending pursuant to 32 V.S.A. §
5401(12), the percentage of the aggregated exclusions allowed from “education spending”
provided in subdivision (B) of this subsection (6) shall be as follows:
(i) For fiscal year 2020, 90 percent.
(ii) For fiscal year 2021, 80 percent.
(iii) For fiscal year 2022, 70 percent.
(iv) For fiscal year 2023, 60 percent.
Sec. 4. 32 V.S.A. § 5401 is amended to read:
§ 5401. DEFINITIONS
As used in this chapter:
***
(12) “Excess spending” means:
(A) The per-equalized-pupil amount of the district's education spending, as defined
in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve
fund under 24 V.S.A. § 2804(b).
(B) In excess of 121 percent the fiscal year percentage provided in subsection (C)
of this section of the statewide average district education spending per equalized pupil increased
by inflation, as determined by the Secretary of Education on or before November 15 of each year
based on the passed budgets to date. As used in this subdivision, “increased by inflation” means
increasing the statewide average district education spending per equalized pupil for fiscal year
2015 by the most recent New England Economic Project cumulative price index, as of

3

 November 15, for state and local government purchases of goods and services, from fiscal year
2015 through the fiscal year for which the amount is being determined.
(C)(i) For fiscal year 2020, in excess of 119 percent.
(ii) For fiscal year 2021, in excess of 117 percent.
(iii) For fiscal year 2022, in excess of 115 percent.
(iv) For fiscal year 2023, in excess of 113 percent.
(v) For fiscal year 2024, in excess of 111 percent.
***
(16) “Income dollar equivalent yield” means the amount of spending per equalized
pupil that would result if the income percentage in subdivision 6066(a)(2) of this title were 2.0
percent, and the statutory reserves under 16 V.S.A. § 4026 and section 5402b of this title were
maintained. “Base income percentage” means a percentage set by the General Assembly each
year under 32 V.S.A. § 5402b(b).
Sec. 5. 32 V.S.A. § 5401(12) is amended to read:
(12) “Excess spending” means:
(A) The per-equalized-pupil amount of the district's education spending, as defined
in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve
fund under 24 V.S.A. § 2804(b).
(B) In excess of the fiscal year percentage provided in subsection (C) of this
section 110 percent of the statewide average district education spending per equalized pupil
increased by inflation, as determined by the Secretary of Education on or before November 15 of
each year based on the passed budgets to date. As used in this subdivision, “increased by
inflation” means increasing the statewide average district education spending per equalized pupil

4

 for fiscal year 2015 by the most recent New England Economic Project cumulative price index,
as of November 15, for state and local government purchases of goods and services, from fiscal
year 2015 through the fiscal year for which the amount is being determined.
(C)(i) For fiscal year 2020, in excess of 119 percent.
(ii) For fiscal year 2021, in excess of 117 percent.
(iii) For fiscal year 2022, in excess of 115 percent.
(iv) For fiscal year 2023, in excess of 113 percent.
(v) For fiscal year 2024, in excess of 111 percent.
Sec. 6. 32 V.S.A. § 5402b is amended to read:
§ 5402b. STATEWIDE EDUCATION TAX YIELDS; RECOMMENDATION OF THE
COMMISSIONER
(a) Annually, no later than on or before December 1, the Commissioner of Taxes,
after consultation with the Secretary of Education, the Secretary of Administration, and the Joint
Fiscal Office, shall calculate and recommend a property dollar equivalent yield, an income dollar
equivalent yield a base income percentage, and a nonresidential property tax rate for the
following fiscal year. In making these calculations, the Commissioner shall assume:
(1) the homestead base tax rate in subdivision 5402(a)(2) of this title is $1.00 per
$100.00 of equalized education property value;
(2) the applicable percentage in subdivision 6066(a)(2) of this title is 2.0;
[Repealed.]
(3) the statutory reserves under 16 V.S.A. § 4026 and this section were are
maintained at five percent; and

5

 (4) the percentage change in the median average education tax bill applied to
nonresidential property, and the percentage change in the median average education tax bill of
homestead property, and the percentage change in the median average education tax bill for
taxpayers who claim an adjustment under subsection 6066(a) of this title are equal.; and
(5) the following amounts are transferred from the Education Fund to the General
Fund in fiscal years 2021 through 2024:
(A) for fiscal years 2021 and 2024, $13,000,000.00; and
(B) for fiscal years 2022 and 2023, $14,000,000.00.
(b) For each fiscal year, the General Assembly shall set a property dollar
equivalent yield and an income dollar equivalent yield, a base income percentage consistent with
the definitions in this chapter.
***
Sec. 7. ONE-TIME FISCAL YEAR 2019 FUND TRANSFER AND INTER-FUND
OBLIGATION
(a) In fiscal year 2018 only, the sum of $8,600,000.00 is transferred from the
General Fund to the Education Fund.
(b) In fiscal year 2019 only, the sum of $45,400,000.00 is transferred from the
General Fund to the Education Fund.
(c) Of the amount in subsections (a) and (b) of this section, the combined total of
$54,000,000.00 shall be paid back to the General Fund from the Education Fund during fiscal
years 2021 through 2024 according to the following schedule:
(1) $13,000,000.00 in fiscal year 2021;
(2) $14,000,000.00 in fiscal year 2022;

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 (3) $14,000,000.00 in fiscal year 2023; and
(4) $13,000,000.00 in fiscal year 2024.
Sec. 8. PROPERTY DOLLAR EQUIVALENT YIELD FOR FISCAL YEAR 2019
(a) Pursuant to 32 V.S.A. § 5402b(b), for fiscal year 2019 only, the property dollar
equivalent yield shall be $9,832.00.
(b) Notwithstanding any other provision of law, for fiscal year 2019 only, the base
income percentage under 32 V.S.A. § 5401(16) shall be 1.72 percent.
Sec. 9. NONRESIDENTIAL PROPERTY TAX RATE FOR FISCAL YEAR 2019
Notwithstanding any other provision of law, for fiscal year 2019 only, the
nonresidential education property tax imposed under 32 V.S.A. § 5402(a)(2) shall be $1.535 per
$100.00.
* * * Property Tax Adjustments * * *
Sec. 10. 32 V.S.A. § 6066(a) is amended to read:
(a) An eligible claimant who owned the homestead on April 1 of the year in which the
claim is filed shall be entitled to an adjustment amount determined as follows:
(1)(A) For a claimant with household income of $90,000.00 or more:
(i) the statewide education tax rate, multiplied by the equalized value of the
housesite in the taxable year;
(ii) minus (if less) the sum of:
(I) the income percentage of household income for the taxable year; plus
(II) the statewide education tax rate, multiplied by the equalized value of the
housesite in the taxable year in excess of $250,000.00.

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 (B) For a claimant with household income of less than $90,000.00 but more than
$47,000.00, the statewide education tax rate, multiplied by the equalized value of the housesite in
the taxable year, minus (if less) the sum of:
(i) the income percentage of household income for the taxable year; plus
(ii) the statewide education tax rate, multiplied by the equalized value of the
housesite in the taxable year in excess of $500,000.00 $400,000.00.
(C) For a claimant whose household income does not exceed $47,000.00, the
statewide education tax rate, multiplied by the equalized value of the housesite in the taxable
year, minus the lesser of:
(i) the sum of the income percentage of household income for the taxable year plus
the statewide education tax rate, multiplied by the equalized value of the housesite in the taxable
year in excess of $500,000.00 $400,000.00; or
(ii) the statewide education tax rate, multiplied by the equalized value of the
housesite in the taxable year reduced by $15,000.00.
(2) “Income percentage” in this section means two percent the base income
percentage adopted by the General Assembly for the fiscal year, multiplied by the education
income property tax spending adjustment under subdivision 5401(13)(B)(A) of this title for the
property tax year which that begins in the claim year for the municipality in which the homestead
residence is located.
***
Sec. 11. 32 V.S.A. § 6066b is added to read:
§ 6066b. NEW HOMESTEAD PROPERTY TAX ADJUSTMENT; COMPUTATION
(a) As used in this section:

8

 (1) “Household income” shall have the same meaning and be calculated in the
same manner as in 32 V.S.A. § 6061(4), minus the dollar amount of personal exemptions
claimed by the claimant under 32 V.S.A. § 5811(21)(C)(i) in the taxable year.
(2) “Income percentage” means the base income percentage adopted by the
General Assembly for the fiscal year, multiplied by the education property tax spending
adjustment under subdivision 5401(13)(A) of this title for the property tax year that begins in the
claim year for the municipality in which the homestead residence is located.
(3) “Eligible housesite” in this section means the lesser of the claimant’s housesite
as defined by 32 V.S.A. § 6061(11) or $250,000.00 minus the claimant’s household income.
(b) Notwithstanding 32 V.S.A. § 6066, an eligible claimant who becomes the
owner of the homestead on or after July 1, 2018 and who is the owner of the homestead on April
1 of the year in which the claim is filed shall be entitled to an adjustment in the amount of the
statewide education tax rate, multiplied by the equalized value of the eligible housesite in the
taxable year minus (if less) the income percentage of household income for the taxable year.
(c) A claimant whose household income does not exceed $47,000.00 shall also be
entitled to an additional adjustment amount from the claimant’s municipal taxes for the
upcoming fiscal year that is equal to the municipal property taxes for the municipal fiscal year
that began in the taxable year upon the eligible housesite minus (if less) three percent of the
household income for the taxable year.
* * * Success in Education * * *
Sec. 12. 16 V.S.A. § 2901 is amended to read:
§ 2901. SUCCESS FOR ALL STUDENTS IN THE GENERAL EDUCATION
ENVIRONMENT

9

 (a)

It is the policy of the State that each Each local school district shall

develop and maintain, in consultation with parents, a comprehensive system of education
that will is designed to result, to the extent appropriate, in all students succeeding in the
general education environment. A comprehensive system of education includes a full range
of services and accommodations that are needed by students in the district. These services
could include a separate alternative program if the district finds that some of its students
could be better served in an environment outside the classroom, or if the district finds that
separate placement is the best way to provide services to a student who is disrupting the
class or having difficulty learning in a traditional school setting for educational, emotional,
or personal reasons and thereby impairing the ability of the classroom teacher to provide
quality high-quality services to that student or to other students. This chapter does not
replace or expand entitlements created by federal law, nor is it the intent of this chapter to
create a higher standard for maintaining a student in the general classroom than the
standard created in the following federal laws: 20 U.S.C. § 1401 et seq. chapter 33,
Individuals with Disabilities Education Act; 29 U.S.C. § 794, Section 504 of the
Rehabilitation Act of 1973; and 42 U.S.C. § 12101 et seq. chapter 126, Americans with
Disabilities Act.
(b)

[Repealed.]

(c)

No individual entitlement or private right of action is created by this

section.
Sec. 13. 16 V.S.A. § 2902 is amended to read:
§ 2902. TIERED SYSTEM OF SUPPORTS AND EDUCATIONAL SUPPORT
TEAM

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 (a)

Within each school district’s comprehensive system of educational

services, each public school shall develop and maintain a tiered system of academic and
behavioral supports for the purpose of providing all students with the opportunity to
succeed or to be challenged in the general education environment. For each school it
maintains, a school district board shall assign responsibility for developing and
maintaining the tiered system of supports either to the superintendent pursuant to a contract
entered into under section 267 of this title or to the school principal. The school shall
provide all students a full and fair opportunity to access the system of supports and
achieve educational success. The tiered system of supports shall, at a minimum, include an
educational support team, instructional and behavioral interventions, and accommodations
that are available as needed for any student who requires support beyond what can be
provided in the general education classroom, and may include intensive, individualized
interventions for any student requiring a higher level of support.
(b)

The tiered system of supports shall:

(1) be aligned as appropriate with the general education curriculum;
(2) be designed to enhance the ability of the general education system to meet
the needs of all students;
(3) be designed to provide necessary supports promptly, regardless of an
individual student’s eligibility for categorical programs;
(4) seek to identify and respond to students in need of support for at-risk
behaviors emotional or behavioral challenges and to students in need of specialized,
individualized behavior supports; and
(5) provide all students with a continuum of evidence-based and research-

11

 based behavior positive behavioral practices that teach and encourage prosocial skills and
behaviors schoolwide promote social and emotional learning, including trauma-sensitive
programming, that are both school-wide and focused on specific students or groups of
students;
(6) promote collaboration with families, community supports, and the system
of health and human services; and
(7) provide professional development, as needed, to support all staff in full
implementation of the multi-tiered system of support.
(c)

The educational support team for each public school in the district

shall be composed of staff from a variety of teaching and support positions and shall:
(1) Determine which enrolled students require additional assistance to be
successful in school or to complete secondary school based on indicators set forth in
guidelines developed by the Secretary, such as academic progress, attendance, behavior, or
poverty. The educational support team shall pay particular attention to students during
times of academic or personal transition.
(2) Identify the classroom accommodations, remedial services, and other
supports that have been to be provided to the identified student.
(3) Assist teachers to plan for and provide services and accommodations to
students in need of classroom supports or enrichment activities.
(4) Develop an individualized strategy, in collaboration with the student’s
parents or legal guardian whenever possible, to assist the identified student to succeed in
school and to complete his or her secondary education.
(5) Maintain

a

written

record

12

of

its

actions. (6)

 Report no less than annually to the Secretary, in a form the Secretary
prescribes, on the ways in which the educational support system has addressed
the needs of students who require additional assistance in order to succeed in
school or to complete secondary school and on the additional financial costs of complying
with this subsection (c).
(d)

No individual entitlement or private right of action is created by this

(e)

The Secretary shall establish guidelines for teachers and

section.

administrators in following federal laws relating to provision of services for children with
disabilities and the implementation of this section. The Secretary shall develop and
provide to supervisory unions information to share with parents of children suspected of
having a disability that describes the differences between the tiered system of academic
and behavioral supports required under this section, Section 504 of the Rehabilitation Act
of 1973, 29 U.S.C. § 794, and the Individuals with Disabilities Education Act, 20 U.S.C.
chapter 33, including how and when school staff and parents of children having a
suspected disability may request interventions and services under those entitlements.
(f)It is the intent of the General Assembly that a gifted and talented student
shall be able to take advantage of services that an educational support
team can provide. It is not the intent of the General Assembly that funding
under chapter 101 of this title shall be available for a gifted and talented student unless the
student has been otherwise determined to be a student for whom funding under that chapter
is available.
(g)

The tiered system of academic and behavioral supports required

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 under this section shall not be used by a school district to deny a timely initial
comprehensive special education evaluation for children suspected of having a disability.
The Agency of Education shall adopt policies and procedures to ensure that a school
district’s evaluation of a child suspected of having a disability is not denied because of
implementation of the tiered system of academic and behavioral supports. The policies
and procedures shall include:
(1) the definition of what level of progress is sufficient for a child to stop
receiving instructional services and supports through the tiered system of academic and
behavioral supports;
(2) guidance on how long children are to be served in each tier; and (3)
guidance on how a child’s progress is to be measured.
* * * Census-Based Funding Model; Amendment of Special
Education Laws * * *
Sec. 14. 16 V.S.A. chapter 101 is amended to read:
CHAPTER 101. SPECIAL EDUCATION
Subchapter 1. General Provisions
§ 2941. POLICY AND PURPOSE
It is the policy of the State to ensure equal educational opportunities for all children
in Vermont. This means that children with disabilities are entitled to receive a free
appropriate public education. It is further the policy of the State to pay 60 percent of the
statewide costs expended by public education for children with disabilities. The purpose of
this chapter is to enable the Agency to ensure the provision of the special educational
facilities and instruction education services and supports in accordance with individualized

14

 education programs necessary to meet the needs of children with disabilities.
§ 2942. DEFINITIONS
As used in this chapter
***
(8) A “student who requires additional support” means a student who:
(A)

is on an individualized education program;

(B)

is on a section 504 plan under the Rehabilitation Act of 1973, 29

U.S.C. § 794;

(C)

is not on an individualized education program or section 504 plan but

whose ability to learn is negatively impacted by a disability or by social, emotional, or
behavioral needs, or whose ability to learn is negatively impacted because the student is
otherwise at risk;
(D)

is an English language learner; or (E)

reads below grade level.
***
SUBCHAPTER 2. AID FOR SPECIAL EDUCATION AND SUPPORT SERVICES
§ 2961. STANDARD MAINSTREAM BLOCK GRANTS CENSUS GRANT
(a)

Each supervisory union shall be eligible to receive a standard

mainstream block grant each school year. The mainstream block grant shall be equal to the
supervisory union’s mainstream salary standard multiplied by 60 percent.
(b)

The supervisory union shall expend all such assistance for special

education services or for remedial or compensatory services in accordance with its

15

 service plan as required under section 2964 of this title. It shall likewise expend, from
local funds, an amount not less than 40 percent of its mainstream salary standard for
special education.
(c)

As

used

in

this section:

(1) “Mainstream salary standard” means:
(A)

the supervisory union’s full-time equivalent staffing for special

education for the preceding year multiplied by the average special education teacher salary
in the State for the preceding year; plus
(B)

an amount equal to the average special education administrator salary

in the State for the preceding year, plus, for any supervisory union with member districts
which have in the aggregate more than 1,500 average daily membership, a fraction of an
additional full-time equivalent salary for a special education administrator, the numerator
of which is the aggregate average daily membership of the supervisory union’s member
districts minus 1,500, and the denominator of which is the aggregate average daily
membership of member districts in the largest supervisory union in the State minus 1,500.
(2) “Full-time equivalent staffing” means 9.75 special education
teaching positions per 1,000 average daily membership.
(d)

If in any fiscal year, a supervisory union in which a school is

maintained does not expend an amount equal to its mainstream salary standard on special
education expenditures, the supervisory union may expend the balance, including the
matching funds, to provide support and remedial services pursuant to section 2902 or 2903
of this title. A supervisory union choosing to expend funds in this way shall submit a report
describing the services provided and their costs with the final financial report submitted

16

 under section 2968 of this title.
(a) As used in this section:
(1) “Average daily membership” shall have the same meaning as in
subdivision 4001(1) of this title, except it shall exclude State-placed students.
(2) “Average daily membership of a supervisory union” means the aggregate
average daily membership of the school districts that are members of the supervisory
union or, for a supervisory district, the average daily membership of the supervisory
district.
(3) “Long-term membership” of a supervisory union in any school year means
the average of the supervisory union’s average daily membership over three school years.
(4) “Uniform base amount” means an amount determined by: (A)
dividing an amount:
(i)

equal to the average State appropriation for fiscal years 2018, 2019,

and 2020 for special education under 16 V.S.A. §§ 2961 (standard mainstream block
grants), 2963 (special education expenditures reimbursement), and 2963a (exceptional
circumstances); and
(ii)

increased by the annual change in the National Income and Product

Accounts (NIPA) Implicit Price Deflator for State and Local Government Consumption
Expenditures and Gross Investment as reported by the U.S. Department of Commerce,
Bureau of Economic Analysis; by
(B)

the statewide average daily membership for prekindergarten

through grade 12 for the 2019–2020 school year.
(b)

The State commits to satisfying its special education maintenance of

17

 fiscal support requirement under 34 C.F.R. § 300.163(a).
(c)

Each supervisory union shall receive a census grant each fiscal

year to support the provision of special education services to students on an
individualized education program. Supervisory unions shall use this funding and other
available sources of funding to provide special education services to students in
accordance with their individualized education programs as mandated under federal law.
A supervisory union may use census grant funds to support the delivery of the
supervisory union’s comprehensive system of educational services under sections 2901
and 2902 of this title, but shall not use census grant funds in a manner that abrogates its
responsibility to provide special education services to students in accordance with their
individualized education programs as mandated under federal law.
(d)(1)(A) For fiscal year 2021, the amount of the census grant for a
supervisory union shall be:
(i)

the average amount it received for fiscal years 2017, 2018, and 2019

from the State for special education under sections 2961 (standard mainstream block
grants), 2963 (special education expenditures reimbursement), and 2963a (exceptional
circumstances) of this title; increased by
(ii)

the annual change in the National Income and Product Accounts

(NIPA) Implicit Price Deflator for State and Local Government Consumption
Expenditures and Gross Investment as reported by the U.S. Department of
Commerce, Bureau of Economic Analysis.
(B) The amount determined under subdivision (A) of this subdivision (1)
shall be divided by the supervisory union’s long-term membership, to determine the base

18

 amount of the census grant, which is the amount of the census grant calculated on a per
student basis.
(2) For fiscal year 2025 and subsequent fiscal years, the amount of the census
grant for a supervisory union shall be the uniform base amount multiplied by the
supervisory union’s long-term membership.
(3) For fiscal years 2022, 2023, and 2024, the amount of the census grant for
a supervisory union shall be determined by multiplying the supervisory union’s long-term
membership by a base amount established under this subdivision. The base amounts for
each supervisory union for fiscal years 2022, 2023, and 2024 shall move gradually the
supervisory union’s fiscal year 2021 base amount to the fiscal year 2025 uniform base
amount by pro rating the change between the supervisory union’s fiscal year 2021 base
amount and the fiscal year 2025 uniform base amount over this three-fiscal-year period.
§ 2962. EXTRAORDINARY SERVICES SPECIAL EDUCATION
REIMBURSEMENT
(a)

Except as otherwise provided in this subchapter, extraordinary

services reimbursement shall be payable, based on where the related cost is incurred, to a
town school district, city school district, union school district, unified union school district,
incorporated school district, the member school districts of an interstate school district, and
unorganized town or gore or to a supervisory union. [Repealed.]
(b)

The amount of extraordinary services reimbursement provided to

each district or supervisory union shall be equal to 95 percent of its extraordinary special
education expenditures. [Repealed.]
(c) As used in this subchapter, “extraordinary special education expenditures”

19

 means a school district’s or supervisory union’s allowable expenditures that for any one
child exceed $60,000.00 for a fiscal year. In this subsection, child means a student with
disabilities who is three years of age or older in the current school year. The State Board
shall define allowable expenditures that shall include any expenditures required under
federal law, and any costs of mediation conducted by a mediator who is approved by the
Secretary.
(1) As used in this section, “child” means a student with disabilities who is
three years of age or older in the current school year.
(2) As used in this subchapter, “extraordinary expenditures” means a
supervisory union’s allowable special education expenditures that for any one child in a
fiscal year exceed $60,000.00, increased annually by the annual change in the National
Income and Product Accounts (NIPA) Implicit Price Deflator for State and Local
Government Consumption Expenditures and Gross Investment as reported by the U.S.
Department of Commerce, Bureau of Economic Analysis.
(3) The State Board of Education shall define allowable special education
expenditures that shall include any expenditures required under federal law in order to
implement fully individual education programs under the Individuals with Disabilities
Education Act, 20 U.S.C. chapter 33, and any costs of mediation conducted by a mediator
who is approved by the Secretary.
(b)

If a supervisory union has extraordinary expenditures, it shall be

eligible for extraordinary special education reimbursement (extraordinary reimbursement)
as provided in this section.
(c)

A supervisory union that has extraordinary expenditures in a fiscal

20

 year for any one child shall be eligible for extraordinary reimbursement equal to:
(1) an amount equal to its special education expenditures in that fiscal year
for that child that exceed the extraordinary expenditures threshold amount under
subdivision (a)(2) of this section (excess expenditures) multiplied by 95 percent; plus
(2) an amount equal to the lesser of: (A) the
amount of its excess expenditures; or
(B)(i)

the extraordinary expenditures threshold amount under

subdivision (a)(2) of this section; minus
(ii)

the base amount of the census grant received by the supervisory

union under subsection 2961(d) of this title for that fiscal year; multiplied by
(iii)

60 percent.

(d)

The State Board of Education shall establish by rule the

administrative process for supervisory unions to submit claims for extraordinary
reimbursement under this section and for the review and payment of those claims.
(e)

Under section 2973 of this title, a supervisory union, in its role as

the local education agency, may place a student with an individualized education plan
under the Individuals with Disabilities Education Act, 20 U.S.C. chapter 33, with certain
approved independent schools that accept public tuition. If the approved independent
school is entitled to special education cost reimbursement under that section, it may bill the
supervisory union for excess special education costs incurred by the independent school in
providing special education services to that student beyond those covered by general
tuition. If those costs for that student exceed the extraordinary expenditures’ threshold as
defined in subdivision (a)(2) of this section, the supervisory union shall be entitled to

21

 extraordinary reimbursement under this section for that student as if it incurred those costs
directly.
§ 2967. AID PROJECTION; STATE SHARE
(a)

On or before December 15, the Secretary shall publish an estimate,

by supervisory union and its member districts to the extent they anticipate reimbursable, of
its anticipated special education expenditures under this chapter, of the amount of State
assistance necessary to fully fund sections 2961 through 2963 of this title in for the ensuing
school year.
(b)

The total expenditures made by the State in any fiscal year pursuant

to this chapter shall be 60 percent of the statewide total special education expenditures of
funds that are not derived from federal sources. Special As used in this section, special
education expenditures shall include:
(1) costs eligible for grants and reimbursements under sections 2961 through
2963a and 2962 of this title;
(2) costs for services for persons who are visually impaired; and (3)
costs for persons who are deaf and or hard of hearing;
(3)(4) costs for the interdisciplinary team program; (4)
costs for regional specialists in multiple disabilities;
(5) funds expended for training and programs to meet the needs of students
with emotional or behavioral problems challenges under subsection 2969(c) of this title;
and
(6) funds expended for training under subsection 2969(d) of this title.
§ 2968. REPORTS

22

 (a)

On or before November 15, March 15, and August 1 of each school

year, each supervisory union and its member districts to the extent they incur reimbursable
expenditures under this chapter shall file a financial report with the Secretary in a form
prescribed by the Secretary. The report shall describe total expenditures for special
education actually incurred during the preceding period, and shall describe revenues
derived from different funding sources, including federal assistance, State assistance under
this chapter, and local effort.
(b)

If a supervisory union or its member districts that have incurred

reimbursable expenditures under this chapter fail to file a complete report by August 1,
until the properly completed August 1 report is filed and accepted by the Secretary, the
Secretary may withhold any funds due the supervisory union or school district under this
title and shall subtract $100.00 per business day from funds due to the supervisory union or
school district under this title for that fiscal year. The Secretary may waive the $100.00
penalty required under this subsection upon appeal by the supervisory union or school
district.
The Secretary shall establish procedures for administration of this subsection.
(c)

The Secretary shall review and monitor the reports received

pursuant to subsection (a) of this section as well as the service plans received pursuant to
section 2964 of this title, and shall assist supervisory unions and school districts to
complete and submit these documents in a timely and accurate fashion.
(d)

Special education receipts and expenditures shall be included within

the audits required of a supervisory union and its member districts that have incurred
reimbursable expenditures under this chapter pursuant to section 323 of this title.

23

 [Repealed.]
§ 2969. PAYMENTS
(a)(1) On or before August 15, December 15, and April 15 of each fiscal year,
the State Treasurer shall withdraw from the Education Fund, based on a warrant issued by
the Commissioner of Finance and Management, and shall forward to each supervisory
union and its member districts to the extent they anticipate reimbursable expenditures
under this chapter, the amount of State assistance estimated in accordance with State Board
rules to be necessary to fund sections 2961 through 2963a of this title in the current fiscal
period. The State Board shall by rule ensure that the amount of such assistance shall be
adjusted to compensate for any overpayments or underpayments determined, after review
and acceptance of the reports submitted under section 2968 of this title, to have been made
in previous periods. Notwithstanding this subsection, failure to submit the reports within
the timelines established by subsection 2968(a) of this title shall result in the withholding
of any payments until the report is filed one-third of the census grant due to the
supervisory union under section 2961 of this title for that fiscal year.
(2) On or before November 15, January 15, April 15, and August 1 of each
school year, each supervisory union, to the extent it incurs extraordinary expenditures
under section 2962 of this title, shall file a financial report with the Secretary in a form
prescribed by the Secretary. The report shall describe total extraordinary expenditures
actually incurred during the reporting period.
(3) On or before December 15, February 15, May 15, and September 15 of
each school year, based on a warrant issued by the Commissioner of Finance and
Management, the State Treasurer shall withdraw from the Education Fund and shall

24

 forward to each supervisory union the amount of extraordinary reimbursement incurred by
the supervisory union under section 2962 of this title that is unreimbursed and determined
by the Agency of Education to be payable to the supervisory union.
(b)

[Repealed.]

(c)

For the purpose of meeting the needs of students with emotional or

behavioral problems challenges, each fiscal year the Secretary shall use for training,
program development, and building school and regional capacity, up to one percent of the
State funds appropriated under this subchapter.
(d)

For the training of teachers, administrators, and other personnel in

the identification and evaluation of, and provision of education educational services to
children who require educational supports, each fiscal year the Secretary shall use up to
0.75 percent of the State funds appropriated under this subchapter. In order to set priorities
for the use of these funds, the Secretary shall identify effective practices and areas of
critical need. The Secretary may expend up to five percent of these funds for statewide
training and shall distribute the remaining funds to school districts or supervisory unions.
(e)

School districts and supervisory unions that apply for funds under

this section must submit a plan for training that will result in lasting changes in their
school systems and give assurances that at least 50 percent of the costs of training,
including in-kind costs, will be assumed by the applicant. The Secretary shall establish
written procedures and criteria for the award of such funds. In addition, the Secretary may
identify schools most in need of training assistance and may pay for 100 percent of the
assistance to the supervisory union or school district for these schools to fund the provision
of training assistance for these schools.

25

 ***
§ 2974. SPECIAL EDUCATION PROGRAM; FISCAL REVIEW
(a)

Annually, the Secretary shall report to the State Board regarding:

(1) special education expenditures by supervisory unions the total amount of
census grants made to supervisory unions under section 2961 of this title;
(2) the rate of growth or decrease in special education costs, including the
identity of high- and low-spending supervisory unions the total amount of extraordinary
special education reimbursement made to supervisory unions under section 2962 of this
title;
(3) results for special education students;
(4) the availability of special education staff;
(5)

the consistency of special education program implementation statewide;

(6) the status of the education support systems tiered systems of supports in
supervisory unions; and
(7)

a statewide summary of the special education student count, including:

(A)

the percentage of the total average daily membership represented by

special education students statewide and by supervisory union;
(B)

the percentage of special education students by disability category;

(C)

the percentage of special education students served by public schools

and

within the supervisory union, by day placement, and by residential placement.
(b)

The Secretary’s report shall include the following data for both

high- and low-spending supervisory unions:

26

 (1) each supervisory union’s special education staff-to-child count ratios as
compared to the State average, including a breakdown of ratios by staffing categories;
(2) each supervisory union’s percentage of students in day programs and
residential placements as compared to the State average of students in those placements
and information about the categories of disabilities for the students in such placements;
(3) whether the supervisory union was in compliance with section 2901 of
this title;
(4) any unusual community characteristics in each supervisory union relevant
to special education placements;
(5) a review of high- and low-spending supervisory unions’ special education
student count patterns over time;
(6) a review of the supervisory union’s compliance with federal and State
requirements to provide a free, appropriate public education to eligible students; and
(7) any other factors affecting its spending.
(c)

The Secretary shall review low-spending supervisory unions to

determine the reasons for their spending patterns and whether those supervisory unions
used cost-effective strategies appropriate to replicate in other supervisory unions.
(d)

For the purposes of this section, a “high-spending supervisory

union” is a supervisory union that, in the previous school year, spent at least 20 percent
more than the statewide average of special education eligible costs per average daily
membership. Also for the purposes of this section, a “low-spending supervisory union” is
a supervisory union that, in the previous school year,
spent no more than 80 percent of the statewide average of special education eligible costs

27

 per average daily membership.
(e)

The Secretary and Agency staff shall assist the high-spending

supervisory unions, that have been identified in subsection (a) of this section and have not
presented an explanation for their spending that is satisfactory to the Secretary, to identify
reasonable alternatives and to develop a remediation plan. Development of the remediation
plan shall include an on-site review. The supervisory union shall have two years to make
progress on the remediation plan. At the conclusion of the two years or earlier, the
supervisory union shall report its progress on the remediation plan.
(f)

Within 30 days of receipt of the supervisory union’s report of

progress, the Secretary shall notify the supervisory union that its progress is either
satisfactory or not satisfactory.
(1) If the supervisory union fails to make satisfactory progress, the Secretary
shall notify the supervisory union that, in the ensuing school year, the Secretary shall
withhold 10 percent of the supervisory union’s special education expenditures
reimbursement pending satisfactory compliance with the plan.
(2) If the supervisory union fails to make satisfactory progress after the first
year of withholding, 10 percent shall be withheld in each subsequent year pending
satisfactory compliance with the plan; provided, however, before funds are withheld in
any year under this subdivision (f)(2), the supervisory union shall explain to the State
Board either the reasons the supervisory union believes it made satisfactory progress on the
remediation plan or the reasons it failed to do so. The State Board’s decision whether to
withhold funds under this subdivision shall be final.
(3) If the supervisory union makes satisfactory progress under any

28

 subdivision of this subsection, the Secretary shall release to the supervisory union any
special education expenditures reimbursement withheld for the prior fiscal year only.
(g)

Within 10 days after receiving the Secretary’s notice under

subdivision (f)(1) of this section, the supervisory union may challenge the Secretary’s
decision by filing a written objection to the State Board outlining the reasons the
supervisory union believes it made satisfactory progress on the remediation plan. The
Secretary may file a written response within 10 days after the supervisory union’s
objection is filed. The State Board may give the supervisory union and the Secretary an
opportunity to be heard. The State Board’s decision shall be final. The State shall withhold
no portion of the supervisory union’s reimbursement before the State Board issues its
decision under this subsection.
(h)

Nothing in this section shall prevent a supervisory union from

seeking and receiving the technical assistance of Agency staff to reduce its special
education spending.
§ 2975. UNUSUAL SPECIAL EDUCATION COSTS; FINANCIAL ASSISTANCE
The Secretary may use up to two percent of the funds appropriated for
allowable special education expenditures, as that term is defined in subsection 2967(b) of
this title State Board of Education rules, to directly assist supervisory unions with special
education expenditures of an unusual or unexpected nature. These funds shall not be used
for exceptional circumstances that are funded under section 2963a of this title. The
Secretary’s decision regarding a supervisory union’s eligibility for and amount of
assistance shall be final.
* * * Title 16 Education Technical and Conforming Changes * * *

29

 Sec. 15. 16 V.S.A. § 826 is amended to read:
§ 826. NOTICE OF TUITION RATES; SPECIAL EDUCATION CHARGES
***
(c) Excess special education costs incurred by a district supervisory union in
providing special education services to a student beyond those covered by tuition may be
charged to the student’s supervisory union for the district of residence. However, only
actual costs or actual proportionate costs attributable to the student may be charged.
***
Sec. 16. 16 V.S.A. § 2958 is amended to read:
§ 2958. RESIDENTIAL PLACEMENT REVIEW TEAM; RESIDENTIAL
PLACEMENTS
(a) A school district supervisory union shall notify the parents and the
Secretary when it believes residential placement is a possible option for inclusion in a
child’s individualized education program.
***
Sec. 17. 16 V.S.A. § 4002 is amended to read:
§ 4002. PAYMENT; ALLOCATION
(a)

State and federal funds appropriated for services delivered by the

supervisory union and payable through the Agency shall be paid to the order of the
supervisory union and administered in accordance with the plan adopted under
subdivision 261a(4) of this title. Funding for special education service under section
2969 of this title shall be paid to the districts and supervisory unions in accordance with
that section.

30

 (b)

The Secretary shall notify the superintendent or chief executive

officer of each supervisory union in writing of federal or State funds disbursed to member
school districts.
* * * Census-Based Funding Advisory Group * * *
Sec. 18. CENSUS-BASED FUNDING ADVISORY GROUP
(a)

Creation. There is created the Census-based Funding Advisory

Group to consider and make recommendations on the implementation of a census- based
model of funding for students who require additional support.
(b)

Membership. The Advisory Group shall be composed of the

following 12 members:
(1) the Executive Director of the Vermont Superintendents Association or
designee;
(2) the Executive Director of the Vermont School Boards Association or
designee;
(3) the Executive Director of the Vermont Council of Special Education
Administrators or designee;
(4) the Executive Director of the Vermont Principals’ Association or
designee;
(5) the Executive Director of the Vermont Independent Schools Association
or designee;
(6)

the Executive Director of the Vermont-National Education Association

or designee;
(7) the Secretary of Education or designee;

31

 (8)

one member selected by the Vermont-National Education Association

who is a special education teacher;
(9) one member selected by the Vermont Association of School Business
Officials;
(10) one member selected by the Vermont Legal Aid Disability Law Project;
(11) one member who is either a family member, guardian, or education
surrogate of a student requiring special education services or a person who has received
special education services directly, selected by the Vermont Coalition for Disability Rights;
and
(12) the Commissioner of the Vermont Department of Mental Health or
designee.
(c)

Powers

and

duties.

The

Advisory

Group

shall: (1) advise the State Board of Education on the development of proposed
rules to implement this act prior to the submission of the proposed rules to the
Interagency Committee on Administrative Rules;
(2) advise the Agency of Education and supervisory unions on the
implementation of this act; and
(3) recommend to the General Assembly any statutory changes it determines
are necessary or advisable to meet the goals of this act, including any statutory changes
necessary to align special education funding for approved independent schools with the
census grant funding model for public schools as envisioned in the amendments to 16
V.S.A. chapter 101 in Sec. 5 of this act.
(d)

Assistance. The Advisory Group shall have the administrative,

32

 technical, and legal assistance of the Agency of Education.
(e)

Meetings.

(1) The Secretary of Education shall call the first meeting of the Advisory
Group to occur on or before September 30, 2018.
(2) The Advisory Group shall select a chair from among its members at the
first meeting.
(3) A majority of the membership shall constitute a quorum.
(4) The Advisory Group shall cease to exist on June 30, 2022.
(f)

Reports. On or before January 15, 2019, the Advisory Group shall

submit a written report to the House and Senate Committees on Education and the State
Board of Education with its findings and recommendations on the development of
proposed rules to implement this act and any recommendations for legislation. On or
before January 15 of 2020, 2021, and 2022, the Advisory Group shall submit a
supplemental written report to the House and Senate Committees on Education and the
State Board of Education with a status of implementation under this act and any
recommendations for legislation.
(g)

Reimbursement. Members of the Advisory Group who are not

employees of the State of Vermont and who are not otherwise compensated or reimbursed
for their attendance shall be entitled to per diem compensation and reimbursement of
expenses pursuant to 32 V.S.A. § 1010 for not more than eight meetings per year.
(h)

Appropriation. The sum of $3,900.00 is appropriated for fiscal year

2018 from the General Fund to the Agency of Education to provide funding for per diem
compensation and reimbursement under subsection (g) of this section. The Agency shall

33

 include in its budget request to the General Assembly for each of fiscal years 2020,
2021, and 2022 the amount

of

$3,900.00 to provide funding for per diem compensation and
reimbursement under subsection (g) of this section.
* * * Training and Technical Assistance on Delivery of Special Education Services * * *
Sec. 19. TRAINING AND TECHNICAL ASSISTANCE ON THE DELIVERY OF
SPECIAL EDUCATION SERVICES
(a)

The Agency of Education shall, for the 2018–2019, 2019–2020, and

2020–2021 school years, assist supervisory unions to expand and improve their delivery of
services to students who require additional supports in accordance with the report entitled
“Expanding and Strengthening Best-Practice Supports for Students who Struggle”
delivered to the Agency of Education in November 2017 from the District Management
Group. This assistance shall include the training of teachers and staff and technical
assistance with the goal of embedding the following best practices for the delivery of
special education services:
(1) ensuring core instruction meets most needs of most students;
(2) providing additional instructional time outside core subjects to students
who require additional support, rather than providing interventions instead of core
instruction;
(3) ensuring students who require additional support receive all instruction
from highly skilled teachers;
(4) creating or strengthening a systems-wide approach to supporting positive
student behaviors based on expert support; and

34

 (5) providing specialized instruction from skilled and trained experts to
students with more intensive needs.
(b)

The sum of $200,000.00 is appropriated from federal funds that are

available under the Individuals with Disabilities Education Act for fiscal year 2019 to
the Agency of Education, which the Agency shall administer in accordance with this
section. The Agency shall include in its budget request to the General Assembly for each
of fiscal years 2020 and 2021 the amount of
$200,000.00 from federal funds that are available under the Individuals with
Disabilities Education Act for administration in accordance with this section.
(c)

The Agency of Education shall present to the General Assembly on

or before December 15 in 2019, 2020, and 2021 a report describing what changes
supervisory unions have made to expand and improve their delivery of services to students
who require additional supports and describing the associated delivery challenges. The
Agency shall share each report with all supervisory unions.
* * * Agency of Education; Staffing * * *
Sec. 20. AGENCY OF EDUCATION; STAFFING
The following positions are created in the Agency of Education: one fulltime, exempt legal counsel specializing in special education law and two full- time,
classified positions specializing in effective instruction for students who require additional
support. There is appropriated to the Agency of Education from the General Fund for fiscal
year 2019 the amount of $325,000.00 for salaries, benefits, and operating expenses.
* * * Extraordinary Services Reimbursement * * *
Sec. 21. 16 V.S.A. § 2962 is amended to read:

35

 § 2962. EXTRAORDINARY SERVICES REIMBURSEMENT
(a)

Except as otherwise provided in this subchapter, extraordinary

services reimbursement shall be payable, based on where the related cost is incurred, to a
town school district, city school district, union school district, unified union school district,
incorporated school district, the member school districts of an interstate school district, and
an unorganized town or gore or to a supervisory union.
(b)

The amount of extraordinary services reimbursement provided to

each district or supervisory union shall be equal to 90 95 percent of its extraordinary
special education expenditures.
(c) As used in this subchapter, “extraordinary special education expenditures”
means a school district’s or supervisory union’s allowable expenditures that for any one
child exceed $50,000.00 $60,000.00 for a fiscal year. In this subsection, child means a
student with disabilities who is three years of age or older in the current school year. The
State Board shall define allowable expenditures that shall include any expenditures
required under federal law, and any costs of mediation conducted by a mediator who is
approved by the Secretary.
Sec. 22. 16 V.S.A. § 4001(6)(B)(v) is amended to read:
(v) Spending attributable to the district’s share of special education spending
in excess of $50,000.00 that is not reimbursed as an extraordinary reimbursement under
section 2962 of this title for any one student in the fiscal year occurring two years prior.
* * * Rulemaking * * *
Sec. 23. RULEMAKING
The Agency of Education shall recommend to the State Board proposed

36

 rules that are necessary to implement this act and, on or before November 1,
2019, the State Board of Education shall adopt rules that are necessary to
implement this act. The State Board and the Agency of Education shall consult with the
Census-based Funding Advisory Group established under Sec. 9 of this act in developing
the State Board rules. The State Board rules shall include rules that establish processes for
reporting, monitoring, and evaluation designed to ensure:
(1)

the achievement of the goal under this act of enhancing the effectiveness,

availability, and equity of services provided to all students who require additional support
in Vermont’s school districts; and
(2) that supervisory unions are complying with the Individuals with
Disabilities Education Act, 20 U.S.C. chapter 33.
* * * Transition * * *
Sec. 24. TRANSITION
(a)Notwithstanding the requirement under 16 V.S.A. § 2964 for a supervisory
union to submit a service plan to the Secretary of Education, a supervisory union shall not
be required to submit a service plan for fiscal year 2021.
(b)

On or before November 1, 2019, a supervisory union shall submit to

the Secretary such information as required by the Secretary to estimate the supervisory
union’s projected fiscal year 2021 extraordinary special education reimbursement under
Sec. 5 of this act.
(c)

The Agency of Education shall assist supervisory unions as they

transition to the census-based funding model in satisfying their maintenance of effort
requirements under federal law.

37

 Sec. 25. TRANSITION FOR ALLOWABLE SPECIAL EDUCATION COSTS
(a)

Allowable special education costs shall include salaries and benefits

of licensed special education teachers, including vocational special needs teachers and
instructional aides for the time they carry out special education responsibilities.
(1) The allowable cost that a local education agency may claim includes a
school period or service block during which the staff member identified in this subsection
is providing special education services to a group of eight or fewer students, and not less
than 25 percent of the students are receiving the special education services, in accordance
with their individualized education programs.
(2)

In addition to the time for carrying out special education responsibilities,

a local education agency may claim up to 20 percent of special
education staff members’ time, if that staff spends the additional time
performing consultation to assist with the development of and providing instructional
services required by:
(A)

a plan pursuant to Section 504 of the Rehabilitation Act of 1973, 29

U.S.C. § 794; or
(B)

a plan for students who require additional assistance in order to

succeed in the general education environment.
(b)

This section is repealed on July 1, 2020.
* * * Statewide Healthcare Benefit * * *

Sec. 26. STATEMENT OF PURPOSE FOR SECTIONS 26-32 OF THIS ACT
(a) On December 18, 2017, the Vermont Educational Health Benefits Commission
recommended that the State establish a statewide health care benefit to be negotiated between

38

 school employees and the State in order to improve consistency and predictability in developing
health care plans and rates and offer parity of benefits among all school employees. However,
the Commission noted the need for additional work in developing the parameters of negotiations
and issues of income sensitization.
(b) The General Assembly deems it to be in the best interests of the State to
establish transitional health care benefit terms for collective bargaining agreements with school
employees that take effect on or after July 1, 2019 for calendar years 2020 and 2021 in order to
ensure consistent school employee health care plans in advance of statewide negotiations of
health care benefits in calendar year 2022 and beyond.
Sec. 27. 16 V.S.A. § 2004 is amended to read:
§ 2004. AGENDA
(a) The school board, through its negotiations council, shall, upon request, negotiate
with representatives of the teachers’ or administrators’ organization negotiations council on
matters of salary, related economic conditions of employment, the manner in which it will
enforce an employee’s obligation to pay the agency service fee, procedures for processing
complaints and grievances relating to employment, and any mutually agreed-upon matters not in
conflict with the statutes and laws of the State of Vermont.
(b) As used in this section, the terms “salary” and “related economic conditions of
employment” shall not include health care benefits or coverage. Health care benefits and health
coverage, including health reimbursement and health savings accounts, shall not be subject to
collective bargaining pursuant to this chapter.
Sec. 28. 21 V.S.A. § 1722 is amended to read:
§ 1722. DEFINITIONS

39

 As used in this chapter:
***
(12) “Municipal employee” means any employee of a municipal
employer, including a municipal school employee or a professional employee as defined in
subdivision 1502(11) of this title, except:
***
(17) “Wages, hours, and other conditions of employment” means any
condition of employment directly affecting the economic circumstances, health, safety, or
convenience of employees but excluding matters of managerial prerogative as defined in this
section. For collective bargaining related to municipal school employees, “wages, hours, and
other conditions of employment” shall not include health care benefits or coverage.
***
(21) “Municipal school employee” means an employee of a supervisory
district, supervisory union, or school district that is not otherwise subject to 16 V.S.A. chapter 57
(labor relations for teachers and administrators).
Sec. 29. 21 V.S.A. § 1725 is amended to read:
§ 1725. COLLECTIVE BARGAINING PROCEDURE
(a)(1) For the purpose of collective bargaining, the representatives of the
municipal employer and the bargaining unit shall meet at any reasonable time and shall bargain
in good faith with respect to wages, hours, and conditions of employment, and shall execute a
written contract incorporating any agreement reached; provided, however, that neither party shall
be compelled to agree to a proposal nor to make a concession, nor to bargain over any issue of
managerial prerogative.

40

 (2) For the purpose of collective bargaining related to municipal school
employees, “wages, hours, and conditions of employment” shall not include health care benefits
or coverage. Health care benefits and coverage, including health reimbursement and health
savings accounts, shall not be subject to collective bargaining by municipal school employees
pursuant to this chapter.
***
Sec. 30. TRANSITIONAL HEALTH CARE BENEFIT TERMS
(a) The health care benefit and coverage provisions of a collective bargaining
agreement between a supervisory union or school district and school employees that take effect
on or after July 1, 2019 and July 1, 2020 shall contain the following:
(1) a requirement that the supervisory union or school district provide a
premium contribution in an amount equal to 80 percent of the premium for the VEHI Gold
Consumer-Driven Health Plan (CDHP), with school employees responsible for the balance of the
premium for the VEHI plan they select; and
(2) requirements that the supervisory union or school district contribute toward
school employees’ out-of-pocket expenses as follows:
(A) for each enrollee selecting a high-deductible VEHI plan that is eligible
for a health savings account pursuant to 26 U.S.C. § 223, a requirement that the supervisory
union or school district establish a health savings account to which it shall contribute an amount
intended to equalize average out of pocket school employee costs at calendar year 2017 levels;
and
(B) for each enrollee selecting a VEHI plan that is not eligible for health
savings account pursuant to 26 U.S.C. § 223, a requirement that the supervisory union or school

41

 district establish a health reimbursement arrangement to which it shall contribute $2,100.00 for
an individual plan, $4,200.00 for a two-person or parent-child plan, or $3,800.00 for a family
plan and for which the school employee shall bear first dollar responsibility for the full amount
of the out-of-pocket expenses for which he or she is responsible.
(b) As used in this section:
(1) “School employee” means a teacher or administrator as defined in 16 V.S.A.
§ 1981 and a municipal school employee as defined in 21 V.S.A. § 1722 who was participating
in a VEHI plan during calendar year 2018.
(2) “Supervisory union” and “school district” shall have the same meanings as
set forth in 16 V.S.A. § 11.
Sec. 31. STUDY COMMITTEE ON STATEWIDE NEGOTIATION OF HEALTH CARE
BENEFITS FOR SCHOOL EMPLOYEES
(a) The Study Committee on Statewide Negotiation of Health Care Benefits for School Employee
(Committee) is created to determine how to transition to a single statewide health benefit plan for
all school employees of supervisory unions and school districts.
(b)(1) The Committee shall comprise the following ten members:
(A) four members appointed by the labor organization representing the greatest
number of teachers, administrators, and municipal school employees in this State;
(B) one member appointed by the labor organization representing the secondgreatest number of teachers, administrators, and municipal school employees in this
State; and
(C) five members appointed by the Vermont School Boards Association.

42

 (2) If a member of the Committee ceases to serve, a replacement appointee shall be
appointed in the same manner as the initial appointment.
(c) The Committee shall propose draft legislation that addresses the following matters concerning
the transition to a single statewide health benefit plan for all school employees of supervisory
unions and school districts:
(1) the structure and composition of parties to a statewide negotiation;
(2) a timeline for negotiations and impasse procedures;
(3) incorporation into agreements;
(4) a process for statewide ratification of the agreement resulting from the statewide
negotiation;
(5) how income sensitization will be decided as part of the negotiations; and
(6) a process for adjudication of unfair labor practice complaints.
(d) The Committee’s draft legislation shall include a requirement that any fact-finding required for
impasse resolution shall give weight to:
(1) the financial capacity of the school district;
(2) the interest and welfare of the public and the financial ability of the school board to pay
for increased costs of public services, including the cost of labor;
(3) comparisons of the wages, hours, and conditions of employment of the employees
involved in the dispute with the wages, hours, and conditions of employment of State and
municipal employees who are not employed by supervisory unions or school districts;
(4) the overall compensation currently received by the employees, including direct wages,
fringe benefits, and continuity conditions and stability of employment, and all other
benefits received; and

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 (5) the rate of growth of the economy of the State of Vermont for the year of negotiation
as well as during the prior three-year period.
(e)(1) The Committee shall consult with the Secretary of Education and the Vermont Education
Health Initiative as necessary.
(2) The Committee shall have the administrative, technical, and legal assistance of the
Agency of Education and the Departments of Tax and Financial Regulation.
(f) On or before November 15, 2019, the Committee shall provide its proposed legislation to the
House Committees on Education, on General, Housing, and Military Affairs, and on Ways and
Means and the Senate Committees on Education, on Economic Development, Housing and
General Affairs, and on Finance.
(g) The Committee’s first meeting shall occur on or before August 1, 2018. The Committee shall
select a chair from among its members at the first meeting. A majority of the membership shall
constitute a quorum. The Committee shall cease to exist on November 16, 2019.
(h) As used in this section, “supervisory union” and “school district” shall have the same meanings
as set forth in 16 V.S.A. § 11.
Sec. 32. BENEFITS ADVISORY GROUP
The Committee shall include in its proposed legislation provisions creating a benefits
advisory group made up of VSEA appointees and other stakeholders, to provide input to VEHI
concerning plan design, implementation, and the experience of insureds under VEHIadministered plans.
Sec. 33. STAFF TO STUDENT RATIOS TASK FORCE
(a) Creation. There is created the Staff to Student Ratios Task Force, a collaborative effort
among government, non-profit organizations, research experts, and other education

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 stakeholders, that will strive to best ensure education quality while simultaneously
ensuring fiscal efficiency in the context of the state’s declining student population.
Specifically, the Task Force is charged with:
(1) reviewing current staff to student count ratios for specific categories of schools
and school district configurations, and establishing optimal target ratios for
different school district configurations;
(2) identifying barriers that hamper staffing flexibility at the local level, including
whether aspects of the regulatory environment, including but not limited to
mandatory staffing requirements and collective bargaining or other contractual
obligations, contribute to lower staff to student ratios;
(3) aligning to the greatest extent possible the work of the task force with existing
research findings and reports, based on studies conducted either nationally or in
New England, concerning optimal classroom practices and resources, and class
and school sizes for successful learning outcomes, and the impact of population
decline on rural schools;
(4) attending to compliance with federal rules and regulations, so as to avoid
jeopardizing the state’s federal funding;
(5) determining a mechanism or mechanisms that account for the effects of familial
and community level poverty and human services need, including but not limited

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 to student experiences of trauma and familial or community level addiction, on
staffing ratios; and
(6) developing recommended strategies for districts to help them meet targets.
(b) Membership. The Committee shall be composed of the following six members:
(1) the Secretary of Education or designee;
(2) the Executive Director of the Vermont Superintendents Association or designee;
(3) the Executive Director of the Vermont School Boards Association or designee;
(4) the Executive Director of the Vermont Principals’ Association or designee;
(5) the Executive Director of the Vermont-National Education Association or designee;
(6) one member selected by the Vermont Association of School Business Officials;
(7) two to four members from Vermont postsecondary institutions, selected by the
Task Force, who have expertise in areas among the following: multi-age classrooms and
teaching strategies, interdisciplinary instruction, school realignment and reconfiguration, and
the impact of community poverty, trauma or addiction on education staffing; and
(8) a national expert in rural education, selected by the Task Force.
(c) The Committee shall have technical assistance from the Agency of Education.
(d) Report. On or before December 15, 2018, the Committee shall present to the House and
Senate Committees on Education its findings concerning optimum staff to student ratios,
including optimum ratios for a variety of school and school district sizes and

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 configurations. The Committee shall include in its report a recommendation as to whether
staff to student target ratios should be included in statute for fiscal year 2021.
(e) Meetings.
(1) The Secretary of Education shall call the first meeting of the Task Force to occur on
or before July 1, 2018.
(2) The Task Force shall select a chair from among its members at the first meeting.
(3) The Task Force shall cease to exist on December 31, 2018.
(f) Compensation and reimbursement. Members of the Task Force who are not employees of
the State of Vermont and who are not otherwise compensated or reimbursed for their
attendance shall be entitled to per diem compensation and reimbursement of expenses
pursuant to 32 V.S.A. § 1010 for not more than ten meetings. These payments shall be made
from monies appropriated to the Agency of Education.
(g) Appropriation. The sum of $2,440.00 is appropriated from the General Fund to the
Agency of Education to provide funding for the purposes set forth in this section.

Sec. 34. 2017 Acts and Resolves No. 85, Sec. D.101 as amended by 2018 Acts and Resolves
No. 87, Sec. 36 is further amended to read:
***
(b) Notwithstanding any provision of law to the contrary, in fiscal year 2018:
(1) The following amounts shall be transferred to the General Fund from the funds indicated:
21370 Tobacco Litigation Settlement Fund

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$19,000,000.00

 (A) $4,000,000 from among several special funds to be identified by the Secretary of
Administration shall be transferred to the General Fund, notwithstanding associated statutory and
session laws.
***
(d) An amount not to exceed $45,400,000 shall be reserved in the General Fund at the close of
fiscal year 2018 to be used in fiscal year 2019 pursuant to Sec. 7(b) of this Act. Of the amount
of $45,400,000, an amount of $20,000,000 is attributable to the Emergency Board’s adoption of
upgraded General Fund revenue effective May 7, 2018.
Sec. 35 2018 Acts and Resolves No. 87, Sec. 43 is amended to read:
(c) Pursuant to 32 V.S.A. Sec. 308c(b), $7,000,000 is unreserved from the General Fund Balance
Reserve in fiscal year 2018.
Sec. 36 H.924 As originally recommended by the governor is amended to read:
Sec. B.1101 FISCAL YEAR 2019 ONE-TIME GENERAL FUND APPROPRIATIONS
***
(c) The sum of $1,423,516 $23,516 is appropriated to the Secretary of Administration for
distribution to departments to fund changes in employee classification that occur and are
approved in accordance with the collective bargaining agreements.
Sec. C.100.4 2017 Acts and Resolves No. 85, Sec. E.513 is amended to read:
***
(b) Pursuant to Sec. 7(a) of this Act, in fiscal year 2018 only, the sum of $8,600,000 is
transferred from the General Fund to the Education Fund to bring the Education Fund reserve to
48

 its statutory maximum of five percent pursuant to 16 V.S.A. Sec. 4026(b) at the close of fiscal
year 2018.
Sec. D.105 FISCAL YEAR 2019 CONTRACT FUNDING
(a) The amount of $8,312,303 in general funds originally proposed in the Governor’s
Recommended budget to fund Pay Act in fiscal year 2019 is reduced to $7,712,303.
Sec. D.101 FUND TRANSFERS, REVERSIONS, AND RESERVES
***
(5) Notwithstanding 2016 Acts and Resolves No. 172, Sec. E. 228, all or a portion of the
unencumbered balances in the Insurance Regulatory and Supervision Fund (Fund Number
21075), the Captive Insurance Regulatory and Supervision Fund (Fund Number 21085), and the
Securities Regulatory and Supervision Fund (Fund Number 21080) expected to be approximately
$30,014,057 shall be transferred to the General Fund, provided that on or before July 1, 2019, the
Commissioner of Financial Regulation certifies to the Joint Fiscal Committee that the transfer of
such balances, or any smaller portion deemed proper by the Commissioner, will not impair the
ability of the Department in fiscal year 2020 to provide thorough, competent, fair, and effective
regulatory services, or maintain accreditation by the National Association of Insurance
Commissioners; and that the Joint Fiscal Committee does not reject such certification.
Sec. E.513 Appropriation and transfer to education

***

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 (c) Pursuant to Sec. 7(b) of this Act, in fiscal year 2019 only, the sum of $45,400,000 is
transferred from the General Fund to the Education Fund.

Sec. 37. EFFECTIVE DATES
(a) This Act shall take effect on passage except:
(1) Secs. 2 (phase-out of aggregate exclusions) and 4, 32 V.S.A. § 5401(12)
(phase-out of excess spending threshold) shall take effect on July 1, 2019 and apply to fiscal
years 2020 and after.
(2) Sec. 3 (50% aggregate exclusions) shall take effect on July 1, 2023 and
apply to fiscal years 2024 and after.
(3) Secs. 4, 32 V.S.A. § 5401(16) (base income percentage definition), 6 (yield
recommendation), 10, 32 V.S.A. § 6066(a)(2) (income percentage definition), and 11 (new
homeowner adjustment) shall take effect on July 1, 2018 and apply to fiscal years 2019 and after.
(4) Sec. 5 (110% excess spending threshold) shall take effect on July 1, 2024
and apply to fiscal years 2025 and after.
(5) Secs. 7(b) (one-time fund transfer and interfund obligation), 8 (yield, base
income percentage), and 9 (nonresidential rate) shall take effect on July 1, 2018 and apply to
fiscal year 2019 only.
(6) Notwithstanding 1 V.S.A. § 214, Sec. 10, 32 V.S.A. § 6066(a)(1) (housesite
value cap), shall take effect on July 1, 2017 and apply to fiscal years 2018 and after.
(7) Secs. 14 (16 V.S.A. chapter 101) and 24 (special education transition) shall
take effect on July 1, 2020.

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 (8) Secs. 21 (extraordinary services reimbursement) and 22 (16 V.S.A. §
4001(6)(B)(v)) shall take effect on July 1, 2019.

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