HB 563-FN - AS AMENDED BY THE HOUSE
13Mar2025... 0650h
2025 SESSION
25-0223
02/11
HOUSE BILL 563-FN
SPONSORS: Rep. Ladd, Graf. 5; Rep. Cordelli, Carr. 7; Rep. Drye, Sull. 7; Rep. Spilsbury, Sull. 3; Rep. S. Smith, Sull. 3; Rep. Leishman, Hills. 33; Rep. Cornell, Hills. 22; Sen. Ward, Dist 8
COMMITTEE: Education Funding
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AMENDED ANALYSIS
This bill changes the calculation of costs of an opportunity for an adequate education, extraordinary need grants, and determination of education grants. It also establishes fiscal capacity disparity aid grants.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
13Mar2025... 0650h 25-0223
02/11
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Five
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Cost of an Opportunity for an Adequate Education. Amend RSA 198:40-a, I-II to read as follows:
I. [For the biennium] Beginning July 1, [2023] 2026, the annual cost of providing the opportunity for an adequate education as defined in RSA 193-E:2-a shall be as specified in paragraph II. The department shall adjust the rates specified in this paragraph in accordance with RSA 198:40-d.
II.(a) A cost of [$4,100] $4,351 per pupil in the ADMR, plus differentiated aid as follows:
(b) An additional [$2,300] $2,441 for each pupil in the ADMR who is eligible for a free or reduced price meal anytime during the determination year; plus
(c) An additional [$800] $849 for each pupil in the ADMR who is an English language learner anytime during the determination year; plus
(d) An additional [$2,100] $3,140 for each pupil in the ADMR who is receiving special education services anytime during the determination year.
2 Annual Adjustment. Amend RSA 198:40-d to read as follows:
198:40-d Annual Adjustment.
Beginning July 1, [2024] 2027, and every year thereafter, the department of education shall adjust the following with an increase of 2 percent annually, rounded up to the nearest whole dollar:
I. Per pupil costs in RSA 198:40-a, II; and
II. [Extraordinary need grant "grant floor," "grant ceiling," "factor," and "max grant" as defined in RSA 198:40-f, II, (a)-(d); and
III.] Chartered public school additional grants under RSA 194-B:11, I(b)(1)(A) and (B).
3 Extraordinary Need Grants. RSA 198:40-f is repealed and reenacted to read as follows:
198:40-f Extraordinary Need Grants.
I. In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-a, each year the commissioner shall calculate an extraordinary need grant for schools and provide that amount of aid to a municipality's school districts as follows:
(a) A municipality with an equalized valuation per pupil eligible to receive a free or reduced-priced meal of $1,700,000 or less shall receive $11,730 per pupil eligible to receive a free or reduced-price meal in the municipality's ADMR.
(b) A municipality with an equalized valuation per pupil eligible to receive a free or reduced-price meal between $1,700,001 and $6,999,999 shall receive a grant equal to $0.00221321 for each dollar of difference between its equalized valuation per pupil eligible to receive a free or reduced-price meal and $6,999,999, for each pupil eligible to receive a free or reduced-price meal in the municipality's ADMR.
(c) A municipality with an equalized valuation per pupil eligible to receive a free or reduced-price meal of $7,000,000 or more shall not receive an extraordinary need grant.
II. ? In this section:
(a) “Grant floor” means $1,700,000 in equalized valuation per free or reduced-price meal pupil.
(b) “Grant ceiling” means $7,000,000 in equalized valuation per free or reduced-price meal pupil.
(c) “Factor” means $0.00221321 for each dollar difference between equalized valuation per free or reduced-price meal pupil.
(d) “Maximum grant” means $11,730 per free or reduced-price meal pupil.
III. The extraordinary needs grants shall be calculated using the formula described in paragraph I, however, beginning July 1, 2027, and every year thereafter, the grant floor, grant ceiling, and maximum grant shall be increased by 2 percent. The factor shall be readjusted by taking the newly adjusted maximum grant and dividing by the difference between the grant floor and grant ceiling.
4 New Section; Fiscal Capacity Disparity Aid. Amend RSA 198 by inserting after section 40-f the following new section:
198:40-g Fiscal Capacity Disparity Aid.
I. In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-a, each year the commissioner shall calculate a fiscal capacity disparity aid grant for schools and provide that amount of aid to a municipality's school districts as follows:
(a) A municipality with an equalized valuation per pupil of $1,000,000 or less shall receive $1,250 per pupil eligible in the municipality's ADMR.
(b) A municipality with an equalized valuation per pupil between $1,000,001 and $1,599,999 shall receive a grant equal to $0.00208333 for each dollar of difference between its equalized valuation per pupil and $1,599,999, for each pupil the municipality's ADMR.
(c) A municipality with an equalized valuation per pupil of $1,600,000 or more shall not receive a fiscal capacity disparity aid grant.
II. In this section:
(a) “Grant floor” means $1,000,000 in equalized valuation per pupil.
(b) “Grant ceiling” means $1,600,000 in equalized valuation per pupil.
(c) “Factor” means $0.00208333 for each dollar difference between equalized valuation per pupil.
(d) “Maximum grant” means $1,250 per pupil.
III. The fiscal capacity disparity aid grants shall be calculated using the formula described in paragraph I, however, beginning July 1, 2027, and every year thereafter, the grant floor, grant ceiling, and maximum grant shall be increased by 2 percent. The factor shall be readjusted by taking the newly adjusted maximum grant and dividing by the difference between the grant floor and grant ceiling.
5 Determination of Education Grants. Amend RSA 198:41, I(b)-(c) to read as follows:
(b) Subtract the amount of the education tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:8 for the next tax year; [and]
(c) Add the municipality's extraordinary need grant pursuant to RSA 198:40-f;[.]
(d) Add the municipality’s fiscal capacity disparity aid grant pursuant to RSA 198:40-g; and
(e) For municipalities with a total ADMR of 5,000 or more, subtract the amount necessary to limit the total additional targeted aid to $3,750 per pupil in the municipality’s ADMR. For the purpose of this paragraph, additional targeted aid shall be the sum of a municipality’s extraordinary needs grant and fiscal capacity disparity aid grant.
6 Effective Date. This act shall take effect July 1, 2026.
25-0223
1/8/25
HB 563-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to adequate education grant amounts for pupils receiving special education services.
FISCAL IMPACT:
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Estimated State Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | None | |||||
Expenditures* | $0 | FY 2026 District Adequacy - Approximately $7.1M Charter School Grants - Approximately $50K Education Freedom Accounts - Approximately $44K Total - Approximately $7.2M
FY 2027 and Beyond Indeterminable, but similar magnitude expected (see methodology below) | ||||
Funding Source(s) | Education Trust Fund | |||||
Appropriations* | $0 | Statutory Open Appropriation | ||||
Funding Source(s) | Education Trust Fund | |||||
*Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill | ||||||
| ||||||
Estimated Political Subdivision Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Local Revenue | $0 | FY 2026 Approximately $7.1M
FY 2027 and Beyond Indeterminable, but similar magnitude expected (see methodology below) | ||||
Local Expenditures | $0 | $0 | $0 | $0 | ||
METHODOLOGY:
This bill, effective for FY 2026, replaces the current special education (SPED) differentiated aid definition for students receiving (SPED) services with the following categories:
- Category A Disability – Student who is receiving SPED services for less than 80 percent of the school day
- Category B Disability – Student who is receiving SPED services for 80 percent or more of the school day
- Category C Disability – Student who is receiving SPED services in separate schools, residential facilities, or homebound/ hospital placements.
- “Catch All” – Student who is receiving SPED services within the categories, however, is not identified in such category as of the annual October 1 data collection date.
This bill will impact adequacy payments to school districts, charter school grants, and education freedom accounts (EFAs).
Disability Category | Estimated # Students | ||
District Public Schools | Charter Public Schools | EFAs | |
Category A | 22,077 | 583 | 360 |
Category B | 5,007 | 46 | 40 |
Category C | 325 | 0 | 0 |
"Catch All" | 4,060 | 348 | 0 |
Grand Total | 31,469 | 977 | 400 |
In addition to the SPED per pupil aid amount change, this bill also seeks to update the statute for base and other differentiated aid per pupil amounts with the 2% annual adjustment increase calculated by the Department of Education. Below is a summary of this bill’s impact on per pupil aid amounts:
Per Pupil Aid Amount | Current Law | Proposed | Increase / (Decrease) |
Base Adequacy | $4,265.64 | $4,266.00 | $0.36 |
Differentiated Aid |
|
|
|
Free-Reduced Price Meal Eligible | $2,392.92 | $2,393.00 | $0.08 |
English Language Learner | $832.32 | $832.00 | ($0.32) |
Special Education | $2,184.84 | $0.00 | ($2,184.84) |
SPED - Category A | $0.00 | $2,185.00 | $2,185.00 |
SPED - Category B | $0.00 | $3,278.00 | $3,278.00 |
SPED - Category C | $0.00 | $7,648.00 | $7,648.00 |
SPED - "Catch All" | $0.00 | $2,185.00 | $2,185.00 |
District Adequacy
Based on the SPED data and per pupil aid amounts presented above, this bill will increase adequacy grants to school districts by an estimated $7,139,756 in FY 2026:
| Current Law | Proposed | Increase |
Adequacy Grant | $716,948,319 | $724,088,075 | $7,139,756 |
Statewide Education Property Tax (SWEPT) | $363,516,836 | $363,516,836 | $0 |
Final State Grant | $1,080,465,155 | $1,087,604,911 | $7,139,756 |
Data for FY 2027 and FY 2028 is not yet available, therefore, this bill’s impact on district adequacy beyond FY 2026 is indeterminable, however expected to be in the $7 million to $8 million range per year.
Charter School Grants
Based on the SPED student data presented above, this bill would increase aid to charter schools by $50,434 in FY 2026. Data to estimate FY 2027 and FY 2028 student counts is not yet available, therefore, this bill’s impact on charter school grants beyond FY 2026 is indeterminable, however expected to be approximately the same as the FY 2026 estimate.
Education Freedom Accounts (EFAs)
Based on the SPED student data presented above, this bill would increase EFAs by $43,784 in FY 2026. Data to estimate FY 2027 and FY 2028 student counts is not yet available, therefore, this bill’s impact on EFAs beyond FY 2026 is indeterminable, however expected to be approximately the same as the FY 2026 estimate.
The Department notes that “point in time” counts done on October 1 are on a federal fiscal year (FFY) basis (FFY 23 = school year 2023-2024 = October 2023 counts), and there is an approximate six-month lag between when the “point in time” counts are available from the Bureau of Special Education to the Bureau of School Finance. Therefore, annual November 15th preliminary estimates will not be able to use current school year “point in time” counts. Also, the SPED “point in time” counts are done in the fall, which means the Bureau of School Finance wouldn’t be aware if a student shifted categories during the school year.
AGENCIES CONTACTED:
Department of Education