Chapter 71B of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by adding after section 5C the following new section:-

Section 5D. (a) There is hereby established, subject to appropriation, a pre-special education referral reimbursement program.  The program shall reimburse municipalities for one half of the eligible instructional costs associated with the reduction of special education referrals for problems with reading/literacy through the implementation of a qualified literacy intervention program.  Said reimbursements shall be in addition to amounts distributed pursuant to chapter 70 of the General Laws and shall not be included in the calculation of base aid, as defined in said chapter 70, for any subsequent fiscal year.

(b) For the purposes of this section, the following words shall have the following meanings:—

“Qualified literacy intervention program,” a pre referral early intervention program for children determined to be at risk of failing to learn to read in the first grade.  Programs eligible for reimbursement must be able to demonstrate effectiveness based on published research.

“Instructional costs”, costs directly attributable to providing students with one to one literacy teaching intervention services provided as part of a qualified intervention program.  Such costs shall include salary of educational personnel, salary of related services personnel, costs for specialized books, materials or equipment.  Instructional costs shall not include transportation costs, administrative or overhead costs, the costs of adapting classrooms or materials that are used by more than one student, or the costs of fringe benefits of personnel employed by the school district.  Instructional costs for the purposes of this reimbursement program also shall not include the salary of personnel providing educational services when such services are not specially designed instruction for the student as part of a qualified literacy intervention program.

(c) Instructional costs eligible for reimbursement under the program shall be reported by a school district to the department in a form and manner as prescribed by the commissioner. The department shall review the report and approve those per pupil instructional costs that are eligible for reimbursement pursuant to the program within 30 days of submission. Based upon the approved costs, the department shall calculate the reimbursement due a municipality.

(d) Districts shall notify the department within 30 days of any change in previously approved instructional costs, including but not limited to changes in a student’s enrollment status in a qualified literacy intervention program. 

(e) In preparing a budget recommendation for the subsequent fiscal year for consideration by the local appropriating authority, a school district shall project qualified literacy intervention program costs and enrollments, including per pupil instructional costs eligible for reimbursement under this program. The school committee’s budget recommendation shall exclude any such instructional costs eligible for reimbursement under this program. Upon receipt of reimbursements paid under this program by the municipal treasurer, in the case of local school districts, or the regional district treasurer in the case of regional school districts, such amounts shall be recorded by the municipality or district as additional appropriations to the school committee, without any further action being required on the part of the local appropriating authority.

(f) Local school districts seeking reimbursement for qualified literacy intervention programs shall track and report numbers of students in grades 1, 2, and 3,; numbers of students referred to special education for literacy for each grade; and the overall percentage of students referred to special education for literacy each year.  Districts receiving pre-special education reimbursements shall report to the department the numbers and percentages of students in grades 1, 2, and 3 who are referred to special education for literacy each year. 

(f) Reimbursements shall be made based on the previous year’s per-pupil instructional costs, as pursuant to subsection (c), in compliance with department of education audits and procedures. Reimbursements shall be made in 4 quarterly payments to coincide with the distribution of funds made available pursuant to chapter 70. Each quarterly payment shall be equal to 25 per cent of the estimated reimbursements for the previous year’s submissions, subject to appropriation.

(g) The department shall monitor the effectiveness of the pre-special education referral program. Continued reimbursement for instructional costs of a qualified literacy program shall be contingent on demonstrated reduction of special education literacy referrals of at least 20 per cent after 3 years. In addition, standardized test results shall be evaluated for districts receiving payments through the pre-special education referral reimbursement program. Continued reimbursement shall be contingent on measurable improvement in literacy scores on statewide literacy assessments.