SECTION 1. Section 22N of chapter 7 of the General Laws, as appearing in the 2014 Official Edition, is hereby amended in the sixth paragraph by inserting after the first sentence the following 3 sentences:-

The division shall establish a subsequent year price for a contractor for goods or services related to special education as defined in section 1 of chapter 71B located within the commonwealth by adding a per student annual adjustment amount to the current authorized price, so called. The per student annual adjustment amount will be determined by multiplying the current authorized price, so called, by a percentage factor, as determined on an annual basis by the operational services division. The annual adjustment amount percentage for each cost component shall correspond to the actual cost component structure of these programs.

SECTION 2: Section 1B of Chapter 69 of the General Laws, as appearing in the 2014 Official Edition,  is hereby amended by inserting after the seventh paragraph the following paragraph:-

The board shall annually publish a supplemental report containing student achievement data for each approved private special education school or program, provided that such data shall include student performance on the statewide assessment system approved by the board under section 1I.

SECTION 3. Section 8 of chapter 70B of the General Laws, as so appearing, is hereby amended by striking out, in line 24, the word “and”.

SECTION 4. Said section 8 of said chapter 70B, as so appearing, is hereby further amended by striking out paragraph (8) and inserting in place thereof the following:-

(8) priority shall be given to projects needed in the judgment of said authority to transition from court-ordered and authority approved racial balance school districts to walk-to, so-called, or other school districts; and

(9) priority shall be given to projects needed in the judgment of said authority to create space for in-district special education programs and services.

SECTION 5. Subclause (C) of subsection (a) of section 10 of said chapter 70B, as so appearing, is hereby amended by adding the following sentence:- “The authority shall award incentive points for projects that include spaces for in-district special education programs and services, including special education programs and services provided by education collaboratives pursuant to section 4E of chapter 40 for public school districts within public school buildings.”

SECTION 6. Chapter 71B of the General Laws is hereby amended by adding after section 10 thereof the following new section:-

Section 10A. Each approved private special education school or program authorized under this chapter to provide special education services to children, and that enrolls students funded by the commonwealth or its political subdivisions, shall file annual reports with the department of elementary and secondary education. Each approved private special education school or program shall annually prepare, financial statements, including: (1) a statement of net assets; (2) a statement of revenues, expenditures and changes in net assets; and (3) such supplemental statements and schedules that may be required by the department. Each school shall annually cause an independent audit to be made of its financial statements consistent with the generally accepted governmental auditing standards. Each school shall file the audit report and any related management letters annually on or before January 1, for the previous fiscal year with the department and the state auditor, and shall submit a copy of the audit report and any related management letters to each school committee that had students attending said approved private special education school during the period covered by the audit report.

The audited financial statements, accompanying notes and schedules shall disclose, but not be limited to: (1) transactions between the approved private special education school and any related for profit or non-profit organization; (2) transactions or contracts related to the purchase, sale or lease of real property; (3) the names, duties and total compensation of the 5 most highly compensated employees; (4) the amounts expended on administration and overhead; (5) information on programs and services provided by the school, including the cost effectiveness of such programs and services; (6) whether the school has achieved the goals set forth in its students’ IEPs; and (7) any other items that may be required by regulation.

SECTION 7. Notwithstanding any general or special law to the contrary, the division of purchased services of the department of procurement shall promulgate rules and regulations relative to the pricing of programs approved under chapter 71B of the General Laws for the purpose of promoting recruitment and retention of all direct care staff and improving instructional resources. Said rules and regulations shall include the following provisions:-

(a) the division shall establish a pricing mechanism, including eligibility and procedural requirements, that allows approved programs to apply for salary and benefit increases for all direct care staff including, but not limited to, teachers, related service staff, health care staff and clinical staff to increase the rate of licensure and certification, as may be required by state or federal law, and to decrease the rate of staff attrition and to ensure that benefits and salaries are comparable to the benefits and salaries of similar employees in public schools or relevant agencies of the commonwealth. Said salaries and benefits shall be prorated for the length of said programs. The pricing mechanism shall also address department of elementary and secondary education approved instructional resource upgrades;

(b) the department of elementary and secondary education shall, at the next evaluation of an approved private special education program as required in section 3 of chapter 71B, review the facilities, textbooks, equipment, technology, materials and supplies of the program necessary to instruct students in the Massachusetts curriculum frameworks and recommend to the division pricing adjustments to address needed instructional resource upgrades as determined by the department; and

(c) the division’s pricing mechanisms shall not be based upon non-commonwealth or prior year’s revenues. No mechanism established by the division shall delay a program price adjustment for more than 90 days. Private special education programs must provide purchasers, the department of elementary and secondary education and the operational services division with a notice of intent to apply for salary and benefit upgrades by October 1 for the following fiscal year.