IDEA MOE Adjustment Act

To amend the Individuals with Disabilities Education Act in order to limit the penalties to a State that does not meet its maintenance of effort level of funding to a one-time penalty, and for other purposes. 1. Short title This Act may be cited as the IDEA MOE Adjustment Act 2. IDEA penalty limitation (a) In general Section 611(d) of the Individuals with Disabilities Education Act ( 20 U.S.C. 1411(d) (5) Special rule regarding penalties (A) Distribution of funds In any case where a State's allocation under this subsection is reduced pursuant to section 612(a)(18)(B), the Secretary shall distribute to all other States that were not subject to a reduction in allocation under such section, the amount by which any State's allocation under this subsection was reduced under such section, in accordance with subclauses (II) and (III) of paragraph (3)(A)(i) and without regard to paragraphs (A)(i)(I) and (B) of paragraph (3). (B) Use of funds by States Each State that receives additional funds under subparagraph (A) shall allocate such funds to local educational agencies in accordance with subsection (f). (C) No consideration for future years allocation In calculating the amounts for allocations under this subsection for fiscal year 2013 and all subsequent years, the Secretary, when determining the amount a State received under this subsection for a preceding fiscal year, shall not consider— (i) any amount by which a State's allocation for fiscal year 2012 or any subsequent year is reduced pursuant to section 612(a)(18); and (ii) any amount by which a State's allocation increased, pursuant to subparagraph (A), as a result of a State's reduction in allocation for fiscal year 2012 or any subsequent year. . (b) Application of Reduction Over Multi-Year Period Subparagraph (B) of section 612(a)(18) of the Individuals with Disabilities Education Act ( 20 U.S.C. 1412(a)(18)(B) (B) Reduction of funds for failure to maintain support In any case where a State fails to comply with the requirement of subparagraph (A) for a fiscal year, the State shall be subject to a reduction of the State's allocation of funds under section 611 by the amount by which the State fails to meet the requirement. The Secretary shall carry out such reduction, in accordance with section 611(d)(5), by— (i) reducing the State's allocation under section 611 for the following fiscal year by the entire amount of the reduction; or (ii) applying the reduction to the State's allocations under such section over a multi-year period of not more than 5 consecutive fiscal years, until the entire amount of the reduction has been applied. .

Summary: IDEA MOE Adjustment Act Amends the Individuals with Disabilities Education Act to alter the formula for reallocating the federal special education funding that is denied to states that reduce their level of special education funding from one fiscal year to the next. Reallocates: 85% of those funds on the basis of each nonpenalized state's share of children aged 3 through 21 who are of the same age as children with disabilities for whom the state provides a free appropriate public education, and 15% of those funds on the basis of each nonpenalized state's share of those children who are impoverished. Prohibits the Secretary of Education from considering those penalties or redistributions when calculating the amount of special education funds a state received in a preceding fiscal year for purposes of determining the state's current share of federal special education funds. Limits the application of the penalty imposed on a state that reduces its special education funding from one fiscal year to the next to a reduction of federal special education funds (equal to the amount of the state shortfall) that is imposed: (1) the following fiscal year, or (2) over a multi-year period that is no more than five consecutive fiscal years. (Currently, that penalty may be imposed on a state for any fiscal year after the fiscal year the state reduces its special education funding.)