A bill to amend the Individuals with Disabilities Education Act to provide grants to State educational agencies to establish high cost funds from which local educational agencies are paid a percentage of the costs of providing a free appropriate public education to high need children and other high costs associated with educating children with disabilities, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Supporting Success for High Need 
Students Act of 2003''.

SEC. 2. HIGH COST FUND FOR LOCAL EDUCATIONAL AGENCIES.

    Part B of the Individuals with Disabilities Education Act (20 
U.S.C. 1411 et seq.) is amended by adding at the end the following:

``SEC. 620. HIGH COST FUND FOR LOCAL EDUCATIONAL AGENCIES.

    ``(a) Definitions.--In this section:
            ``(1) Average per-pupil expenditure.--The term `average 
        per-pupil expenditure' has the meaning given the term in 
        section 9101 of the Elementary and Secondary Education Act of 
        1965.
            ``(2) High need child.--The term `high need child' means a 
        child with a disability for whom a free appropriate public 
        education in a fiscal year costs more than 4 times the average 
        per-pupil expenditure for such fiscal year.
    ``(b) Authorization of Grant Program and Allotment.--
            ``(1) Reservation.--From funds appropriated under 
        subsection (h), the Secretary shall reserve--
                    ``(A) not more than 1 percent to assist the 
                outlying areas in providing a free appropriate public 
                education to children with disabilities in such areas 
                for whom a free appropriate public education costs more 
                than 4 times the national average per-pupil expenditure 
                or 4 times the average per-pupil expenditure in the 
                outlying area; and
                    ``(B) 1.226 percent to assist the Secretary of the 
                Interior in providing a free appropriate public 
                education to children with disabilities on reservations 
                who are enrolled in schools for Indian children 
                operated or funded by the Secretary of the Interior for 
                whom a free appropriate public education costs more 
                than 4 times the national average per-pupil expenditure 
                or 4 times the average per-pupil expenditure in such 
                schools.
            ``(2) Grant Program.--From funds appropriated under 
        subsection (h), and not reserved under paragraph (1), the 
        Secretary shall award grants to State educational agencies, 
        from allotments under paragraph (3), to enable the State 
        educational agencies to establish high cost funds, as described 
        in subsection (c), from which local educational agencies shall 
        receive disbursements to pay a percentage of the costs of 
        providing a free appropriate public education to high need 
        children and other high costs, as described in subsection 
        (c)(3), associated with educating children with disabilities.
            ``(3) Allotment.--From funds appropriated under subsection 
        (h) for a fiscal year, and not reserved under paragraph (1), 
        the Secretary shall allot to each State an amount that bears 
        the same ratio to such funds as the amount the State received 
        under section 611 for the fiscal year bears to the total amount 
        received by all States under that section for the fiscal year.
    ``(c) High Cost Fund.--
            ``(1) In general.--Each State educational agency that 
        receives a grant under subsection (b) shall--
                    ``(A) use the grant funds to establish a high cost 
                fund; and
                    ``(B) make disbursements from the high cost fund to 
                local educational agencies in accordance with this 
                subsection.
            ``(2) Required disbursements from the fund.--
                    ``(A) In general.--Each State educational agency 
                that receives a grant under subsection (b) shall make 
                disbursements from the fund established under paragraph 
                (1) to local educational agencies to pay the percentage 
                described in subparagraph (C) of the costs of providing 
                a free appropriate public education to high need 
                children.
                    ``(B) Application.--
                            ``(i) In general.--A local educational 
                        agency that desires a disbursement under this 
                        paragraph shall submit an application to the 
                        State educational agency at such time, in such 
                        manner, and containing such information as the 
                        State educational agency may require.
                            ``(ii) Contents.--An application submitted 
                        pursuant to clause (i) shall contain the 
                        following:
                                    ``(I) A figure that reflects the 
                                costs of providing a free appropriate 
                                public education to each high need 
                                child served by the local educational 
                                agency in a fiscal year for whom such 
                                agency desires a disbursement under 
                                this section.
                                    ``(II) The IEP for each high need 
                                child served by the local educational 
                                agency for whom such agency desires a 
                                disbursement under this section.
                                    ``(III) Assurances that grant funds 
                                provided under this section shall not 
                                be used to pay costs that otherwise 
                                would be reimbursable as medical 
                                assistance for a child with a 
                                disability under the State medicaid 
                                program under title XIX of the Social 
                                Security Act.
                    ``(C) Disbursements.--
                            ``(i) In general.--Subject to subparagraph 
                        (D), a State educational agency shall make a 
                        disbursement to a local educational agency that 
                        submits an application under subparagraph (B) 
                        in an amount that is equal to 75 percent of the 
                        costs that are in excess of 4 times the average 
                        per-pupil expenditure in either the Nation or 
                        the State where the child resides (calculated 
                        from whichever average per-pupil expenditure is 
                        lower) associated with educating each high need 
                        child served by such local educational agency 
                        in a fiscal year for whom such agency desires a 
                        disbursement.
                            ``(ii) Appropriate costs.--The costs 
                        associated with educating a high need child 
                        under clause (i) are only those costs 
                        associated with providing special education and 
                        related services to such child that are 
                        identified in such child's appropriately 
                        developed IEP.
                    ``(D) Disallowance of certain payments.--A State 
                educational agency may disallow payment of certain 
                costs included in the figure submitted by a local 
                educational agency under subparagraph (B)(ii)(I) if 
                such costs are determined by the State educational 
                agency to be inappropriate or unnecessary excess costs 
                associated with providing a free appropriate public 
                education to a high need child.
                    ``(E) Legal fees.--The costs associated with 
                providing a free appropriate public education to a high 
                need child shall not include legal fees, court costs, 
                or other costs associated with a cause of action 
                brought on behalf of such child to ensure a free 
                appropriate public education for such child.
            ``(3) Permissible disbursements from remaining funds.--A 
        State educational agency may make disbursements to local 
        educational agencies from any funds that are remaining in the 
        high cost fund after making the required disbursements under 
        paragraph (2) for a fiscal year for the following purposes:
                    ``(A) To pay the costs associated with serving 
                children with disabilities who moved into the areas 
                served by such local educational agencies after 
                commencement of the school year to assist the local 
                educational agencies in providing a free appropriate 
                public education for such children in such year.
                    ``(B) To compensate local educational agencies that 
                expend over a threshold amount determined by the State 
                educational agency on costs associated with providing a 
                free appropriate public education to all children with 
                disabilities served by such agencies.
            ``(4) Limitation on administrative costs.--A State 
        educational agency may use not more than 2 percent of the funds 
        received under this section for the administrative costs of 
        carrying out such agency's responsibilities under this section.
    ``(d) Assurance of a Free Appropriate Public Education.--Nothing in 
this section shall be construed--
            ``(1) to limit or condition the right of a child with a 
        disability who is assisted under this part to receive a free 
        appropriate public education pursuant to section 612(a)(1) in a 
        least restrictive environment pursuant to section 612(a)(5); 
        and
            ``(2) to authorize a State educational agency or local 
        educational agency to indicate a limit on what is expected to 
        be spent on the education of a child with a disability.
    ``(e) Evaluation and Report.--The Secretary shall--
            ``(1) evaluate the effectiveness of the high cost funds 
        established pursuant to this section; and
            ``(2) submit a report to the appropriate committees of 
        Congress on such evaluation.
    ``(f) Supplement, Not Supplant.--Funds made available under this 
section shall be used to supplement and not supplant other Federal, 
State, and local funds available for providing a free appropriate 
public education for children with disabilities.
    ``(g) Medicaid Services Not Affected.--Grant funds provided under 
this section shall not be used to pay costs that otherwise would be 
reimbursable as medical assistance for a child with a disability under 
the State medicaid program under title XIX of the Social Security Act.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $750,000,000 for fiscal year 
2004 and such sums as may be necessary for each succeeding fiscal 
year.''.

Summary: Supporting Success for High Need Students Act of 2003 - Amends the Individuals with Disabilities Education Act (IDEA) to direct the Secretary of Education to make grants to State educational agencies (SEAs) to establish high-cost funds from which local educational agencies (LEAs) are paid a portion of: (1) the costs of providing a free appropriate public education to high-need children; and (2) other high costs associated with educating children with disabilities under IDEA part B.Allocates such grants to States using the IDEA part B allotment formula; and authorizes appropriations for such targeted grants. Permits LEAs to apply for disbursements from the SEA's high-cost fund to offset 75 percent of that portion of a high-need student's education that costs more than four times the average per pupil expenditure (in the Nation or State, whichever is lower). Allows disbursements to cover education and related services included in an appropriately formulated Individualized Education Plan. Prohibits use of such disbursements to pay: (1) costs otherwise reimbursable as medical assistance under the State Medicaid program; (2) inappropriate or unnecessary excess costs disallowed by the SEA; or (2) legal, court, or other costs associated with a cause of action brought to ensure a free appropriate public education for a high-need child.