May 17, 2022 Residential Placement Bill

Public Act 102-0703 – Residential Placement Bill

Hodges, Loizzi, Eisenhammer, Rodick & Kohn LLP

For the last several school years, and specifically during the COVID-19 pandemic, school districts have faced challenges in securing placements for students in residential facilities approved by the Illinois State Board of Education (“ISBE”). This is due in part to the limited number of residential facilities approved by ISBE pursuant to ISBE’s Part 401 rules and ISBE’s prohibition on placing students in non-ISBE approved residential facilities through the IEP process. As a result, many students with significant needs were unable to get timely access to residential facilities and remained on waiting lists with limited resources for interim programming. Further complicating this issue was ISBE’s position, set forth in a February 2020 memo, stating it would no longer reimburse school districts for students placed in non-ISBE approved special education placements even if ordered by an ISBE Hearing Officer. 

Following advocacy by special education administrators and the Illinois Council of School Attorneys, ISBE issued a letter on January 10, 2022, immediately reinstating its practice of reimbursing school districts for placements in non-ISBE approved residential facilities when ordered by an ISBE Hearing Officer. However, ISBE’s letter indicated it still would not provide reimbursement to school districts for placements in non-approved residential facilities pursuant to a settlement agreement or IEP team determination.  

On February 4, 2022, ISBE filed emergency rules allowing school districts to place students in  non-ISBE approved residential facilities when no ISBE-approved facility accepts the student or immediate placement is not available and allowing school districts to receive reimbursement for placements in such non-approved facilities if certain conditions are met. The emergency rules also allow for reimbursement when an ISBE Hearing Officer orders placement in a non-approved residential facility. ISBE also filed corresponding emergency rules on behalf of the Illinois Purchased Care Review Board (“IPCRB”). These proposed amendments to the ISBE and IPCRB rules are awaiting approval from the Joint Committee on Administrative Rules (“JCAR”) to make the emergency rules permanent.​

Additionally, the Illinois General Assembly recently introduced and passed House Bill 4365 to codify the changes to the ISBE regulations regarding residential placements. On April 22, 2022, Governor Pritzker signed HB 4365 into law; Public Act 102-0703 went into effect immediately. The Act amends Section 14-7.02 of the Illinois School Code (105 ILCS 5/14-7.02) to specifically provide where a student’s IEP team determines residential placement is appropriate, the financial responsibility and reimbursement of the resident school district applies to both nonpublic special education residential facilities that are approved by ISBE pursuant to its Part 401 rules or other applicable laws or rules and emergency placements in facilities that are not approved.  

Pursuant to Public Act 102-0703, an IEP team may place a student in a non-ISBE approved, nonpublic special education residential facility if ISBE provides an emergency and student-specific approval for placement. ISBE is to respond to the emergency placement request within 10 days. In order to get approval for such placement, a school district must demonstrate:

1. the facility demonstrates appropriate licensure of teachers for the student population;

2. the facility demonstrates age-appropriate curriculum;

3. the facility provides enrollment and attendance data;

4. the facility demonstrates the ability to implement the child’s IEP; and

5. the school district demonstrates that it made good faith efforts to place the student in an approved facility, but not approved facility has accepted the student or has availability for immediate placement of the student.

Section 14-7.02 of the School Code also now includes if an ISBE Hearing Officer orders placement of a student with a disability in a residential facility that is not ISBE approved, then the facility shall be deemed approved for placement and school district payments and reimbursements shall be made accordingly.

Emergency placement in a residential facility by a school district or ISBE Hearing Officer may continue so long as (1) the student’s IEP team determines annually that such placement continues to be appropriate to meet the student’s needs, and (2) at least every 3 years following the student’s placement, the IEP team reviews appropriate placements approved by ISBE to determine whether there are any approved placements that can meet the student’s needs, have accepted the student, and have availability for placement of the student. 

Public Act 102-0703, and the emergency and proposed ISBE rules, should help alleviate the residential placement crisis. 

Also, we would be remiss if we did not remind readers of a related requirement that went into effect last August for residential placement decisions by an IEP team. Per Public Act 102-0254 (eff. August 6, 2021), before an IEP team places a student in an out-of-state special education residential facility, the school district and parents/guardians must explore in-state residential facility options. In-state residential facility options also must be considered at an annual review while the student is placed in an out-of-state residential facility. IEP teams should document consideration of in-state residential facilities.