1.    Each year the superintendent of public instruction shall identify the approximately one percent of students with a disability and students with a significant medical condition statewide who are not eligible for cost reimbursement under section 15.1-29-14 and who require the greatest school district expenditures to provide them with education and services, including special education and related services. This percentage represents the number of students that would qualify for excess cost reimbursement beyond the multiplier that is established in subsection 3.

2.    The excess costs of providing services to these students are the responsibility of the state and the superintendent of public instruction shall reimburse the school districts for any excess costs incurred in the provision of the services to the identified students.

3.    “Excess costs” are those that exceed four times the state average cost of education per student and which are incurred by the students identified in subsection 1.

4.    All costs of providing services to those students identified in subsection 1, other than excess costs reimbursed by the state, are the responsibility of the student’s school district of residence.

5.    In addition to any other reimbursements provided under this section, if a school district expends more than two percent of its annual budget for the provision of education and services to one student with a disability or significant medical condition, the district shall notify the superintendent of public instruction. Upon verification, the superintendent shall reimburse the district for the difference between:

a.    Two percent of the district’s annual budget; and b.    The lesser of:

(1) The amount actually expended by the district for the provision of special education and related services to that student; or

(2) The amount representing four times the state average cost of education per student.