The California State Board of Education authorized the study to document the overall costs of special education due process fair hearings to all parties--the parents, local education agencies, and the state. The study also analyzed the factors that enter into the costs of hearings, and some conclusions were drawn and recommendations made for reducing the costs. Data were collected from three main sources: the state Office of Special Education, the local education agencies, and the parents of students involved in fair hearings. Data were analyzed in terms of state government costs, issues in fair hearings, costs to parents, costs to local education agencies, legal counsel and mediation, hidden costs, and availability of records. Among findings were that the most frequently reported issue prompting fair hearings was payment by public education agencies for nonpublic school placement, that state level hearings conducted by hearing officers were on the average six times more costly than panel hearings for the parents responding to the study, that certain cost saving features were reported already in use by local education agencies, and that legal counsel tended to be the single costliest element in fair hearings for local education agencies and parents. Among appendixes are sample letters, a survey packet for local education agencies, and matrixes of mean parent and mean local education agency costs. (SB)