U.S. House and Senate negotiators agreed yesterday on a deal that would reimpose a $4,000 cap on attorneys' fees in cases involving D.C. special education students.

The congressional limit, unique to the city, would restore a restriction in place from 1999 to 2001.

The change was attached to a $512 million package of city aid included in an omnibus 2003 federal budget. The conference committee hammered out final details of the full $397.4 billion federal plan last night, and it's to go to the full House for a vote today and to the Senate tomorrow.

The votes would complete approval of the city's $5.8 billion budget, five months after the fiscal year began. Included are federal dollars to operate the District's courts, parole agency, prisons and Medicaid program, plus $17 million in new assistance for public charter schools, $15 million for homeland security, $10 million for bioterrorism preparedness, and $50 million for sewer infrastructure and family court reforms.

For the second year in a row, congressional leaders rejected a change sought by the Senate and opposed by the House to end a two-year-old ban on the District's use of locally raised tax dollars to pay for free drug needle exchange programs to combat AIDS and other diseases.

D.C. public school officials have asked for the fee cap to be reimposed since 2001. Trial lawyers lobbied for its elimination, which was backed by city officials and supporters in Congress who argued that only the city should have the power to set a cap.

Under the legislation, lawyers and employees of lawyers with a financial interest in businesses providing special education services also would be barred from receiving payments pending certification by the District that their holdings did not pose a conflict of interest.

The cap was sought by Sen. Kay Bailey Hutchison (R-Tex.). A similar provision stalled last year after opposition from Rep. Joe Knollenberg (R-Mich.), outgoing chairman of the House Appropriations subcommittee on the District.

Supporters of the cap say lawyers are charging too much to represent children who maintain that they are not receiving required services from the school system. They also complain that lawyers are filing too many cases against the school system. When the school system loses cases, it must pay attorney fees for the student. The system loses cases often because it has not provided required services for special needs children.

Opponents of the cap say children who need help from the school system, especially those from low-income families, must have access to lawyers. They say that a cap limits the number of lawyers representing children and that, as a result, more will go unserved.