January 10, 2018, Introduced by Reps. Canfield, Faris, Elder, Cambensy, Liberati, Pagan, Pagel, Calley, Schor, Inman, Chang, LaGrand, Lucido, Howell, Howrylak, Phelps and Guerra and referred to the Committee on Appropriations.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending sections 18, 20, 22b, and 31a (MCL 388.1618, 388.1620,
388.1622b, and 388.1631a), sections 18, 20, and 22b as amended by
2017 PA 108 and section 31a as amended by 2017 PA 143.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 18. (1) Except as provided in another section of this
article, each district or other entity shall apply the money
received by the district or entity under this article to salaries
and other compensation of teachers and other employees, tuition,
transportation, lighting, heating, ventilation, water service, the
purchase of textbooks, other supplies, and any other school
operating expenditures defined in section 7. However, not more than
20% of the total amount received by a district under sections 22a
and 22b or received by an intermediate district under section 81
may be transferred by the board to either the capital projects fund
or to the debt retirement fund for debt service. The money shall
not be applied or taken for a purpose other than as provided in
this section. The department shall determine the reasonableness of
expenditures and may withhold from a recipient of funds under this
article the apportionment otherwise due upon a violation by the
recipient.
(2) A district or intermediate district shall adopt an annual
budget in a manner that complies with the uniform budgeting and
accounting act, 1968 PA 2, MCL 141.421 to 141.440a. Within 15 days
after a district board adopts its annual operating budget for the
following school fiscal year, or after a district board adopts a
subsequent revision to that budget, the district shall make all of
the following available through a link on its website homepage, or
may make the information available through a link on its
intermediate district's website homepage, in a form and manner
prescribed by the department:
(a) The annual operating budget and subsequent budget
revisions.
(b) Using data that have already been collected and submitted
to the department, a summary of district expenditures for the most
recent fiscal year for which they are available, expressed in the
following 2 pie charts:
(i) A chart of personnel expenditures, broken into the
following subcategories:
(A) Salaries and wages.
(B) Employee benefit costs, including, but not limited to,
medical, dental, vision, life, disability, and long-term care
benefits.
(C) Retirement benefit costs.
(D) All other personnel costs.
(ii) A chart of all district expenditures, broken into the
following subcategories:
(A) Instruction.
(B) Support services.
(C) Business and administration.
(D) Operations and maintenance.
(c) Links to all of the following:
(i) The current collective bargaining agreement for each
bargaining unit.
(ii) Each health care benefits plan, including, but not
limited to, medical, dental, vision, disability, long-term care, or
any other type of benefits that would constitute health care
services, offered to any bargaining unit or employee in the
district.
(iii) The audit report of the audit conducted under subsection
(4)
(5) for the most recent fiscal year for which it is
available.
(iv) The bids required under section 5 of the public employees
health benefits act, 2007 PA 106, MCL 124.75.
(v) The district's written policy governing procurement of
supplies, materials, and equipment.
(vi) The district's written policy establishing specific
categories of reimbursable expenses, as described in section
1254(2) of the revised school code, MCL 380.1254.
(vii) Either the district's accounts payable check register
for the most recent school fiscal year or a statement of the total
amount of expenses incurred by board members or employees of the
district that were reimbursed by the district for the most recent
school fiscal year.
(d) The total salary and a description and cost of each fringe
benefit included in the compensation package for the superintendent
of the district and for each employee of the district whose salary
exceeds $100,000.00.
(e) The annual amount spent on dues paid to associations.
(f) The annual amount spent on lobbying or lobbying services.
As used in this subdivision, "lobbying" means that term as defined
in section 5 of 1978 PA 472, MCL 4.415.
(g) Any deficit elimination plan or enhanced deficit
elimination plan the district was required to submit under the
revised school code.
(h) Identification of all credit cards maintained by the
district as district credit cards, the identity of all individuals
authorized to use each of those credit cards, the credit limit on
each credit card, and the dollar limit, if any, for each
individual's authorized use of the credit card.
(i) Costs incurred for each instance of out-of-state travel by
the school administrator of the district that is fully or partially
paid for by the district and the details of each of those instances
of out-of-state travel, including at least identification of each
individual on the trip, destination, and purpose.
(3) For the information required under subsection (2)(a),
(2)(b)(i), and (2)(c), an intermediate district shall provide the
same information in the same manner as required for a district
under subsection (2).
(4) In addition to the information required under subsection
(2), a district that is a cyber school, as defined in section 551
of the revised school code, MCL 380.551, shall make available
through a link on the cyber school's website homepage a breakdown
of expenditures coded as purchased or contracted services as if
they were not purchased or contracted services, broken into the
following subcategories:
(a) Salaries and wages.
(b) Employee benefit costs, including, but not limited to,
medical, dental, vision, life, disability, and long-term care
benefits.
(c) Retirement benefit costs.
(d) All other personnel costs.
(e) Any profit to an educational management organization with
which the cyber school has a contract that is related to the
contract with the cyber school.
(5) (4)
For the purposes of determining the
reasonableness of
expenditures, whether a district or intermediate district has
received the proper amount of funds under this article, and whether
a violation of this article has occurred, all of the following
apply:
(a) The department shall require that each district and
intermediate district have an audit of the district's or
intermediate district's financial and pupil accounting records
conducted at least annually, and at such other times as determined
by the department, at the expense of the district or intermediate
district, as applicable. The audits must be performed by a
certified public accountant or by the intermediate district
superintendent, as may be required by the department, or in the
case of a district of the first class by a certified public
accountant, the intermediate superintendent, or the auditor general
of the city. A district or intermediate district shall retain these
records for the current fiscal year and from at least the 3
immediately preceding fiscal years.
(b) If a district operates in a single building with fewer
than 700 full-time equated pupils, if the district has stable
membership, and if the error rate of the immediately preceding 2
pupil accounting field audits of the district is less than 2%, the
district may have a pupil accounting field audit conducted
biennially but must continue to have desk audits for each pupil
count. The auditor must document compliance with the audit cycle in
the pupil auditing manual. As used in this subdivision, "stable
membership" means that the district's membership for the current
fiscal year varies from the district's membership for the
immediately preceding fiscal year by less than 5%.
(c) A district's or intermediate district's annual financial
audit shall include an analysis of the financial and pupil
accounting data used as the basis for distribution of state school
aid.
(d) The pupil and financial accounting records and reports,
audits, and management letters are subject to requirements
established in the auditing and accounting manuals approved and
published by the department.
(e) All of the following shall be done not later than November
1 each year for reporting the prior fiscal year data:
(i) A district shall file the annual financial audit reports
with the intermediate district and the department.
(ii) The intermediate district shall file the annual financial
audit reports for the intermediate district with the department.
(iii) The intermediate district shall enter the pupil
membership audit reports for its constituent districts and for the
intermediate district, for the pupil membership count day and
supplemental count day, in the Michigan student data system.
(f) The annual financial audit reports and pupil accounting
procedures reports shall be available to the public in compliance
with the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246.
(g) Not later than January 31 of each year, the department
shall notify the state budget director and the legislative
appropriations subcommittees responsible for review of the school
aid budget of districts and intermediate districts that have not
filed an annual financial audit and pupil accounting procedures
report required under this section for the school year ending in
the immediately preceding fiscal year.
(6) (5)
By November 1 each fiscal year,
each district and
intermediate district shall submit to the center, in a manner
prescribed by the center, annual comprehensive financial data
consistent with the district's or intermediate district's audited
financial statements and consistent with accounting manuals and
charts of accounts approved and published by the department. For an
intermediate district, the report shall also contain the website
address where the department can access the report required under
section 620 of the revised school code, MCL 380.620. The department
shall ensure that the prescribed Michigan public school accounting
manual chart of accounts includes standard conventions to
distinguish expenditures by allowable fund function and object. The
functions shall include at minimum categories for instruction,
pupil support, instructional staff support, general administration,
school administration, business administration, transportation,
facilities operation and maintenance, facilities acquisition, and
debt service; and shall include object classifications of salary,
benefits, including categories for active employee health
expenditures, purchased services, supplies, capital outlay, and
other. Districts shall report the required level of detail
consistent with the manual as part of the comprehensive annual
financial report.
(7) (6)
By September 30 of each year, each
district and
intermediate district shall file with the department the special
education actual cost report, known as "SE-4096", on a form and in
the manner prescribed by the department.
(8) (7)
By October 7 of each year, each
district and
intermediate district shall file with the center the transportation
expenditure report, known as "SE-4094", on a form and in the manner
prescribed by the center.
(9) (8)
The department shall review its
pupil accounting and
pupil auditing manuals at least annually and shall periodically
update those manuals to reflect changes in this article.
(10) (9)
If a district that is a public
school academy
purchases property using money received under this article, the
public school academy shall retain ownership of the property unless
the public school academy sells the property at fair market value.
(11) (10)
If a district or intermediate
district does not
comply
with subsections (4), (5), (6), and (7), and (8), or
if the
department determines that the financial data required under
subsection
(5) (6) are not consistent with audited financial
statements, the department shall withhold all state school aid due
to the district or intermediate district under this article,
beginning with the next payment due to the district or intermediate
district, until the district or intermediate district complies with
subsections
(4), (5), (6), and (7),
and (8). If the district or
intermediate
district does not comply with subsections (4), (5),
(6),
and (7), and (8) by the end of the fiscal year, the district
or intermediate district forfeits the amount withheld.
(12) (11)
If a district or intermediate
district does not
comply
with subsection (2) , or
(4), as applicable, the department
may withhold up to 10% of the total state school aid due to the
district or intermediate district under this article, beginning
with the next payment due to the district or intermediate district,
until the district or intermediate district complies with
subsection (2) or (4), as applicable. If the district or
intermediate district does not comply with subsection (2) or (4),
as applicable, by the end of the fiscal year, the district or
intermediate district forfeits the amount withheld.
(13) (12)
By November 1 of each year, if a
district or
intermediate district offers virtual learning under section 21f,
the district or intermediate district shall submit to the
department a report that details the per-pupil costs of operating
the virtual learning by vendor type. The report shall include at
least all of the following information concerning the operation of
virtual learning for the immediately preceding school fiscal year:
(a) The name of the district operating the virtual learning
and of each district that enrolled students in the virtual
learning.
(b) The total number of students enrolled in the virtual
learning and the total number of membership pupils enrolled in the
virtual learning.
(c) For each pupil who is enrolled in a district other than
the district offering virtual learning, the name of that district.
(d) The district in which the pupil was enrolled before
enrolling in the district offering virtual learning.
(e) The number of participating students who had previously
dropped out of school.
(f) The number of participating students who had previously
been expelled from school.
(g) The total cost to enroll a student in the program. This
cost shall be reported on a per-pupil, per-course, per-semester or
trimester basis by vendor type. The total shall include costs
broken down by cost for content development, content licensing,
training, virtual instruction and instructional support, personnel,
hardware and software, payment to each virtual learning provider,
and other costs associated with operating virtual learning.
(h) The name of each virtual education provider contracted by
the district and the state in which each virtual education provider
is headquartered.
(14) (13)
By March 31 of each year, the
department shall
submit to the house and senate appropriations subcommittees on
state school aid, the state budget director, and the house and
senate fiscal agencies a report summarizing the per-pupil costs by
vendor type of virtual courses available under section 21f.
(15) (14)
As used in subsections (12) and
(13), (13) and (14),
"vendor type" means the following:
(a) Virtual courses provided by the Michigan Virtual
University.
(b) Virtual courses provided by a school of excellence that is
a cyber school, as defined in section 551 of the revised school
code, MCL 380.551.
(c) Virtual courses provided by third party vendors not
affiliated with a Michigan public school.
(d) Virtual courses created and offered by a district or
intermediate district.
(16) (15)
An allocation to a district or
another entity under
this article is contingent upon the district's or entity's
compliance with this section.
(17) (16)
Beginning October 1, 2017, and not
less than once
every 3 months after that date, the department shall submit to the
senate and house subcommittees on school aid and to the senate and
house standing committees on education an itemized list of
allocations under this article to any association or consortium
consisting of associations. The report shall detail the recipient
or recipients, the amount allocated, and the purpose for which the
funds were distributed.
Sec. 20. (1) For 2017-2018, both of the following apply:
(a) The basic foundation allowance is $8,289.00.
(b) The minimum foundation allowance is $7,631.00.
(2) The amount of each district's foundation allowance shall
be calculated as provided in this section, using a basic foundation
allowance in the amount specified in subsection (1).
(3) Except as otherwise provided in this section, the amount
of a district's foundation allowance shall be calculated as
follows, using in all calculations the total amount of the
district's foundation allowance as calculated before any proration:
(a) Except as otherwise provided in this subdivision, for a
district that had a foundation allowance for the immediately
preceding state fiscal year that was at least equal to the minimum
foundation allowance for the immediately preceding state fiscal
year, but less than the basic foundation allowance for the
immediately preceding state fiscal year, the district shall receive
a foundation allowance in an amount equal to the sum of the
district's foundation allowance for the immediately preceding state
fiscal year plus the difference between twice the dollar amount of
the adjustment from the immediately preceding state fiscal year to
the current state fiscal year made in the basic foundation
allowance and [(the difference between the basic foundation
allowance for the current state fiscal year and basic foundation
allowance for the immediately preceding state fiscal year minus
$20.00) times (the difference between the district's foundation
allowance for the immediately preceding state fiscal year and the
minimum foundation allowance for the immediately preceding state
fiscal year) divided by the difference between the basic foundation
allowance for the current state fiscal year and the minimum
foundation allowance for the immediately preceding state fiscal
year.] However, the foundation allowance for a district that had
less than the basic foundation allowance for the immediately
preceding state fiscal year shall not exceed the basic foundation
allowance for the current state fiscal year.
(b) Except as otherwise provided in this subsection, for a
district that in the immediately preceding state fiscal year had a
foundation allowance in an amount equal to the amount of the basic
foundation allowance for the immediately preceding state fiscal
year, the district shall receive a foundation allowance for 2017-
2018 in an amount equal to the basic foundation allowance for 2017-
2018.
(c) For a district that had a foundation allowance for the
immediately preceding state fiscal year that was greater than the
basic foundation allowance for the immediately preceding state
fiscal year, the district's foundation allowance is an amount equal
to the sum of the district's foundation allowance for the
immediately preceding state fiscal year plus the lesser of the
increase in the basic foundation allowance for the current state
fiscal year, as compared to the immediately preceding state fiscal
year, or the product of the district's foundation allowance for the
immediately preceding state fiscal year times the percentage
increase
in the United States consumer price index Consumer Price
Index in the calendar year ending in the immediately preceding
fiscal year as reported by the May revenue estimating conference
conducted under section 367b of the management and budget act, 1984
PA 431, MCL 18.1367b.
(d) For a district that has a foundation allowance that is not
a whole dollar amount, the district's foundation allowance shall be
rounded up to the nearest whole dollar.
(e) For a district that received a foundation allowance
supplemental payment calculated under section 20m and paid under
section 22b for 2016-2017, the district's 2016-2017 foundation
allowance is considered to have been an amount equal to the sum of
the district's actual 2016-2017 foundation allowance as otherwise
calculated
under this section plus the lesser of the per pupil per-
pupil amount of the district's supplemental payment for 2016-2017
as calculated under section 20m or the product of the district's
foundation allowance for the immediately preceding state fiscal
year
times the percentage increase in the United States consumer
price
index Consumer Price Index in the calendar year ending in the
immediately preceding fiscal year as reported by the May revenue
estimating conference conducted under section 367b of the
management and budget act, 1984 PA 431, MCL 18.1367b.
(4) Except as otherwise provided in this subsection, beginning
in 2014-2015, the state portion of a district's foundation
allowance is an amount equal to the district's foundation allowance
or the basic foundation allowance for the current state fiscal
year, whichever is less, minus the local portion of the district's
foundation allowance. For a district described in subsection
(3)(c), beginning in 2014-2015, the state portion of the district's
foundation allowance is an amount equal to $6,962.00 plus the
difference between the district's foundation allowance for the
current state fiscal year and the district's foundation allowance
for 1998-99, minus the local portion of the district's foundation
allowance. For a district that has a millage reduction required
under section 31 of article IX of the state constitution of 1963,
the state portion of the district's foundation allowance shall be
calculated as if that reduction did not occur. For a receiving
district, if school operating taxes continue to be levied on behalf
of a dissolved district that has been attached in whole or in part
to the receiving district to satisfy debt obligations of the
dissolved district under section 12 of the revised school code, MCL
380.12, the taxable value per membership pupil of property in the
receiving district used for the purposes of this subsection does
not include the taxable value of property within the geographic
area of the dissolved district. For a community district, if school
operating taxes continue to be levied by a qualifying school
district under section 12b of the revised school code, MCL 380.12b,
with the same geographic area as the community district, the
taxable value per membership pupil of property in the community
district to be used for the purposes of this subsection does not
include the taxable value of property within the geographic area of
the community district.
(5) The allocation calculated under this section for a pupil
shall be based on the foundation allowance of the pupil's district
of residence. For a pupil enrolled pursuant to section 105 or 105c
in a district other than the pupil's district of residence, the
allocation calculated under this section shall be based on the
lesser of the foundation allowance of the pupil's district of
residence or the foundation allowance of the educating district.
For a pupil in membership in a K-5, K-6, or K-8 district who is
enrolled in another district in a grade not offered by the pupil's
district of residence, the allocation calculated under this section
shall be based on the foundation allowance of the educating
district if the educating district's foundation allowance is
greater than the foundation allowance of the pupil's district of
residence. The calculation under this subsection shall take into
account a district's per-pupil allocation under section 20m.
(6) Except as otherwise provided in this subsection, for
pupils in membership, other than special education pupils, in a
public school academy, the allocation calculated under this section
is an amount per membership pupil other than special education
pupils in the public school academy equal to the foundation
allowance of the district in which the public school academy is
located or the state maximum public school academy allocation,
whichever is less. Except as otherwise provided in this subsection,
for pupils in membership, other than special education pupils, in a
public school academy that is a cyber school and is authorized by a
school district, the allocation calculated under this section is an
amount per membership pupil other than special education pupils in
the public school academy equal to the foundation allowance of the
district that authorized the public school academy or the state
maximum public school academy allocation, whichever is less.
However, a public school academy that had an allocation under this
subsection before 2009-2010 that was equal to the sum of the local
school operating revenue per membership pupil other than special
education pupils for the district in which the public school
academy is located and the state portion of that district's
foundation allowance shall not have that allocation reduced as a
result of the 2010 amendment to this subsection. Notwithstanding
section 101, for a public school academy that begins operations
after the pupil membership count day, the amount per membership
pupil calculated under this subsection shall be adjusted by
multiplying that amount per membership pupil by the number of hours
of pupil instruction provided by the public school academy after it
begins operations, as determined by the department, divided by the
minimum number of hours of pupil instruction required under section
101(3). The result of this calculation shall not exceed the amount
per membership pupil otherwise calculated under this subsection.
Beginning in 2017-2018, for pupils in membership, other than
special education pupils, in a public school academy that was
issued a contract under section 552 of the revised school code, MCL
380.552, to operate as a school of excellence that is a cyber
school and is in at least its second year of operation, the
allocation calculated under this section is an amount equal to 80%
of the amount as would otherwise be calculated under this
subsection for that public school academy.
(7) Except as otherwise provided in this subsection, for
pupils in membership, other than special education pupils, in a
community district, the allocation calculated under this section is
an amount per membership pupil other than special education pupils
in the community district equal to the foundation allowance of the
qualifying school district, as described in section 12b of the
revised school code, MCL 380.12b, that is located within the same
geographic area as the community district.
(8) Subject to subsection (4), for a district that is formed
or reconfigured after June 1, 2002 by consolidation of 2 or more
districts or by annexation, the resulting district's foundation
allowance under this section beginning after the effective date of
the consolidation or annexation shall be the lesser of the sum of
the average of the foundation allowances of each of the original or
affected districts, calculated as provided in this section,
weighted as to the percentage of pupils in total membership in the
resulting district who reside in the geographic area of each of the
original or affected districts plus $100.00 or the highest
foundation allowance among the original or affected districts. This
subsection does not apply to a receiving district unless there is a
subsequent consolidation or annexation that affects the district.
The calculation under this subsection shall take into account a
district's per-pupil allocation under section 20m.
(9) Each fraction used in making calculations under this
section shall be rounded to the fourth decimal place and the dollar
amount of an increase in the basic foundation allowance shall be
rounded to the nearest whole dollar.
(10) State payments related to payment of the foundation
allowance for a special education pupil are not calculated under
this section but are instead calculated under section 51a.
(11) To assist the legislature in determining the basic
foundation allowance for the subsequent state fiscal year, each
revenue estimating conference conducted under section 367b of the
management and budget act, 1984 PA 431, MCL 18.1367b, shall
calculate a pupil membership factor, a revenue adjustment factor,
and an index as follows:
(a) The pupil membership factor shall be computed by dividing
the estimated membership in the school year ending in the current
state fiscal year, excluding intermediate district membership, by
the estimated membership for the school year ending in the
subsequent state fiscal year, excluding intermediate district
membership. If a consensus membership factor is not determined at
the revenue estimating conference, the principals of the revenue
estimating conference shall report their estimates to the house and
senate subcommittees responsible for school aid appropriations not
later than 7 days after the conclusion of the revenue conference.
(b) The revenue adjustment factor shall be computed by
dividing the sum of the estimated total state school aid fund
revenue for the subsequent state fiscal year plus the estimated
total state school aid fund revenue for the current state fiscal
year, adjusted for any change in the rate or base of a tax the
proceeds of which are deposited in that fund and excluding money
transferred into that fund from the countercyclical budget and
economic stabilization fund under the management and budget act,
1984 PA 431, MCL 18.1101 to 18.1594, by the sum of the estimated
total school aid fund revenue for the current state fiscal year
plus the estimated total state school aid fund revenue for the
immediately preceding state fiscal year, adjusted for any change in
the rate or base of a tax the proceeds of which are deposited in
that fund. If a consensus revenue factor is not determined at the
revenue estimating conference, the principals of the revenue
estimating conference shall report their estimates to the house and
senate subcommittees responsible for school aid appropriations not
later than 7 days after the conclusion of the revenue conference.
(c) The index shall be calculated by multiplying the pupil
membership factor by the revenue adjustment factor. If a consensus
index is not determined at the revenue estimating conference, the
principals of the revenue estimating conference shall report their
estimates to the house and senate subcommittees responsible for
school aid appropriations not later than 7 days after the
conclusion of the revenue conference.
(12) Payments to districts and public school academies shall
not be made under this section. Rather, the calculations under this
section shall be used to determine the amount of state payments
under section 22b.
(13) If an amendment to section 2 of article VIII of the state
constitution of 1963 allowing state aid to some or all nonpublic
schools is approved by the voters of this state, each foundation
allowance or per-pupil payment calculation under this section may
be reduced.
(14) As used in this section:
(a) "Certified mills" means the lesser of 18 mills or the
number of mills of school operating taxes levied by the district in
1993-94.
(b) "Combined state and local revenue" means the aggregate of
the district's state school aid received by or paid on behalf of
the district under this section and the district's local school
operating revenue.
(c) "Combined state and local revenue per membership pupil"
means the district's combined state and local revenue divided by
the district's membership excluding special education pupils.
(d) "Current state fiscal year" means the state fiscal year
for which a particular calculation is made.
(e) "Dissolved district" means a district that loses its
organization, has its territory attached to 1 or more other
districts, and is dissolved as provided under section 12 of the
revised school code, MCL 380.12.
(f) "Immediately preceding state fiscal year" means the state
fiscal year immediately preceding the current state fiscal year.
(g) "Local portion of the district's foundation allowance"
means an amount that is equal to the difference between (the sum of
the product of the taxable value per membership pupil of all
property in the district that is nonexempt property times the
district's certified mills and, for a district with certified mills
exceeding 12, the product of the taxable value per membership pupil
of property in the district that is commercial personal property
times the certified mills minus 12 mills) and (the quotient of the
product of the captured assessed valuation under tax increment
financing acts times the district's certified mills divided by the
district's membership excluding special education pupils).
(h) "Local school operating revenue" means school operating
taxes levied under section 1211 of the revised school code, MCL
380.1211. For a receiving district, if school operating taxes are
to be levied on behalf of a dissolved district that has been
attached in whole or in part to the receiving district to satisfy
debt obligations of the dissolved district under section 12 of the
revised school code, MCL 380.12, local school operating revenue
does not include school operating taxes levied within the
geographic area of the dissolved district.
(i) "Local school operating revenue per membership pupil"
means a district's local school operating revenue divided by the
district's membership excluding special education pupils.
(j) "Maximum public school academy allocation", except as
otherwise provided in this subdivision, means the maximum per-pupil
allocation as calculated by adding the highest per-pupil allocation
among all public school academies for the immediately preceding
state fiscal year plus the difference between twice the amount of
the difference between the basic foundation allowance for the
current state fiscal year and the basic foundation allowance for
the immediately preceding state fiscal year and [(the amount of the
difference between the basic foundation allowance for the current
state fiscal year and the basic foundation allowance for the
immediately preceding state fiscal year minus $20.00) times (the
difference between the highest per-pupil allocation among all
public school academies for the immediately preceding state fiscal
year and the minimum foundation allowance for the immediately
preceding state fiscal year) divided by the difference between the
basic foundation allowance for the current state fiscal year and
the minimum foundation allowance for the immediately preceding
state fiscal year.] For the purposes of this subdivision, for 2017-
2018, the maximum public school academy allocation is $7,631.00.
(k) "Membership" means the definition of that term under
section 6 as in effect for the particular fiscal year for which a
particular calculation is made.
(l) "Nonexempt property" means property that is not a
principal residence, qualified agricultural property, qualified
forest property, supportive housing property, industrial personal
property, commercial personal property, or property occupied by a
public school academy.
(m) "Principal residence", "qualified agricultural property",
"qualified forest property", "supportive housing property",
"industrial personal property", and "commercial personal property"
mean those terms as defined in section 1211 of the revised school
code, MCL 380.1211.
(n) "Receiving district" means a district to which all or part
of the territory of a dissolved district is attached under section
12 of the revised school code, MCL 380.12.
(o) "School operating purposes" means the purposes included in
the operation costs of the district as prescribed in sections 7 and
18 and purposes authorized under section 1211 of the revised school
code, MCL 380.1211.
(p) "School operating taxes" means local ad valorem property
taxes levied under section 1211 of the revised school code, MCL
380.1211, and retained for school operating purposes.
(q) "Tax increment financing acts" means 1975 PA 197, MCL
125.1651 to 125.1681, the tax increment finance authority act, 1980
PA 450, MCL 125.1801 to 125.1830, the local development financing
act, 1986 PA 281, MCL 125.2151 to 125.2174, the brownfield
redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2672,
125.2670, or the corridor improvement authority act, 2005 PA 280,
MCL 125.2871 to 125.2899.
(r) "Taxable value per membership pupil" means taxable value,
as certified by the county treasurer and reported to the
department, for the calendar year ending in the current state
fiscal year divided by the district's membership excluding special
education pupils for the school year ending in the current state
fiscal year.
Sec. 22b. (1) For discretionary nonmandated payments to
districts under this section, there is allocated for 2016-2017 an
amount not to exceed $3,841,000,000.00 from the state school aid
fund and general fund appropriations in section 11 and an amount
not to exceed $72,000,000.00 from the community district education
trust fund appropriation in section 11, and there is allocated for
2017-2018
an amount not to exceed $3,965,500,000.00
$3,949,500,000.00 from the state school aid fund and general fund
appropriations in section 11 and an amount not to exceed
$72,000,000.00 from the community district education trust fund
appropriation in section 11. Except for money allocated from the
community district trust fund, money allocated under this section
that is not expended in the state fiscal year for which it was
allocated, as determined by the department, may be used to
supplement the allocations under sections 22a and 51c in order to
fully fund those calculated allocations for the same fiscal year.
(2) Subject to subsection (3) and section 296, the allocation
to a district under this section shall be an amount equal to the
sum of the amounts calculated under sections 20, 20m, 51a(2),
51a(3), and 51a(11), minus the sum of the allocations to the
district under sections 22a and 51c. For a community district, the
allocation as otherwise calculated under this section shall be
increased by an amount equal to the amount of local school
operating tax revenue that would otherwise be due to the community
district if not for the operation of section 386 of the revised
school code, MCL 380.386, and this increase shall be paid from the
community district education trust fund allocation in subsection
(1) in order to offset the absence of local school operating
revenue in a community district in the funding of the state portion
of the foundation allowance under section 20(4).
(3) In order to receive an allocation under subsection (1),
each district shall do all of the following:
(a) Comply with section 1280b of the revised school code, MCL
380.1280b.
(b) Comply with sections 1278a and 1278b of the revised school
code, MCL 380.1278a and 380.1278b.
(c) Furnish data and other information required by state and
federal law to the center and the department in the form and manner
specified by the center or the department, as applicable.
(d) Comply with section 1230g of the revised school code, MCL
380.1230g.
(e) Comply with section 21f.
(4) Districts are encouraged to use funds allocated under this
section for the purchase and support of payroll, human resources,
and other business function software that is compatible with that
of the intermediate district in which the district is located and
with other districts located within that intermediate district.
(5) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this
state related to commercial or industrial property tax appeals,
including, but not limited to, appeals of classification, that
impact revenues dedicated to the state school aid fund.
(6) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this
state associated with lawsuits filed by 1 or more districts or
intermediate districts against this state. If the allocation under
this section is insufficient to fully fund all payments required
under this section, the payments under this subsection shall be
made in full before any proration of remaining payments under this
section.
(7) It is the intent of the legislature that all
constitutional obligations of this state have been fully funded
under sections 22a, 31d, 51a, 51c, and 152a. If a claim is made by
an entity receiving funds under this article that challenges the
legislative determination of the adequacy of this funding or
alleges that there exists an unfunded constitutional requirement,
the state budget director may escrow or allocate from the
discretionary funds for nonmandated payments under this section the
amount as may be necessary to satisfy the claim before making any
payments to districts under subsection (2). If funds are escrowed,
the escrowed funds are a work project appropriation and the funds
are carried forward into the following fiscal year. The purpose of
the work project is to provide for any payments that may be awarded
to districts as a result of litigation. The work project shall be
completed upon resolution of the litigation.
(8) If the local claims review board or a court of competent
jurisdiction makes a final determination that this state is in
violation of section 29 of article IX of the state constitution of
1963 regarding state payments to districts, the state budget
director shall use work project funds under subsection (7) or
allocate from the discretionary funds for nonmandated payments
under this section the amount as may be necessary to satisfy the
amount owed to districts before making any payments to districts
under subsection (2).
(9) If a claim is made in court that challenges the
legislative determination of the adequacy of funding for this
state's constitutional obligations or alleges that there exists an
unfunded constitutional requirement, any interested party may seek
an expedited review of the claim by the local claims review board.
If the claim exceeds $10,000,000.00, this state may remove the
action to the court of appeals, and the court of appeals shall have
and shall exercise jurisdiction over the claim.
(10) If payments resulting from a final determination by the
local claims review board or a court of competent jurisdiction that
there has been a violation of section 29 of article IX of the state
constitution of 1963 exceed the amount allocated for discretionary
nonmandated payments under this section, the legislature shall
provide for adequate funding for this state's constitutional
obligations at its next legislative session.
(11) If a lawsuit challenging payments made to districts
related to costs reimbursed by federal title XIX Medicaid funds is
filed against this state, then, for the purpose of addressing
potential liability under such a lawsuit, the state budget director
may place funds allocated under this section in escrow or allocate
money from the funds otherwise allocated under this section, up to
a maximum of 50% of the amount allocated in subsection (1). If
funds are placed in escrow under this subsection, those funds are a
work project appropriation and the funds are carried forward into
the following fiscal year. The purpose of the work project is to
provide for any payments that may be awarded to districts as a
result of the litigation. The work project shall be completed upon
resolution of the litigation. In addition, this state reserves the
right to terminate future federal title XIX Medicaid reimbursement
payments to districts if the amount or allocation of reimbursed
funds is challenged in the lawsuit. As used in this subsection,
"title XIX" means title XIX of the social security act, 42 USC 1396
to
1396v.1396w-5.
Sec. 31a. (1) From the state school aid fund money
appropriated in section 11, there is allocated for 2017-2018 an
amount
not to exceed $510,207,300.00 $526,207,300.00
for payments
to eligible districts and eligible public school academies for the
purposes of ensuring that pupils are proficient in English language
arts by the end of grade 3, that pupils are proficient in
mathematics by the end of grade 8, that pupils are attending school
regularly, that high school graduates are career and college ready,
and for the purposes under subsections (7) and (8).
(2) For a district that has combined state and local revenue
per membership pupil under sections 20 and 20m that is greater than
the basic foundation allowance under section 20 for the current
fiscal year, the allocation under this section shall be an amount
equal to 30% of the allocation for which it would otherwise be
eligible under this section before any proration under subsection
(14).
(3) For a district or public school academy to be eligible to
receive funding under this section, other than funding under
subsection (7) or (8), the district or public school academy, for
grades K to 3, shall comply with the requirements under section
1280f of the revised school code, MCL 380.1280f, and use resources
to address early literacy, and for at least grades 4 to 8 or, if
the district or public school academy does not operate all of
grades 4 to 8, for all of the grades it operates, must implement a
multi-tiered
multitiered system of supports that is an evidence-
based model that uses data-driven problem solving to integrate
academic and behavioral instruction and that uses intervention
delivered to all pupils in varying intensities based on pupil
needs.
This multi-tiered multitiered
system of supports must
provide at least all of the following essential elements:
(a) Implements effective instruction for all learners.
(b) Intervenes early.
(c)
Provides a multi-tiered multitiered
model of instruction
and intervention that provides the following:
(i) A core curriculum and classroom interventions available to
all pupils that meet the needs of most pupils.
(ii) Targeted group interventions.
(iii) Intense individual interventions.
(d) Monitors pupil progress to inform instruction.
(e) Uses data to make instructional decisions.
(f) Uses assessments including universal screening,
diagnostics, and progress monitoring.
(g) Engages families and the community.
(h) Implements evidence-based, scientifically validated,
instruction and intervention.
(i) Implements instruction and intervention practices with
fidelity.
(j) Uses a collaborative problem-solving model.
(4) Except as otherwise provided in this subsection, an
eligible district or eligible public school academy shall receive
under this section for each membership pupil in the district or
public school academy who is determined to be economically
disadvantaged, as reported to the center in the form and manner
prescribed by the center not later than the fifth Wednesday after
the pupil membership count day of the immediately preceding fiscal
year, an amount per pupil equal to 11.5% of the statewide weighted
average foundation allowance. However, a public school academy that
began operations as a public school academy after the pupil
membership count day of the immediately preceding school year shall
receive under this section for each membership pupil in the public
school academy, who is determined to be economically disadvantaged,
as reported to the center in the form and manner prescribed by the
center not later than the fifth Wednesday after the pupil
membership count day of the current fiscal year, an amount per
pupil equal to 11.5% of the statewide weighted average foundation
allowance.
(5) Except as otherwise provided in this section, a district
or public school academy receiving funding under this section shall
use that money only to provide instructional programs and direct
noninstructional services, including, but not limited to, medical,
mental health, or counseling services, for at-risk pupils; for
school health clinics; and for the purposes of subsection (6), (7),
or (8). In addition, a district that is a school district of the
first class or a district or public school academy in which at
least 50% of the pupils in membership were determined to be
economically disadvantaged in the immediately preceding state
fiscal year, as determined and reported as described in subsection
(4), may use not more than 20% of the funds it receives under this
section for school security. A district or public school academy
shall not use any of that money for administrative costs. The
instruction or direct noninstructional services provided under this
section may be conducted before or after regular school hours or by
adding extra school days to the school year.
(6) A district or public school academy that receives funds
under this section and that operates a school breakfast program
under section 1272a of the revised school code, MCL 380.1272a,
shall use from the funds received under this section an amount, not
to exceed $10.00 per pupil for whom the district or public school
academy receives funds under this section, necessary to pay for
costs associated with the operation of the school breakfast
program.
(7) From the funds allocated under subsection (1), there is
allocated for 2017-2018 an amount not to exceed $6,057,300.00 to
support primary health care services provided to children and
adolescents up to age 21. These funds shall be expended in a form
and manner determined jointly by the department and the department
of health and human services. If any funds allocated under this
subsection are not used for the purposes of this subsection for the
fiscal year in which they are allocated, those unused funds shall
be used that fiscal year to avoid or minimize any proration that
would otherwise be required under subsection (14) for that fiscal
year.
(8) From the funds allocated under subsection (1), there is
allocated for 2017-2018 an amount not to exceed $5,150,000.00 for
the state portion of the hearing and vision screenings as described
in section 9301 of the public health code, 1978 PA 368, MCL
333.9301. A local public health department shall pay at least 50%
of the total cost of the screenings. The frequency of the
screenings shall be as required under R 325.13091 to R 325.13096
and R 325.3271 to R 325.3276 of the Michigan Administrative Code.
Funds shall be awarded in a form and manner approved jointly by the
department and the department of health and human services.
Notwithstanding section 17b, payments to eligible entities under
this subsection shall be paid on a schedule determined by the
department.
(9) Each district or public school academy receiving funds
under this section shall submit to the department by July 15 of
each fiscal year a report, in the form and manner prescribed by the
department, that includes a brief description of each program
conducted or services performed by the district or public school
academy using funds under this section, the amount of funds under
this section allocated to each of those programs or services, the
total number of at-risk pupils served by each of those programs or
services, and the data necessary for the department and the
department of health and human services to verify matching funds
for the temporary assistance for needy families program. In
prescribing the form and manner of the report, the department shall
ensure that districts are allowed to expend funds received under
this section on any activities that are permissible under this
section. If a district or public school academy does not comply
with this subsection, the department shall withhold an amount equal
to the August payment due under this section until the district or
public school academy complies with this subsection. If the
district or public school academy does not comply with this
subsection by the end of the state fiscal year, the withheld funds
shall be forfeited to the school aid fund.
(10) In order to receive funds under this section, a district
or public school academy shall allow access for the department or
the department's designee to audit all records related to the
program for which it receives those funds. The district or public
school academy shall reimburse the state for all disallowances
found in the audit.
(11) Subject to subsections (6), (7), and (8), a district or
public school academy may use up to 100% of the funds it receives
under this section to implement schoolwide reform in schools with
40% or more of their pupils identified as at-risk pupils by
providing instructional or noninstructional services consistent
with the school improvement plan.
(12) A district or public school academy that receives funds
under this section may use up to 3% of those funds to provide
research-based professional development to district and school
leadership and teachers that is aligned to professional learning
standards; is integrated into district, school building, and
classroom practices; and is solely related to the following:
(a)
Implementing the multi-tiered multitiered
system of
supports required in subsection (3) with fidelity and utilizing the
data from that system to inform curriculum and instruction.
(b) Implementing section 1280f of the revised school code, MCL
380.1280f, as required under subsection (3), with fidelity.
(13) A district or public school academy that receives funds
under this section may use funds received under this section to
support instructional or behavioral coaches. Funds used for this
purpose are not subject to the cap under subsection (12).
(14) If necessary, and before any proration required under
section 296, the department shall prorate payments under this
section by reducing the amount of the allocation as otherwise
calculated under this section by an equal percentage per district.
(15) If a district is dissolved pursuant to section 12 of the
revised school code, MCL 380.12, the intermediate district to which
the dissolved school district was constituent shall determine the
estimated number of pupils that are economically disadvantaged and
that are enrolled in each of the other districts within the
intermediate district and provide that estimate to the department
for the purposes of distributing funds under this section within 60
days after the school district is declared dissolved.
(16) Beginning in 2018-2019, if a district or public school
academy does not demonstrate to the satisfaction of the department
that at least 50% of at-risk pupils are proficient in English
language arts by the end of grade 3 as measured by the state
assessment for the immediately preceding school year and
demonstrate to the satisfaction of the department improvement over
each of the 3 immediately preceding school years in the percentage
of at-risk pupils that are career- and college-ready as determined
by proficiency on the English language arts, mathematics, and
science content area assessments on the grade 11 summative
assessment under section 1279g(2)(a) of the revised school code,
MCL 380.1279g, the district or public school academy shall ensure
all of the following:
(a) The district or public school academy shall determine the
proportion of total at-risk pupils that represents the number of
pupils in grade 3 that are not proficient in English language arts
by the end of grade 3, and the district or public school academy
shall expend that same proportion multiplied by 1/2 of its total
at-risk funds under this section on tutoring and other methods of
improving grade 3 English language arts proficiency.
(b) The district or public school academy shall determine the
proportion of total at-risk pupils that represent the number of
pupils in grade 11 that are not career- and college-ready as
measured by the student's score on the English language arts,
mathematics, and science content area assessments on the grade 11
summative assessment under section 1279g(2)(a) of the revised
school code, MCL 380.1279g, and the district or public school
academy shall expend that same proportion multiplied by 1/2 of its
total at-risk funds under this section on tutoring and other
activities to improve scores on the college entrance examination
portion of the Michigan merit examination.
(17) As used in subsection (16), "total at-risk pupils" means
the sum of the number of pupils in grade 3 that are not proficient
in English language arts by the end of third grade as measured on
the state assessment and the number of pupils in grade 11 that are
not career- and college-ready as measured by the student's score on
the English language arts, mathematics, and science content area
assessments on the grade 11 summative assessment under section
1279g(2)(a) of the revised school code, MCL 380.1279g.
(18) A district or public school academy that receives funds
under this section may use funds received under this section to
provide an anti-bullying or crisis intervention program.
(19) The department shall collaborate with the department of
health and human services to prioritize assigning Pathways to
Potential Success coaches to elementary schools that have a high
percentage of pupils in grades K to 3 who are not proficient in
English language arts, based upon state assessments for pupils in
those grades.
(20) For the purpose of determining the number of economically
disadvantaged pupils enrolled in a community district for 2017-
2018, disadvantaged pupils who were enrolled in the education
achievement system for 2016-2017 shall be considered to have been
enrolled in the community district for 2016-2017.
(21) As used in this section:
(a) "At-risk pupil" means a pupil for whom the district has
documentation that the pupil meets any of the following criteria:
(i) The pupil is economically disadvantaged.
(ii) The pupil is an English language learner.
(iii) The pupil is chronically absent as defined by and
reported to the center.
(iv) The pupil is a victim of child abuse or neglect.
(v) The pupil is a pregnant teenager or teenage parent.
(vi) The pupil has a family history of school failure,
incarceration, or substance abuse.
(vii) The pupil is an immigrant who has immigrated within the
immediately preceding 3 years.
(viii) The pupil did not complete high school in 4 years and
is still continuing in school as identified in the Michigan cohort
graduation and dropout report.
(ix) For pupils for whom the results of the state summative
assessment have been received, is a pupil who did not achieve
proficiency on the English language arts, mathematics, science, or
social studies content area assessment.
(x) Is a pupil who is at risk of not meeting the district's or
public school academy's core academic curricular objectives in
English language arts or mathematics, as demonstrated on local
assessments.
(b) "Economically disadvantaged" means a pupil who has been
determined eligible for free or reduced-price meals as determined
under the Richard B. Russell national school lunch act, 42 USC 1751
to 1769j; who is in a household receiving supplemental nutrition
assistance program or temporary assistance for needy families
assistance; or who is homeless, migrant, or in foster care, as
reported to the center.
(c) "English language learner" means limited English
proficient pupils who speak a language other than English as their
primary language and have difficulty speaking, reading, writing, or
understanding English as reported to the center.
(d) "Statewide weighted average foundation allowance" means
the number that is calculated by adding together the result of each
district's or public school academy's foundation allowance or per
pupil payment calculated under section 20 multiplied by the number
of pupils in membership in that district or public school academy,
and then dividing that total by the statewide number of pupils in
membership. For the purposes of this calculation, a district's
foundation allowance shall not exceed the basic foundation
allowance under section 20 for the current state fiscal year.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.