SB-0773, As Passed Senate, September 30, 2007
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 773
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending sections 8b, 11, 11j, 17b, 39a, and 147 (MCL 388.1608b,
388.1611, 388.1611j, 388.1617b, 388.1639a, and 388.1747), section
8b as amended by 2003 PA 158, sections 11, 11j, 17b, and 147 as
amended by 2007 PA 6, and section 39a as amended by 2006 PA 342;
and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 8b. (1) The department shall assign a district code to
each public school academy that is authorized under the revised
school code and is eligible to receive funding under this act
within 30 days after a contract is submitted to the department by
the authorizing body of a public school academy.
(2) If the department does not assign a district code to a
public school academy within the 30-day period described in
subsection (1), the district code the department shall use to make
payments under this act to the newly authorized public school
academy shall be a number that is equivalent to the sum of the last
district code assigned to a public school academy located in the
same county as the newly authorized public school academy plus 1.
However, if there is not an existing public school academy located
in the same county as the newly authorized public school academy,
then the district code the department shall use to make payments
under this act to the newly authorized public school academy shall
be a 5-digit number that has the county code in which the public
school academy is located as its first 2 digits, 9 as its third
digit, 0 as its fourth digit, and 1 as its fifth digit. If the
number of public school academies in a county grows to exceed 100,
the third digit in this 5-digit number shall then be 8 for the
public school academies in excess of 100.
Sec.
11. (1) For the fiscal year ending September 30, 2007,
there
is appropriated for the public schools of this state and
certain
other state purposes relating to education the sum of
$11,299,963,200.00
from the state school aid fund established by
section
11 of article IX of the state constitution of 1963 and the
sum
of $35,000,000.00 from the general fund. For the fiscal period
beginning October 1, 2007 and ending October 31, 2007, there is
appropriated for the public schools of this state and certain other
state purposes relating to education the sum of $1,049,123,900.00
from the state school aid fund established by section 11 of article
IX of the state constitution of 1963 and the sum of $3,181,800.00
from the general fund. In addition, available federal funds are
appropriated for the fiscal year ending September 30, 2008. Funds
appropriated under this section are allocated as follows:
(a) Except for funds allocated under section 11j, all state
funds are allocated for the same purposes, from the same funding
sources, and under the same conditions as state funds were
allocated under this act for the fiscal year ending September 30,
2007, and are allocated in an amount equal to 9.09% of the amount
allocated for the fiscal year ending September 30, 2007 for each of
the purposes provided under each funding section of this act.
(b) Except for funds allocated under section 39a and funds
that were allocated under former sections 41a and 98b, all federal
funds are allocated for the same purposes, from the same funding
sources, under the same conditions, and in the same amounts as
those federal funds were allocated under this act for the fiscal
year ending September 30, 2007.
(2) The appropriations under this section shall be allocated
as provided in this act. Money appropriated under this section from
the general fund shall be expended to fund the purposes of this act
before the expenditure of money appropriated under this section
from the state school aid fund. If the maximum amount appropriated
under this section from the state school aid fund for a fiscal year
exceeds the amount necessary to fully fund allocations under this
act from the state school aid fund, that excess amount shall not be
expended in that state fiscal year and shall not lapse to the
general fund, but instead shall be deposited into the school aid
stabilization fund created in section 11a.
(3) If the maximum amount appropriated under this section from
the state school aid fund and the school aid stabilization fund for
a fiscal year exceeds the amount available for expenditure from the
state school aid fund for that fiscal year, payments under sections
11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f, 51a(2), 51a(12), 51c, 53a,
and 56 shall be made in full. In addition, for districts beginning
operations after 1994-95 that qualify for payments under section
22b, payments under section 22b shall be made so that the
qualifying districts receive the lesser of an amount equal to the
1994-95 foundation allowance of the district in which the district
beginning operations after 1994-95 is located or $5,500.00. The
amount of the payment to be made under section 22b for these
qualifying districts shall be as calculated under section 22a, with
the balance of the payment under section 22b being subject to the
proration otherwise provided under this subsection and subsection
(4). If proration is necessary, state payments under each of the
other sections of this act from all state funding sources shall be
prorated in the manner prescribed in subsection (4) as necessary to
reflect the amount available for expenditure from the state school
aid fund for the affected fiscal year. However, if the department
of treasury determines that proration will be required under this
subsection, or if the department of treasury determines that
further proration is required under this subsection after an
initial proration has already been made for a fiscal year, the
department of treasury shall notify the state budget director, and
the state budget director shall notify the legislature at least 30
calendar days or 6 legislative session days, whichever is more,
before the department reduces any payments under this act because
of the proration. During the 30 calendar day or 6 legislative
session day period after that notification by the state budget
director, the department shall not reduce any payments under this
act because of proration under this subsection. The legislature may
prevent proration from occurring by, within the 30 calendar day or
6 legislative session day period after that notification by the
state budget director, enacting legislation appropriating
additional funds from the general fund, countercyclical budget and
economic stabilization fund, state school aid fund balance, or
another source to fund the amount of the projected shortfall.
(4) If proration is necessary, the department shall calculate
the proration in district and intermediate district payments that
is required under subsection (3) as follows:
(a) The department shall calculate the percentage of total
state school aid allocated under this act for the affected fiscal
year for each of the following:
(i) Districts.
(ii) Intermediate districts.
(iii) Entities other than districts or intermediate districts.
(b) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the
percentage calculated under subdivision (a)(i) for districts by
reducing payments to districts. This reduction shall be made by
calculating an equal dollar amount per pupil as necessary to
recover this percentage of the proration amount and reducing each
district's total state school aid from state sources, other than
payments under sections 11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f,
51a(2), 51a(12), 51c, and 53a, by that amount.
(c) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the
percentage calculated under subdivision (a)(ii) for intermediate
districts by reducing payments to intermediate districts. This
reduction shall be made by reducing the payments to each
intermediate district, other than payments under sections 11f, 11g,
26a, 26b, 51a(2), 51a(12), 53a, and 56, on an equal percentage
basis.
(d) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the
percentage calculated under subdivision (a)(iii) for entities other
than districts and intermediate districts by reducing payments to
these entities. This reduction shall be made by reducing the
payments to each of these entities, other than payments under
sections 11j, 26a, and 26b, on an equal percentage basis.
(5) Except for the allocation under section 26a, any general
fund allocations under this act that are not expended by the end of
the state fiscal year are transferred to the school aid
stabilization fund created under section 11a.
(6)
In addition to the appropriations in subsection (1), for
the
fiscal year ending September 30,
2007, there is appropriated
from
the reserve for undistributed investment income in the
Michigan public school employees' retirement system an
amount not
to
exceed $262,000,000.00 solely for the purpose of issuing credits
pursuant
to section 147.
Sec.
11j. From the appropriation in section 11, there is
allocated
For the fiscal year ending September 30, 2008, there is
appropriated from the state school aid fund an amount not to exceed
$42,500,000.00
for 2006-2007 $1,900,000.00 for payments to the
school loan bond redemption fund in the department of treasury on
behalf of districts and intermediate districts. Notwithstanding
section 11 or any other provision of this act, funds allocated
under this section are not subject to proration and shall be paid
in full.
Sec. 17b. (1) Not later than October 20, November 20, December
20, January 20, February 20, March 20, April 20, May 20, June 20,
July 20, and August 20, the department shall prepare electronic
files of the amount to be distributed under this act in the
installment to the districts and intermediate districts and deliver
the electronic files to the state treasurer, and the state
treasurer shall pay the installments on each of those dates or, if
the date is not a business day, on the next business day following
that date. Except as otherwise provided in this act, the portion of
the district's or intermediate district's state fiscal year
entitlement to be included in each installment shall be 1/11. For
the fiscal period beginning October 1, 2007 and ending October 31,
2007 only, the portion of the district's or intermediate district's
entitlement for that fiscal period to be included in each
installment shall be the entire portion. A district or intermediate
district shall accrue the payments received in July and August to
the school fiscal year ending the immediately preceding June 30.
(2) The state treasurer shall make payment under this section
by drawing a warrant in favor of the treasurer of each district or
intermediate district for the amount payable to the district or
intermediate district according to the electronic files and
delivering the warrant to the treasurer of each district or
intermediate district, or if the state treasurer receives a written
request by the treasurer of the district or intermediate district
specifying an account, by electronic funds transfer to that account
of the amount payable to the district or intermediate district
according to the electronic files. The department may make
adjustments in payments made under this section through additional
payments when changes in law or errors in computation cause the
regularly scheduled payment to be less than the amount to which the
district or intermediate district is entitled pursuant to this act.
(3) Except as otherwise provided in this act, grant payments
to districts and intermediate districts under this act shall be
paid according to the installment schedule under subsection (1).
For the fiscal period beginning October 1, 2007 and ending October
31, 2007 only, for all grant payments that are to be made pursuant
to an agreement with the department, the department shall ensure
that the grant payments made during this fiscal period reflect the
reduced appropriation amount for this fiscal period in a way that
is appropriate for the program funded by the grant.
(4) Upon the written request of a district or intermediate
district and the submission of proof satisfactory to the department
of a need of a temporary and nonrecurring nature, the
superintendent, with the written concurrence of the state treasurer
and the state budget director, may authorize an advance release of
funds due a district or intermediate district under this act. An
advance authorized under this subsection shall not cause funds to
be paid to a district or intermediate district more than 30 days
earlier than the established payment date for those funds.
Sec. 39a. (1) From the federal funds appropriated in section
11,
there is allocated for 2006-2007 2007-2008 to districts,
intermediate districts, and other eligible entities all available
federal
funding, estimated at $636,978,000.00 $669,660,100.00, for
the federal programs under the no child left behind act of 2001,
Public Law 107-110. These funds are allocated as follows:
(a) An amount estimated at $9,625,800.00 to provide students
with drug- and violence-prevention programs and to implement
strategies to improve school safety, funded from DED-OESE, drug-
free schools and communities funds.
(b)
An amount estimated at $6,140,900.00 $6,405,500.00 for the
purpose of improving teaching and learning through a more effective
use of technology, funded from DED-OESE, educational technology
state grant funds.
(c) An amount estimated at $106,249,200.00 for the purpose of
preparing, training, and recruiting high-quality teachers and class
size reduction, funded from DED-OESE, improving teacher quality
funds.
(d)
An amount estimated at $7,627,400.00 $9,854,300.00 for
programs to teach English to limited English proficient (LEP)
children, funded from DED-OESE, language acquisition state grant
funds.
(e) An amount estimated at $8,550,000.00 for the Michigan
charter school subgrant program, funded from DED-OESE, charter
school funds.
(f)
An amount estimated at $58,000.00 for Michigan model
partnership
for character education programs, funded from DED-OESE,
title
X, fund for improvement of education funds.
(f) (g)
An amount estimated at $468,700.00
$676,000.00 for
rural and low income schools, funded from DED-OESE, rural and low
income school funds.
(g) (h)
An amount estimated at
$3,115,900.00 to help schools
develop and implement comprehensive school reform programs, funded
from DED-OESE, title I and title X, comprehensive school reform
funds.
(h) (i)
An amount estimated at $428,860,300.00
$456,971,500.00
to provide supplemental programs to enable educationally
disadvantaged children to meet challenging academic standards,
funded from DED-OESE, title I, disadvantaged children funds.
(i) (j)
An amount estimated at $3,022,700.00
$2,531,700.00 for
the purpose of providing unified family literacy programs, funded
from DED-OESE, title I, even start funds.
(j) (k)
An amount estimated at
$8,186,200.00 for the purpose
of identifying and serving migrant children, funded from DED-OESE,
title I, migrant education funds.
(k) (l) An
amount estimated at $22,928,000.00 $24,733,200.00 to
promote high-quality school reading instruction for grades K-3,
funded from DED-OESE, title I, reading first state grant funds.
(l) (m)
An amount estimated at $2,848,900.00
$2,849,000.00 for
the purpose of implementing innovative strategies for improving
student achievement, funded from DED-OESE, title VI, innovative
strategies funds.
(m) (n)
An amount estimated at $29,296,000.00
$29,911,800.00
for the purpose of providing high-quality extended learning
opportunities, after school and during the summer, for children in
low-performing schools, funded from DED-OESE, twenty-first century
community learning center funds. Of these funds, $25,000.00 may be
used to support the Michigan after-school partnership. All of the
following apply to the Michigan after-school partnership:
(i) The department shall collaborate with the department of
human services to extend the duration of the Michigan after-school
initiative, to be renamed the Michigan after-school partnership and
oversee its efforts to implement the policy recommendations and
strategic next steps identified in the Michigan after-school
initiative's report of December 15, 2003.
(ii) Funds shall be used to leverage other private and public
funding to engage the public and private sectors in building and
sustaining high-quality out-of-school-time programs and resources.
The co-chairs, representing the department and the department of
human services, shall name a fiduciary agent and may authorize the
fiduciary to expend funds and hire people to accomplish the work of
the Michigan after-school partnership.
(iii) Participation in the Michigan after-school partnership
shall be expanded beyond the membership of the initial Michigan
after-school initiative to increase the representation of parents,
youth, foundations, employers, and others with experience in
education, child care, after-school and youth development services,
and crime and violence prevention, and to include representation
from the Michigan department of community health. Each year, on or
before December 31, the Michigan after-school partnership shall
report its progress in reaching the recommendations set forth in
the Michigan after-school initiative's report to the legislature
and the governor.
(2) From the federal funds appropriated in section 11, there
is
allocated for 2006-2007 2007-2008
to districts, intermediate
districts, and other eligible entities all available federal
funding,
estimated at $4,646,400.00 $32,411,000.00, for the
following programs that are funded by federal grants:
(a) An amount estimated at $600,000.00 for acquired
immunodeficiency syndrome education grants, funded from HHS-center
for disease control, AIDS funding.
(b)
An amount estimated at $1,500,100.00 $1,665,400.00 to
provide services to homeless children and youth, funded from DED-
OVAE, homeless children and youth funds.
(c)
An amount estimated at $1,000,000.00 $200,000.00 for
refugee children school impact grants, funded from HHS-ACF, refugee
children school impact funds.
(d) An amount estimated at $1,445,600.00 for serve America
grants, funded from the corporation for national and community
service funds.
(e)
An amount estimated at $100,700.00 to encourage interstate
and
intrastate coordination of migrant education, funded from DED-
OESE,
title I, migrant education program funds $28,500,000.00 for
providing career and technical education services to pupils, funded
from DED-OVAE, basic grants to states.
(3) To the extent allowed under federal law, the funds
allocated
under subsection (1)(i), (j), and (l) (1)(h),
(i), and (k)
may be used for 1 or more reading improvement programs that meet at
least 1 of the following:
(a) A research-based, validated, structured reading program
that aligns learning resources to state standards and includes
continuous assessment of pupils and individualized education plans
for pupils.
(b) A mentoring program that is a research-based, validated
program or a statewide 1-to-1 mentoring program and is designed to
enhance the independence and life quality of pupils who are
mentally impaired by providing opportunities for mentoring and
integrated employment.
(c) A cognitive development program that is a research-based,
validated educational service program focused on assessing and
building essential cognitive and perceptual learning abilities to
strengthen pupil concentration and learning.
(d) A structured mentoring-tutorial reading program for pupils
in preschool to grade 4 that is a research-based, validated program
that develops individualized educational plans based on each
pupil's age, assessed needs, reading level, interests, and learning
style.
(4) All federal funds allocated under this section shall be
distributed in accordance with federal law and with flexibility
provisions outlined in Public Law 107-116, and in the education
flexibility partnership act of 1999, Public Law 106-25.
Notwithstanding section 17b, payments of federal funds to
districts, intermediate districts, and other eligible entities
under this section shall be paid on a schedule determined by the
department.
(5) As used in this section:
(a) "DED" means the United States department of education.
(b) "DED-OESE" means the DED office of elementary and
secondary education.
(c) "DED-OVAE" means the DED office of vocational and adult
education.
(d) "HHS" means the United States department of health and
human services.
(e) "HHS-ACF" means the HHS administration for children and
families.
Sec. 147. (1) The allocation for 2006-2007
2007-2008 for the
public school employees' retirement system pursuant to the public
school employees retirement act of 1979, 1980 PA 300, MCL 38.1301
to 38.1408, shall be made using the entry age normal cost actuarial
method and risk assumptions adopted by the public school employees
retirement board and the department of management and budget. The
annual level percentage of payroll contribution rate is estimated
at
17.74% 16.72% for the 2006-2007 2007-2008 state fiscal year. The
portion of the contribution rate assigned to districts and
intermediate districts for each fiscal year is all of the total
percentage points. This contribution rate reflects an amortization
period
of 30 years for 2006-2007 2007-2008. The public school
employees' retirement system board shall notify each district and
intermediate district by February 28 of each fiscal year of the
estimated contribution rate for the next fiscal year.
(2)
Upon enactment of legislation reducing pension
contributions
of each district or intermediate district to the
public
school employees' retirement system that would otherwise be
due
from that district or intermediate district, the director of
the
department of management and budget shall direct the public
school
employees' retirement system to issue credits for the fiscal
year
ending September 30, 2007 not to exceed an aggregate of
$276,000,000.00.
The credits shall be used to meet the required
pension
obligations of each district or intermediate district and
shall
reduce the amount of pension contributions otherwise due from
that
district or intermediate district based on the original
contribution
rate. The portion of a credit issued on behalf of a
district
related to nonfederal wages as reported to the public
school
employees' retirement system for the state fiscal year
ending
September 30, 2006 shall be considered to be a payment on
behalf
of the district for the purposes of calculating payments
made
under section 22b for 2006-2007. The portion of a credit
issued
on behalf of an intermediate district related to nonfederal
wages
as reported to the public school employees' retirement system
for
the state fiscal year ending September
30, 2006 shall be
considered
to be a payment on behalf of the intermediate district
for
the purpose of calculating payments made under section 81 for
2006-2007.
The portion of credits issued by the public school
employees'
retirement system attributable to nonfederal wages in
aggregate
shall equal the appropriation under section 11(6). The
total
credit provided under this subsection for a particular
district
or intermediate district shall be determined based on that
district's
or intermediate district's percentage of the total
statewide
payroll for all districts and intermediate districts for
the
state fiscal year ending September
30, 2006.
Enacting section 1. In accordance with section 30 of article I
of the state constitution of 1963, total state spending in this
amendatory act from state sources for the fiscal period beginning
October 1, 2007 and ending October 31, 2007 is estimated at
$1,052,305,700.00 and state appropriations to be paid to local
units of government for the fiscal period beginning October 1, 2007
and ending October 31, 2007 are estimated at $1,044,700,000.00.
Enacting section 2. Sections 41a and 98b of the state school
aid act of 1979, 1979 PA 94, MCL 388.1641a and 388.1698b, are
repealed.
Enacting section 3. This amendatory act takes effect October
1, 2007.
Enacting section 4. This amendatory act does not take effect
unless House Bill No. 5194 of the 94th Legislature is enacted into
law.
Enacting section 5. This amendatory act does not take effect
unless either House Bill No. 5198 or all of the following bills of
the 94th Legislature are enacted into law:
(a) House Bill No. 5252.
(b) House Bill No. 5253.
(c) House Bill No. 5254.
(d) House Bill No. 5255.
(e) House Bill No. 5256.