SB-1163, As Passed House, May 26, 2010

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1163

A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 6, 11, 11a, 11d, 11g, 11j, 11k, 11m, 15, 18,

19, 20, 20d, 22a, 22b, 22d, 22e, 24, 24a, 24c, 26a, 26b, 29, 31a,

31d, 31f, 32b, 32c, 32d, 32j, 32l, 39a, 41, 51a, 51c, 51d, 53a, 54,

56, 61a, 62, 64, 65, 74, 81, 94a, 98, 99, 99i, 99p, 101, 104, 107,

and 147 (MCL 388.1606, 388.1611, 388.1611a, 388.1611d, 388.1611g,

388.1611j, 388.1611k, 388.1611m, 388.1615, 388.1618, 388.1619,

388.1620, 388.1620d, 388.1622a, 388.1622b, 388.1622d, 388.1622e,

388.1624, 388.1624a, 388.1624c, 388.1626a, 388.1626b, 388.1629,

388.1631a, 388.1631d, 388.1631f, 388.1632b, 388.1632c, 388.1632d,

388.1632j, 388.1632l, 388.1639a, 388.1641, 388.1651a, 388.1651c,

388.1651d, 388.1653a, 388.1654, 388.1656, 388.1661a, 388.1662,

388.1664, 388.1665, 388.1674, 388.1681, 388.1694a, 388.1698,

388.1699, 388.1699i, 388.1699p, 388.1701, 388.1704, 388.1707, and

388.1747), sections 6, 11, 94a, and 101 as amended by 2009 PA 203,

sections 11a, 11g, 11j, 11k, 11m, 15, 18, 19, 20, 20d, 22a, 22b,

22d, 22e, 24, 24a, 24c, 26a, 26b, 29, 31a, 31d, 31f, 32b, 32d, 32j,

32l, 39a, 41, 51a, 51c, 51d, 53a, 54, 56, 61a, 62, 64, 65, 74, 81,

98, 99, 99i, 104, 107, and 147 as amended and section 11d as added

by 2009 PA 121, and sections 32c and 99p as amended by 2008 PA 268,

and by adding sections 92, 93, 98d, and 166d; and to repeal acts

and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 6. (1) "Center program" means a program operated by a

district or by an intermediate district for special education

pupils from several districts in programs for pupils with autism

spectrum disorder, pupils with severe cognitive impairment, pupils

with moderate cognitive impairment, pupils with severe multiple

impairments, pupils with hearing impairment, pupils with visual

impairment, and pupils with physical impairment or other health

impairment. Programs for pupils with emotional impairment housed in

buildings that do not serve regular education pupils also qualify.

Unless otherwise approved by the department, a center program

either shall serve all constituent districts within an intermediate

district or shall serve several districts with less than 50% of the

pupils residing in the operating district. In addition, special

education center program pupils placed part-time in noncenter

programs to comply with the least restrictive environment

provisions of section 612 of part B of the individuals with

disabilities education act, 20 USC 1412, may be considered center

program pupils for pupil accounting purposes for the time scheduled

in either a center program or a noncenter program.

(2) "District and high school graduation rate" means the

annual completion and pupil dropout rate that is calculated by the

center pursuant to nationally recognized standards.

(3) "District and high school graduation report" means a

report of the number of pupils, excluding adult participants, in

the district for the immediately preceding school year, adjusted

for those pupils who have transferred into or out of the district

or high school, who leave high school with a diploma or other

credential of equal status.

(4) "Membership", except as otherwise provided in this act,

means for a district, public school academy, university school, or

intermediate district the sum of the product of .75 times the

number of full-time equated pupils in grades K to 12 actually

enrolled and in regular daily attendance on the pupil membership

count day for the current school year, plus the product of .25

times the final audited count from the supplemental count day for

the immediately preceding school year. All pupil counts used in

this subsection are as determined by the department and calculated

by adding the number of pupils registered for attendance plus

pupils received by transfer and minus pupils lost as defined by

rules promulgated by the superintendent, and as corrected by a

subsequent department audit. For the purposes of this section and

section 6a, for a school of excellence that is a cyber school, as

defined in section 551 of the revised school code, MCL 380.551, and

is in compliance with section 553a of the revised school code, MCL

380.553a, a pupil's participation in the cyber school's educational

program is considered regular daily attendance. The amount of the

foundation allowance for a pupil in membership is determined under

section 20. In making the calculation of membership, all of the

following, as applicable, apply to determining the membership of a

district, public school academy, university school, or intermediate

district:

(a) Except as otherwise provided in this subsection, and

pursuant to subsection (6), a pupil shall be counted in membership

in the pupil's educating district or districts. An individual pupil

shall not be counted for more than a total of 1.0 full-time equated

membership.

(b) If a pupil is educated in a district other than the

pupil's district of residence, if the pupil is not being educated

as part of a cooperative education program, if the pupil's district

of residence does not give the educating district its approval to

count the pupil in membership in the educating district, and if the

pupil is not covered by an exception specified in subsection (6) to

the requirement that the educating district must have the approval

of the pupil's district of residence to count the pupil in

membership, the pupil shall not be counted in membership in any

district.

district shall be counted in membership in the intermediate

district.

(d) A pupil placed by a court or state agency in an on-grounds

program of a juvenile detention facility, a child caring

institution, or a mental health institution, or a pupil funded

under section 53a, shall be counted in membership in the district

or intermediate district approved by the department to operate the

program.

(e) A pupil enrolled in the Michigan schools for the deaf and

blind shall be counted in membership in the pupil's intermediate

district of residence.

(f) A pupil enrolled in a ~~vocational~~ career and technical

education program supported by a millage levied over an area larger

than a single district or in an area vocational-technical education

program established pursuant to section 690 of the revised school

code, MCL 380.690, shall be counted only in the pupil's district of

residence.

(g) A pupil enrolled in a university school shall be counted

in membership in the university school.

(h) A pupil enrolled in a public school academy shall be

counted in membership in the public school academy.

(i) For a new district, university school, or public school

academy beginning its operation after December 31, 1994, membership

for the first 2 full or partial fiscal years of operation shall be

determined as follows:

(i) If operations begin before the pupil membership count day

for the fiscal year, membership is the average number of full-time

equated pupils in grades K to 12 actually enrolled and in regular

daily attendance on the pupil membership count day for the current

school year and on the supplemental count day for the current

school year, as determined by the department and calculated by

adding the number of pupils registered for attendance on the pupil

membership count day plus pupils received by transfer and minus

pupils lost as defined by rules promulgated by the superintendent,

and as corrected by a subsequent department audit, plus the final

audited count from the supplemental count day for the current

school year, and dividing that sum by 2.

(ii) If operations begin after the pupil membership count day

for the fiscal year and not later than the supplemental count day

for the fiscal year, membership is the final audited count of the

number of full-time equated pupils in grades K to 12 actually

enrolled and in regular daily attendance on the supplemental count

day for the current school year.

(j) If a district is the authorizing body for a public school

academy, then, in the first school year in which pupils are counted

in membership on the pupil membership count day in the public

school academy, the determination of the district's membership

shall exclude from the district's pupil count for the immediately

preceding supplemental count day any pupils who are counted in the

public school academy on that first pupil membership count day who

were also counted in the district on the immediately preceding

supplemental count day.

(k) In a district, public school academy, university school,

or intermediate district operating an extended school year program

approved by the superintendent, a pupil enrolled, but not scheduled

to be in regular daily attendance on a pupil membership count day,

shall be counted.

(l) Pupils to be counted in membership shall be not less than 5

years of age on December 1 and less than 20 years of age on

September 1 of the school year except a special education pupil who

is enrolled and receiving instruction in a special education

program or service approved by the department, ~~and not having~~ who

does not have a high school diploma, and who is less than 26 years

of age as of September 1 of the current school year shall be

counted in membership.

(m) An individual who has obtained a high school diploma shall

not be counted in membership. An individual who has obtained a

general educational development (G.E.D.) certificate shall not be

counted in membership. An individual participating in a job

training program funded under former section 107a or a jobs program

funded under former section 107b, administered by the Michigan

strategic fund or the department of energy, labor, and economic

growth, or participating in any successor of either of those 2

programs, shall not be counted in membership.

(n) If a pupil counted in membership in a public school

academy is also educated by a district or intermediate district as

part of a cooperative education program, the pupil shall be counted

in membership only in the public school academy unless a written

agreement signed by all parties designates the party or parties in

which the pupil shall be counted in membership, and the

instructional time scheduled for the pupil in the district or

intermediate district shall be included in the full-time equated

membership determination under subdivision (q). However, for pupils

receiving instruction in both a public school academy and in a

district or intermediate district but not as a part of a

cooperative education program, the following apply:

(i) If the public school academy provides instruction for at

least 1/2 of the class hours specified in subdivision (q), the

public school academy shall receive as its prorated share of the

full-time equated membership for each of those pupils an amount

equal to 1 times the product of the hours of instruction the public

school academy provides divided by the number of hours specified in

subdivision (q) for full-time equivalency, and the remainder of the

full-time membership for each of those pupils shall be allocated to

the district or intermediate district providing the remainder of

the hours of instruction.

(ii) If the public school academy provides instruction for less

than 1/2 of the class hours specified in subdivision (q), the

district or intermediate district providing the remainder of the

hours of instruction shall receive as its prorated share of the

full-time equated membership for each of those pupils an amount

equal to 1 times the product of the hours of instruction the

district or intermediate district provides divided by the number of

hours specified in subdivision (q) for full-time equivalency, and

the remainder of the full-time membership for each of those pupils

shall be allocated to the public school academy.

(o) An individual less than 16 years of age as of September 1

of the current school year who is being educated in an alternative

education program shall not be counted in membership if there are

also adult education participants being educated in the same

program or classroom.

(p) The department shall give a uniform interpretation of

full-time and part-time memberships.

(q) The number of class hours used to calculate full-time

equated memberships shall be consistent with section 101(3). In

determining full-time equated memberships for pupils who are

enrolled in a postsecondary institution, a pupil shall not be

considered to be less than a full-time equated pupil solely because

of the effect of his or her postsecondary enrollment, including

necessary travel time, on the number of class hours provided by the

district to the pupil.

(r) Except as otherwise provided in this subdivision, full-

time equated memberships for pupils in kindergarten shall be

determined by dividing the number of class hours scheduled and

provided per year per kindergarten pupil by a number equal to 1/2

the number used for determining full-time equated memberships for

pupils in grades 1 to 12.

(s) For a district, university school, or public school

academy that has pupils enrolled in a grade level that was not

offered by the district, university school, or public school

academy in the immediately preceding school year, the number of

pupils enrolled in that grade level to be counted in membership is

the average of the number of those pupils enrolled and in regular

daily attendance on the pupil membership count day and the

supplemental count day of the current school year, as determined by

the department. Membership shall be calculated by adding the number

of pupils registered for attendance in that grade level on the

pupil membership count day plus pupils received by transfer and

minus pupils lost as defined by rules promulgated by the

superintendent, and as corrected by subsequent department audit,

plus the final audited count from the supplemental count day for

the current school year, and dividing that sum by 2.

(t) A pupil enrolled in a cooperative education program may be

counted in membership in the pupil's district of residence with the

written approval of all parties to the cooperative agreement.

(u) If, as a result of a disciplinary action, a district

determines through the district's alternative or disciplinary

education program that the best instructional placement for a pupil

is in the pupil's home or otherwise apart from the general school

population, if that placement is authorized in writing by the

district superintendent and district alternative or disciplinary

education supervisor, and if the district provides appropriate

instruction as described in this subdivision to the pupil at the

pupil's home or otherwise apart from the general school population,

the district may count the pupil in membership on a pro rata basis,

with the proration based on the number of hours of instruction the

district actually provides to the pupil divided by the number of

hours specified in subdivision (q) for full-time equivalency. For

the purposes of this subdivision, a district shall be considered to

be providing appropriate instruction if all of the following are

met:

(i) The district provides at least 2 nonconsecutive hours of

instruction per week to the pupil at the pupil's home or otherwise

apart from the general school population under the supervision of a

certificated teacher.

(ii) The district provides instructional materials, resources,

and supplies, except computers, that are comparable to those

otherwise provided in the district's alternative education program.

(iii) Course content is comparable to that in the district's

alternative education program.

(iv) Credit earned is awarded to the pupil and placed on the

pupil's transcript.

(v) A pupil enrolled in an alternative or disciplinary

education program described in section 25 shall be counted in

membership in the district or public school academy that is

educating the pupil.

(w) If a pupil was enrolled in a public school academy on the

pupil membership count day, if the public school academy's contract

with its authorizing body is revoked or the public school academy

otherwise ceases to operate, and if the pupil enrolls in a district

within 45 days after the pupil membership count day, the department

shall adjust the district's pupil count for the pupil membership

count day to include the pupil in the count.

(x) For a public school academy that has been in operation for

at least 2 years and that suspended operations for at least 1

semester and is resuming operations, membership is the sum of the

product of .75 times the number of full-time equated pupils in

grades K to 12 actually enrolled and in regular daily attendance on

the first pupil membership count day or supplemental count day,

whichever is first, occurring after operations resume, plus the

product of .25 times the final audited count from the most recent

pupil membership count day or supplemental count day that occurred

before suspending operations, as determined by the superintendent.

(y) If a district's membership for a particular fiscal year,

as otherwise calculated under this subsection, would be less than

1,550 pupils and the district has 4.5 or fewer pupils per square

mile, as determined by the department, and, beginning in 2007-2008,

if the district does not receive funding under section 22d(2), the

district's membership shall be considered to be the membership

figure calculated under this subdivision. If a district educates

and counts in its membership pupils in grades 9 to 12 who reside in

a contiguous district that does not operate grades 9 to 12 and if 1

or both of the affected districts request the department to use the

determination allowed under this sentence, the department shall

include the square mileage of both districts in determining the

number of pupils per square mile for each of the districts for the

purposes of this subdivision. The membership figure calculated

under this subdivision is the greater of the following:

(i) The average of the district's membership for the 3-fiscal-

year period ending with that fiscal year, calculated by adding the

district's actual membership for each of those 3 fiscal years, as

otherwise calculated under this subsection, and dividing the sum of

those 3 membership figures by 3.

(ii) The district's actual membership for that fiscal year as

otherwise calculated under this subsection.

(z) If a public school academy that is not in its first or

second year of operation closes at the end of a school year and

does not reopen for the next school year, the department shall

adjust the membership count of the district in which a former pupil

of the public school academy enrolls and is in regular daily

attendance for the next school year to ensure that the district

receives the same amount of membership aid for the pupil as if the

pupil were counted in the district on the supplemental count day of

the preceding school year.

(aa) Full-time equated memberships for preprimary-aged special

education pupils who are not enrolled in kindergarten but are

enrolled in a classroom program under R 340.1754 of the Michigan

administrative code shall be determined by dividing the number of

class hours scheduled and provided per year by 450. Full-time

equated memberships for preprimary-aged special education pupils

who are not enrolled in kindergarten but are receiving nonclassroom

services under R 340.1755 of the Michigan administrative code shall

be determined by dividing the number of hours of service scheduled

and provided per year per pupil by 180.

(bb) A pupil of a district that begins its school year after

Labor day who is enrolled in an intermediate district program that

begins before Labor day shall not be considered to be less than a

full-time pupil solely due to instructional time scheduled but not

attended by the pupil before Labor day.

(cc) For the first year in which a pupil is counted in

membership on the pupil membership count day in a middle college

program described in section 64, the membership is the average of

the full-time equated membership on the pupil membership count day

and on the supplemental count day for the current school year, as

determined by the department. If a pupil was counted by the

operating district on the immediately preceding supplemental count

day, the pupil shall be excluded from the district's immediately

preceding supplemental count for purposes of determining the

district's membership.

(dd) A district that educates a pupil who attends a United

States Olympic education center may count the pupil in membership

regardless of whether or not the pupil is a resident of this state.

(ee) A pupil enrolled in a district other than the pupil's

district of residence pursuant to section 1148(2) of the revised

school code, MCL 380.1148, shall be counted in the educating

district.

(ff) A pupil enrolled in a school of excellence described in

section 101(11) or a pupil for whom a public school has obtained a

seat-time waiver from the department under section 101 shall not be

counted for more than a total of 0.75 full-time equated membership

for each pupil described in this subdivision.

(5) "Public school academy" means that term as defined in the

revised school code.

(6) "Pupil" means a person in membership in a public school. A

district must have the approval of the pupil's district of

residence to count the pupil in membership, except approval by the

pupil's district of residence is not required for any of the

following:

(a) A nonpublic part-time pupil enrolled in grades 1 to 12 in

accordance with section 166b.

(b) A pupil receiving 1/2 or less of his or her instruction in

a district other than the pupil's district of residence.

school.

(d) A pupil enrolled in a district other than the pupil's

district of residence under an intermediate district schools of

choice pilot program as described in section 91a or former section

91 if the intermediate district and its constituent districts have

been exempted from section 105.

(e) A pupil enrolled in a district other than the pupil's

district of residence if the pupil is enrolled in accordance with

section 105 or 105c.

(f) A pupil who has made an official written complaint or

whose parent or legal guardian has made an official written

complaint to law enforcement officials and to school officials of

the pupil's district of residence that the pupil has been the

victim of a criminal sexual assault or other serious assault, if

the official complaint either indicates that the assault occurred

at school or that the assault was committed by 1 or more other

pupils enrolled in the school the pupil would otherwise attend in

the district of residence or by an employee of the district of

residence. A person who intentionally makes a false report of a

crime to law enforcement officials for the purposes of this

subdivision is subject to section 411a of the Michigan penal code,

1931 PA 328, MCL 750.411a, which provides criminal penalties for

that conduct. As used in this subdivision:

(i) "At school" means in a classroom, elsewhere on school

premises, on a school bus or other school-related vehicle, or at a

school-sponsored activity or event whether or not it is held on

school premises.

(ii) "Serious assault" means an act that constitutes a felony

violation of chapter XI of the Michigan penal code, 1931 PA 328,

MCL 750.81 to 750.90g, or that constitutes an assault and

infliction of serious or aggravated injury under section 81a of the

Michigan penal code, 1931 PA 328, MCL 750.81a.

(g) A pupil whose district of residence changed after the

pupil membership count day and before the supplemental count day

and who continues to be enrolled on the supplemental count day as a

nonresident in the district in which he or she was enrolled as a

resident on the pupil membership count day of the same school year.

(h) A pupil enrolled in an alternative education program

operated by a district other than his or her district of residence

who meets 1 or more of the following:

(i) The pupil has been suspended or expelled from his or her

district of residence for any reason, including, but not limited

to, a suspension or expulsion under section 1310, 1311, or 1311a of

the revised school code, MCL 380.1310, 380.1311, and 380.1311a.

(ii) The pupil had previously dropped out of school.

(iii) The pupil is pregnant or is a parent.

(iv) The pupil has been referred to the program by a court.

(v) The pupil is enrolled in an alternative or disciplinary

education program described in section 25.

(i) A pupil enrolled in the Michigan virtual high school, for

the pupil's enrollment in the Michigan virtual high school.

(j) A pupil who is the child of a person who is employed by

the district or who is the child of a person who was employed by

the district as of the time the pupil first enrolled in the

district but who is no longer an employee of the district due to a

reduction in the district's workforce. As used in this subdivision,

"child" includes an adopted child, stepchild, or legal ward.

(k) An expelled pupil who has been denied reinstatement by the

expelling district and is reinstated by another school board under

section 1311 or 1311a of the revised school code, MCL 380.1311 and

380.1311a.

(l) A pupil enrolled in a district other than the pupil's

district of residence in a program described in section 64 if the

pupil's district of residence and the enrolling district are both

constituent districts of the same intermediate district.

(m) A pupil enrolled in a district other than the pupil's

district of residence who attends a United States Olympic education

center.

(n) A pupil enrolled in a district other than the pupil's

district of residence pursuant to section 1148(2) of the revised

school code, MCL 380.1148.

(o) A pupil who enrolls in a district other than the pupil's

district of residence as a result of the pupil's school not making

adequate yearly progress under the no child left behind act of

2001, Public Law 107-110.

However, if a district educates pupils who reside in another

district and if the primary instructional site for those pupils is

established by the educating district after 2009-2010 and is

located within the boundaries of that other district, the educating

district must have the approval of that other district to count

those pupils in membership.

(7) "Pupil membership count day" of a district or intermediate

district means:

(a) Except as provided in subdivision (b), the fourth

Wednesday after Labor day each school year or, for a district or

building in which school is not in session on that Wednesday due to

conditions not within the control of school authorities, with the

approval of the superintendent, the immediately following day on

which school is in session in the district or building.

(b) For a district or intermediate district maintaining school

during the entire school year, the following days:

(i) Fourth Wednesday in July.

(ii) Fourth Wednesday after Labor day.

(iii) Second Wednesday in February.

(iv) Fourth Wednesday in April.

(8) "Pupils in grades K to 12 actually enrolled and in regular

daily attendance" means pupils in grades K to 12 in attendance and

receiving instruction in all classes for which they are enrolled on

the pupil membership count day or the supplemental count day, as

applicable. Except as otherwise provided in this subsection, a

pupil who is absent from any of the classes in which the pupil is

enrolled on the pupil membership count day or supplemental count

day and who does not attend each of those classes during the 10

consecutive school days immediately following the pupil membership

count day or supplemental count day, except for a pupil who has

been excused by the district, shall not be counted as 1.0 full-time

equated membership. A pupil who is excused from attendance on the

pupil membership count day or supplemental count day and who fails

to attend each of the classes in which the pupil is enrolled within

30 calendar days after the pupil membership count day or

supplemental count day shall not be counted as 1.0 full-time

equated membership. In addition, a pupil who was enrolled and in

attendance in a district, intermediate district, or public school

academy before the pupil membership count day or supplemental count

day of a particular year but was expelled or suspended on the pupil

membership count day or supplemental count day shall only be

counted as 1.0 full-time equated membership if the pupil resumed

attendance in the district, intermediate district, or public school

academy within 45 days after the pupil membership count day or

supplemental count day of that particular year. Pupils not counted

as 1.0 full-time equated membership due to an absence from a class

shall be counted as a prorated membership for the classes the pupil

attended. For purposes of this subsection, "class" means a period

of time in 1 day when pupils and a certificated teacher or legally

qualified substitute teacher are together and instruction is taking

place.

(9) "Rule" means a rule promulgated pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(10) "The revised school code" means 1976 PA 451, MCL 380.1 to

380.1852.

(11) "School district of the first class", "first class school

district", and "district of the first class" ~~, except in subsection~~

~~(6),~~ mean a district that had at least 60,000 pupils in membership

for the immediately preceding fiscal year.

(12) "School fiscal year" means a fiscal year that commences

July 1 and continues through June 30.

(13) "State board" means the state board of education.

(14) "Superintendent", unless the context clearly refers to a

district or intermediate district superintendent, means the

superintendent of public instruction described in section 3 of

article VIII of the state constitution of 1963.

(15) "Supplemental count day" means the day on which the

supplemental pupil count is conducted under section 6a.

(16) "Tuition pupil" means a pupil of school age attending

school in a district other than the pupil's district of residence

for whom tuition may be charged. Tuition pupil does not include a

pupil who is a special education pupil or a pupil described in

subsection (6)(c) to ~~(m)~~ (o). A pupil's district of residence shall

not require a high school tuition pupil, as provided under section

111, to attend another school district after the pupil has been

assigned to a school district.

(17) "State school aid fund" means the state school aid fund

established in section 11 of article IX of the state constitution

of 1963.

(18) "Taxable value" means the taxable value of property as

determined under section 27a of the general property tax act, 1893

PA 206, MCL 211.27a.

(19) "Textbook" means a book that is selected and approved by

the governing board of a district and that contains a presentation

of principles of a subject, or that is a literary work relevant to

Senate Bill No. 1163 (H-4) as amended May 26, 2010

the study of a subject required for the use of classroom pupils, or

another type of course material that forms the basis of classroom

instruction.

(20) "Total state aid" or "total state school aid" means the

total combined amount of all funds due to a district, intermediate

district, or other entity under all of the provisions of this act.

(21) "University school" means an instructional program

operated by a public university under section 23 that meets the

requirements of section 23.

Sec. 11. (1) For the fiscal year ending September 30, 2010,

there is appropriated for the public schools of this state and

certain other state purposes relating to education the sum of

~~$10,793,954,100.00~~ $10,725,857,500.00 from the state school aid

fund ~~established by section 11 of article IX of the state~~

~~constitution of 1963~~ and the sum of ~~$31,800,000.00~~ $30,206,200.00

from the general fund. For the fiscal year ending September 30,

2010, there is also appropriated the sum of $450,000,000.00 from

the federal funding awarded to this state under title XIV of the

American recovery and reinvestment act of 2009, Public Law 111-5,

to be used solely for the purpose of funding the primary funding

formula calculated under section 20, in accordance with federal

law. For the fiscal year ending September 30, 2011, there is

appropriated for the public schools of this state and certain other

state purposes relating to education the sum of [$11,052,638,600.00]

from the state school aid fund and the sum of $31,706,200.00 from

the general fund. For the fiscal year ending September 30, 2011,

there is also appropriated the sum of $184,256,600.00 from the

federal funding awarded to this state under title XIV of the

American recovery and reinvestment act of 2009, Public Law 111-5,

to be used solely for the purpose of funding the primary funding

formula calculated under section 20, in accordance with federal

law. In addition, any money received by this state from the federal

incentive grant program created under sections 14005 and 14006 of

title XIV of the American recovery and reinvestment act of 2009,

Public Law 111-5, known as the "race to the top" grant program, and

all other available federal funds are appropriated each fiscal year

for the fiscal year ending September 30, 2010 and for the fiscal

year ending September 30, 2011.

(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 under subsection (3), 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.

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.

Sec. 11a. (1) The school aid stabilization fund is created as

a separate account within the state school aid fund established by

section 11 of article IX of the state constitution of 1963.

(2) The state treasurer may receive money or other assets from

any source for deposit into the school aid stabilization fund. The

state treasurer shall deposit into the school aid stabilization

fund all of the following:

(a) Unexpended and unencumbered state school aid fund revenue

for a fiscal year that remains in the state school aid fund as of

the bookclosing for that fiscal year.

(b) Money statutorily dedicated to the school aid

stabilization fund.

(3) Money available in the school aid stabilization fund may

not be expended without a specific appropriation from the school

aid stabilization fund. Money in the school aid stabilization fund

shall be expended only for purposes for which state school aid fund

money may be expended.

(4) The state treasurer shall direct the investment of the

school aid stabilization fund. The state treasurer shall credit to

the school aid stabilization fund interest and earnings from fund

investments.

(5) Money in the school aid stabilization fund at the close of

a fiscal year shall remain in the school aid stabilization fund and

shall not lapse to the unreserved school aid fund balance or the

general fund.

(6) If the maximum amount appropriated under section 11 from

the state school aid fund for a fiscal year exceeds the amount

available for expenditure from the state school aid fund for that

fiscal year, there is appropriated from the school aid

stabilization fund to the state school aid fund an amount equal to

the projected shortfall as determined by the department of

treasury, but not to exceed available money in the school aid

stabilization fund. If the money in the school aid stabilization

fund is insufficient to fully fund an amount equal to the projected

shortfall, the state budget director shall notify the legislature

as required under section 11(3) and state payments in an amount

equal to the remainder of the projected shortfall shall be prorated

in the manner provided under section 11(4).

(7) For ~~2009-2010~~ 2010-2011, there is appropriated from the

school aid stabilization fund to the state school aid fund the

amount necessary to fully fund the allocations under this act.

Sec. 11d. (1) For 2009-2010 only, the department shall deduct

an amount equal to ~~$165.00~~ $100.00 per membership pupil from the

total state school aid otherwise allocated under this act to each

district, except for money allocated under sections 11g, 22a, 31d,

51a(12), 51c, and 53a. ~~If a district complies with subsection (2),~~

a A district may choose to apply this reduction to funding the

district receives under any provision of this act, other than

sections 11g, 22a, 31d, 51a(12), 51c, and 53a, even if the

reduction chosen by the district results in a program being reduced

or discontinued. ~~If a district does not comply with subsection (2),~~

~~the district shall apply this reduction to available funding under~~

~~section 22b first, up to the total amount of the reduction, before~~

~~reducing other funding the district receives under this act, other~~

~~than sections 11g, 22a, 31d, 51a(12), 51c, and 53a.~~

(2) For 2010-2011, the department shall deduct an amount equal

to $100.00 per membership pupil from the total state school aid

otherwise allocated under this act to each district, except for

money allocated under sections 11g, 22a, 31d, 32d, 51a(12), 51c,

and 53a. A district may choose to apply this reduction to funding

the district receives under any provision of this act, other than

sections 11g, 22a, 31d, 32d, 51a(12), 51c, and 53a, even if the

reduction chosen by the district results in a program being reduced

or discontinued.

(3) ~~(2)~~ Not later than February 1, 2010, a district shall

enter into an agreement with the department to develop a service

consolidation plan to reduce school operating costs that is in

compliance with department guidelines. The department guidelines

may identify, but are not limited to, allowable cost-sharing

arrangements for the provision of business services and

instructional services and the creation of joint operating

agreements between and among districts and intermediate districts.

The department shall establish guidelines for service consolidation

plans under this subsection not later than 60 days after the

effective date of this section.

(4) In addition to developing a service consolidation plan

under subsection (2), a district or intermediate district that

purchases diesel fuel shall explore possibilities for coordinating

regional purchasing of diesel fuel.

(5) Not later than February 1, 2011, a district shall begin to

implement all of the service consolidation measures the district

identified in the service consolidation plan the district developed

under subsection (3) and shall submit to the department, in the

form and manner prescribed by the department, a report on the

status of the district's implementation of that service

consolidation plan.

Sec. 11g. (1) From the appropriation in section 11, there is

allocated for this section an amount not to exceed $39,000,000.00

for the fiscal year ending September 30, ~~2010~~ 2011 and for each

succeeding fiscal year through the fiscal year ending September 30,

2015, after which these payments will cease. These allocations are

for paying the amounts described in subsection (3) to districts and

intermediate districts, other than those receiving a lump-sum

payment under section 11f(2), that were not plaintiffs in the

consolidated cases known as Durant v State of Michigan, Michigan

supreme court docket no. 104458-104492 and that, on or before March

2, 1998, submitted to the state treasurer a waiver resolution

described in section 11f. The amounts paid under this section

represent offers of settlement and compromise of any claim or

claims that were or could have been asserted by these districts and

intermediate districts, as described in this section.

(2) This section does not create any obligation or liability

of this state to any district or intermediate district that does

not submit a waiver resolution described in section 11f. This

section and any other provision of this act are not intended to

admit liability or waive any defense that is or would be available

to this state or its agencies, employees, or agents in any

litigation or future litigation with a district or intermediate

district regarding these claims or potential claims.

(3) The amount paid each fiscal year to each district or

intermediate district under this section shall be 1 of the

following:

(a) If the district or intermediate district does not borrow

money and issue bonds under section 11i, 1/30 of the total amount

listed in section 11h for the district or intermediate district

through the fiscal year ending September 30, 2013.

(b) If the district or intermediate district borrows money and

issues bonds under section 11i, an amount in each fiscal year

calculated by the department of treasury that is equal to the debt

service amount in that fiscal year on the bonds issued by that

district or intermediate district under section 11i and that will

result in the total payments made to all districts and intermediate

districts in each fiscal year under this section being no more than

the amount appropriated under this section in each fiscal year.

(4) The entire amount of each payment under this section each

fiscal year shall be paid on May 15 of the applicable fiscal year

or on the next business day following that date. If a district or

intermediate district borrows money and issues bonds under section

11i, the district or intermediate district shall use funds received

under this section to pay debt service on bonds issued under

section 11i. If a district or intermediate district does not borrow

money and issue bonds under section 11i, the district or

intermediate district shall use funds received under this section

only for the following purposes, in the following order of

priority:

(a) First, to pay debt service on voter-approved bonds issued

by the district or intermediate district before the effective date

of this section.

(b) Second, to pay debt service on other limited tax

obligations.

district or intermediate district under the revised school code.

(5) To the extent payments under this section are used by a

district or intermediate district to pay debt service on debt

payable from millage revenues, and to the extent permitted by law,

the district or intermediate district may make a corresponding

reduction in the number of mills levied for debt service.

(6) A district or intermediate district may pledge or assign

payments under this section as security for bonds issued under

section 11i, but shall not otherwise pledge or assign payments

under this section.

Sec. 11j. From the appropriation in section 11, there is

allocated an amount not to exceed ~~$40,000,000.00~~ $45,134,000.00 for

~~2009-2010~~ 2010-2011 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. 11k. For ~~2009-2010~~ 2010-2011, there is appropriated from

the general fund to the school loan revolving fund an amount equal

to the amount of school bond loans assigned to the Michigan

~~municipal bond~~ finance authority, not to exceed the total amount of

school bond loans held in reserve as long-term assets. As used in

this section, "school loan revolving fund" means that fund created

in section 16c of the shared credit rating act, 1985 PA 227, MCL

141.1066c.

Sec. 11m. From the appropriations in section 11, there is

allocated for 2009-2010 an amount not to exceed $30,000,000.00 and

for 2010-2011 there is allocated an amount not to exceed

$45,000,000.00 for fiscal year cash-flow borrowing costs solely

related to the state school aid fund established by section 11 of

article IX of the state constitution of 1963.

Sec. 15. (1) If a district or intermediate district fails to

receive its proper apportionment, the department, upon satisfactory

proof that the district or intermediate district was entitled

justly, shall apportion the deficiency in the next apportionment.

Subject to subsections (2) and (3), if a district or intermediate

district has received more than its proper apportionment, the

department, upon satisfactory proof, shall deduct the excess in the

next apportionment. Notwithstanding any other provision in this

act, state aid overpayments to a district, other than overpayments

in payments for special education or special education

transportation, may be recovered from any payment made under this

act other than a special education or special education

transportation payment. State aid overpayments made in special

education or special education transportation payments may be

recovered from subsequent special education or special education

transportation payments.

(2) If the result of an audit conducted by or for the

department affects the current fiscal year membership, affected

payments shall be adjusted in the current fiscal year. A deduction

due to an adjustment made as a result of an audit conducted by or

for the department, or as a result of information obtained by the

department from the district, an intermediate district, the

department of treasury, or the office of auditor general, shall be

deducted from the district's apportionments when the adjustment is

finalized. At the request of the district and upon the district

presenting evidence satisfactory to the department of the hardship,

the department may grant up to an additional 4 years for the

adjustment if the district would otherwise experience a significant

hardship.

(3) If, because of the receipt of new or updated data, the

department determines during a fiscal year that the amount paid to

a district or intermediate district under this act for a prior

fiscal year was incorrect under the law in effect for that year,

the department may make the appropriate deduction or payment in the

district's or intermediate district's allocation for the fiscal

year in which the determination is made. The deduction or payment

shall be calculated according to the law in effect in the fiscal

year in which the improper amount was paid.

(4) Expenditures made by the department under this act that

are caused by the write-off of prior year accruals may be funded by

revenue from the write-off of prior year accruals.

(5) In addition to funds appropriated in section 11 for all

programs and services, there is appropriated for ~~2009-2010~~ 2010-

2011 for obligations in excess of applicable appropriations an

amount equal to the collection of overpayments, but not to exceed

amounts available from overpayments.

Sec. 18. (1) Except as provided in another section of this

act, each district or other entity shall apply the money received

by the district or entity under this act to salaries and other

compensation of teachers and other employees, tuition,

transportation, lighting, heating, ventilation, water service, the

purchase of textbooks which are designated by the board to be used

in the schools under the board's charge, other supplies, and any

Senate Bill No. 1163 (H-4) as amended May 26, 2010

other school operating expenditures defined in section 7. However,

not more than 20% of the total amount received by a district under

article 2 or intermediate district under article 8 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

act the apportionment otherwise due upon a violation by the

recipient.

(2) Within 30 days after a board or intermediate board adopts

its annual operating budget for the following school fiscal year,

or after a board or intermediate board adopts a subsequent revision

to that budget, the district or intermediate district shall make

[all of the following

] available through a link on its website home page,

or a district may make the information available through a link on

its intermediate district's website home page, 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 or intermediate 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:

Senate Bill No. 1163 (H-4) as amended May 26, 2010

(A) Salaries and wages.

(B) Employee benefit costs, including, but not limited to,

medical, dental, vision, life, disability, and long-term care

benefits.

(D) All other personnel costs.

(ii) A chart of all district expenditures, broken into the

following subcategories:

(A) Instruction.

(B) Support services.

(D) Operations and maintenance.

(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

(3) for the most recent fiscal year for which it is available.

(d) The total salary and a description and cost of each fringe

benefit included in the compensation package for the superintendent

of the district or intermediate district and for each employee of

the district or intermediate district whose salary exceeds

~~$100,000.00~~ $90,000.00.

(e) The annual amount spent on dues paid to associations.

Senate Bill No. 1163 (H-4) as amended May 26, 2010

(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.]

(3) For the purpose of determining the reasonableness of

expenditures and whether a violation of this act has occurred, ~~the~~

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 at the expense of the district or

intermediate district, as applicable, 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.

(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%.

accompanied by the intermediate district's pupil accounting

procedures report.

(d) 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.

(e) The pupil 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.

(f) Except as otherwise provided in this subsection, a

district shall file the annual financial audit reports with the

intermediate district not later than 120 days after the end of each

school fiscal year and the intermediate district shall forward the

annual financial audit reports for its constituent districts and

for the intermediate district, and the pupil accounting procedures

report for the pupil membership count day and supplemental count

day, to the department not later than November 15 of each year.

(g) 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.

(h) Not later than December 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.

(4) By November 15 of each year, each district and

intermediate district shall submit to the center, in a manner

prescribed by the center, annual comprehensive financial data

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. The department

shall make this information available online to districts and

intermediate districts, and shall include per-pupil amounts spent

on instruction and instructional support service functions, and

indicate how much of those costs were attributable to salaries.

Districts and intermediate districts shall include a link on their

websites to the website where the department posts this

information.

(5) 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.

(6) 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.

(7) 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 act.

(8) If a district that is a public school academy purchases

property using money received under this act, the public school

academy shall retain ownership of the property unless the public

school academy sells the property at fair market value.

(9) If a district or intermediate district does not comply

with subsection (3), (4), (5), or (6), the department shall

withhold all state school aid due to the district or intermediate

district under this act, beginning with the next payment due to the

district or intermediate district, until the district or

intermediate district complies with subsections (3), (4), (5), and

(6). If the district or intermediate district does not comply with

subsections (3), (4), (5), and (6) by the end of the fiscal year,

the district or intermediate district forfeits the amount withheld.

Sec. 19. ~~(1) A district shall comply with any requirements of~~

~~sections 1204a, 1277, 1278, and 1280 of the revised school code,~~

~~MCL 380.1204a, 380.1277, 380.1278, and 380.1280, commonly referred~~

~~to as "public act 25 of 1990" that are not also required by the no~~

~~child left behind act of 2001, Public Law 107-110, as determined by~~

~~the department.~~

~~(2) Each district and intermediate district shall provide to~~

~~the department, in a form and manner prescribed by the department,~~

~~information necessary for the development of an annual progress~~

~~report on the required implementation of sections 1204a, 1277,~~

~~1278, and 1280 of the revised school code, MCL 380.1204a, 380.1277,~~

~~380.1278, and 380.1280, commonly referred to as "public act 25 of~~

~~1990".~~

(1) ~~(3)~~ A district or intermediate district shall comply with

all applicable reporting requirements specified in state and

federal law. Data provided to the center, in a form and manner

prescribed by the center, shall be aggregated and disaggregated as

required by state and federal law. In addition, a district or

intermediate district shall cooperate with all measures taken by

the center to comply with the provisions of the American recovery

and reinvestment act of 2009, Public Law 111-5, requiring the

establishment of a statewide P-20 longitudinal data system.

(2) ~~(4)~~ Each district shall furnish to the center not later

than 5 weeks after the pupil membership count day, in a manner

prescribed by the center, the information necessary for the

preparation of the district and high school graduation report. This

information shall meet requirements established in the pupil

auditing manual approved and published by the department. The

center shall calculate an annual graduation and pupil dropout rate

for each high school, each district, and this state, in compliance

with nationally recognized standards for these calculations. The

center shall report all graduation and dropout rates to the senate

and house education committees and appropriations committees, the

state budget director, and the department not later than 30 days

after the publication of the list described in subsection ~~(8).~~(6).

(3) ~~(5)~~ By the first business day in December and by June 30

of each year, a district shall furnish to the center, in a manner

prescribed by the center, information related to educational

personnel as necessary for reporting required by state and federal

law.

(4) ~~(6)~~ By June 30 of each year, a district shall furnish to

the center, in a manner prescribed by the center, information

related to safety practices and criminal incidents as necessary for

reporting required by state and federal law.

(5) ~~(7)~~ If a district or intermediate district fails to meet

the requirements of ~~subsection (2), (3), (4), (5), or (6),~~ this

section, the department shall withhold 5% of the total funds for

which the district or intermediate district qualifies under this

act until the district or intermediate district complies with all

of those subsections. If the district or intermediate district does

not comply with all of those subsections by the end of the fiscal

year, the department shall place the amount withheld in an escrow

account until the district or intermediate district complies with

all of those subsections.

(6) ~~(8)~~ Before publishing a list of schools or districts

determined to have failed to make adequate yearly progress as

required by the no child left behind act of 2001, Public Law 107-

110, the department shall allow a school or district to appeal that

determination. The department shall consider and act upon the

appeal within 30 days after it is submitted and shall not publish

the list until after all appeals have been considered and decided.

Sec. 20. (1) For 2009-2010 and for 2010-2011, the basic

foundation allowance is $8,489.00.

(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) For a district that had a foundation allowance for the

immediately preceding state fiscal year that was at least equal to

the sum of $7,108.00 plus the total dollar amount of all

adjustments made from 2006-2007 to the immediately preceding state

fiscal year in the lowest foundation allowance among all districts,

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 dollar amount of the adjustment from the

immediately preceding state fiscal year to the current state fiscal

year made in the basic foundation allowance minus $20.00) times

(the difference between the district's foundation allowance for the

immediately preceding state fiscal year and the sum of $7,108.00

plus the total dollar amount of all adjustments made from 2006-2007

to the immediately preceding state fiscal year in the lowest

foundation allowance among all districts) divided by the difference

between the basic foundation allowance for the current state fiscal

year and the sum of $7,108.00 plus the total dollar amount of all

adjustments made from 2006-2007 to the immediately preceding state

fiscal year in the lowest foundation allowance among all

districts]. For 2009-2010 and for 2010-2011, for a district that

had a foundation allowance for the immediately preceding state

fiscal year that was at least equal to the sum of $7,108.00 plus

the total dollar amount of all adjustments made from 2006-2007 to

the immediately preceding state fiscal year in the lowest

foundation allowance among all districts, 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 district's 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 at least equal to the amount of

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 dollar

amount of the adjustment from the immediately preceding state

fiscal year to the current state fiscal year in the basic

foundation allowance.

district that in the 1994-95 state fiscal year had a foundation

allowance greater than $6,500.00, 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 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 in the 1994-95 state fiscal year had a

foundation allowance greater than $6,500.00 and that has a

foundation allowance for the 2009-2010 state fiscal year, as

otherwise calculated under this section, that is less than the

basic foundation allowance, the district's foundation allowance for

2009-2010 and each succeeding fiscal year shall be considered to be

an amount equal to the basic foundation allowance.

(e) ~~(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.

(f) ~~(e)~~ For a district that received a payment under section

22c as that section was in effect for 2001-2002, the district's

2001-2002 foundation allowance shall be considered to have been an

amount equal to the sum of the district's actual 2001-2002

foundation allowance as otherwise calculated under this section

plus the per pupil amount of the district's equity payment for

2001-2002 under section 22c as that section was in effect for 2001-

2002.

(g) ~~(f)~~ For a district that received a payment under section

22c as that section was in effect for 2006-2007, the district's

2006-2007 foundation allowance shall be considered to have been an

amount equal to the sum of the district's actual 2006-2007

foundation allowance as otherwise calculated under this section

plus the per pupil amount of the district's equity payment for

2006-2007 under section 22c as that section was in effect for 2006-

2007.

(4) Except as otherwise provided in this subsection, 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 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 ad valorem property tax revenue of

the district captured under tax increment financing acts divided by

the district's membership excluding special education pupils. For a

district described in subsection (3)(c), 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 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 ad

valorem property tax revenue of the district captured under tax

increment financing acts divided by the district's membership

excluding special education pupils. 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 the purposes of state law, federal funding awarded

to this state under title XIV of the American recovery and

reinvestment act of 2009, Public Law 111-5, that is appropriated

under section 11 and allocated under section 22b, is considered to

be part of the state portion of a district's foundation allowance

and is considered to be part of the total state school aid paid to

a public school academy.

(5) The allocation calculated under this section for a pupil

shall be based on the foundation allowance of the pupil's district

of residence. However, for a pupil enrolled in a district other

than the pupil's district of residence, if the foundation allowance

of the pupil's district of residence has been adjusted pursuant to

subsection (19), the allocation calculated under this section shall

not include the adjustment described in subsection (19). 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 20j(2).~~

(6) Subject to subsection (7) and except as otherwise provided

in this subsection, for pupils in membership, other than special

education pupils, in a public school academy or a university

school, the allocation calculated under this section is an amount

per membership pupil other than special education pupils in the

public school academy or university school equal to the ~~sum of the~~

~~local school operating revenue per membership pupil other than~~

~~special education pupils for~~ foundation allowance of the district

in which the public school academy or university school is located

~~and the state portion of that district's foundation allowance,~~ or

the state maximum public school academy allocation, whichever is

less. However, a public school academy or university school 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 or university school 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.

(7) If more than 25% of the pupils residing within a district

are in membership in 1 or more public school academies located in

the district, then the amount per membership pupil calculated under

this section for a public school academy located in the district

shall be reduced by an amount 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 ad

valorem property tax revenue of the district captured under tax

increment financing acts divided by the district's membership

excluding special education pupils, in the school fiscal year

ending in the current state fiscal year, calculated as if the

resident pupils in membership in 1 or more public school academies

located in the district were in membership in the district. In

order to receive state school aid under this act, a district

described in this subsection shall pay to the authorizing body that

is the fiscal agent for a public school academy located in the

district for forwarding to the public school academy an amount

equal to that local school operating revenue per membership pupil

for each resident pupil in membership other than special education

pupils in the public school academy, as determined by the

department.

(8) If a district does not receive an amount calculated under

subsection (9); if the number of mills the district may levy on a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, and commercial personal property under section 1211 of

the revised school code, MCL 380.1211, is 0.5 mills or less; and if

the district elects not to levy those mills, the district instead

shall receive a separate supplemental amount calculated under this

subsection in an amount equal to the amount the district would have

received had it levied those mills, as determined by the department

of treasury. A district shall not receive a separate supplemental

amount calculated under this subsection for a fiscal year unless in

the calendar year ending in the fiscal year the district levies the

district's certified mills on property that is nonexempt property.

(9) For a district that had combined state and local revenue

per membership pupil in the 1993-94 state fiscal year of more than

$6,500.00 and that had fewer than 350 pupils in membership, if the

district elects not to reduce the number of mills from which a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, and commercial personal property are exempt and not to

levy school operating taxes on a principal residence, qualified

agricultural property, qualified forest property, supportive

housing property, industrial personal property, and commercial

personal property as provided in section 1211 of the revised school

code, MCL 380.1211, and not to levy school operating taxes on all

property as provided in section 1211(2) of the revised school code,

MCL 380.1211, there is calculated under this subsection for 1994-95

and each succeeding fiscal year a separate supplemental amount in

an amount equal to the amount the district would have received per

membership pupil had it levied school operating taxes on a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, and commercial personal property at the rate authorized

for the district under section 1211 of the revised school code, MCL

380.1211, and levied school operating taxes on all property at the

rate authorized for the district under section 1211(2) of the

revised school code, MCL 380.1211, as determined by the department

of treasury. If in the calendar year ending in the fiscal year a

district does not levy the district's certified mills on property

that is nonexempt property, the amount calculated under this

subsection will be reduced by the same percentage as the millage

actually levied compares to the district's certified mills.

(10) 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 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. ~~The calculation under this subsection shall~~

~~take into account a district's per pupil allocation under section~~

~~20j(2).~~

(11) 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.

(12) 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.

(13) 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.

membership factor by the revenue adjustment factor. However, for

2009-2010 and for 2010-2011, the index shall be 1.00. 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.

(14) If the principals at the revenue estimating conference

reach a consensus on the index described in subsection (13)(c), the

lowest foundation allowance among all districts for the subsequent

state fiscal year shall be at least the amount of that consensus

index multiplied by the lowest foundation allowance among all

districts for the immediately preceding state fiscal year.

(15) If at the January revenue estimating conference it is

estimated that pupil membership, excluding intermediate district

membership, for the subsequent state fiscal year will be greater

than 101% of the pupil membership, excluding intermediate district

membership, for the current state fiscal year, then it is the

intent of the legislature that the executive budget proposal for

the school aid budget for the subsequent state fiscal year include

a general fund/general purpose allocation sufficient to support the

membership in excess of 101% of the current year pupil membership.

(16) For a district that had combined state and local revenue

per membership pupil in the 1993-94 state fiscal year of more than

$6,500.00, that had fewer than 7 pupils in membership in the 1993-

94 state fiscal year, that has at least 1 child educated in the

district in the current state fiscal year, and that levies the

number of mills of school operating taxes authorized for the

district under section 1211 of the revised school code, MCL

380.1211, a minimum amount of combined state and local revenue

shall be calculated for the district as provided under this

subsection. The minimum amount of combined state and local revenue

for 1999-2000 shall be $67,000.00 plus the district's additional

expenses to educate pupils in grades 9 to 12 educated in other

districts as determined and allowed by the department. The minimum

amount of combined state and local revenue under this subsection,

before adding the additional expenses, shall increase each fiscal

year by the same percentage increase as the percentage increase in

the basic foundation allowance from the immediately preceding

fiscal year to the current fiscal year. The state portion of the

minimum amount of combined state and local revenue under this

subsection shall be calculated by subtracting from the minimum

amount of combined state and local revenue under this subsection

the sum of the district's local school operating revenue and an

amount equal to the product of ~~the sum of~~ the state portion of the

district's foundation allowance ~~plus the amount calculated under~~

~~section 20j~~ times the district's membership. As used in this

subsection, "additional expenses" means the district's expenses for

tuition or fees, not to exceed the basic foundation allowance for

the current state fiscal year, plus a room and board stipend not to

exceed $10.00 per school day for each pupil in grades 9 to 12

educated in another district, as approved by the department.

(17) For a district in which 7.75 mills levied in 1992 for

school operating purposes in the 1992-93 school year were not

renewed in 1993 for school operating purposes in the 1993-94 school

year, the district's combined state and local revenue per

membership pupil shall be recalculated as if that millage reduction

did not occur and the district's foundation allowance shall be

calculated as if its 1994-95 foundation allowance had been

calculated using that recalculated 1993-94 combined state and local

revenue per membership pupil as a base. A district is not entitled

to any retroactive payments for fiscal years before 2000-2001 due

to this subsection.

(18) For a district in which an industrial facilities

exemption certificate that abated taxes on property with a state

equalized valuation greater than the total state equalized

valuation of the district at the time the certificate was issued or

$700,000,000.00, whichever is greater, was issued under 1974 PA

198, MCL 207.551 to 207.572, before the calculation of the

district's 1994-95 foundation allowance, the district's foundation

allowance for 2002-2003 is an amount equal to the sum of the

district's foundation allowance for 2002-2003, as otherwise

calculated under this section, plus $250.00.

(19) For a district that received a grant under former section

32e for 2001-2002, the district's foundation allowance for 2002-

2003 and each succeeding fiscal year shall be adjusted to be an

amount equal to the sum of the district's foundation allowance, as

otherwise calculated under this section, plus the quotient of 100%

of the amount of the grant award to the district for 2001-2002

under former section 32e divided by the number of pupils in the

district's membership for 2001-2002 who were residents of and

enrolled in the district. Except as otherwise provided in this

subsection, a district qualifying for a foundation allowance

adjustment under this subsection shall use the funds resulting from

this adjustment for at least 1 of grades K to 3 for purposes

allowable under former section 32e as in effect for 2001-2002, and

may also use these funds to reduce class size in grades K to 8 or

for an early intervening program described in subsection (20). For

an individual school or schools operated by a district qualifying

for a foundation allowance under this subsection that have been

determined by the department to meet the adequate yearly progress

standards of the federal no child left behind act of 2001, Public

Law 107-110, in both mathematics and English language arts at all

applicable grade levels for all applicable subgroups, the district

may submit to the department an application for flexibility in

using the funds resulting from this adjustment that are

attributable to the pupils in the school or schools. The

application shall identify the affected school or schools and the

affected funds and shall contain a plan for using the funds for

specific purposes identified by the district that are designed to

reduce class size, but that may be different from the purposes

otherwise allowable under this subsection. The department shall

approve the application if the department determines that the

purposes identified in the plan are reasonably designed to reduce

class size. If the department does not act to approve or disapprove

an application within 30 days after it is submitted to the

department, the application is considered to be approved. If an

application for flexibility in using the funds is approved, the

district may use the funds identified in the application for any

purpose identified in the plan.

(20) An early intervening program that uses funds resulting

from the adjustment under subsection (19) shall meet either or both

of the following:

(a) Shall monitor individual pupil learning for pupils in

grades K to 3 and provide specific support or learning strategies

to pupils in grades K to 3 as early as possible in order to reduce

the need for special education placement. The program shall include

literacy and numeracy supports, sensory motor skill development,

behavior supports, instructional consultation for teachers, and the

development of a parent/school learning plan. Specific support or

learning strategies may include support in or out of the general

classroom in areas including reading, writing, math, visual memory,

motor skill development, behavior, or language development. These

would be provided based on an understanding of the individual

child's learning needs.

(b) Shall provide early intervening strategies for pupils in

grades K to 3 using schoolwide systems of academic and behavioral

supports and shall be scientifically research-based. The strategies

to be provided shall include at least pupil performance indicators

based upon response to intervention, instructional consultation for

teachers, and ongoing progress monitoring. A schoolwide system of

academic and behavioral support should be based on a support team

available to the classroom teachers. The members of this team could

include the principal, special education staff, reading teachers,

and other appropriate personnel who would be available to

systematically study the needs of the individual child and work

with the teacher to match instruction to the needs of the

individual child.

(21) For a district that levied 1.9 mills in 1993 to finance

an operating deficit, the district's foundation allowance shall be

calculated as if those mills were included as operating mills in

the calculation of the district's 1994-1995 foundation allowance. A

district is not entitled to any retroactive payments for fiscal

years before 2006-2007 due to this subsection. A district receiving

an adjustment under this subsection shall not receive more than

$800,000.00 for a fiscal year as a result of this adjustment.

(22) For a district that levied 2.23 mills in 1993 to finance

an operating deficit, the district's foundation allowance shall be

calculated as if those mills were included as operating mills in

the calculation of the district's 1994-1995 foundation allowance. A

district is not entitled to any retroactive payments for fiscal

years before 2006-2007 due to this subsection. A district receiving

an adjustment under this subsection shall not receive more than

$500,000.00 for a fiscal year as a result of this adjustment.

(23) Payments to districts, university schools, or 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.

(24) 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.

(25) 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.

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) "Immediately preceding state fiscal year" means the state

fiscal year immediately preceding the current state fiscal year.

(f) "Local school operating revenue" means school operating

taxes levied under section 1211 of the revised school code, MCL

380.1211.

(g) "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.

(h) "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 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 dollar amount of the adjustment from

the immediately preceding state fiscal year to the current state

fiscal year made in the basic foundation allowance 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 sum of $7,108.00 plus the total dollar

amount of all adjustments made from 2006-2007 to the immediately

preceding state fiscal year in the lowest per-pupil allocation

among all public school academies) divided by the difference

between the basic foundation allowance for the current state fiscal

year and the sum of $7,108.00 plus the total dollar amount of all

adjustments made from 2006-2007 to the immediately preceding state

fiscal year in the lowest per-pupil allocation among all public

school academies]. For 2009-2010 and 2010-2011, maximum public

school academy allocation means $7,580.00.

(i) "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.

(j) "Nonexempt property" means property that is not a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, or commercial personal property.

(k) "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 7dd of the general property~~

~~tax act, 1893 PA 206, MCL 211.7dd, and~~ section 1211 of the revised

school code, MCL 380.1211.

(l) "School operating purposes" means the purposes included in

the operation costs of the district as prescribed in sections 7 and

18.

(m) "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.

(n) "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,

or the corridor improvement authority act, 2005 PA 280, MCL

125.2871 to 125.2899.

(o) "Taxable value per membership pupil" means taxable value,

as certified by the department of treasury, 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. 20d. In making the final determination required under

former section 20a of a district's combined state and local revenue

per membership pupil in 1993-94 and in making calculations under

section 20 for ~~2009-2010~~ 2010-2011, the department and the

department of treasury shall comply with all of the following:

(a) For a district that had combined state and local revenue

per membership pupil in the 1994-95 state fiscal year of $6,500.00

or more and served as a fiscal agent for a state board designated

area vocational education center in the 1993-94 school year, total

state school aid received by or paid on behalf of the district

pursuant to this act in 1993-94 shall exclude payments made under

former section 146 and under section 147 on behalf of the

district's employees who provided direct services to the area

vocational education center. Not later than June 30, 1996, the

department shall make an adjustment under this subdivision to the

district's combined state and local revenue per membership pupil in

the 1994-95 state fiscal year and the department of treasury shall

make a final certification of the number of mills that may be

levied by the district under section 1211 of the revised school

code, MCL 380.1211, as a result of the adjustment under this

subdivision.

(b) If a district had an adjustment made to its 1993-94 total

state school aid that excluded payments made under former section

146 and under section 147 on behalf of the district's employees who

provided direct services for intermediate district center programs

operated by the district under article 5, if nonresident pupils

attending the center programs were included in the district's

membership for purposes of calculating the combined state and local

revenue per membership pupil for 1993-94, and if there is a signed

agreement by all constituent districts of the intermediate district

that an adjustment under this subdivision shall be made, the

foundation allowances for 1995-96 and 1996-97 of all districts that

had pupils attending the intermediate district center program

operated by the district that had the adjustment shall be

calculated as if their combined state and local revenue per

membership pupil for 1993-94 included resident pupils attending the

center program and excluded nonresident pupils attending the center

program.

Sec. 22a. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$5,882,000,000.00~~

$5,785,000,000.00 for 2009-2010 and an amount not to exceed

$5,764,000,000.00 for 2010-2011 for payments to districts,

qualifying university schools, and qualifying public school

academies to guarantee each district, qualifying university school,

and qualifying public school academy an amount equal to its 1994-95

total state and local per pupil revenue for school operating

purposes under section 11 of article IX of the state constitution

of 1963. Pursuant to section 11 of article IX of the state

constitution of 1963, this guarantee does not apply to a district

in a year in which the district levies a millage rate for school

district operating purposes less than it levied in 1994. However,

subsection (2) applies to calculating the payments under this

section. Funds allocated under this section that are not expended

in the state fiscal year for which they were allocated, as

determined by the department, may be used to supplement the

allocations under sections 22b and 51c in order to fully fund those

calculated allocations for the same fiscal year.

(2) To ensure that a district receives an amount equal to the

district's 1994-95 total state and local per pupil revenue for

school operating purposes, there is allocated to each district a

state portion of the district's 1994-95 foundation allowance in an

amount calculated as follows:

(a) Except as otherwise provided in this subsection, the state

portion of a district's 1994-95 foundation allowance is an amount

equal to the district's 1994-95 foundation allowance or $6,500.00,

whichever is less, minus 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 ad

valorem property tax revenue of the district captured under tax

increment financing acts divided by the district's membership. 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.

(b) For a district that had a 1994-95 foundation allowance

greater than $6,500.00, the state payment under this subsection

shall be the sum of the amount calculated under subdivision (a)

plus the amount calculated under this subdivision. The amount

calculated under this subdivision shall be equal to the difference

between the district's 1994-95 foundation allowance minus $6,500.00

and the current year hold harmless school operating taxes per

pupil. If the result of the calculation under subdivision (a) is

negative, the negative amount shall be an offset against any state

payment calculated under this subdivision. If the result of a

calculation under this subdivision is negative, there shall not be

a state payment or a deduction under this subdivision. The taxable

values per membership pupil used in the calculations under this

subdivision are as adjusted by ad valorem property tax revenue

captured under tax increment financing acts divided by the

district's membership.

(3) Beginning in 2003-2004, for pupils in membership in a

qualifying public school academy or qualifying university school,

there is allocated under this section to the authorizing body that

is the fiscal agent for the qualifying public school academy for

forwarding to the qualifying public school academy, or to the board

of the public university operating the qualifying university

school, an amount equal to the 1994-95 per pupil payment to the

qualifying public school academy or qualifying university school

under section 20.

(4) A district, qualifying university school, or qualifying

public school academy may use funds allocated under this section in

conjunction with any federal funds for which the district,

qualifying university school, or qualifying public school academy

otherwise would be eligible.

(5) For a district that is formed or reconfigured after June

1, 2000 by consolidation of 2 or more districts or by annexation,

the resulting district's 1994-95 foundation allowance under this

section beginning after the effective date of the consolidation or

annexation shall be the average of the 1994-95 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

in the state fiscal year in which the consolidation takes place who

reside in the geographic area of each of the original districts. If

an affected district's 1994-95 foundation allowance is less than

the 1994-95 basic foundation allowance, the amount of that

district's 1994-95 foundation allowance shall be considered for the

purpose of calculations under this subsection to be equal to the

amount of the 1994-95 basic foundation allowance.

(6) As used in this section:

(a) "1994-95 foundation allowance" means a district's 1994-95

foundation allowance calculated and certified by the department of

treasury or the superintendent under former section 20a as enacted

in 1993 PA 336 and as amended by 1994 PA 283.

(b) "Certified mills" means the lesser of 18 mills or the

number of mills of school operating taxes levied by the district in

1993-94.

for which a particular calculation is made.

(d) "Current year hold harmless school operating taxes per

pupil" means the per pupil revenue generated by multiplying a

district's 1994-95 hold harmless millage by the district's current

year taxable value per membership pupil.

(e) "Hold harmless millage" means, for a district with a 1994-

95 foundation allowance greater than $6,500.00, the number of mills

by which the exemption from the levy of school operating taxes on a

homestead, qualified agricultural property, qualified forest

property, supportive housing property, industrial personal

property, and commercial personal property could be reduced as

provided in section 1211 of the revised school code, MCL 380.1211,

and the number of mills of school operating taxes that could be

levied on all property as provided in section 1211(2) of the

revised school code, MCL 380.1211, as certified by the department

of treasury for the 1994 tax year.

(f) "Homestead", ~~means that term~~ "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.

(g) "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.

(h) "Nonexempt property" means property that is not a

principal residence, qualified agricultural property, qualified

forest property, supportive housing property, industrial personal

property, or commercial personal property.

~~(i) "Qualified agricultural property" means that term as~~

~~defined in section 1211 of the revised school code, MCL 380.1211.~~

(i) ~~(j)~~ "Qualifying public school academy" means a public

school academy that was in operation in the 1994-95 school year and

is in operation in the current state fiscal year.

(j) ~~(k)~~ "Qualifying university school" means a university

school that was in operation in the 1994-95 school year and is in

operation in the current fiscal year.

(k) (l) "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.

(l) ~~(m)~~ "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,

or the corridor improvement authority act, 2005 PA 280, MCL

125.2871 to 125.2899.

(m) ~~(n)~~ "Taxable value per membership pupil" means each of the

following divided by the district's membership:

(i) For the number of mills by which the exemption from the

levy of school operating taxes on a homestead, qualified

agricultural property, qualified forest property, supportive

housing property, industrial personal property, and commercial

personal property may be reduced as provided in section 1211 of the

revised school code, MCL 380.1211, the taxable value of homestead,

qualified agricultural property, qualified forest property,

supportive housing property, industrial personal property, and

commercial personal property for the calendar year ending in the

current state fiscal year.

(ii) For the number of mills of school operating taxes that may

be levied on all property as provided in section 1211(2) of the

revised school code, MCL 380.1211, the taxable value of all

property for the calendar year ending in the current state fiscal

year.

Sec. 22b. (1) From the state funds appropriated in section 11,

there is allocated for 2009-2010 an amount not to exceed

~~$3,323,800,000.00~~ $3,299,300,000.00 and there is allocated for

2010-2011 an amount not to exceed $3,578,600,000.00 for

discretionary nonmandated payments to districts under this section.

Funds allocated under this section that are not expended in the

state fiscal year for which they were 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) In addition to the funds allocated in subsection (1),

there is allocated an amount estimated at $450,000,000.00 for 2009-

2010 and there is allocated an amount estimated at $184,256,600.00

for 2010-2011 from the federal funds awarded to this state under

title XIV of the American recovery and reinvestment act of 2009,

Public Law 111-5. These funds shall be distributed in a form and

manner determined by the department based on an equal dollar amount

per the number of membership pupils used to calculate the ~~August~~

~~20, 2009~~ final state aid payment of the immediately preceding

fiscal year and shall be expended in a manner prescribed by federal

law.

(3) Subject to subsection (4) and section 11, the allocation

to a district under this section shall be an amount equal to the

sum of the amounts calculated under sections 20, ~~20j,~~ 51a(2),

51a(3), and 51a(12), minus the sum of the allocations to the

district under sections 22a and 51c.

(4) In order to receive an allocation under subsection (1),

each district shall do all of the following:

(a) Administer in each grade level that it operates in grades

1 to 5 a standardized assessment approved by the department of

grade-appropriate basic educational skills. A district may use the

Michigan literacy progress profile to satisfy this requirement for

grades 1 to 3. Also, if the revised school code is amended to

require annual assessments at additional grade levels, in order to

receive an allocation under this section each district shall comply

with that requirement.

(b) Comply with sections 1278a and 1278b of the revised school

code, MCL 380.1278a and 380.1278b.

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.

(5) 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.

(6) 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.

(7) ~~(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.

(8) ~~(7)~~ It is the intent of the legislature that all

constitutional obligations of this state have been fully funded

under sections 22a, 31d, 51a, and 51c. If a claim is made by an

entity receiving funds under this act 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 (3). 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.

(9) ~~(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)~~ (8) 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 (3).

(10) ~~(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.

(11) ~~(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.

(12) ~~(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.

Sec. 22d. (1) From the appropriation in section 11, an amount

not to exceed $2,025,000.00 is allocated for ~~2009-2010~~ 2010-2011

for additional payments to small, geographically isolated districts

under this section.

(2) From the allocation under subsection (1), there is

allocated for ~~2009-2010~~ 2010-2011 an amount not to exceed

$750,000.00 for payments under this subsection to districts that

meet all of the following:

(a) Operates grades K to 12.

(b) Has fewer than 250 pupils in membership.

least 1 of the following:

(i) Is located in the Upper Peninsula at least 30 miles from

any other public school building.

(ii) Is located on an island that is not accessible by bridge.

(3) The amount of the additional funding to each eligible

district under subsection (2) shall be determined under a spending

plan developed as provided in this subsection and approved by the

superintendent of public instruction. The spending plan shall be

developed cooperatively by the intermediate superintendents of each

intermediate district in which an eligible district is located. The

intermediate superintendents shall review the financial situation

of each eligible district, determine the minimum essential

financial needs of each eligible district, and develop and agree on

a spending plan that distributes the available funding under

subsection (2) to the eligible districts based on those financial

needs. The intermediate superintendents shall submit the spending

plan to the superintendent of public instruction for approval. Upon

approval by the superintendent of public instruction, the amounts

specified for each eligible district under the spending plan are

allocated under subsection (2) and shall be paid to the eligible

Senate Bill No. 1163 (H-4) as amended May 26, 2010

districts in the same manner as payments under section 22b.

(4) Subject to subsection (6), from the allocation in

subsection (1), there is allocated for ~~2009-2010~~ 2010-2011 an

amount not to exceed $1,275,000.00 for payments under this

subsection to districts that meet all of the following:

(a) The district has 5.0 or fewer pupils per square mile as

determined by the department.

(b) The district has a total square mileage greater than 200.0

or is 1 of 2 districts that have consolidated transportation

services and have a combined total square mileage greater than

200.0.

(5) The funds allocated under subsection (4) shall be

allocated on an equal per pupil basis.

(6) A district receiving funds allocated under subsection (2)

is not eligible for funding allocated under subsection (4).

Sec. 22e. (1) Beginning in 2008-2009, an amount will be

allocated each fiscal year from the appropriation in section 11 for

additional payments under this section to districts that meet the

eligibility requirements under subsection (2). For 2009-2010 [

], there is allocated for this purpose from the

appropriation in section 11 an amount [ ] not to

exceed $1,300,000.00. [For 2010-2011, there is allocated for this purpose

from the appropriation in section 11 an amount not to exceed $2,000,000.00.]

(2) To be eligible for a payment under this section, a

district must be determined by the department and the department of

treasury to meet all of the following:

(a) The district levies 1 of the following operating millage

amounts:

Senate Bill No. 1163 (H-4) as amended May 26, 2010

(i) All of the operating millage it is authorized to levy under

section 1211 of the revised school code, MCL 380.1211.

(ii) The amount of operating millage it is authorized to levy

after a voluntary reduction of its operating millage rate adopted

by the board of the district.

(iii) The amount of operating millage it is authorized to levy

after a millage reduction required under the limitation of section

31 of article IX of the state constitution of 1963, if a ballot

question asking for approval to levy millage in excess of the

limitation has been rejected in the district.

(b) The district receives a reduced amount of local school

operating revenue under section 1211 of the revised school code,

MCL 380.1211, as a result of the exemptions of industrial personal

property and commercial personal property that were enacted in 2007

PA 37.

foundation allowance, as calculated under section 20(4).

[(d) Beginning with 2010-2011, the district received funding under this section for the first time in either 2008-2009 or 2009-2010.]

(3) ~~The~~ Subject to subsection (4), the amount of the

additional funding to each eligible district under this section is

the sum of the following and shall be paid to the eligible

districts in the same manner as payments under section 22b:

(a) The product of the taxable value of the district's

industrial personal property for the calendar year ending in the

fiscal year multiplied by the total number of mills the district

levies on nonexempt property under section 1211 of the revised

school code, MCL 380.1211, for that calendar year.

(b) The product of the taxable value of the district's

Senate Bill No. 1163 (H-4) as amended May 26, 2010

commercial personal property for the calendar year ending in the

fiscal year multiplied by the lesser of 12 mills or the total

number of mills the district levies on nonexempt property under

section 1211 of the revised school code, MCL 380.1211, for that

calendar year.

[(4) Beginning with 2010-2011, the amount of the additional funding

to an eligible district under this section for a fiscal year is as

follows:

(a) If the district first received funding under this section for

2008-2009, an amount equal to the amount the district actually received under this section for 2008-2009.

(b) If the district first received funding under this section for 2009-2010, an amount equal to the amount the district actually received under this section for 2009-2010.]

(5) If the total amount of the payments calculated under this

section for a fiscal year exceeds the allocation for this section

for that fiscal year, the payment to each district shall be

prorated on an equal percentage basis.

Sec. 24. (1) From the appropriation in section 11, there is

allocated for ~~2009-2010~~ 2010-2011 an amount not to exceed

$8,000,000.00 for payments to the educating district or

intermediate district for educating pupils assigned by a court or

the department of human services to reside in or to attend a

juvenile detention facility or child caring institution licensed by

the department of human services and approved by the department to

provide an on-grounds education program. The amount of the payment

under this section to a district or intermediate district shall be

calculated as prescribed under subsection (2).

(2) The total amount allocated under this section shall be

allocated by paying to the educating district or intermediate

district an amount equal to the lesser of the district's or

intermediate district's added cost or the department's approved per

pupil allocation for the district or intermediate district. For the

purposes of this subsection:

(a) "Added cost" means 100% of the added cost each fiscal year

for educating all pupils assigned by a court or the department of

human services to reside in or to attend a juvenile detention

facility or child caring institution licensed by the department of

human services or the department of energy, labor, and economic

growth and approved by the department to provide an on-grounds

education program. Added cost shall be computed by deducting all

other revenue received under this act for pupils described in this

section from total costs, as approved by the department, in whole

or in part, for educating those pupils in the on-grounds education

program or in a program approved by the department that is located

on property adjacent to a juvenile detention facility or child

caring institution. Costs reimbursed by federal funds are not

included.

(b) "Department's approved per pupil allocation" for a

district or intermediate district shall be determined by dividing

the total amount allocated under this section for a fiscal year by

the full-time equated membership total for all pupils approved by

the department to be funded under this section for that fiscal year

for the district or intermediate district.

(3) A district or intermediate district educating pupils

described in this section at a residential child caring institution

may operate, and receive funding under this section for, a

department-approved on-grounds educational program for those pupils

that is longer than 181 days, but not longer than 233 days, if the

child caring institution was licensed as a child caring institution

and offered in 1991-92 an on-grounds educational program that was

longer than 181 days but not longer than 233 days and that was

operated by a district or intermediate district.

(4) Special education pupils funded under section 53a shall

not be funded under this section.

Sec. 24a. From the appropriation in section 11, there is

allocated an amount not to exceed ~~$2,523,200.00~~ $1,751,300.00 for

2009-2010 and there is allocated an amount not to exceed

$1,526,200.00 for 2010-2011 for payments to intermediate districts

for pupils who are placed in juvenile justice service facilities

operated by the department of human services. Each intermediate

district shall receive an amount equal to the state share of those

costs that are clearly and directly attributable to the educational

programs for pupils placed in facilities described in this section

that are located within the intermediate district's boundaries. The

intermediate districts receiving payments under this section shall

cooperate with the department of human services to ensure that all

funding allocated under this section is utilized by the

intermediate district and department of human services for

educational programs for pupils described in this section. Pupils

described in this section are not eligible to be funded under

section 24. However, a program responsibility or other fiscal

responsibility associated with these pupils shall not be

transferred from the department of human services to a district or

intermediate district unless the district or intermediate district

consents to the transfer.

Sec. 24c. From the appropriation in section 11, there is

allocated an amount not to exceed ~~$642,300.00 for 2009-2010~~

$653,200.00 for 2010-2011 for payments to districts for pupils who

are enrolled in a nationally administered community-based education

and youth mentoring program, known as the youth challenge program,

that is located within the district and is administered by the

department of military and veterans affairs. A district receiving

payments under this section shall contract with the department of

military and veterans affairs to ensure that all funding allocated

under this section is utilized by the district and the department

of military and veterans affairs for the youth challenge program.

Sec. 26a. From the state school aid fund appropriation in

section 11, there is allocated an amount not to exceed

$26,300,000.00 for ~~2009-2010~~ 2010-2011, and from the general fund

appropriation in section 11, there is allocated an amount not to

exceed $9,200,000.00 for ~~2009-2010~~ 2010-2011 to reimburse

districts, intermediate districts, and the state school aid fund

pursuant to section 12 of the Michigan renaissance zone act, 1996

PA 376, MCL 125.2692, for taxes levied in ~~2009~~ 2010. The

allocations shall be made not later than 60 days after the

department of treasury certifies to the department and to the state

budget director that the department of treasury has received all

necessary information to properly determine the amounts due to each

eligible recipient.

Sec. 26b. (1) From the appropriation in section 11, there is

allocated for ~~2009-2010~~ 2010-2011 an amount not to exceed

$3,400,000.00 for payments to districts, intermediate districts,

and community college districts for the portion of the payment in

lieu of taxes obligation that is attributable to districts,

intermediate districts, and community college districts pursuant to

section 2154 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.2154.

(2) If the amount appropriated under this section is not

sufficient to fully pay obligations under this section, payments

shall be prorated on an equal basis among all eligible districts,

intermediate districts, and community college districts.

Sec. 29. (1) From the appropriation in section 11, there is

allocated an amount not to exceed $20,000,000.00 for ~~2009-2010~~

2010-2011 for additional payments to eligible districts for

declining enrollment assistance.

(2) A district is eligible for a payment under this section if

all of the following apply:

(a) The district's pupil membership for the current fiscal

year is less than the district's pupil membership for the

immediately preceding fiscal year and the district's pupil

membership for the immediately preceding fiscal year is less than

the district's pupil membership for the previously preceding fiscal

year as calculated under section 6 for that fiscal year.

(b) The district's average pupil membership is greater than

the district's pupil membership for the current fiscal year as

calculated under section 6.

section 6(4)(y) or 22d(2).

(3) Payments to each eligible district shall be equal to the

difference between the district's average pupil membership and the

district's pupil membership as calculated under section 6 for the

current fiscal year multiplied by the district's foundation

allowance as calculated under section 20. If the total amount of

the payments calculated under this subsection exceeds the

allocation for this section, the payment to each district shall be

prorated on an equal percentage basis.

(4) For the purposes of this section, "average pupil

membership" means the average of the district's membership for the

3-fiscal-year period ending with the current fiscal year,

calculated by adding the district's actual membership for each of

those 3 fiscal years, as otherwise calculated under section 6, and

dividing the sum of those 3 membership figures by 3.

Sec. 31a. (1) From the state school aid fund money

appropriated in section 11, there is allocated for ~~2009-2010~~ 2010-

2011 an amount not to exceed ~~$317,695,500.00~~ $318,881,200.00 for

payments to eligible districts and eligible public school academies

under this section. Subject to subsection (14), the amount of the

additional allowance under this section, other than funding under

subsection (6) or (7), shall be based on the number of actual

pupils in membership in the district or public school academy who

met the income eligibility criteria for free breakfast, lunch, or

milk in the immediately preceding state fiscal year, as determined

under the Richard B. Russell national school lunch act, 42 USC 1751

to 1769i, and reported to the department by October 31 of the

immediately preceding fiscal year and adjusted not later than

December 31 of the immediately preceding fiscal year. However, for

a public school academy that began operations as a public school

academy after the pupil membership count day of the immediately

preceding school year, the basis for the additional allowance under

this section shall be the number of actual pupils in membership in

the public school academy who met the income eligibility criteria

for free breakfast, lunch, or milk in the current state fiscal

year, as determined under the Richard B. Russell national school

lunch act.

(2) To be eligible to receive funding under this section,

other than funding under subsection (6) or (7), a district or

public school academy that has not been previously determined to be

eligible shall apply to the department, in a form and manner

prescribed by the department, and a district or public school

academy must meet all of the following:

(a) The ~~sum of the~~ district's or public school academy's

combined state and local revenue per membership pupil in the

current state fiscal year, as calculated under section 20, ~~plus the~~

~~amount of the district's per pupil allocation under section 20j(2),~~

is less than or equal to the basic foundation allowance under

section 20 for the current state fiscal year.

(b) The district or public school academy agrees to use the

funding only for purposes allowed under this section and to comply

with the program and accountability requirements under this

section.

(3) 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 met the income eligibility criteria for

free breakfast, lunch, or milk, as determined under the Richard B.

Russell national school lunch act and as reported to the department

by October 31 of the immediately preceding fiscal year and adjusted

not later than December 31 of the immediately preceding fiscal

year, an amount per pupil equal to 11.5% of the ~~sum of the~~

district's foundation allowance or public school academy's per

pupil amount calculated under section 20, ~~plus the amount of the~~

~~district's per pupil allocation under section 20j(2),~~ not to exceed

the basic foundation allowance under section 20 for the current

state fiscal year, or of the public school academy's per membership

pupil amount calculated under section 20 for the current state

fiscal year. 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 met the

income eligibility criteria for free breakfast, lunch, or milk, as

determined under the Richard B. Russell national school lunch act

and as reported to the department by October 31 of the current

fiscal year and adjusted not later than December 31 of the current

fiscal year, an amount per pupil equal to 11.5% of the public

school academy's per membership pupil amount calculated under

section 20 for the current state fiscal year.

(4) 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

or counseling services, for at-risk pupils; for school health

clinics; and for the purposes of subsection (5), (6), or (7). 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 met the income eligibility criteria for free

breakfast, lunch, or milk in the immediately preceding state fiscal

year, as determined and reported as described in subsection (1),

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 or to

supplant another program or other funds, except for funds allocated

to the district or public school academy under this section in the

immediately preceding year and already being used by the district

or public school academy for at-risk pupils. 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 and may include, but are not limited

to, tutorial services, early childhood programs to serve children

age 0 to 5, and reading programs as described in former section 32f

as in effect for 2001-2002. A tutorial method may be conducted with

paraprofessionals working under the supervision of a certificated

teacher. The ratio of pupils to paraprofessionals shall be between

10:1 and 15:1. Only 1 certificated teacher is required to supervise

instruction using a tutorial method. As used in this subsection,

"to supplant another program" means to take the place of a

previously existing instructional program or direct

noninstructional services funded from a funding source other than

funding under this section.

(5) Except as otherwise provided in subsection (12), 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.

(6) From the funds allocated under subsection (1), there is

allocated for ~~2009-2010~~ 2010-2011 an amount not to exceed

~~$3,557,300.00~~ $4,743,000.00 to support child and adolescent health

centers. These grants shall be awarded for 5 consecutive years

beginning with 2003-2004 in a form and manner approved jointly by

the department and the department of community health. Each grant

recipient shall remain in compliance with the terms of the grant

award or shall forfeit the grant award for the duration of the 5-

year period after the noncompliance. To continue to receive funding

for a child and adolescent health center under this section a grant

recipient shall ensure that the child and adolescent health center

has an advisory committee and that at least one-third of the

members of the advisory committee are parents or legal guardians of

school-aged children. A child and adolescent health center program

shall recognize the role of a child's parents or legal guardian in

the physical and emotional well-being of the child. Funding under

this subsection shall be used to support child and adolescent

health center services provided to children up to age 21. 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.

(7) From the funds allocated under subsection (1), there is

allocated for ~~2009-2010~~ 2010-2011 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 community

health. Notwithstanding section 17b, payments to eligible entities

under this subsection shall be paid on a schedule determined by the

department.

(8) 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, not to exceed 10 pages, on the usage by

the district or public school academy of funds under this section,

which report shall include at least a brief description of each

program conducted 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, the number of at-risk pupils

eligible for free or reduced price school lunch who were served by

each of those programs, and the total number of at-risk pupils

served by each of those programs. 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.

(9) 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.

(10) Subject to subsections (5), (6), (7), (12), and (13), any

district may use up to 100% of the funds it receives under this

section to reduce the ratio of pupils to teachers in grades K-6, or

any combination of those grades, in school buildings in which the

percentage of pupils described in subsection (1) exceeds the

district's aggregate percentage of those pupils. Subject to

subsections (5), (6), (7), (12), and (13), if a district obtains a

waiver from the department, the district may use up to 100% of the

funds it receives under this section to reduce the ratio of pupils

to teachers in grades K-6, or any combination of those grades, in

school buildings in which the percentage of pupils described in

subsection (1) is at least 60% of the district's aggregate

percentage of those pupils and at least 30% of the total number of

pupils enrolled in the school building. To obtain a waiver, a

district must apply to the department and demonstrate to the

satisfaction of the department that the class size reductions would

be in the best interests of the district's at-risk pupils.

(11) A district or public school academy may use funds

received under this section for adult high school completion,

general educational development (G.E.D.) test preparation, adult

English as a second language, or adult basic education programs

described in section 107.

(12) For an individual school or schools operated by a

district or public school academy receiving funds under this

section that have been determined by the department to meet the

adequate yearly progress standards of the no child left behind act

of 2001, Public Law 107-110, in both mathematics and English

language arts at all applicable grade levels for all applicable

subgroups, the district or public school academy may submit to the

department an application for flexibility in using the funds

received under this section that are attributable to the pupils in

the school or schools. The application shall identify the affected

school or schools and the affected funds and shall contain a plan

for using the funds for specific purposes identified by the

district that are designed to benefit at-risk pupils in the school,

but that may be different from the purposes otherwise allowable

under this section. The department shall approve the application if

the department determines that the purposes identified in the plan

are reasonably designed to benefit at-risk pupils in the school. If

the department does not act to approve or disapprove an application

within 30 days after it is submitted to the department, the

application is considered to be approved. If an application for

flexibility in using the funds is approved, the district may use

the funds identified in the application for any purpose identified

in the plan.

(13) A district or public school academy that receives funds

under this section may use funds it receives under this section to

implement and operate an early intervening program for pupils in

grades K to 3 that meets either or both of the following:

(a) Monitors individual pupil learning and provides specific

support or learning strategies to pupils as early as possible in

order to reduce the need for special education placement. The

program shall include literacy and numeracy supports, sensory motor

skill development, behavior supports, instructional consultation

for teachers, and the development of a parent/school learning plan.

Specific support or learning strategies may include support in or

out of the general classroom in areas including reading, writing,

math, visual memory, motor skill development, behavior, or language

development. These would be provided based on an understanding of

the individual child's learning needs.

(b) Provides early intervening strategies using school-wide

systems of academic and behavioral supports and is scientifically

research-based. The strategies to be provided shall include at

least pupil performance indicators based upon response to

intervention, instructional consultation for teachers, and ongoing

progress monitoring. A school-wide system of academic and

behavioral support should be based on a support team available to

the classroom teachers. The members of this team could include the

principal, special education staff, reading teachers, and other

appropriate personnel who would be available to systematically

study the needs of the individual child and work with the teacher

to match instruction to the needs of the individual child.

(14) If necessary, and before any proration required under

section 11, the department shall prorate payments under this

section by reducing the amount of the per pupil payment under this

section by a dollar amount calculated by determining the amount by

which the amount necessary to fully fund the requirements of this

section exceeds the maximum amount allocated under this section and

then dividing that amount by the total statewide number of pupils

who met the income eligibility criteria for free breakfast, lunch,

or milk in the immediately preceding fiscal year, as described in

subsection (1).

(15) If a district is formed by consolidation after June 1,

1995, and if 1 or more of the original districts was not eligible

before the consolidation for an additional allowance under this

section, the amount of the additional allowance under this section

for the consolidated district shall be based on the number of

pupils described in subsection (1) enrolled in the consolidated

district who reside in the territory of an original district that

was eligible before the consolidation for an additional allowance

under this section.

(16) A Except as otherwise provided in subsection (18), a

district or public school academy that does not meet the

eligibility requirement under subsection (2)(a) is eligible for

funding under this section if at least 1/4 of the pupils in

membership in the district or public school academy met the income

eligibility criteria for free breakfast, lunch, or milk in the

immediately preceding state fiscal year, as determined and reported

as described in subsection (1), and at least 4,500 of the pupils in

membership in the district or public school academy met the income

eligibility criteria for free breakfast, lunch, or milk in the

immediately preceding state fiscal year, as determined and reported

as described in subsection (1). A district or public school academy

that is eligible for funding under this section because the

district meets the requirements of this subsection shall receive

under this section for each membership pupil in the district or

public school academy who met the income eligibility criteria for

free breakfast, lunch, or milk in the immediately preceding fiscal

year, as determined and reported as described in subsection (1), an

amount per pupil equal to ~~8.63%~~ 11.5% of the ~~sum of the~~ district's

foundation allowance or public school academy's per pupil

allocation under section 20, ~~plus the amount of the district's per~~

~~pupil allocation under section 20j(2),~~ not to exceed the basic

foundation allowance under section 20 for the current state fiscal

year.

(17) A district that does not meet the eligibility requirement

under subsection (2)(a) is eligible for funding under this section

if at least 75% of the pupils in membership in the district met the

income eligibility criteria for free breakfast, lunch, or milk in

the immediately preceding state fiscal year, as determined and

reported as described in subsection (1), the district receives an

adjustment under section 20(19), and the district does not receive

any state portion of its foundation allowance as calculated under

section 20. A district that is eligible for funding under this

section because the district meets the requirements of this

subsection shall receive under this section for each membership

pupil in the district who met the income eligibility criteria for

free breakfast, lunch, or milk in the immediately preceding fiscal

year, as determined and reported as described in subsection (1), an

amount per pupil equal to 11.5% of the sum of the district's

foundation allowance under section 20, not to exceed the basic

foundation allowance under section 20 for the current state fiscal

year.

(18) For a district described in subsection (16), the total

allocation to the district otherwise due under this section, after

any reduction under subsection (14), shall be further reduced by

25%.

(19) ~~(18)~~ As used in this section, "at-risk pupil" means a

pupil for whom the district has documentation that the pupil meets

at least 2 of the following criteria: is a victim of child abuse or

neglect; is below grade level in English language and communication

skills or mathematics; is a pregnant teenager or teenage parent; is

eligible for a federal free or reduced-price lunch subsidy; has

atypical behavior or attendance patterns; or has a family history

of school failure, incarceration, or substance abuse. For pupils

for whom the results of at least the applicable Michigan education

assessment program (MEAP) test have been received, at-risk pupil

also includes a pupil who does not meet the other criteria under

this subsection but who did not achieve at least a score of level 2

on the most recent MEAP English language arts, mathematics, or

science test for which results for the pupil have been received.

For pupils for whom the results of the Michigan merit examination

have been received, at-risk pupil also includes a pupil who does

not meet the other criteria under this subsection but who did not

achieve proficiency on the reading component of the most recent

Michigan merit examination for which results for the pupil have

been received, did not achieve proficiency on the mathematics

component of the most recent Michigan merit examination for which

results for the pupil have been received, or did not achieve basic

competency on the science component of the most recent Michigan

merit examination for which results for the pupil have been

received. For pupils in grades K-3, at-risk pupil also includes a

pupil who is at risk of not meeting the district's core academic

curricular objectives in English language arts or mathematics.

Sec. 31d. (1) From the appropriations in section 11, there is

allocated an amount not to exceed $22,495,100.00 for ~~2009-2010~~

2010-2011 for the purpose of making payments to districts and other

eligible entities under this section.

(2) The amounts allocated from state sources under this

section shall be used to pay the amount necessary to reimburse

districts for 6.0127% of the necessary costs of the state mandated

portion of the school lunch programs provided by those districts.

The amount due to each district under this section shall be

computed by the department using the methods of calculation adopted

by the Michigan supreme court in the consolidated cases known as

Durant v State of Michigan, Michigan supreme court docket no.

104458-104492.

(3) The payments made under this section include all state

payments made to districts so that each district receives at least

6.0127% of the necessary costs of operating the state mandated

portion of the school lunch program in a fiscal year.

(4) The payments made under this section to districts and

other eligible entities that are not required under section 1272a

of the revised school code, MCL 380.1272a, to provide a school

lunch program shall be in an amount not to exceed $10.00 per

eligible pupil plus 5 cents for each free lunch and 2 cents for

each reduced price lunch provided, as determined by the department.

(5) From the federal funds appropriated in section 11, there

is allocated for ~~2009-2010~~ 2010-2011 all available federal funding,

estimated at ~~$370,000,000.00~~ $400,000,000.00, for the national

school lunch program and all available federal funding, estimated

at $2,506,000.00, for the emergency food assistance program.

(6) Notwithstanding section 17b, payments to eligible entities

other than districts under this section shall be paid on a schedule

determined by the department.

(7) In purchasing food for a school lunch program funded under

this section, preference shall be given to food that is grown or

produced by Michigan businesses if it is competitively priced and

of comparable quality.

Sec. 31f. (1) From the appropriations in section 11, there is

allocated an amount not to exceed $9,625,000.00 for ~~2009-2010~~ 2010-

2011 for the purpose of making payments to districts to reimburse

for the cost of providing breakfast.

(2) The funds allocated under this section for school

breakfast programs shall be made available to all eligible

applicant districts that meet all of the following criteria:

(a) The district participates in the federal school breakfast

program and meets all standards as prescribed by 7 CFR parts 220

and 245.

(b) Each breakfast eligible for payment meets the federal

standards described in subdivision (a).

(3) The payment for a district under this section is at a per

meal rate equal to the lesser of the district's actual cost or 100%

of the statewide average cost of a breakfast served, as determined

and approved by the department, less federal reimbursement,

participant payments, and other state reimbursement. The statewide

average cost shall be determined by the department using costs as

reported in a manner approved by the department for the preceding

school year.

(4) Notwithstanding section 17b, payments under this section

may be made pursuant to an agreement with the department.

(5) In purchasing food for a school breakfast program funded

under this section, preference shall be given to food that is grown

or produced by Michigan businesses if it is competitively priced

and of comparable quality.

Sec. 32b. (1) From the funds appropriated under section 11,

there is allocated an amount not to exceed $6,000,000.00 for ~~2009-~~

~~2010~~ 2010-2011 for competitive grants to intermediate districts for

the creation and continuance of great start communities or other

community purposes as identified by the early childhood investment

corporation. These dollars may not be expended until both of the

following conditions have been met:

(a) The early childhood investment corporation has identified

matching dollars of at least an amount equal to the amount of the

matching dollars for 2006-2007.

(b) The executive committee of the corporation includes, in

addition to the members of the executive committee provided for by

the interlocal agreement creating the corporation under the urban

cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.510 to

124.512, 4 members appointed by the governor as provided in this

subdivision. Not later than 30 days after the convening of a

regular legislative session in an odd-numbered year, the speaker of

the house of representatives, the house minority leader, the senate

majority leader, and the senate minority leader shall each submit

to the governor a list of 3 or more individuals as nominees for

appointment as members of the executive committee of the

corporation. The corporation shall notify each of the legislative

leaders of this requirement to submit a list of nominees not later

than 30 days before the date that the list is due. Within 60 days

of the submission to the governor of nominees by each of the 4

legislative leaders, the governor shall appoint 1 member of the

executive committee from each list of nominees submitted by each of

the 4 legislative leaders. A member appointed under this

subdivision shall serve a term as a member of the executive

committee through the next regular legislative session unless he or

she resigns or is otherwise unable to serve. When a vacancy occurs

other than by expiration of a term, the corporation shall notify

the legislative leader who originally nominated the member of the

vacancy and that legislative leader shall submit to the governor a

list of 3 or more individuals as nominees for appointment to fill

the vacancy within 30 days after being notified by the corporation

of the vacancy. The governor shall make an appointment to fill that

vacancy in the same manner as the original appointment not later

than 60 days after the date the vacancy occurs.

(2) The early childhood investment corporation shall award

grants to eligible intermediate districts in an amount to be

determined by the corporation.

(3) In order to receive funding, each intermediate district

applicant shall agree to convene a local great start collaborative

to address the availability of the 6 components of a great start

system in its communities: physical health, social-emotional

health, family supports, basic needs, economic stability and

safety, and parenting education and early education and care, to

ensure that every child in the community is ready for kindergarten.

Specifically, each grant will fund the following:

(a) The completion of a community needs assessment and

strategic plan for the creation of a comprehensive system of early

childhood services and supports, accessible to all children from

birth to kindergarten and their families.

(b) Identification of local resources and services for

children with disabilities, developmental delays, or special needs

and their families.

high-quality early childhood and childcare programs.

(d) Evaluation of local programs.

(4) Not later than December 1 of each fiscal year, for the

grants awarded under this section for the immediately preceding

fiscal year, the department shall provide to the house and senate

appropriations subcommittees on state school aid, the state budget

director, and the house and senate fiscal agencies a report

detailing the amount of each grant awarded under this section, the

grant recipients, the activities funded by each grant under this

section, and an analysis of each grant recipient's success in

addressing the development of a comprehensive system of early

childhood services and supports.

(5) An intermediate district receiving funds under this

section may carry over any unexpended funds received under this

section into the next fiscal year and may expend those unused funds

in the next fiscal year. A recipient of a grant shall return any

unexpended grant funds to the department in the manner prescribed

by the department not later than September 30 of the next fiscal

year after the fiscal year in which the funds are received.

(6) Notwithstanding section 17b, payments under this section

may be made pursuant to an agreement with the department.

Sec. 32c. (1) ~~From~~ If the double deduction allowed for state

income tax purposes for indirect costs incurred in oil and gas

production is eliminated, then from the general fund appropriation

in section 11, there is allocated an amount not to exceed

~~$2,125,000.00 for 2008-2009~~ $1,500,000.00 for 2010-2011 to the

department for grants for community-based collaborative prevention

services designed to foster positive parenting skills; improve

parent/child interaction, especially for children 0-3 years of age;

promote access to needed community services; increase local

capacity to serve families at risk; improve school readiness; and

support healthy family environments that discourage alcohol,

tobacco, and other drug use. The allocation under this section is

to fund secondary prevention programs as defined by the children's

trust fund for the prevention of child abuse and neglect.

(2) The funds allocated under subsection (1) shall be

distributed through a joint request for proposals process

established by the department in conjunction with the children's

trust fund and the interagency director's workgroup. Projects

funded with grants awarded under this section shall meet all of the

following:

(a) Be secondary prevention initiatives and voluntary to

consumers. This appropriation is not intended to serve the needs of

children for whom and families in which neglect or abuse has been

substantiated.

(b) Demonstrate that the planned services are part of a

community's integrated comprehensive family support strategy

endorsed by the community collaborative and, where there is a great

start collaborative, demonstrate that the planned services are part

of the community's great start strategic plan.

be in-kind services, unless this requirement is waived by the

interagency director's workgroup.

(3) Notwithstanding section 17b, payments under this section

may be made pursuant to an agreement with the department.

(4) Not later than January 30 of the next fiscal year, the

department shall prepare and submit to the governor and the

legislature an annual report of outcomes achieved by the providers

of the community-based collaborative prevention services funded

under this section for a fiscal year.

Sec. 32d. (1) For ~~2009-2010~~ 2010-2011, ~~from the state school~~

~~aid fund appropriation in section 11,~~ there is allocated ~~an amount~~

~~not to exceed $88,100,000.00~~ to eligible districts for great start

readiness programs ~~and from~~ an amount not to exceed $88,100,000.00

from the state school aid fund money appropriated in section 11. In

addition, from the general fund appropriation in section 11, there

is allocated an amount not to exceed ~~$7,575,000.00~~ $15,150,000.00

for competitive great start readiness program grants. Funds

allocated under this section shall be used to provide part-day or

full-day comprehensive free compensatory programs designed to do 1

or both of the following:

(a) Improve the readiness and subsequent achievement of

educationally disadvantaged children as defined by the department

who will be at least 4, but less than 5 years of age, as of

December 1 of the school year in which the programs are offered,

and who show evidence of 2 or more risk factors as defined by the

state board.

(b) Provide preschool and parenting education programs similar

to those under former section 32b as in effect for 2001-2002.

Beginning in 2007-2008, funds spent by a district for programs

described in this subdivision shall not exceed the lesser of the

amount spent by the district under this subdivision for 2006-2007

or the amount spent under this subdivision in any subsequent fiscal

year.

(2) To be eligible to receive payments under this section, a

district shall comply with this section and section 39. To receive

competitive grant payments under this section, an eligible grant

recipient shall comply with this section and section 32l.

(3) In addition to the allocation under subsection (1), from

the general fund money appropriated under section 11, there is

allocated an amount not to exceed $300,000.00 for ~~2009-2010~~ 2010-

2011 for a competitive grant to continue a longitudinal evaluation

of children who have participated in great start readiness

programs.

(4) To be eligible for funding under this section, a program

shall prepare children for success in school through comprehensive

part-day or full-day programs that contain all of the following

program components, as determined by the department:

(a) Participation in a collaborative recruitment and

enrollment process. At a minimum, the process shall include all

other funded preschool programs that may serve children in the same

geographic area, to assure that each child is enrolled in the

program most appropriate to his or her needs and to maximize the

use of federal, state, and local funds.

(b) An age-appropriate educational curriculum that is in

compliance with the early childhood standards of quality for

prekindergarten children adopted by the state board.

(d) Health and developmental screening services for all

program participants.

(e) Referral services for families of program participants to

community social service agencies, as appropriate.

(f) Active and continuous involvement of the parents or

guardians of the program participants.

(g) A plan to conduct and report annual great start readiness

program evaluations and continuous improvement plans using criteria

approved by the department.

(h) Participation in a multidistrict, multiagency, school

readiness advisory committee that provides for the involvement of

classroom teachers, parents or guardians of program participants,

and community, volunteer, and social service agencies and

organizations, as appropriate. The advisory committee shall review

the program components listed in this subsection and make

recommendations for changes to the great start readiness program

for which it is an advisory committee.

(i) For great start readiness programs operated by a district

or consortium of districts, provide for the ongoing articulation of

the early childhood, kindergarten, and first grade programs offered

by the district or districts.

(5) An application for funding under this section shall

provide for the following, in a form and manner determined by the

department:

(a) Ensure compliance with all program components described in

subsection (4).

(b) Ensure that more than ~~50%~~ 75% of the children

participating in an eligible great start readiness program are

children who live with families with a household income that is

equal to or less than 300% of the federal poverty level.

for this program, as follows:

(i) Teachers possessing proper training. For programs the

district manages itself, a valid teaching certificate and an early

childhood (ZA) endorsement are required. This provision does not

apply to a district that subcontracts with an eligible child

development program. In that situation, a teacher must have a valid

Michigan teaching certificate with an early childhood (ZA)

endorsement, a valid Michigan teaching certificate with a child

development associate credential, or a bachelor's degree in child

development with specialization in preschool teaching. However,

both of the following apply to this subparagraph:

(A) If a district demonstrates to the department that it is

unable to fully comply with this subparagraph after making

reasonable efforts to comply, teachers who have significant but

incomplete training in early childhood education or child

development may be employed by the district if the district

provides to the department, and the department approves, a plan for

each teacher to come into compliance with the standards in this

subparagraph. A teacher's compliance plan must be completed within

4 years of the date of employment. Progress toward completion of

the compliance plan shall consist of at least 2 courses per

calendar year.

(B) For a subcontracted program, the department shall consider

a teacher ~~with~~ who has 90 credit hours and at least 4 years'

teaching experience in a qualified preschool program and who was

employed as a teacher in the program in 2009-2010 to meet the

requirements under this subparagraph.

(ii) Paraprofessionals possessing proper training in early

childhood development, including an associate's degree in early

childhood education or child development or the equivalent, or a

child development associate (CDA) credential, or the equivalent as

approved by the state board. However, if a district demonstrates to

the department that it is unable to fully comply with this

subparagraph after making reasonable efforts to comply, the

district may employ paraprofessionals who have completed at least 1

course in early childhood education or child development if the

district provides to the department, and the department approves, a

plan for each paraprofessional to come into compliance with the

standards in this subparagraph. A paraprofessional's compliance

plan must be completed within 2 years of the date of employment.

Progress toward completion of the compliance plan shall consist of

at least 2 courses or 60 clock hours of training per calendar year.

(d) Include a program budget that contains only those costs

that are not reimbursed or reimbursable by federal funding, that

are clearly and directly attributable to the great start readiness

program, and that would not be incurred if the program were not

being offered. The program budget shall indicate the extent to

which these funds will supplement other federal, state, local, or

private funds. Funds received under this section shall not be used

to supplant any federal funds by the applicant to serve children

eligible for a federally funded existing preschool program that has

the capacity to serve those children.

(6) For a grant recipient that enrolls pupils in a full-day

program funded under this section, each child enrolled in the full-

day program shall be counted as 2 children served by the program

for purposes of determining the number of children to be served and

for determining the amount of the grant award. A grant award shall

not be increased solely on the basis of providing a full-day

program. As used in this subsection, "full-day program" means a

program that operates for at least the same length of day as a

district's first grade program for a minimum of 4 days per week, 30

weeks per year. A classroom that offers a full-day program must

enroll all children for the full day to be considered a full-day

program.

(7) A district or consortium of districts receiving a grant

under this section may contract with for-profit or nonprofit

preschool center providers that meet all requirements of subsection

(4) and retain for administrative services an amount equal to not

more than 5% of the grant amount. A district or consortium of

districts may expend not more than 10% of the total grant amount

for administration of the program.

(8) Any public or private for-profit or nonprofit legal entity

or agency may apply for a competitive grant under this section.

However, a district or intermediate district may not apply for a

competitive grant under this section unless the district,

intermediate district, or consortium of districts or intermediate

districts is acting as a local grantee for the federal head start

program operating under the head start act, 42 USC 9831 to 9852.

(9) A recipient of funds under this section shall report to

the department on the midyear report the number of children

participating in the program who meet the income or other

eligibility criteria prescribed by the department and the total

number of children participating in the program. For children

participating in the program who meet the income or other

eligibility criteria specified under subsection (5)(b), a recipient

shall also report whether or not a parent is available to provide

care based on employment status. For the purposes of this

subsection, "employment status" shall be defined by the department

of human services in a manner consistent with maximizing the amount

of spending that may be claimed for temporary assistance for needy

families maintenance of effort purposes.

(10) As used in this section, "part-day program" means a

program that operates at least 4 days per week, 30 weeks per year,

for at least 3 hours of teacher-child contact time per day but for

fewer hours of teacher-child contact time per day than a full-day

program as defined in subsection (6).

(11) A district or intermediate district receiving funds under

this section is encouraged to establish a sliding scale of tuition

rates based upon a child's family income for the purpose of

expanding eligible programs under this section. A district or

intermediate district may charge tuition for programs provided

under this section according to that sliding scale of tuition rates

on a uniform basis for any child who does not meet the program

eligibility requirements under this section.

(12) If there is additional lottery revenue resulting from

implementation of new technology pull-tab dispensers in lottery

games, it is the intent of the legislature that the additional

revenue shall be appropriated for the purposes of this section.

Sec. 32j. (1) From the appropriations in section 11, there is

allocated an amount not to exceed $5,000,000.00 for ~~2009-2010~~ 2010-

2011 for great parents, great start grants to intermediate

districts to provide programs for parents with young children. The

purpose of these programs is to encourage early mathematics and

reading literacy, improve school readiness, reduce the need for

special education services, and foster the maintenance of stable

families by encouraging positive parenting skills.

(2) To qualify for funding under this section, a program shall

provide services to all families with children age 5 or younger

residing within the intermediate district who choose to

participate, including at least all of the following services:

(a) Providing parents with information on child development

from birth to age 5.

(b) Providing parents with methods to enhance parent-child

interaction that promote social and emotional development and age-

appropriate language, mathematics, and early reading skills for

young children; including, but not limited to, encouraging parents

to read to their preschool children at least 1/2 hour per day.

to promote intellectual, physical, and social growth of young

children, including the acquisition of age-appropriate language,

mathematics, and early reading skills.

(d) Promoting access to needed community services through a

community-school-home partnership.

(3) To receive a grant under this section, an intermediate

district shall submit a plan to the department not later than

October 15, ~~2009~~ 2010 in the form and manner prescribed by the

department. The plan shall do all of the following in a manner

prescribed by the department:

(a) Provide a plan for the delivery of the program components

described in subsection (2) that targets resources based on family

need and provides for educators trained in child development to

help parents understand their role in their child's developmental

process, thereby promoting school readiness and mitigating the need

for special education services.

(b) Demonstrate an adequate collaboration of local entities

involved in providing programs and services for preschool children

and their parents and, where there is a great start collaborative,

demonstrate that the planned services are part of the community's

great start strategic plan.

The intermediate district shall provide at least a 20% local match

from local public or private resources for the funds received under

this section. Not more than 1/2 of this matching requirement, up to

a total of 10% of the total project budget, may be satisfied

through in-kind services provided by participating providers of

programs or services. In addition, not more than 10% of the grant

may be used for program administration.

(4) Each intermediate district receiving a grant under this

section shall agree to include a data collection system approved by

the department. The data collection system shall provide a report

by October 15 of each year on the number of children in families

with income below 200% of the federal poverty level that received

services under this program and the total number of children who

received services under this program.

(5) The department or superintendent, as applicable, shall do

all of the following:

(a) The superintendent shall approve or disapprove the plans

and notify the intermediate district of that decision not later

than November 15, ~~2009~~ 2010. The amount allocated to each

intermediate district shall be at least an amount equal to 100% of

the intermediate district's ~~2008-2009~~ 2009-2010 payment under this

section.

(b) The department shall ensure that all programs funded under

this section utilize the most current validated research-based

methods and curriculum for providing the program components

described in subsection (2).

director and the senate and house fiscal agencies summarizing the

data collection reports described in subsection (4) by December 1

of each year.

(6) An intermediate district receiving funds under this

section shall use the funds only for the program funded under this

section. An intermediate district receiving funds under this

section may carry over any unexpended funds received under this

section into the next fiscal year and may expend those unused funds

in the next fiscal year. A recipient of a grant shall return any

unexpended grant funds to the department in the manner prescribed

by the department not later than September 30 of the next fiscal

year after the fiscal year in which the funds are received.

Sec. 32l. (1) The department shall establish a diverse

interagency committee to review the applications for competitive

grants under section 32d. The committee shall be composed of

representatives of the department, appropriate community,

volunteer, and social service agencies and organizations, and

parents.

(2) The superintendent shall award the competitive grants

under section 32d to applicants that are in compliance with that

section and shall give priority for awarding the competitive grants

to programs that offer or contract with another nonprofit or for-

profit early childhood program to provide supplementary day care

and thereby offers full-day programs as part of its early childhood

development program.

(3) The superintendent may award competitive grants under

section 32d at whatever level the superintendent determines

appropriate. However, the amount of a competitive grant under that

section, when combined with other sources of state revenue for this

program, shall not exceed $3,400.00 per participating child or the

cost of the program, whichever is less.

(4) All grant awards under this section are contingent on the

availability of funds and documented evidence of grantee compliance

with early childhood standards of quality for prekindergarten, as

approved by the state board, and with all operational, fiscal,

administrative, and other program requirements.

(5) Except as otherwise provided in this subsection, an

applicant that receives a new grant under this section for 2010-

2011 shall also receive priority for funding under this section for

2011-2012 and 2012-2013. However, after 3 fiscal years of

continuous funding, an applicant is required to compete openly with

new programs and other programs completing their third year.

(6) ~~(5)~~ Notwithstanding section 17b, competitive grant

payments to eligible entities under section 32d shall be paid on a

schedule and in a manner determined by the department.

Sec. 39a. (1) From the federal funds appropriated in section

11, there is allocated for ~~2009-2010~~ 2010-2011 to districts,

intermediate districts, and other eligible entities all available

federal funding, estimated at ~~$752,987,500.00~~ $761,973,600.00, 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 ~~$8,033,600.00~~ $10,808,600.00 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 $7,461,800.00 for the purpose of

improving teaching and learning through a more effective use of

technology, funded from DED-OESE, educational technology state

grant funds.

preparing, training, and recruiting high-quality teachers and class

size reduction, funded from DED-OESE, improving teacher quality

funds.

(d) An amount estimated at $10,322,300.00 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 $898,300.00 for rural and low

income schools, funded from DED-OESE, rural and low income school

funds.

(g) An amount estimated at $1,000.00 to help schools develop

and implement comprehensive school reform programs, funded from

DED-OESE, title I and title X, comprehensive school reform funds.

(h) An amount estimated at $517,479,800.00 to provide

supplemental programs to enable educationally disadvantaged

children to meet challenging academic standards, funded from DED-

OESE, title I, disadvantaged children funds.

(i) An amount estimated at $2,152,700.00 for the purpose of

providing unified family literacy programs, funded from DED-OESE,

title I, even start funds.

(j) An amount estimated at ~~$7,797,700.00~~ $8,807,200.00 for the

purpose of identifying and serving migrant children, funded from

DED-OESE, title I, migrant education funds.

(k) An amount estimated at $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) An amount estimated at $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) An amount estimated at ~~$35,710,100.00~~ $40,050,000.00 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.

(n) An amount estimated at $17,586,100.00 to help support

local school improvement efforts, funded from DED-OESE, title I,

local school improvement grants.

(2) From the federal funds appropriated in section 11, there

is allocated for ~~2009-2010~~ 2010-2011 to districts, intermediate

districts, and other eligible entities all available federal

funding, estimated at ~~$32,559,700.00~~ $32,359,700.00, 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 $1,814,100.00 to provide services

to homeless children and youth, funded from DED-OVAE, homeless

children and youth funds.

~~(c) An amount estimated at $200,000.00 for refugee children~~

~~school impact grants, funded from HHS-ACF, refugee children school~~

~~impact funds.~~

grants, funded from the corporation for national and community

service funds.

(d) ~~(e)~~ An amount estimated at $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)(h), (i), (k), and (n) 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.

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) For the purposes of applying for federal grants

appropriated under this act, the department shall allow an

intermediate district to submit a consolidated application on

behalf of 2 or more districts with the agreement of those

districts.

(6) ~~(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.

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. 41. From the appropriation in section 11, there is

allocated an amount not to exceed $2,800,000.00 for ~~2009-2010~~ 2010-

2011 to applicant districts and intermediate districts offering

programs of instruction for pupils of limited English-speaking

ability under section 1153 of the revised school code, MCL

380.1153. Reimbursement shall be on a per pupil basis and shall be

based on the number of pupils of limited English-speaking ability

in membership on the pupil membership count day. Funds allocated

under this section shall be used solely for instruction in

speaking, reading, writing, or comprehension of English. A pupil

shall not be counted under this section or instructed in a program

under this section for more than 3 years.

Sec. 51a. (1) From the appropriation in section 11, there is

allocated for 2009-2010 an amount not to exceed ~~$1,061,283,000.00~~

$1,019,583,000.00 and there is allocated for 2010-2011 an amount

not to exceed $1,057,883,000.00 from state sources and all

available federal funding under sections 611 to 619 of part B of

the individuals with disabilities education act, 20 USC 1411 to

1419, estimated at $350,700,000.00 for 2009-2010 and estimated at

$385,700,000.00 for 2010-2011, plus any carryover federal funds

from previous year appropriations. The allocations under this

subsection are for the purpose of reimbursing districts and

intermediate districts for special education programs, services,

and special education personnel as prescribed in article 3 of the

revised school code, MCL 380.1701 to 380.1766; net tuition payments

made by intermediate districts to the Michigan schools for the deaf

and blind; and special education programs and services for pupils

who are eligible for special education programs and services

according to statute or rule. For meeting the costs of special

education programs and services not reimbursed under this article,

a district or intermediate district may use money in general funds

or special education funds, not otherwise restricted, or

contributions from districts to intermediate districts, tuition

payments, gifts and contributions from individuals, or federal

funds that may be available for this purpose, as determined by the

intermediate district plan prepared pursuant to article 3 of the

revised school code, MCL 380.1701 to 380.1766. All federal funds

allocated under this section in excess of those allocated under

this section for 2002-2003 may be distributed in accordance with

the flexible funding provisions of the individuals with

disabilities education act, Public Law 108-446, including, but not

limited to, 34 CFR 300.206 and 300.208. 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.

(2) From the funds allocated under subsection (1), there is

allocated each fiscal year the amount necessary, estimated at

~~$240,300,000.00~~ $238,500,000.00 for 2009-2010 and estimated at

$248,200,000.00 for 2010-2011, for payments toward reimbursing

districts and intermediate districts for 28.6138% of total approved

costs of special education, excluding costs reimbursed under

section 53a, and 70.4165% of total approved costs of special

education transportation. Allocations under this subsection shall

be made as follows:

(a) The initial amount allocated to a district under this

subsection toward fulfilling the specified percentages shall be

calculated by multiplying the district's special education pupil

membership, excluding pupils described in subsection (12), times

the ~~sum of the~~ foundation allowance under section 20 of the pupil's

district of residence, ~~plus the amount of the district's per pupil~~

~~allocation under section 20j(2),~~ not to exceed the basic foundation

allowance under section 20 for the current fiscal year, or, for a

special education pupil in membership in a district that is a

public school academy or university school, times an amount equal

to the amount per membership pupil calculated under section 20(6).

For an intermediate district, the amount allocated under this

subdivision toward fulfilling the specified percentages shall be an

amount per special education membership pupil, excluding pupils

described in subsection (12), and shall be calculated in the same

manner as for a district, using the foundation allowance under

section 20 of the pupil's district of residence, not to exceed the

basic foundation allowance under section 20 for the current fiscal

year. ~~, and that district's per pupil allocation under section~~

~~20j(2).~~

(b) After the allocations under subdivision (a), districts and

intermediate districts for which the payments calculated under

subdivision (a) do not fulfill the specified percentages shall be

paid the amount necessary to achieve the specified percentages for

the district or intermediate district.

(3) From the funds allocated under subsection (1), there is

allocated each fiscal year for 2009-2010 and for 2010-2011 the

amount necessary, estimated at ~~$1,300,000.00,~~ $1,200,000.00 for

2009-2010 and estimated at $1,400,000.00 for 2010-2011, to make

payments to districts and intermediate districts under this

subsection. If the amount allocated to a district or intermediate

district for a fiscal year under subsection (2)(b) is less than the

sum of the amounts allocated to the district or intermediate

district for 1996-97 under sections 52 and 58, there is allocated

to the district or intermediate district for the fiscal year an

amount equal to that difference, adjusted by applying the same

proration factor that was used in the distribution of funds under

section 52 in 1996-97 as adjusted to the district's or intermediate

district's necessary costs of special education used in

calculations for the fiscal year. This adjustment is to reflect

reductions in special education program operations or services

between 1996-97 and subsequent fiscal years. Adjustments for

reductions in special education program operations or services

shall be made in a manner determined by the department and shall

include adjustments for program or service shifts.

(4) If the department determines that the sum of the amounts

allocated for a fiscal year to a district or intermediate district

under subsection (2)(a) and (b) is not sufficient to fulfill the

specified percentages in subsection (2), then the shortfall shall

be paid to the district or intermediate district during the fiscal

year beginning on the October 1 following the determination and

payments under subsection (3) shall be adjusted as necessary. If

the department determines that the sum of the amounts allocated for

a fiscal year to a district or intermediate district under

subsection (2)(a) and (b) exceeds the sum of the amount necessary

to fulfill the specified percentages in subsection (2), then the

department shall deduct the amount of the excess from the

district's or intermediate district's payments under this act for

the fiscal year beginning on the October 1 following the

determination and payments under subsection (3) shall be adjusted

as necessary. However, if the amount allocated under subsection

(2)(a) in itself exceeds the amount necessary to fulfill the

specified percentages in subsection (2), there shall be no

deduction under this subsection.

(5) State funds shall be allocated on a total approved cost

basis. Federal funds shall be allocated under applicable federal

requirements, except that an amount not to exceed $3,500,000.00 may

be allocated by the department each fiscal year for 2009-2010 and

for 2010-2011 to districts, intermediate districts, or other

eligible entities on a competitive grant basis for programs,

equipment, and services that the department determines to be

designed to benefit or improve special education on a statewide

scale.

(6) From the amount allocated in subsection (1), there is

allocated each fiscal year an amount not to exceed $2,200,000.00

for 2009-2010 and for 2010-2011 to reimburse 100% of the net

increase in necessary costs incurred by a district or intermediate

district in implementing the revisions in the administrative rules

for special education that became effective on July 1, 1987. As

used in this subsection, "net increase in necessary costs" means

the necessary additional costs incurred solely because of new or

revised requirements in the administrative rules minus cost savings

permitted in implementing the revised rules. Net increase in

necessary costs shall be determined in a manner specified by the

department.

(7) For purposes of this article, all of the following apply:

(a) "Total approved costs of special education" shall be

determined in a manner specified by the department and may include

indirect costs, but shall not exceed 115% of approved direct costs

for section 52 and section 53a programs. The total approved costs

include salary and other compensation for all approved special

education personnel for the program, including payments for social

security and medicare and public school employee retirement system

contributions. The total approved costs do not include salaries or

other compensation paid to administrative personnel who are not

special education personnel as defined in section 6 of the revised

school code, MCL 380.6. Costs reimbursed by federal funds, other

than those federal funds included in the allocation made under this

article, are not included. Special education approved personnel not

utilized full time in the evaluation of students or in the delivery

of special education programs, ancillary, and other related

services shall be reimbursed under this section only for that

portion of time actually spent providing these programs and

services, with the exception of special education programs and

services provided to youth placed in child caring institutions or

juvenile detention programs approved by the department to provide

an on-grounds education program.

(b) Beginning with the 2004-2005 fiscal year, a district or

intermediate district that employed special education support

services staff to provide special education support services in

2003-2004 or in a subsequent fiscal year and that in a fiscal year

after 2003-2004 receives the same type of support services from

another district or intermediate district shall report the cost of

those support services for special education reimbursement purposes

under this act. This subdivision does not prohibit the transfer of

special education classroom teachers and special education

classroom aides if the pupils counted in membership associated with

those special education classroom teachers and special education

classroom aides are transferred and counted in membership in the

other district or intermediate district in conjunction with the

transfer of those teachers and aides.

~~2009~~ a fiscal year that the amounts allocated for ~~2008-2009~~ that

fiscal year under subsections (2), (3), (6), (8), and (12) and

sections 53a, 54, and 56 will exceed expenditures for ~~2008-2009~~

that fiscal year under subsections (2), (3), (6), (8), and (12) and

sections 53a, 54, and 56, then ~~for 2008-2009 only,~~ for a district

or intermediate district whose reimbursement for ~~2008-2009~~ that

fiscal year would otherwise be affected by subdivision (b),

subdivision (b) does not apply to the calculation of the

reimbursement for that district or intermediate district and

reimbursement for that district or intermediate district shall be

calculated in the same manner as it was for 2003-2004. If the

amount of the excess allocations under subsections (2), (3), (6),

(8), and (12) and sections 53a, 54, and 56 is not sufficient to

fully fund the calculation of reimbursement to those districts and

intermediate districts under this subdivision, then the

calculations and resulting reimbursement under this subdivision

shall be prorated on an equal percentage basis.

(d) Reimbursement for ancillary and other related services, as

defined by R 340.1701c of the Michigan administrative code, shall

not be provided when those services are covered by and available

through private group health insurance carriers or federal

reimbursed program sources unless the department and district or

intermediate district agree otherwise and that agreement is

approved by the state budget director. Expenses, other than the

incidental expense of filing, shall not be borne by the parent. In

addition, the filing of claims shall not delay the education of a

pupil. A district or intermediate district shall be responsible for

payment of a deductible amount and for an advance payment required

until the time a claim is paid.

(e) Beginning with calculations for 2004-2005, if an

intermediate district purchases a special education pupil

transportation service from a constituent district that was

previously purchased from a private entity; if the purchase from

the constituent district is at a lower cost, adjusted for changes

in fuel costs; and if the cost shift from the intermediate district

to the constituent does not result in any net change in the revenue

the constituent district receives from payments under sections 22b

and 51c, then upon application by the intermediate district, the

department shall direct the intermediate district to continue to

report the cost associated with the specific identified special

education pupil transportation service and shall adjust the costs

reported by the constituent district to remove the cost associated

with that specific service.

(8) From the allocation in subsection (1), there is allocated

each fiscal year for 2009-2010 and for 2010-2011 an amount not to

exceed $15,313,900.00 to intermediate districts. The payment under

this subsection to each intermediate district shall be equal to the

amount of the 1996-97 allocation to the intermediate district under

subsection (6) of this section as in effect for 1996-97.

(9) A pupil who is enrolled in a full-time special education

program conducted or administered by an intermediate district or a

pupil who is enrolled in the Michigan schools for the deaf and

blind shall not be included in the membership count of a district,

but shall be counted in membership in the intermediate district of

residence.

(10) Special education personnel transferred from 1 district

to another to implement the revised school code shall be entitled

to the rights, benefits, and tenure to which the person would

otherwise be entitled had that person been employed by the

receiving district originally.

(11) If a district or intermediate district uses money

received under this section for a purpose other than the purpose or

purposes for which the money is allocated, the department may

require the district or intermediate district to refund the amount

of money received. Money that is refunded shall be deposited in the

state treasury to the credit of the state school aid fund.

(12) From the funds allocated in subsection (1), there is

allocated each fiscal year the amount necessary, estimated at

$7,800,000.00 for 2009-2010 and estimated at $6,600,000.00 for

2010-2011, to pay the foundation allowances for pupils described in

this subsection. The allocation to a district under this subsection

shall be calculated by multiplying the number of pupils described

in this subsection who are counted in membership in the district

times the ~~sum of the~~ foundation allowance under section 20 of the

pupil's district of residence, ~~plus the amount of the district's~~

~~per pupil allocation under section 20j(2),~~ not to exceed the basic

foundation allowance under section 20 for the current fiscal year,

or, for a pupil described in this subsection who is counted in

membership in a district that is a public school academy or

university school, times an amount equal to the amount per

membership pupil under section 20(6). The allocation to an

intermediate district under this subsection shall be calculated in

the same manner as for a district, using the foundation allowance

under section 20 of the pupil's district of residence, not to

exceed the basic foundation allowance under section 20 for the

current fiscal year. ~~, and that district's per pupil allocation~~

~~under section 20j(2).~~ This subsection applies to all of the

following pupils:

(a) Pupils described in section 53a.

(b) Pupils counted in membership in an intermediate district

who are not special education pupils and are served by the

intermediate district in a juvenile detention or child caring

facility.

intermediate district and provided educational services by the

department of community health.

(13) If it is determined that funds allocated under subsection

(2) or (12) or under section 51c will not be expended, funds up to

the amount necessary and available may be used to supplement the

allocations under subsection (2) or (12) or under section 51c in

order to fully fund those allocations. After payments under

subsections (2) and (12) and section 51c, the remaining

expenditures from the allocation in subsection (1) shall be made in

the following order:

(a) 100% of the reimbursement required under section 53a.

(b) 100% of the reimbursement required under subsection (6).

(d) 100% of the payment required under subsection (3).

(e) 100% of the payment required under subsection (8).

(f) 100% of the payments under section 56.

(14) The allocations under subsections (2), (3), and (12)

shall be allocations to intermediate districts only and shall not

be allocations to districts, but instead shall be calculations used

only to determine the state payments under section 22b.

(15) If a public school academy enrolls pursuant to this

section a pupil who resides outside of the intermediate district in

which the public school academy is located and who is eligible for

special education programs and services according to statute or

rule, or who is a child with disabilities, as defined under the

individuals with disabilities education act, Public Law 108-446,

the provision of special education programs and services and the

payment of the added costs of special education programs and

services for the pupil are the responsibility of the district and

intermediate district in which the pupil resides unless the

enrolling district or intermediate district has a written agreement

with the district or intermediate district in which the pupil

resides or the public school academy for the purpose of providing

the pupil with a free appropriate public education and the written

agreement includes at least an agreement on the responsibility for

the payment of the added costs of special education programs and

services for the pupil.

Sec. 51c. As required by the court in the consolidated cases

known as Durant v State of Michigan, Michigan supreme court docket

no. 104458-104492, from the allocation under section 51a(1), there

is allocated each fiscal year for 2009-2010 and for 2010-2011 the

amount necessary, estimated at ~~$742,300,000.00,~~ $702,500,000.00 for

2009-2010 and estimated at $732,100,000.00 for 2010-2011, for

payments to reimburse districts for 28.6138% of total approved

costs of special education excluding costs reimbursed under section

53a, and 70.4165% of total approved costs of special education

transportation. Funds allocated under this section that are not

expended in the state fiscal year for which they were allocated, as

determined by the department, may be used to supplement the

allocations under sections 22a and 22b in order to fully fund those

calculated allocations for the same fiscal year.

Sec. 51d. (1) From the federal funds appropriated in section

11, there is allocated for ~~2009-2010~~ 2010-2011 all available

federal funding, estimated at $74,000,000.00, for special education

programs that are funded by federal grants. All federal funds

allocated under this section shall be distributed in accordance

with federal law. 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.

(2) From the federal funds allocated under subsection (1), the

following amounts are allocated for ~~2009-2010~~ 2010-2011:

(a) An amount estimated at $15,000,000.00 for handicapped

infants and toddlers, funded from DED-OSERS, handicapped infants

and toddlers funds.

(b) An amount estimated at $14,000,000.00 for preschool grants

(Public Law 94-142), funded from DED-OSERS, handicapped preschool

incentive funds.

education programs funded by DED-OSERS, handicapped program,

individuals with disabilities act funds.

(3) As used in this section, "DED-OSERS" means the United

States department of education office of special education and

rehabilitative services.

Sec. 53a. (1) For districts, reimbursement for pupils

described in subsection (2) shall be 100% of the total approved

costs of operating special education programs and services approved

by the department and included in the intermediate district plan

adopted pursuant to article 3 of the revised school code, MCL

380.1701 to 380.1766, minus the district's foundation allowance

calculated under section 20. ~~, and minus the amount calculated for~~

~~the district under section 20j.~~ For intermediate districts,

reimbursement for pupils described in subsection (2) shall be

calculated in the same manner as for a district, using the

foundation allowance under section 20 of the pupil's district of

residence, not to exceed the basic foundation allowance under

section 20 for the current fiscal year. ~~, and under section 20j.~~

(2) Reimbursement under subsection (1) is for the following

special education pupils:

(a) Pupils assigned to a district or intermediate district

through the community placement program of the courts or a state

agency, if the pupil was a resident of another intermediate

district at the time the pupil came under the jurisdiction of the

court or a state agency.

(b) Pupils who are residents of institutions operated by the

department of community health.

health institutions for the developmentally disabled who are placed

in community settings other than the pupil's home.

(d) Pupils enrolled in a department-approved on-grounds

educational program longer than 180 days, but not longer than 233

days, at a residential child care institution, if the child care

institution offered in 1991-92 an on-grounds educational program

longer than 180 days but not longer than 233 days.

(e) Pupils placed in a district by a parent for the purpose of

seeking a suitable home, if the parent does not reside in the same

intermediate district as the district in which the pupil is placed.

(3) Only those costs that are clearly and directly

attributable to educational programs for pupils described in

subsection (2), and that would not have been incurred if the pupils

were not being educated in a district or intermediate district, are

reimbursable under this section.

(4) The costs of transportation shall be funded under this

section and shall not be reimbursed under section 58.

(5) Not more than $13,500,000.00 of the allocation for ~~2009-~~

~~2010~~ 2010-2011 in section 51a(1) shall be allocated under this

section.

Sec. 54. Each intermediate district shall receive an amount

per pupil for each pupil in attendance at the Michigan schools for

the deaf and blind. The amount shall be proportionate to the total

instructional cost at each school. Not more than $1,688,000.00 of

the allocation for ~~2009-2010~~ 2010-2011 in section 51a(1) shall be

allocated under this section.

Sec. 56. (1) For the purposes of this section:

(a) "Membership" means for a particular fiscal year the total

membership for the immediately preceding fiscal year of the

intermediate district and the districts constituent to the

intermediate district.

(b) "Millage levied" means the millage levied for special

education pursuant to part 30 of the revised school code, MCL

380.1711 to 380.1743, including a levy for debt service

obligations.

districts constituent to an intermediate district, except that if a

district has elected not to come under part 30 of the revised

school code, MCL 380.1711 to 380.1743, membership and taxable value

of the district shall not be included in the membership and taxable

value of the intermediate district.

(2) From the allocation under section 51a(1), there is

allocated an amount not to exceed $36,881,100.00 each fiscal year

for 2009-2010 and for 2010-2011 to reimburse intermediate districts

levying millages for special education pursuant to part 30 of the

revised school code, MCL 380.1711 to 380.1743. The purpose, use,

and expenditure of the reimbursement shall be limited as if the

funds were generated by these millages and governed by the

intermediate district plan adopted pursuant to article 3 of the

revised school code, MCL 380.1701 to 380.1766. As a condition of

receiving funds under this section, an intermediate district

distributing any portion of special education millage funds to its

constituent districts shall submit for departmental approval and

implement a distribution plan.

(3) Reimbursement for those millages levied in 2008-2009 shall

be made in 2009-2010 at an amount per 2008-2009 membership pupil

computed by subtracting from ~~$179,700.00~~ $180,600.00 the 2008-2009

taxable value behind each membership pupil and multiplying the

resulting difference by the 2008-2009 millage levied. Reimbursement

for those millages levied in 2009-2010 shall be made in 2010-2011

at an amount per 2009-2010 membership pupil computed by subtracting

from $181,700.00 the 2009-2010 taxable value behind each membership

pupil and multiplying the resulting difference by the 2009-2010

millage levied.

Sec. 61a. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$27,000,000.00 for 2009-2010~~

$26,611,300.00 for 2010-2011 to reimburse on an added cost basis

districts, except for a district that served as the fiscal agent

for a vocational education consortium in the 1993-94 school year,

and secondary area vocational-technical education centers for

secondary-level ~~vocational-technical~~ career and technical education

programs ~~, including parenthood education programs,~~ according to

rules approved by the superintendent. Applications for

participation in the programs shall be submitted in the form

prescribed by the department. The department shall determine the

added cost for each ~~vocational-technical~~ career and technical

education program area. The allocation of added cost funds shall be

based on the type of ~~vocational-technical~~ career and technical

education programs provided, the number of pupils enrolled, and the

length of the training period provided, and shall not exceed 75% of

the added cost of any program. With the approval of the department,

the board of a district maintaining a secondary ~~vocational-~~

~~technical~~ career and technical education program may offer the

program for the period from the close of the school year until

September 1. The program shall use existing facilities and shall be

operated as prescribed by rules promulgated by the superintendent.

(2) Except for a district that served as the fiscal agent for

a vocational education consortium in the 1993-94 school year,

districts and intermediate districts shall be reimbursed for local

~~vocational~~ career and technical education administration, shared

time ~~vocational~~ career and technical education administration, and

career education planning district ~~vocational-technical~~ career and

technical education administration. The definition of what

constitutes administration and reimbursement shall be pursuant to

guidelines adopted by the superintendent. Not more than $800,000.00

of the allocation in subsection (1) shall be distributed under this

subsection.

Sec. 62. (1) For the purposes of this section:

(a) "Membership" means for a particular fiscal year the total

membership for the immediately preceding fiscal year of the

intermediate district and the districts constituent to the

intermediate district or the total membership for the immediately

preceding fiscal year of the area vocational-technical program.

(b) "Millage levied" means the millage levied for area

vocational-technical education pursuant to sections 681 to 690 of

the revised school code, MCL 380.681 to 380.690, including a levy

for debt service obligations incurred as the result of borrowing

for capital outlay projects and in meeting capital projects fund

requirements of area vocational-technical education.

districts constituent to an intermediate district or area

vocational-technical education program, except that if a district

has elected not to come under sections 681 to 690 of the revised

school code, MCL 380.681 to 380.690, the membership and taxable

value of that district shall not be included in the membership and

taxable value of the intermediate district. However, the membership

and taxable value of a district that has elected not to come under

sections 681 to 690 of the revised school code, MCL 380.681 to

380.690, shall be included in the membership and taxable value of

the intermediate district if the district meets both of the

following:

(i) The district operates the area vocational-technical

education program pursuant to a contract with the intermediate

district.

(ii) The district contributes an annual amount to the operation

of the program that is commensurate with the revenue that would

have been raised for operation of the program if millage were

levied in the district for the program under sections 681 to 690 of

the revised school code, MCL 380.681 to 380.690.

(2) From the appropriation in section 11, there is allocated

an amount not to exceed $9,000,000.00 each fiscal year for 2009-

2010 and for 2010-2011 to reimburse intermediate districts and area

vocational-technical education programs established under section

690(3) of the revised school code, MCL 380.690, levying millages

for area vocational-technical education pursuant to sections 681 to

690 of the revised school code, MCL 380.681 to 380.690. The

purpose, use, and expenditure of the reimbursement shall be limited

as if the funds were generated by those millages.

(3) Reimbursement for the millages levied in 2008-2009 shall

be made in 2009-2010 at an amount per 2008-2009 membership pupil

computed by subtracting from ~~$189,600.00~~ $191,000.00 the 2008-2009

taxable value behind each membership pupil and multiplying the

resulting difference by the ~~2009-2010~~ 2008-2009 millage levied.

Reimbursement for the millages levied in 2009-2010 shall be made in

2010-2011 at an amount per 2009-2010 membership pupil computed by

subtracting from $194,700.00 the 2009-2010 taxable value behind

each membership pupil and multiplying the resulting difference by

the 2009-2010 millage levied.

Sec. 64. (1) From the appropriation in section 11, there is

allocated an amount not to exceed $2,000,000.00 for ~~2009-2010~~ 2010-

2011 for grants to intermediate districts or a district of the

first class that are in consortium with a community college or

state public university and a hospital or other appropriate entity

to create and implement a middle college focused on the field of

health sciences or other field approved by the superintendent of

public instruction.

(2) Awards shall be made in a manner and form as determined by

the department; however, at a minimum, eligible consortia funded

under this section shall ensure the middle college provides all of

the following:

(a) Outreach programs to provide information to middle school

and high school students about career opportunities in the health

sciences field or other field approved by the superintendent of

public instruction.

(b) An individualized education plan for each pupil enrolled

in the program.

(d) Clinical rotations that provide opportunities for pupils

to observe careers in the health sciences or other field approved

by the superintendent of public instruction.

(e) Instruction in mathematics, science, and language arts

that is integrated, where appropriate, into the courses in the

approved field.

(3) For the purposes of this section, "middle college" means a

series of courses and other requirements and conditions established

by the consortium that allow a pupil to graduate with a high school

diploma and a certificate or degree from a community college or

state public university.

(4) Beginning in 2006-2007, a district or intermediate

district may receive a grant under this section for up to 4

consecutive fiscal years. For the first 2 fiscal years of the grant

period, the grant amount shall be 100% of the award determined by

the department. For each of the remaining 2 fiscal years of the

grant period, the grant amount shall be an amount equal to 50% of

the recipient's grant amount for the previous fiscal year.

Sec. 65. (1) From the amount appropriated in section 11, there

is allocated an amount not to exceed ~~$980,100.00 for 2009-2010~~

$905,100.00 for 2010-2011 for grants to districts or intermediate

districts, as determined by the department, for eligible precollege

programs in engineering and the sciences.

(2) From the funds allocated under subsection (1), the

department shall award $680,100.00 for ~~2009-2010~~ 2010-2011 to the 2

eligible existing programs that received funds appropriated for

these purposes in the appropriations act containing the department

of energy, labor, and economic growth budget for 2005-2006.

(3) ~~(4)~~ From the funds allocated under subsection (1), the

department shall award $225,000.00 for ~~2009-2010~~ 2010-2011 to

eligible intermediate districts for programs to train pupils in

alternative energy. The department shall award $75,000.00 to each

eligible intermediate district. The intermediate district shall use

the funds for engineering and sciences programs with industry level

partnerships that are in proximity to renewable energy facilities.

To be eligible for funds under this subsection, an intermediate

district must meet all of the following requirements:

(a) The combined total 2007-2008 pupil membership for all of

Senate Bill No. 1163 (H-4) as amended May 26, 2010

its constituent districts was less than 20,000 pupils.

(b) Levied at least .11 but not more than .19 operating mills

in 2007-2008.

(d) At least 28% of the combined total number of pupils in

membership for all of its constituent districts were eligible for

free or reduced-price lunch for 2007-2008.

(e) Is contiguous to at least 1 other intermediate district

that meets the requirements of subdivisions (a) to (d).

(4) ~~(5)~~ The department shall submit a report to the

appropriations subcommittees responsible for this act, to the state

budget director, and to the house and senate fiscal agencies by

February 1, ~~2010~~ 2011 regarding dropout rates, grade point

averages, enrollment in science, engineering, and math-based

curricula, and employment in science, engineering, and mathematics-

based fields for pupils who were enrolled in the programs awarded

funds under ~~this section~~ subsection (2) or under preceding

legislation. The report shall continue to evaluate the

effectiveness of the precollege programs in engineering and

sciences funded under this section.

(5) ~~(6)~~ Notwithstanding section 17b, payments under this

section shall be paid on a schedule and in a manner determined by

the department.

Sec. 74. (1) From the amount appropriated in section 11, there

is allocated an amount not to exceed ~~$1,625,000.00~~ [$3,028,500.00]

for ~~2009-2010~~ 2010-2011 for the purposes of this section.

(2) From the allocation in subsection (1), there is allocated

Senate Bill No. 1163 (H-4) as amended May 26, 2010

for ~~2009-2010~~ 2010-2011 the amount necessary for payments to state

supported colleges or universities and intermediate districts

providing school bus driver safety instruction pursuant to section

51 of the pupil transportation act, 1990 PA 187, MCL 257.1851. The

payments shall be in an amount determined by the department not to

exceed 75% of the actual cost of instruction and driver

compensation for each public or nonpublic school bus driver

attending a course of instruction. For the purpose of computing

compensation, the hourly rate allowed each school bus driver shall

not exceed the hourly rate received for driving a school bus.

Reimbursement compensating the driver during the course of

instruction shall be made by the department to the college or

university or intermediate district providing the course of

instruction.

(3) From the allocation in subsection (1), there is allocated

each fiscal year the amount necessary to pay the reasonable costs

of nonspecial education auxiliary services transportation provided

pursuant to section 1323 of the revised school code, MCL 380.1323.

Districts funded under this subsection shall not receive funding

under any other section of this act for nonspecial education

auxiliary services transportation.

[(4) From the funds allocated in subsection (1), there is allocated

an amount not to exceed $1,403,500.00 for 2010-2011 for reimbursement to

districts and intermediate districts for costs associated with the

inspection of school buses and pupil transportation vehicles by the

department of state police as required under section 715a of the Michigan

vehicle code, 1949 PA 300, MCL 257.715a, and section 39 of the pupil

Senate Bill No. 1163 (H-4) as amended May 26, 2010

transportation act, 1990 PA 187, MCL 257.1839. The department of state

police shall prepare a statement of costs attributable to each district

for which bus inspections are provided and submit it to the department

and to each affected district in a time and manner determined jointly by

the department and the department of state police. The department shall

reimburse each district and intermediate district for costs detailed on

the statement within 30 days after receipt of the statement. Districts

for which services are provided shall make payment in the amount

specified on the statement to the department of state police within 45

days after receipt of the statement. The total reimbursement of costs

under this subsection shall not exceed the amount allocated under this