HOUSE BILL No. 5611

December 1, 2009, Introduced by Rep. Segal and referred to the Committee on Appropriations.

A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 11 and 24c (MCL 388.1611 and 388.1624c), as

amended by 2009 PA 121.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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~~ $10,742,247,700.00 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 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. In addition, other

available federal funds are appropriated for the fiscal year ending

September 30,2010.

(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. 24c. From the appropriation in section 11, there is

allocated an amount not to exceed ~~$642,300.00~~ $1,284,600.00

for 2009-2010 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.

Enacting section 1. In accordance with section 30 of article

IX of the state constitution of 1963, total state spending in this

amendatory act and in 2009 PA 121 from state sources for fiscal