HOUSE BILL No. 5963

 

 

March 17, 2010, Introduced by Rep. Melton and referred to the Committee on Education.

 

     A bill to amend 1979 PA 94, entitled

 

"The state school aid act of 1979,"

 

by amending sections 22b and 81 (MCL 388.1622b and 388.1681), as

 

amended by 2009 PA 121.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 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 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 state aid

 

payment 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. Beginning with the December

 

installment in 2010-2011, the department shall also deduct from the

 

district's total allocation under this section an amount equal to

 

the dollar amount by which the district's general fund balance on

 

the June 30 immediately preceding the beginning of the fiscal year,

 

as reported to the department by the district pursuant to section

 

18(4), exceeds an amount equal to 15% of the district's current

 

operating expenditures, as calculated by the department for the

 

purposes of the department's annual education bulletin 1014 report.

 

As used in this subsection, "general fund balance" means the sum of

 

the amounts reported in balance sheet major class code 710, major

 

class code 740, and major class code 750, as those are defined in

 

the chart of accounts approved and published by the department

 

pursuant to section 18(4).

 


     (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.

 

     (c) Furnish data and other information required by state and

 

federal law to the center and the department in the form and manner

 

specified by the center or the department, as applicable.

 

     (d) Comply with section 1230g of the revised school code, MCL

 

380.1230g.

 

     (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 associated with lawsuits filed by 1 or more districts or

 

intermediate districts against this state. If the allocation under

 

this section is insufficient to fully fund all payments required

 


under this section, the payments under this subsection shall be

 

made in full before any proration of remaining payments under this

 

section.

 

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

 

constitutional obligations of this state have been fully funded

 

under sections 22a, 31d, 51a, 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.

 

     (8) If the local claims review board or a court of competent

 

jurisdiction makes a final determination that this state is in

 

violation of section 29 of article IX of the state constitution of

 

1963 regarding state payments to districts, the state budget

 

director shall use work project funds under subsection (7) or

 

allocate from the discretionary funds for nonmandated payments

 

under this section the amount as may be necessary to satisfy the

 

amount owed to districts before making any payments to districts

 

under subsection (3).

 


     (9) If a claim is made in court that challenges the

 

legislative determination of the adequacy of funding for this

 

state's constitutional obligations or alleges that there exists an

 

unfunded constitutional requirement, any interested party may seek

 

an expedited review of the claim by the local claims review board.

 

If the claim exceeds $10,000,000.00, this state may remove the

 

action to the court of appeals, and the court of appeals shall have

 

and shall exercise jurisdiction over the claim.

 

     (10) If payments resulting from a final determination by the

 

local claims review board or a court of competent jurisdiction that

 

there has been a violation of section 29 of article IX of the state

 

constitution of 1963 exceed the amount allocated for discretionary

 

nonmandated payments under this section, the legislature shall

 

provide for adequate funding for this state's constitutional

 

obligations at its next legislative session.

 

     (11) If a lawsuit challenging payments made to districts

 

related to costs reimbursed by federal title XIX medicaid funds is

 

filed against this state, then, for the purpose of addressing

 

potential liability under such a lawsuit, the state budget director

 

may place funds allocated under this section in escrow or allocate

 

money from the funds otherwise allocated under this section, up to

 

a maximum of 50% of the amount allocated in subsection (1). If

 

funds are placed in escrow under this subsection, those funds are a

 

work project appropriation and the funds are carried forward into

 

the following fiscal year. The purpose of the work project is to

 

provide for any payments that may be awarded to districts as a

 

result of the litigation. The work project shall be completed upon

 


resolution of the litigation. In addition, this state reserves the

 

right to terminate future federal title XIX medicaid reimbursement

 

payments to districts if the amount or allocation of reimbursed

 

funds is challenged in the lawsuit. As used in this subsection,

 

"title XIX" means title XIX of the social security act, 42 USC 1396

 

to 1396v.

 

     Sec. 81. (1) Except as otherwise provided in this section,

 

from the appropriation in section 11, there is allocated for 2009-

 

2010 to the intermediate districts the sum necessary, but not to

 

exceed $65,376,800.00, to provide state aid to intermediate

 

districts under this section. Except as otherwise provided in this

 

section, there shall be allocated to each intermediate district for

 

2009-2010 an amount equal to 80% of the amount appropriated under

 

this subsection for 2008-2009. Beginning with the December

 

installment in 2010-2011, the department shall deduct from an

 

intermediate district's total allocation under this section an

 

amount equal to the dollar amount by which the intermediate

 

district's general fund balance on the June 30 immediately

 

preceding the beginning of the fiscal year, as reported to the

 

department by the intermediate district pursuant to section 18(4),

 

exceeds an amount equal to 15% of the intermediate district's

 

current operating expenditures, as calculated by the department for

 

the purposes of the department's annual education bulletin 1014

 

report. Funding provided under this section shall be used to comply

 

with requirements of this act and the revised school code that are

 

applicable to intermediate districts, and for which funding is not

 

provided elsewhere in this act, and to provide technical assistance

 


to districts as authorized by the intermediate school board. As

 

used in this subsection, "general fund balance" means the sum of

 

the amounts reported in balance sheet major class code 710, major

 

class code 740, and major class code 750, as those are defined in

 

the chart of accounts approved and published by the department

 

pursuant to section 18(4).

 

     (2) Intermediate districts receiving funds under this section

 

shall collaborate with the department to develop expanded

 

professional development opportunities for teachers to update and

 

expand their knowledge and skills needed to support the Michigan

 

merit curriculum.

 

     (3) From the allocation in subsection (1), there is allocated

 

to an intermediate district, formed by the consolidation or

 

annexation of 2 or more intermediate districts or the attachment of

 

a total intermediate district to another intermediate school

 

district or the annexation of all of the constituent K-12 districts

 

of a previously existing intermediate school district which has

 

disorganized, an additional allotment of $3,500.00 each fiscal year

 

for each intermediate district included in the new intermediate

 

district for 3 years following consolidation, annexation, or

 

attachment.

 

     (4) During a fiscal year, the department shall not increase an

 

intermediate district's allocation under subsection (1) because of

 

an adjustment made by the department during the fiscal year in the

 

intermediate district's taxable value for a prior year. Instead,

 

the department shall report the adjustment and the estimated amount

 

of the increase to the house and senate fiscal agencies and the

 


state budget director not later than June 1 of the fiscal year, and

 

the legislature shall appropriate money for the adjustment in the

 

next succeeding fiscal year.

 

     (5) In order to receive funding under this section, an

 

intermediate district shall do all of the following:

 

     (a) Demonstrate to the satisfaction of the department that the

 

intermediate district employs at least 1 person who is trained in

 

pupil counting procedures, rules, and regulations.

 

     (b) Demonstrate to the satisfaction of the department that the

 

intermediate district employs at least 1 person who is trained in

 

rules, regulations, and district reporting procedures for the

 

individual-level student data that serves as the basis for the

 

calculation of the district and high school graduation and dropout

 

rates.

 

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

 

code, MCL 380.1278a and 380.1278b.

 

     (d) Furnish data and other information required by state and

 

federal law to the center and the department in the form and manner

 

specified by the center or the department, as applicable.

 

     (e) Comply with section 1230g of the revised school code, MCL

 

380.1230g.

 

     (f) Comply with section 761 of the revised school code, MCL

 

380.761.