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.