HB-5372, As Passed House, April 26, 2012

SUBSTITUTE FOR

HOUSE BILL NO. 5372

A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 3, 4, 6, 11, 11a, 11g, 11j, 11k, 11m, 12, 15,

18, 18c, 19, 20, 20d, 22a, 22b, 22d, 22f, 24, 24a, 24c, 25, 26a,

26b, 31a, 31d, 31f, 32b, 32d, 32j, 39, 39a, 51a, 51c, 51d, 53a, 54,

56, 61a, 62, 74, 81, 93, 94a, 98, 99, 101, 104, 107, 147, 147a,

152a, 201, 201a, 202, 203, 204, 206, 207, 208, 209, 210a, 211, 212,

213, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227,

228, 229, 236, 236a, 237, 238, 239, 239a, 241, 242, 243, 244, 245,

251, 252, 253, 254, 255, 256, 257, 258, 261, 263, 263a, 264, 265,

267, 268, 269, 270, 270a, 273, 274, 274a, 275, 275a, 276, 277, 278,

279, 280, 281, 282, 283, 284, 285, 286, 289, 290, and 291 (MCL

388.1603, 388.1604, 388.1606, 388.1611, 388.1611a, 388.1611g,

388.1611j, 388.1611k, 388.1611m, 388.1612, 388.1615, 388.1618,

388.1618c, 388.1619, 388.1620, 388.1620d, 388.1622a, 388.1622b,

388.1622d, 388.1622f, 388.1624, 388.1624a, 388.1624c, 388.1625,

388.1626a, 388.1626b, 388.1631a, 388.1631d, 388.1631f, 388.1632b,

388.1632d, 388.1632j, 388.1639, 388.1639a, 388.1651a, 388.1651c,

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

388.1674, 388.1681, 388.1693, 388.1694a, 388.1698, 388.1699,

388.1701, 388.1704, 388.1707, 388.1747, 388.1747a, 388.1752a,

388.1801, 388.1801a, 388.1802, 388.1803, 388.1804, 388.1806,

388.1807, 388.1808, 388.1809, 388.1810a, 388.1811, 388.1812,

388.1813, 388.1816, 388.1817, 388.1818, 388.1819, 388.1820,

388.1821, 388.1822, 388.1823, 388.1824, 388.1825, 388.1826,

388.1827, 388.1828, 388.1829, 388.1836, 388.1836a, 388.1837,

388.1838, 388.1839, 388.1839a, 388.1841, 388.1842, 388.1843,

388.1844, 388.1845, 388.1851, 388.1852, 388.1853, 388.1854,

388.1855, 388.1856, 388.1857, 388.1858, 388.1861, 388.1863,

388.1863a, 388.1864, 388.1865, 388.1867, 388.1868, 388.1869,

388.1870, 388.1870a, 388.1873, 388.1874, 388.1874a, 388.1875,

388.1875a, 388.1876, 388.1877, 388.1878, 388.1879, 388.1880,

388.1881, 388.1882, 388.1883, 388.1884, 388.1885, 388.1886,

388.1889, 388.1890, and 388.1891), sections 3, 19, and 101 as

amended by 2010 PA 110, section 4 as amended by 2008 PA 268,

sections 6, 11, 11a, 11m, 22a, 22b, 24a, 24c, 26b, 51a, 51c, 74,

and 104 as amended by 2012 PA 29, sections 11g, 11k, 15, 18, 20,

20d, 22d, 24, 31a, 32b, 32d, 32j, 39, 39a, 51d, 54, 56, 61a, 81,

93, 94a, 98, 99, 107, 147, and 152a as amended and sections 12,

22f, 147a, 201, 201a, 202, 203, 204, 206, 207, 208, 209, 210a, 211,

212, 213, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226,

227, 228, 229, 236, 236a, 237, 238, 239, 239a, 241, 242, 243, 244,

245, 251, 252, 253, 254, 255, 256, 257, 258, 261, 263, 263a, 264,

265, 267, 268, 269, 270, 270a, 273, 274, 274a, 275, 275a, 276, 277,

278, 279, 280, 281, 282, 283, 284, 285, 286, 289, 290, and 291 as

added by 2011 PA 62, sections 11j, 26a, 31d, 31f, 53a, and 62 as

amended by 2011 PA 299, section 18c as added by 2000 PA 297, and

section 25 as amended by 2011 PA 322, and by adding sections 22g,

22i, 95, 229a, 236b, 237b, 246, 260, 265a, 273a, and 293a; and to

repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. (1) "Achievement authority" means that term as defined

in part 7c of the revised school code, MCL 380.771 to 380.778.

(2) "Achievement school" means a public school within the

education achievement system operated, managed, authorized,

established, or overseen by the achievement authority.

(3) ~~(1)~~ "Average daily attendance", for the purposes of

complying with federal law, means 92% of the pupils counted in

membership on the pupil membership count day, as defined in section

6(7).

(4) ~~(2)~~ "Board" means the governing body of a district or

public school academy.

(5) ~~(3)~~ "Center" means the center for educational performance

and information created in section 94a.

(6) ~~(4)~~ "Cooperative education program" means a written

voluntary agreement between and among districts to provide certain

educational programs for pupils in certain groups of districts. The

written agreement shall be approved by all affected districts at

least annually and shall specify the educational programs to be

provided and the estimated number of pupils from each district who

will participate in the educational programs.

(7) ~~(5)~~ "Department", except in section 107, means the

department of education.

(8) ~~(6)~~ "District" means a local school district established

under the revised school code or, except in sections 6(4), 6(6),

13, 20, 22a, ~~23, 29,~~ 31a, ~~51a(15),~~ 51a(14), 105, 105c, and 166b, a

public school academy. ~~Except in sections 6(4), 6(6), 13, 20, 22a,~~

~~29, 51a(15), 105, 105c, and 166b, district also includes a~~

~~university school.~~Except in sections 6(4), 6(6), 6(8), 13, 20, 22a,

31a, 105, 105c, and 166b, district also includes the education

achievement system.

(9) ~~(7)~~ "District of residence", except as otherwise provided

in this subsection, means the district in which a pupil's custodial

parent or parents or legal guardian resides. For a pupil described

in section 24b, the pupil's district of residence is the district

in which the pupil enrolls under that section. For a pupil

described in section 6(4)(d), the pupil's district of residence

shall be considered to be the district or intermediate district in

which the pupil is counted in membership under that section. For a

pupil under court jurisdiction who is placed outside the district

in which the pupil's custodial parent or parents or legal guardian

resides, the pupil's district of residence shall be considered to

be the educating district or educating intermediate district.

(10) ~~(8)~~ "District superintendent" means the superintendent of

a district, the chief administrator of a public school academy, or

the ~~chief administrator of a university school.~~chancellor of the

achievement authority.

Sec. 4. (1) "Education achievement system" means that term as

defined in part 7c of the revised school code, MCL 380.771 to

380.778.

(2) ~~(1)~~ "Elementary pupil" means a pupil in membership in

grades K to 8 in a district not maintaining classes above the

eighth grade or in grades K to 6 in a district maintaining classes

above the eighth grade. For the purposes of calculating universal

service fund (e-rate) discounts, "elementary pupil" includes

children enrolled in a preschool program operated by a district in

its facilities.

(3) ~~(2)~~ "Extended school year" means an educational program

conducted by a district in which pupils must be enrolled but not

necessarily in attendance on the pupil membership count day in an

extended year program. The mandatory clock hours shall be completed

by each pupil not more than 365 calendar days after the pupil's

first day of classes for the school year prescribed. The department

shall prescribe pupil, personnel, and other reporting requirements

for the educational program.

(4) ~~(3)~~ "Fiscal year" means the state fiscal year that

commences October 1 and continues through September 30.

(5) ~~(4)~~ "General educational development testing preparation

program" means a program that has high school level courses in

English language arts, social studies, science, and mathematics and

that prepares a person to successfully complete the general

educational development (GED) test.

(6) ~~(5)~~ "High school pupil" means a pupil in membership in

grades 7 to 12, except in a district not maintaining grades above

the eighth grade.

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

article, means for a district, a public school academy, ~~university~~

~~school,~~ the education achievement system, or an intermediate

district the sum of the product of .90 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 .10 times the final

audited count from the supplemental count day for the immediately

preceding school year. It is the intent of the legislature to move

to a pupil accounting system with 8 pupil membership count dates

beginning in 2013-2014, based on recommendations for this policy

change developed by the department working with the center,

intermediate districts, districts, and other interested

stakeholders. 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, or for the education

achievement system, a pupil's participation in the cyber school's

educational program or in an online educational program of the

education achievement system or of an achievement school 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, a

public school academy, ~~university school,~~ the education achievement

system, or an 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 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.~~

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

counted in membership in the public school academy.

(h) A pupil enrolled in an achievement school shall be counted

in membership in the education achievement system.

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

academy beginning its operation after December 31, 1994, or for the

education achievement system or an achievement school, 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, a public school academy, ~~university school,~~

the education achievement system, or an 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 as follows:

(i) A special education pupil who is enrolled and receiving

instruction in a special education program or service approved by

the department, 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.

(ii) A pupil who is determined by the department to meet all of

the following may be counted in membership:

(A) Is enrolled in a public school academy or an alternative

education high school diploma program, that is primarily focused on

educating homeless pupils and that is located in a city with a

population of more than 500,000.

(B) Had dropped out of school for more than 1 year and has re-

entered school.

current school year.

(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 unless the individual is a ~~student~~ pupil with

a disability as defined in R 340.1702 of the Michigan

administrative code. 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 workforce development agency,~~ 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 or the education achievement system 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 or the education achievement system

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 or the

education achievement system 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 or the education achievement

system provides instruction for at least 1/2 of the class hours

specified in subdivision (q), the public school academy or the

education achievement system 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 or the education achievement system 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 or the education achievement

system 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 or the education achievement system.

(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) ~~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. However, beginning~~ Beginning in 2012-

2013, full-time equated memberships for pupils in kindergarten

shall be determined by dividing the number of ~~class~~ instructional

hours scheduled and provided per year per kindergarten pupil by the

same number used for determining full-time equated memberships for

pupils in grades 1 to 12. Not later than the fifth Wednesday after

the pupil membership count day, each district or public school

academy and the education achievement system shall report to the

department and the center the number of instructional hours

scheduled per kindergarten pupil for 2012-2013. If the number of

instructional hours scheduled per kindergarten pupil is not equal

for all kindergarten pupils in the district, the district or public

school academy and the education achievement system shall report

the number of kindergarten pupils who were scheduled to receive

each of the different numbers of instructional hours scheduled.

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

academy, or the education achievement system that has pupils

enrolled in a grade level that was not offered by the district,

~~university school, or~~ the public school academy, or the education

achievement system 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 the public school academy, or the

education achievement system 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

or the education achievement system within 45 days after the pupil

membership count day, the department shall adjust the district's or

the education achievement system'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 .90 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 .10 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 or the education

achievement system 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 or the education

achievement system receives the same amount of membership aid for

the pupil as if the pupil were counted in the district or the

education achievement system 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 early

childhood special education 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, 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, a public school academy, or the education

achievement system 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 or the education achievement system.

(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.~~the education achievement system.

(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 works at the

district or who is the child of a person who worked at the district

as of the time the pupil first enrolled in the district but who no

longer works at the district due to a workforce reduction. 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 middle college program 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.

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

district of residence as a qualifying pupil under section 22h(2).

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 first Wednesday

in October 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) First Wednesday in October.

(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, an intermediate district, or a public

school academy, or the education achievement system 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, or education achievement system 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" 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 (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, electronic book, or other

instructional print or electronic resource that is selected and

approved by the governing board of a district or, for an

achievement school, by the chancellor of the achievement authority

and that contains a presentation of principles of a subject, or

that is a literary work relevant to 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

article.

~~(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) Subject to subsection (3), for the fiscal year

ending September 30, ~~2012,~~ 2013, there is appropriated for the

public schools of this state and certain other state purposes

relating to education the sum of ~~$10,967,333,600.00~~

House Bill No. 5372 (H-1) as amended April 26, 2012

[$10,782,707,800.00] from the state school aid fund and the sum of

~~$118,642,400.00~~ $333,000,000.00 from the general fund. In addition,

all other available federal funds ~~, except those otherwise~~

~~appropriated under section 11p,~~ are appropriated for the fiscal

year ending September 30, ~~2012.~~2013.

(2) The appropriations under this section shall be allocated

as provided in this article. Money appropriated under this section

from the general fund shall be expended to fund the purposes of

this article before the expenditure of money appropriated under

this section from the state school aid fund.

(3) Any general fund allocations under this article 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 ~~2011-2012,~~ 2012-2013, in addition to the

appropriations in section 11, 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 article.

(8) Effective ~~on the effective date of this subsection,~~

February 24, 2012, in addition to any amounts otherwise deposited

into the school aid stabilization fund, there is transferred from

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

amount equal to $100,000,000.00.

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, ~~2012~~ 2013, 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 article 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 ~~$2,837,800.00 for 2010-2011 and~~

~~an amount not to exceed $93,575,300.00 for 2011-2012~~

$120,390,000.00 for 2012-2013 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 ~~2011-2012,~~ 2012-2013, 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 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 ~~2011-2012~~ 2012-2013 an amount not to exceed

~~$8,500,000.00~~ $10,000,000.00 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. 12. It is the intent of the legislature to appropriate

and allocate for the fiscal year ending September 30, ~~2013~~ 2014 the

same amounts of money from the same sources for the same purposes

as are appropriated and allocated under this article for the fiscal

year ending September 30, ~~2012,~~ 2013, as adjusted for changes in

pupil membership, taxable values, special education costs, interest

costs, and available revenue. These adjustments will be determined

after the January ~~2012~~ 2013 consensus revenue estimating

conference.

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

article, 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

article 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~~ article 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 article

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 ~~2011-2012~~ 2012-

2013 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

article, each district or other entity shall apply the money

received by the district or entity under this article 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

other school operating expenditures defined in section 7. However,

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

intermediate district under this article 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 article the apportionment

otherwise due upon a violation by the recipient.

(2) Within 30 days after a board adopts its annual operating

budget for the following school fiscal year, or after a board

adopts a subsequent revision to that budget, the district shall

make all of the following available through a link on its website

home page, or 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 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:

(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

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

(iv) The bids required under section 5 of the public employee

health benefits act, 2007 PA 106, MCL 124.75.

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

benefit included in the compensation package for the superintendent

of the district and for each employee of the district whose salary

exceeds $100,000.00.

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

(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 information required under subsection (2)(a),

(2)(b)(i), and (2)(c), an intermediate district shall provide the

same information in the same manner as required for a district

under subsection (2).

(4) For the purpose of determining the reasonableness of

expenditures and whether a violation of this article has occurred,

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%.

audit shall include an analysis of the financial and pupil

accounting data used as the basis for distribution of state school

aid.

(d) The pupil and financial 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.

(e) All of the following shall be done not later than November

15 each year:

(i) A district shall file the annual financial audit reports

with the intermediate district and the department.

(ii) The intermediate district shall file the annual financial

audit reports for the intermediate district with the department.

(iii) The intermediate district shall enter the pupil membership

audit reports for its constituent districts and for the

intermediate district, for the pupil membership count day and

supplemental count day, in the Michigan student data system.

(f) 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.

(g) Not later than January 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.

(5) 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.

(6) 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.

(7) 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.

(8) 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 article.

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

property using money received under this article, the public school

academy shall retain ownership of the property unless the public

school academy sells the property at fair market value.

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

with subsections (4), (5), (6), and (7), the department shall

withhold all state school aid due to the district or intermediate

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

the district or intermediate district, until the district or

intermediate district complies with subsections (4), (5), (6), and

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

subsections (4), (5), (6), and (7) by the end of the fiscal year,

the district or intermediate district forfeits the amount withheld.

Sec. 18c. Any contract, mortgage, loan, or other instrument of

indebtedness entered into by a public school academy, the

achievement authority, or an achievement school receiving funds

under this act and a third party does not constitute an obligation,

either general, special, or moral, of this state or of an

authorizing body. The full faith and credit or the taxing power of

this state or any agency of this state, or the full faith and

credit of an authorizing body, shall not be pledged for the payment

of any contract, mortgage, loan, or other instrument of

indebtedness entered into by a public school academy, the

achievement authority, or an achievement school.

Sec. 19. (1) 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~~ establish and maintain a statewide P-20

longitudinal data system.

(2) Each district shall furnish to the center not later than 5

weeks after the pupil membership count day and by June 30 of the

school fiscal year ending in the fiscal year, 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 (6).

(3) 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) 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) If a district or intermediate district fails to meet the

requirements of this section, the department shall withhold 5% of

the total funds for which the district or intermediate district

qualifies under this ~~act~~ article 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) 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.

(7) It is the intent of the legislature to implement not later

than 2014-2015 either a single statewide education data reporting

system or a limited number of education data reporting systems

approved by the department in conjunction with the center. The

department shall work with the center, intermediate districts,

districts, and other interested stakeholders to develop

recommendations on the implementation of this policy change.

Sec. 20. (1) For 2011-2012, and for 2012-2013, the basic

foundation allowance is $8,019.00.

(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 2011-2012, 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 2010-2011, minus $470.00. For 2012-2013,

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 for

2011-2012 in an amount equal to the district's foundation allowance

for 2010-2011, minus $470.00. For 2012-2013, 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 for 2012-2013 in an amount equal to

the district's foundation allowance for the immediately preceding

state fiscal year.

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. Except as otherwise provided

in subdivision (d), for 2011-2012, for a district that in the 1994-

1995 state fiscal year had a foundation allowance greater than

$6,500.00, the district's foundation allowance is an amount equal

to the district's foundation allowance for the 2010-2011 fiscal

year minus $470.00. For 2012-2013, except as otherwise provided in

subdivision (d), for a district that in the 1994-1995 state fiscal

year had a foundation allowance greater than $6,500.00, the

district's foundation allowance is an amount equal to the

district's foundation allowance for the immediately preceding state

fiscal year.

(d) For a district that in the 1994-95 state fiscal year had a

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

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

otherwise calculated under this section, that was less than the

basic foundation allowance, the district's foundation allowance for

2011-2012 and each succeeding fiscal year shall be considered to be

an amount equal to the basic foundation allowance.

(e) 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) 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) 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.

(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 (15), the allocation calculated under this section shall~~

~~not include the adjustment described in subsection (15).~~ 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.

(6) ~~Subject to subsection (7) and except~~ 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

foundation allowance of the district in which the public school

academy ~~or university school~~ is located 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 article, 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.~~

(7) Except as otherwise provided in this subsection, for

pupils attending an achievement school and in membership in the

education achievement system, other than special education pupils,

the allocation calculated under this section is an amount per

membership pupil other than special education pupils equal to the

foundation allowance of the district in which the achievement

school is located, not to exceed the basic foundation allowance.

Notwithstanding section 101, for an achievement school that begins

operation 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 achievement school 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. For the purposes of this subsection, if a public school

is transferred from a district to the state school reform/redesign

district or the achievement authority under section 1280c of the

revised school code, that public school is considered to be an

achievement school within the education achievement system and not

a school that is part of a district, and a pupil attending that

public school is considered to be in membership in the education

achievement system and not in membership in the district that

operated the school before the transfer.

(8) 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.

(9) 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.

(10) 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.

(11) 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

2011-2012, the index shall be 0.93575 and for 2012-2013, the index

shall be 1.00. If a consensus index is not determined at the

House Bill No. 5372 (H-1) as amended April 26, 2012

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.

~~(12) If the principals at the revenue estimating conference~~

~~reach a consensus on the index described in subsection (11)(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.~~

(12) ~~(13)~~ 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. A district receiving an adjustment under this

subsection shall not receive as a result of this adjustment an

amount that exceeds 50% of the amount the district received as a

result of this adjustment for 2010-2011. This adjustment shall not

[~~be made~~ exceed a total cost of $100.00] after 2011-2012.

(13) ~~(14)~~ 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. A district receiving

an adjustment under this subsection shall not receive as a result

of this adjustment an amount that exceeds 50% of the amount the

district received as a result of this adjustment for 2010-2011.

This adjustment shall not be made after 2011-2012.

(14) ~~(15)~~ 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 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. A district receiving an adjustment

under this subsection shall not receive as a result of this

adjustment an amount that exceeds 68.5% of the amount the district

received as a result of this adjustment for 2010-2011. This

adjustment shall not be made after 2011-2012.

(15) ~~(16)~~ 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. A district receiving an adjustment under this

subsection shall not receive as a result of this adjustment an

amount that exceeds 50% of the amount the district received as a

result of this adjustment for 2010-2011. This adjustment shall not

be made after 2011-2012.

(16) ~~(17)~~ 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. A district receiving an adjustment under this

subsection shall not receive as a result of this adjustment an

amount that exceeds 50% of the amount the district received as a

result of this adjustment for 2010-2011. This adjustment shall not

be made after 2011-2012.

(17) ~~(18)~~ Payments to districts, ~~university schools, or~~ public

school academies, or the education achievement system 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.

(18) ~~(19)~~ 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.

(19) ~~(20)~~ 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 2011-2012 and 2012-2013, maximum public

school academy allocation means $7,110.00.

(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 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 ~~2011-2012,~~ 2012-2013, 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 $5,769,000,000.00 for 2011-2012

and there is allocated an amount not to exceed $5,707,000,000.00

for 2012-2013 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) Subject to conditions set forth in this subsection, from

the allocation in subsection (1), there is allocated for 2011-2012

only an amount not to exceed $6,000,000.00 for payments to

districts that meet the eligibility requirements under this

subsection, for the reduction in school operating revenues

resulting from a settlement or other disposition of appeals

described in subdivision (a). A payment may only be made under this

subsection if a settlement agreement is signed by all applicable

parties. Payments made under this subsection shall be in accordance

with the settlement agreement. All of the following apply to

payments under this subsection:

(a) To be eligible for a payment under this subsection, a

district shall be determined by the department and the department

of treasury to meet all of the following:

(i) The district does not receive any state portion of its

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

(ii) Before January 1, 2011, the owner of a natural-gas-powered

power plant located in a renaissance zone within the district's

geographic boundaries for 2009 and 2010 appealed to the Michigan

tax tribunal an order of the state tax commission for tax years

2009 and 2010 pursuant to section 154 of the general property tax

act, 1893 PA 206, MCL 211.154, and appealed to the state tax

commission the 2011 classification and valuation of the power

plant.

(iii) The district received a reduced amount of local school

operating revenue for tax years 2009, 2010, and 2011 as a result of

the exemptions of industrial personal property and commercial

personal property under section 1211 of the revised school code,

MCL 380.1211.

(iv) A settlement agreement has been signed to resolve the

Michigan tax tribunal appeal described in subparagraph (ii) and a

memorandum of understanding that stipulates terms of the settlement

has been executed by the parties.

(b) A payment made under this subsection shall be in addition

to renaissance zone reimbursement amounts paid in the 2009-2010 and

2010-2011 state fiscal years under section 26a to districts

eligible for payment under this subsection. The 2009-2010 and 2010-

2011 state fiscal year payments under section 26a to a district

receiving a payment under this subsection shall not be reduced as a

result of the reduction to the district's 2009 and 2010 taxable

value of real property under the appeals described in subdivision

(a)(ii).

(7) 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", "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) "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) "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.~~

(j) ~~(k)~~ "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.

(k) (l) "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.

(l) ~~(m)~~ "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 2011-2012 an amount not to exceed

$3,052,000,000.00 and there is allocated for 2012-2013 an amount

not to exceed $3,077,000,000.00 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) Subject to subsection (3) and section 296, the allocation

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

sum of the amounts calculated under sections 20, 51a(2), 51a(3),

and 51a(11), minus the sum of the allocations to the district under

sections 22a and 51c.

(3) 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.

(4) 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.

(5) 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.

(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, 51c, and 152a. If a claim is made by

an entity receiving funds under this article 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 (2). 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 (2).

(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.

(12) Not later than January 1, 2013, the department shall

submit a report to the legislature identifying the amount of the

savings that the department has calculated as having been achieved

due to the revised number of instructional hours used to calculate

full-time equated memberships for kindergarten pupils under section

6(4)(r) as amended by 2011 PA 62. It is the intent of the

legislature that funds available due to identified savings will be

appropriated in section 147a to reimburse districts for a portion

of their retirement costs.

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

not to exceed $2,025,000.00 is allocated each fiscal year for 2011-

2012 and for 2012-2013 for supplemental payments to rural districts

under this section.

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

allocated each fiscal year for 2011-2012 and for 2012-2013 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

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

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

subsection (1), there is allocated each fiscal year for 2011-2012

and for 2012-2013 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. 22f. (1) From the appropriation in section 11, there is

allocated for ~~2011-2012 only~~ 2012-2013 an amount not to exceed

~~$154,000,000.00~~ $115,000,000.00 to provide incentive payments to

districts that meet ~~financial~~ best practices under this section.

~~The money allocated in this section represents a portion of the~~

~~year-end state school aid fund balance for 2010-2011.~~ Payments

received under this section may be used for any purpose for which

payments under sections 22a and 22b may be used.

(2) The amount of the incentive payment under this section is

an amount equal to ~~$100.00~~ $75.00 per pupil. A district shall

receive an incentive payment under this section if the district

satisfies at least 4 6 of the following requirements not later than

June 1, ~~2012~~ 2013:

~~(a) If a district provides medical, pharmacy, dental, vision,~~

~~disability, long-term care, or any other type of benefit that would~~

~~constitute a health care services benefit, to employees and their~~

~~dependents, the district does not pay on behalf of any employee a~~

~~total amount that is greater than the state maximum allowable~~

~~employer contribution for health care services benefits, as~~

~~described in subsection (3), depending on the coverage option.~~

(a) ~~(b)~~ If a district provides medical, pharmacy, dental,

vision, disability, long-term care, or any other type of benefit

that would constitute a health care services benefit, to employees

and their dependents, the district is the policyholder for each of

its insurance policies that covers 1 or more of these benefits. A

district that does not directly employ its staff is considered to

have satisfied this requirement.

~~(c) If a district did not enter into an agreement with the~~

~~department to develop a service consolidation plan to reduce school~~

~~operating costs under former section 11d as it was in effect for~~

~~2010-2011, the district enters into an agreement with the~~

~~department to develop a service consolidation plan that is in~~

~~compliance with department guidelines described in subsection (2).~~

~~If a district entered into an agreement with the department to~~

~~develop a service consolidation plan under former section 11d, the~~

~~district continues to implement that plan and report to the~~

House Bill No. 5372 (H-1) as amended April 26, 2012

~~department not later than February 1 of each fiscal year the~~

~~district's progress in implementing that plan.~~

(b) ~~(d)~~ The district has obtained competitive bids on the

provision of pupil transportation, food service, custodial, or 1 or

more other noninstructional services ~~with a value of at least~~

~~$50,000.00.~~for 2012-2013.

nonresident applicants under section 105 or 105c. [A public school

academy is considered to have met this requirement.]

(d) The district monitors individual pupil academic growth in

each subject area at least twice during the school year using

competency-based online assessments and reports those results to

the pupil and his or her parent or guardian, or provides the

department with a plan and is able to show progress toward

developing the technology infrastructure necessary for the

implementation of pupil academic growth assessments by 2014-2015.

(e) The district supports opportunities for pupils to receive

postsecondary credit while attending secondary school, by doing at

least 1 of the following, and makes all eligible pupils and their

parents or guardians aware of these opportunities:

(i) Supports attendance of district pupils under the

postsecondary enrollment operations act, MCL 388.511 to 388.524, or

under the career and technical preparation act, MCL 388.1901 to

388.1913, consistent with provisions under section 21b.

(ii) Offers college-level equivalent courses, as defined in

section 1471 of the revised school code, MCL 380.1471.

(iii) Participates in a middle college. For the purposes of this

subparagraph, "middle college" means a series of courses and other

requirements and conditions that allow a pupil to graduate with a

high school diploma and a certificate or degree from a community

college or state public university.

(iv) Provides other opportunities to pupils that allow those

pupils to graduate with a high school diploma and also complete

coursework that a postsecondary institution normally applies toward

satisfaction of degree requirements.

(f) The district offers online instructional programs or

blended learning opportunities to all eligible pupils. In order to

satisfy this requirement, districts must make all eligible pupils

and their parents or guardians aware of these opportunities. For

the purposes of this subdivision:

(i) "Blended learning" means a hybrid instructional delivery

model where pupils are provided face-to-face instruction, in part

at a supervised school facility away from home and partially

through computer-based and internet-connected learning environments

with some degree of pupil control over time, location, and pace of

instruction.

(ii) "Online instructional program" means a course of study

that generates a credit or a grade, provided in an interactive

computer-based and internet-connected learning environment, in

which pupils are separated from their teachers by time or location,

or both, and in which a Michigan certificated teacher is

responsible for providing direct instruction, diagnosing learning

needs, assessing pupil learning, prescribing intervention

strategies, reporting outcomes, and evaluating the effects of

instruction and support strategies.

(g) ~~(e)~~ The district provides to parents and community members

a dashboard or report card demonstrating the district's efforts to

manage its finances responsibly. The dashboard or report card shall

include at least all of the following for the 3 most recent school

years for which the data are available:

(i) Graduation and dropout rates.

(ii) Average class size in grades kindergarten to 3.

(iii) College readiness as measured by Michigan merit

examination test scores.

(iv) Elementary and middle school MEAP scores.

(v) Teacher, principal, and superintendent salary information

including at least minimum, average, and maximum pay levels.

(vi) General fund balance.

(vii) The total number of days of instruction provided.

(h) The district provides physical education consistent with

the state board's policy on quality physical education adopted

September 25, 2003, and provides health education consistent with

the state board's policy on comprehensive school health education

adopted June 8, 2004.

~~(2) The department shall maintain the guidelines for the~~

~~service consolidation plans that were developed for former section~~

~~11d as it was in effect for 2010-2011. The guidelines may identify,~~

~~but are not limited to, allowable cost-sharing arrangements for the~~

~~provision of noninstructional and instructional services and the~~

~~creation of joint operating agreements between and among districts,~~

~~intermediate districts, and other units of local government. The~~

~~department shall create benchmarks to measure success in~~

House Bill No. 5372 (H-1) as amended April 26, 2012

~~implementing service consolidation plans, including, but not~~

~~limited to, demonstrated cost reductions and efficiency. In~~

~~determining eligibility for incentive payments, the department~~

~~shall recognize service consolidation and cooperation and cost~~

~~reductions already in effect as well as continued progress.~~

~~(3) For the purposes of this section, the state maximum~~

~~allowable employer contribution on behalf of any employee is an~~

~~amount equal to 90% of the combined total costs for the employee~~

~~for the school fiscal year for medical, pharmacy, dental, vision,~~

~~disability, long-term care, or any other type of benefit that would~~

~~constitute a health care services benefit for each of the following~~

~~coverage options:~~

~~(a) Employee only coverage.~~

~~(b) Employee and spouse coverage.~~

~~(c) Employee and children coverage.~~

~~(d) Full family coverage.~~

~~(4) A district that accepts funds allocated under this section~~

~~acknowledges that the incentive payment under this section is for~~

~~2011-2012 only and that funds will not be appropriated for the~~

~~purposes of this section for subsequent fiscal years.~~

(3) ~~(5)~~ If the department determines that a district has

intentionally submitted false information in order to qualify for

an incentive payment under this section, the district forfeits an

amount equal to the amount it received under this section from its

total state school aid for ~~2012-2013.~~2013-2014.

[(4) If the department determines that funds allocated under this section will remain unexpended after the initial allocation of $75.00 per pupil to eligible districts under subsection (2), the remaining unexpended amount is allocated on an equal per pupil basis to districts that meet the requirements of subsection (2) and that have a foundation allowance, as calculated under section 20, in an amount that is less than the basic foundation allowance under that section.]

Sec. 22g. (1) From the funds appropriated in section 11, there

is allocated for 2012-2013 only an amount not to exceed

House Bill No. 5372 (H-1) as amended April 26, 2012

$10,000,000.00 for competitive assistance grants to districts and

intermediate districts. Money allocated in this section represents

a portion of the year-end state school aid fund balance for 2011-

2012.

(2) Funds received under this section may be used for

reimbursement of transition costs associated with the consolidation

of operations or services between 2 or more districts, intermediate

districts, or other local units of government or the consolidation

of districts or intermediate districts. Grant funding shall be

available for consolidations that occur on or after June 1, 2012.

The department shall develop an application process and method of

grant distribution. However, a district or intermediate district is

not eligible to receive funding under this section if the district

or intermediate district receives a grant from the competitive

grant assistance program in the department of treasury

appropriations for 2012-2013 under section 951 of House Bill No.

5382 of the 96th Legislature.

Sec. 22i. (1) From the funds appropriated in section 11, there

is allocated for 2012-2013 an amount not to exceed $75,000,000.00

for technology infrastructure grants to districts or to

intermediate districts on behalf of their constituent districts.

Funds received under this section shall be used for the development

or improvement of a district's technology infrastructure in

preparation for the planned implementation in 2014-2015 of online

growth assessments[. ]

(2) The department shall develop a competitive application

process and method of grant distribution. Grants to districts shall

not exceed $2,000,000.00 per district. A grant to an intermediate

district on behalf of its constituent districts shall not exceed

$2,000,000.00 per constituent district. To receive a grant under

this section, an intermediate district shall demonstrate that a

grant awarded to the intermediate district on behalf of its

constituent districts would provide savings compared to providing

grants to individual districts.

Sec. 24. (1) From the appropriation in section 11, there is

allocated for ~~2011-2012~~ 2012-2013 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 licensing and regulatory

affairs 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.

House Bill No. 5372 (H-1) as amended April 26, 2012

Sec. 24a. From the appropriation in section 11, there is

allocated an amount not to exceed ~~$2,114,800.00 for 2011-2012~~

$2,135,800.00 for 2012-2013 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 [~~$765,600.00~~ $1,500,000.00] for ~~2011-~~

~~2012~~ 2012-

2013 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. Both of the following apply to a

district receiving payments under this section:

(a) The district 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.

(b) The district may retain for its administrative expenses an

amount not to exceed 3% of the amount of the payment the district

receives under this section.

Sec. 25. (1) If a pupil is enrolled in an alternative

education program operated by an intermediate district or district

for the purpose of educating pupils who have been expelled from

school or referred from the court, and if the pupil is counted in

membership in another intermediate district or district, the

intermediate district or district operating the alternative

education program shall report the enrollment information to the

department and to the district in which the pupil is counted in

membership, and the intermediate district or district in which the

pupil is counted in membership shall pay to the intermediate

district or district operating the alternative education program an

amount equal to the amount of the foundation allowance or per pupil

payment as calculated under section 20 for the intermediate

district or district in which the pupil is counted in membership,

prorated according to the number of days of the school year ending

in the fiscal year the pupil is educated in the alternative

education program compared to the number of days of the school year

ending in the fiscal year the pupil was actually enrolled in the

intermediate district or district in which the pupil is counted in

membership. The foundation allowance or per pupil payment shall be

adjusted by the pupil's full-time equated status as affected by the

membership definition under section 6(4). If an intermediate

district or district does not make the payment required under this

section within 30 days after receipt of the report, the department

shall calculate the amount owed, shall deduct that amount from the

remaining state school aid payments to the intermediate district or

district for that fiscal year under this act, and shall pay that

amount to the intermediate district or district operating the

alternative education program. The intermediate district or

district in which the pupil is counted in membership and the

intermediate district or district operating the alternative

education program shall provide to the department all information

the department requires to enforce this section.

(2) If a pupil is enrolled in a strict discipline academy for

pupils who have been expelled or suspended from school or otherwise

placed in a strict discipline academy as described in section 1311g

of the revised school code, MCL 380.1311g, and if the pupil is

counted in membership in another district or intermediate district,

the strict discipline academy shall report the enrollment

information to the department and to the district or intermediate

district in which the pupil is counted in membership. Upon receipt

of enrollment information under this subsection indicating that a

pupil has enrolled in a strict discipline academy as described in

this subsection, the department shall do both of the following:

(a) Adjust the membership calculation for the district or

intermediate district in which the pupil was counted in membership

so that the district's or intermediate district's membership is

prorated to allow the district or intermediate district to receive

for each school day in which the pupil was enrolled in the district

an amount equal to 1/180 of the foundation allowance or per pupil

payment as calculated under section 20 for the district or

intermediate district. The foundation allowance or per pupil

payment shall be adjusted by the pupil's full-time equated status

as affected by the membership definition under section 6(4).

(b) Include in the calculation of state school aid for the

strict discipline academy for each school day in which the pupil is

enrolled in the strict discipline academy, not to exceed a number

of school days equal to the difference between 180 and the number

of school days in which the pupil was reported under this section

as previously enrolled in 1 or more other districts or intermediate

districts, an amount equal to 1/180 of the per pupil payment as

calculated under section 20 for the strict discipline academy. The

per pupil payment shall be adjusted by the pupil's full-time

equated status as affected by the membership definition under

section 6(4).

(3) The changes in calculation of state school aid required

under subsection (2) shall take effect as of the date that the

pupil enrolls in the strict discipline academy, and the department

shall base all subsequent payments under this act for the fiscal

year to the affected districts or intermediate districts and for

the strict discipline academy, as applicable, on this recalculation

of state school aid.

(4) If a pupil enrolls in a strict discipline academy as

described in subsection (2), if adjustments are made in

calculations pursuant to subsection (2) due to that enrollment, and

if the pupil subsequently ceases to be enrolled in the strict

discipline academy, the strict discipline academy shall notify the

department of the last date of the pupil's enrollment in the strict

discipline academy and the number of days the pupil was enrolled in

the strict discipline academy.

(5) If a pupil enrolls in a strict discipline academy as

described in subsection (2), the district or intermediate district

in which the pupil is counted in membership and the strict

discipline academy shall provide to the department all information

the department requires to comply with this section.

~~(6) The changes in the requirements under this section that~~

~~are contained in subsections (2) to (5) apply beginning with~~

~~payments made for the 2011-2012 fiscal year.~~

Sec. 26a. (1) From the state school aid fund appropriation in

section 11, there is allocated an amount not to exceed

~~$22,932,000.00 for 2010-2011 and an amount not to exceed~~

$26,300,000.00 for ~~2011-2012~~ 2012-2013 to reimburse districts and

intermediate districts pursuant to section 12 of the Michigan

renaissance zone act, 1996 PA 376, MCL 125.2692, for taxes levied

in ~~2011~~ 2012. 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.

(2) 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 $3,000,000.00 for 2012-2013 to

reimburse public libraries pursuant to section 12 of the Michigan

renaissance zone act, 1996 PA 376, MCL 125.2692, for taxes levied

in 2012. 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 ~~2011-2012~~ 2012-2013 an amount not to exceed

$1,838,000.00 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. 31a. (1) From the state school aid fund money

appropriated in section 11, there is allocated for ~~2011-2012~~ 2012-

2013 an amount not to exceed $317,695,500.00 for payments to

eligible districts, ~~and~~ eligible public school academies, and the

education achievement system 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 or the education achievement system 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~~ not later

than the fifth Wednesday after the pupil membership count day of

the immediately preceding fiscal year and adjusted not later than

December 31 of the immediately preceding fiscal year in the form

and manner prescribed by the center. However, for a public school

academy that began operations as a public school academy, or for an

achievement school that began operations as an achievement school,

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 or the education achievement system 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 and reported to the department

not later than the fifth Wednesday after the pupil membership count

day.

(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 or the education achievement system shall apply to the

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

a district or public school academy or the education achievement

system must meet all of the following:

(a) The sum of the district's or public school academy's or

the education achievement system's combined state and local revenue

per membership pupil in the current state fiscal year, as

calculated under section 20, 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 or the education

achievement system 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 or the

education achievement system shall receive under this section for

each membership pupil in the district or public school academy or

the education achievement system 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~~ not later than the fifth Wednesday

after the pupil membership count day 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 the

public school academy's or the education achievement system's per

pupil amount calculated under section 20, not to exceed the basic

foundation allowance under section 20 for the current state fiscal

year, or of the public school academy's or the education

achievement system'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, or an

achievement school that began operations as an achievement school,

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 or in the education achievement

system 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~~

not later than the fifth Wednesday after the pupil membership count

day 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 or the education achievement

system'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, or the education achievement system,

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), or the

education achievement system if it meets this requirement, may use

not more than 20% of the funds it receives under this section for

school security. A district, or the public school academy, or the

education achievement system 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

or the education achievement system under this section in the

immediately preceding year and already being used by the district

or public school academy or the education achievement system 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, or the education

achievement system if it operates a school breakfast program, 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 or the education achievement system 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 ~~2011-2012~~ 2012-2013 an amount not to exceed

$3,557,300.00 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 ~~2011-2012~~ 2012-2013 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 and the education achievement system 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 or the education achievement system 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 or the education achievement system using funds

under this section, the amount of funds under this section

allocated to each of those programs, the number of at-risk pupils

House Bill No. 5372 (H-1) as amended April 26, 2012

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 or the education achievement system 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 or the education achievement system complies

with this subsection. If the district or public school academy or

the education achievement system 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 or the education achievement system 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 or the education

achievement system 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,~~ K-12,]

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

House Bill No. 5372 (H-1) as amended April 26, 2012

to teachers in grades [~~K-6,~~ K-12,] 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 or the education

achievement system 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 or the education achievement system 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 or the education achievement system 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~~ use not more than 20% of the funds it

receives under this section for specific alternative purposes

identified by the district or public school academy or the

education achievement system 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.~~ If a district

or public school academy or the education achievement system uses

funds for alternative purposes allowed under the flexibility

provisions under this subsection, the district or public school

academy or the education achievement system shall maintain

documentation of the amounts used for those alternative purposes

and shall make that information available to the department upon

request.

(13) A district or public school academy that receives funds

under this section or the education achievement system 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) 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, or social studies 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.

(17) A district or public school academy that receives funds

under this section or the education achievement system may use

funds received under this section to provide an anti-bullying or

crisis intervention program.

Sec. 31d. (1) From the appropriations in section 11, there is

allocated an amount not to exceed ~~$21,627,100.00 for 2010-2011 and~~

~~an amount not to exceed~~ $22,495,100.00 for ~~2011-2012~~ 2012-2013 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 ~~2011-2012~~ 2012-2013 all available federal funding,

estimated at $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 ~~$3,800,000.00 for 2010-2011 and~~

~~an amount not to exceed~~ $9,625,000.00 for ~~2011-2012~~ 2012-2013 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 $5,900,000.00 for ~~2011-~~

~~2012~~ 2012-2013 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) ~~Beginning with 2012-2013, it is the intent of the~~

~~legislature~~ The department shall develop a plan for a multiyear

phased-in approach to transfer funding for great start

collaboratives under this section into an early childhood block

grant program, along with funding for great start readiness

programs under section 32d and funding for great parents, great

start programs under section 32j. The early childhood block grant

program will allocate funds to intermediate districts and consortia

of intermediate districts to act as fiduciaries and provide

administration of regional early childhood programs in conjunction

with their regional great start collaborative to improve program

quality, evaluation, and efficiency for early childhood programs.

The department shall work with intermediate districts, districts,

great start collaboratives, and the early childhood investment

corporation to establish a revised funding formula, application

process, program criteria, and data reporting requirements. ~~for~~

~~2012-2013. Not later than January 1, 2012, the department shall~~

~~report to the legislature its recommendations for the revisions~~

~~required under this subsection.~~

(7) Notwithstanding section 17b, payments under this section

may be made pursuant to an agreement with the department.

Sec. 32d. (1) ~~For 2011-2012,~~ From the funds appropriated in

section 11, there is allocated to eligible intermediate districts

and consortia of intermediate districts for great start readiness

programs an amount not to exceed $104,275,000.00 ~~from the state~~

~~school aid fund money appropriated in section 11.~~ for 2012-2013.

Funds allocated under this section shall be used to provide part-

day, ~~or full-day~~ school-day, or GSRP/head start blended

comprehensive free compensatory classroom 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 meet the participant eligibility and prioritization

guidelines 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~~ for

the immediately preceding fiscal year.

(2) Funds allocated under this section shall be allocated to

intermediate districts or consortia of intermediate districts. An

intermediate district or consortium of intermediate districts

receiving funding under this section shall act as the fiduciary for

the great start readiness programs. For ~~2011-2012,~~ 2012-2013, the

fiduciary intermediate districts and consortia of intermediate

districts shall allocate the funding under this section as follows:

(a) An amount not to exceed $95,400,000.00 allocated to

intermediate districts and consortia of intermediate districts as

directed by the department based on the formula in section 39. In

order to be eligible to receive funds allocated under this

subdivision from an intermediate district or consortium of

intermediate districts, a district or consortium of districts shall

comply with this section and section 39.

(b) An amount not to exceed $8,875,000.00 allocated in grants

to competitive great start readiness programs as directed by the

department based on the grant award process in section 32l. In order

to be eligible to receive funds allocated under this section from

an intermediate district or consortium of intermediate districts, a

competitive great start readiness program 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 ~~2011-2012~~ 2012-

2013 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 school-day, or GSRP/head start blended 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 annually

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) The ongoing articulation of the kindergarten and first

grade programs offered by the program provider.

(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 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.

personnel for this program, as follows:

(i) Teachers possessing proper training. For programs managed

directly by an a district or intermediate district, a valid

teaching certificate and an early childhood (ZA or ZS) endorsement

are required. This provision does not apply to an a district,

intermediate district, or competitive program 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 or ZS) endorsement, a valid Michigan elementary

teaching certificate with a child development associate credential,

or a bachelor's degree in child development with specialization in

preschool teaching. However, if an ~~intermediate district~~ applicant

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~~

~~intermediate district~~ used if the ~~intermediate district~~ applicant

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

2 years of the date of employment. Progress toward completion of

the compliance plan shall consist of at least 2 courses per

calendar year.

(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. However, if an

~~intermediate district~~ applicant demonstrates to the department that

it is unable to fully comply with this subparagraph after making

reasonable efforts to comply, the ~~intermediate district~~ applicant

may ~~employ~~ use paraprofessionals who have completed at least 1

course that earns college credit in early childhood education or

child development if the ~~intermediate district~~ applicant 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 school-day

program funded under this section, each child enrolled in the

school-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

school-day program.

(7) An intermediate district or consortium of intermediate

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.

An intermediate district, consortium of intermediate districts, or

competitive grant program 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 in a form and manner prescribed by the department

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:

(a) "GSRP/head start blended program" means a part-day program

funded under this section and a head start program, which are

combined for a school-day program.

(b) ~~(a)~~ "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 school-day program.

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 school-day program must enroll all children for the

school day to be considered a school-day program.

(11) A grant recipient 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 grant recipient 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) ~~Beginning with 2012-2013, it is the intent of the~~

~~legislature~~ The department shall develop a plan for a multiyear

phased-in approach to transfer funding for great start readiness

programs under this section into an early childhood block grant

program, along with funding for great start collaboratives under

section 32b and funding for great parents, great start programs

under section 32j. The early childhood block grant program will

allocate funds to intermediate districts and consortia of

intermediate districts to act as fiduciaries and provide