HB-5314, As Passed House, May 8, 2014

SUBSTITUTE FOR

HOUSE BILL NO. 5314

(as amended May 8, 2014)

[A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 6, 8b, 11, 11a, 11g, 11j, 11k, 11m, 12, 15,

17a, 18, 19, 20, 20d, 20f, 20g, 21f, 22a, 22b, 22d, 22f, 22g, 22i,

22j, 24, 24a, 24c, 25e, 26a, 26b, 26c, 31a, 31b, 31d, 31f, 32d,

32p, 39, 39a, 41, 51a, 51c, 51d, 53a, 54, 56, 61a, 62, 74, 81, 94,

94a, 98, 99, 99h, 101, 104, 104b, 107, 147, 147b, 147c, 152a, 161,

163, 168, 201, 201a, 202a, 206, 207, 209, 210, 213, 222, 224, 225,

229, 229a, 230, 236, 236a, 236b, 236c, 241, 245, 252, 256, 263,

263a, 264, 265, 265a, 267, 268, 269, 270, 272a, 273, 274, 274a, 275,

276, 277, 278, 279, 280, 281, 282, 283, and 284 (MCL 388.1606,

388.1608b, 388.1611, 388.1611a, 388.1611g, 388.1611j, 388.1611k,

388.1611m, 388.1612, 388.1615, 388.1617a, 388.1618, 388.1619,

House Bill No. 5314 (H-2) as amended May 8, 2014

388.1620, 388.1620d, 388.1620f, 388.1620g, 388.1621f, 388.1622a,

388.1622b, 388.1622d, 388.1622f, 388.1622g, 388.1622i, 388.1622j,

388.1624, 388.1624a, 388.1624c, 388.1625e, 388.1626a, 388.1626b,

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

388.1632p, 388.1639, 388.1639a, 388.1641, 388.1651a, 388.1651c,

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

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

388.1699h, 388.1701, 388.1704, 388.1704b, 388.1707, 388.1747,

388.1747b, 388.1747c, 388.1752a, 388.1761, 388.1763, 388.1768,

388.1801, 388.1801a, 388.1802a, 388.1806, 388.1807, 388.1809,

388.1810, 388.1813, 388.1822, 388.1824, 388.1825, 388.1829,

388.1829a, 388.1830, 388.1836, 388.1836a, 388.1836b, 388.1836c,

388.1841, 388.1845, 388.1852, 388.1856, 388.1863, 388.1863a,

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

388.1870, 388.1872a, 388.1873, 388.1874, 388.1874a, 388.1875, 388.1876,

388.1877, 388.1878, 388.1879, 388.1880, 388.1881, 388.1882,

388.1883, and 388.1884), sections 6, 20, 24c, 25e, 26a, 74, 104b,

and 107 as amended by 2013 PA 130, section 8b as amended by 2007 PA

92, sections 11, 11m, 20g, 21f, 22a, 22b, 22g, 51a, 51c, 99h, 101,

and 147c as amended and sections 31b and 94 as added by 2014 PA

116, sections 11a, 11j, 11k, 12, 15, 18, 19, 20d, 22d, 22f, 22i,

22j, 24, 24a, 26b, 26c, 31a, 31d, 31f, 32d, 32p, 39, 39a, 41, 51d,

53a, 54, 56, 61a, 62, 81, 94a, 98, 99, 104, 147, 147b, 152a, 201,

201a, 206, 209, 210, 224, 225, 229, 229a, 230, 236, 236a, 236b,

241, 245, 252, 263, 263a, 264, 265, 265a, 267, 268, 269, 270, 273,

274, 274a, 275, 276, 277, 278, 279, 280, 281, and 282 as amended and

sections 20f, 236c, and 272a as added by 2013 PA 60, sections 11g

House Bill No. 5314 (H-2) as amended May 8, 2014

and 17a as amended by 2013 PA 97, section 161 as amended by 1990 PA

207, section 163 as amended by 2007 PA 137, section 168 as added by

1993 PA 175, and section 202a as added and sections 207, 213, 222,

256, 283, and 284 as amended by 2012 PA 201, and by adding sections

11r, 20h, 31g, 64b, 95a, 97, 102b, 104c, 207a, and 207b; and to

repeal acts and parts of acts.]

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

district or by an intermediate district for special education

pupils from several districts in programs for pupils with autism

spectrum disorder, pupils with severe cognitive impairment, pupils

with moderate cognitive impairment, pupils with severe multiple

impairments, pupils with hearing impairment, pupils with visual

impairment, and pupils with physical impairment or other health

impairment. Programs for pupils with emotional impairment housed in

buildings that do not serve regular education pupils also qualify.

Unless otherwise approved by the department, a center program

either shall serve all constituent districts within an intermediate

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

pupils residing in the operating district. In addition, special

education center program pupils placed part-time in noncenter

programs to comply with the least restrictive environment

provisions of section 612 of part B of the individuals with

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

program pupils for pupil accounting purposes for the time scheduled

in either a center program or a noncenter program.

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

annual completion and pupil dropout rate that is calculated by the

center pursuant to nationally recognized standards.

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

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

the district for the immediately preceding school year, adjusted

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

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

credential of equal status.

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

article, means for a district, a public school academy, 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 current school year. A district's,

public school academy's, or intermediate district's membership

shall be adjusted as provided under section 25 25E for pupils who

enroll in the district, public school academy, or intermediate

district after the pupil membership count day. All pupil counts

used in this subsection are as determined by the department and

calculated by adding the number of pupils registered for attendance

plus pupils received by transfer and minus pupils lost as defined

by rules promulgated by the superintendent, and as corrected by a

subsequent department audit. For the purposes of this section and

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

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

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

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

program is considered regular daily attendance; for the education

achievement system, a pupil's participation in an online

educational program of the education achievement system or of an

achievement school is considered regular daily attendance; and for

a district a pupil's participation in an online course as defined

in section 21f 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, 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 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 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, 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) To be counted in membership, a pupil shall meet the minimum

age requirement to be eligible to attend school under section 1147

of the revised school code, MCL 380.1147, or shall be enrolled

under subsection (3) of that section, and shall be 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 175,000.

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

entered school.

current school year.

(iii) If a child does not meet the minimum age requirement to be

eligible to attend school for that school year under section 1147

of the revised school code, MCL 380.1147, but will be 5 years of

age not later than December 1 of that school year, the district may

count the child in membership for that school year if the parent or

legal guardian has notified the district in writing that he or she

intends to enroll the child in kindergarten for that 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 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

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) Beginning in 2012-2013, full-time equated memberships for

pupils in kindergarten shall be determined by dividing the number

of 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. However, to

the extent allowable under federal law, for a district or public

school academy that provides evidence satisfactory to the

department that it used federal title I money in the 2 immediately

preceding school fiscal years to fund full-time kindergarten, 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. The change in the counting of full-time

equated memberships for pupils in kindergarten that took effect for

2012-2013 is not a mandate.

(s) For a district, a public school academy, or the education

achievement system that has pupils enrolled in a grade level that

was not offered by the district, 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 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, the public school academy, or the~~

~~education achievement system that is educating the pupil.~~

(v) ~~(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.

(w) ~~(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.

(x) ~~(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 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.~~

(y) ~~(aa)~~ Full-time equated memberships for 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 special education pupils who are not enrolled in

kindergarten but are receiving early childhood special education

services under R 340.1755 or 340.1862 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.

(z) ~~(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.

(aa) ~~(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.~~

(bb) ~~(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.

(cc) ~~(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.

(dd) ~~(ff)~~ For a pupil enrolled in a dropout recovery program

that meets the requirements of section 23a, the pupil shall be

counted as 1/12 of a full-time equated membership for each month

that the district operating the program reports that the pupil was

enrolled in the program and was in full attendance. However, a

pupil counted under this subdivision shall not be counted as more

than 1.0 FTE in a fiscal year. The district operating the program

shall report to the center the number of pupils who were enrolled

in the program and were in full attendance for a month not later

than the tenth day of the next month. A district shall not report a

pupil as being in full attendance for a month unless both of the

following are met:

(i) A personalized learning plan is in place on or before the

first school day of the month for the first month the pupil

participates in the program.

(ii) The pupil meets the district's definition under section

23a of satisfactory monthly progress for that month or, if the

pupil does not meet that definition of satisfactory monthly

progress for that month, the pupil did meet that definition of

satisfactory monthly progress in the immediately preceding month

and appropriate interventions are implemented within 10 school days

after it is determined that the pupil does not meet that definition

of satisfactory monthly progress.

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

section 5 of the revised school code, MCL 380.5.

(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.

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 750.90h, 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 school, for the

pupil's enrollment in the Michigan virtual 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) An online learning pupil enrolled in a district other than

the pupil's district of residence as an eligible pupil under

section 21f.

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, 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, 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~~ 40,000 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 to the district of residence.

Tuition pupil does not include a pupil who is a special education

pupil, a pupil described in subsection (6)(c) to (p), or a pupil

whose parent or guardian voluntarily enrolls the pupil in a

district that is not the pupil's district of residence. 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.

Sec. 8b. (1) The department shall assign a district code to

each public school academy that is authorized under the revised

school code and is eligible to receive funding under this ~~act~~

article within 30 days after a contract is submitted to the

House Bill No. 5314 (H-2) as amended May 8, 2014

department by the authorizing body of a public school academy.

(2) If the department does not assign a district code to a

public school academy within the 30-day period described in

subsection (1), the district code the department shall use to make

payments under this ~~act~~ article to the newly authorized public

school academy shall be a number that is equivalent to the sum of

the last district code assigned to a public school academy located

in the same county as the newly authorized public school academy

plus 1. However, if there is not an existing public school academy

located in the same county as the newly authorized public school

academy, then the district code the department shall use to make

payments under this ~~act~~ article to the newly authorized public

school academy shall be a 5-digit number that has the county code

in which the public school academy is located as its first 2

digits, 9 as its third digit, 0 as its fourth digit, and 1 as its

fifth digit. If the number of public school academies in a county

grows to exceed 100, the third digit in this 5-digit number shall

then be 8 7 for the public school academies in excess of 100.

Sec. 11. (1) For the fiscal year ending September 30, ~~2014,~~

2015, there is appropriated for the public schools of this state

and certain other state purposes relating to education the sum of

~~$11,115,232,300.00~~ [$11,775,067,600.00] from the state school aid

fund, the sum of ~~$156,000,000.00~~ $18,000,000.00 from the MPSERS

retirement obligation reform reserve fund created under section

147b, and the sum of ~~$234,900,000.00~~ $180,000,000.00 from the

general fund. In addition, all other available federal funds are

appropriated for the fiscal year ending September 30, ~~2014.~~2015.

(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 296(2) and state payments in an amount

equal to the remainder of the projected shortfall shall be prorated

in the manner provided under section 296(3).

(7) For ~~2013-2014,~~ 2014-2015, 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.

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

allocated for this section an amount not to exceed $39,500,000.00

for the fiscal year ending ~~September 30, 2014 and for 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, 2015.

(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.

(7) If a district eligible for payments under this section is

dissolved under section 12 of the revised school code, MCL 380.12,

the payment otherwise due to the dissolved district under this

section shall be paid instead to the intermediate district of the

dissolved district. The intermediate district of the dissolved

district shall perform any functions and responsibilities of the

board and other officers of the dissolved district necessary under

this section on behalf of the dissolved district. As used in this

subsection, "dissolved district" and "receiving district" mean

those terms as defined in section 20.

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

allocated an amount not to exceed ~~$131,660,000.00 for 2013-2014~~

$142,600,000.00 for 2014-2015 for payments to the school loan bond

redemption fund in the department of treasury on behalf of

districts and intermediate districts. Notwithstanding section 296

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 ~~2013-2014,~~ 2014-2015, 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 ~~2013-2014~~ 2014-2015 an amount not to exceed

~~$2,500,000.00~~ $4,000,000.00 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. 11r. (1) From the appropriation in section 11, there is

allocated an amount not to exceed $10,000,000.00 to be deposited

into the distressed districts emergency grant fund created under

this section for the purpose of funding grants under this section.

(2) The distressed districts emergency grant fund is created

as a separate account within the state school aid fund. The state

treasurer may receive money or other assets from any source for

deposit into the distressed districts emergency grant fund. The

state treasurer shall direct the investment of the distressed

districts emergency grant fund and shall credit to the distressed

districts emergency grant fund interest and earnings from the fund.

(3) Subject to subsection (4), a district is eligible to

receive a grant from the distressed districts emergency grant fund

if either of the following applies:

(a) The district has adopted a resolution authorizing the

voluntary dissolution of the district approved by the state

treasurer under section 12 of the revised school code, MCL 380.12,

but the dissolution has not yet taken effect under that section.

(b) The district is a receiving district under section 12 of

the revised school code, MCL 380.12, and the district enrolls

pupils who were previously enrolled in a district that was

dissolved under section 12 of the revised school code, MCL 380.12,

in the immediately preceding school year.

(4) A district receiving funds under section 20g is not

eligible to receive funds under this section.

(5) The amount of a grant under this section shall be

determined by the state treasurer after consultation with the

superintendent of public instruction, but shall not exceed the

estimated amount of remaining district costs in excess of available

revenues, including, but not limited to, payroll, benefits,

retirement system contributions, pupil transportation, food

services, special education, building security, and other costs

necessary to allow the district to operate schools directly and

provide public education services until the end of the current

school fiscal year. For a district that meets the eligibility

criteria under subsection (3)(b), the amount of the grant shall be

determined in the same manner as transition costs under section

20g.

(6) Before disbursing funds under this section, the state

treasurer shall notify the house and senate appropriations

subcommittees on school aid and the house and senate fiscal

agencies. The notification shall include, but not be limited to,

the district receiving funds under this section, the amount of the

funds awarded under this section, an explanation of the district

conditions that necessitate funding under this section, and the

intended use of funds disbursed under this section.

(7) Money in the distressed districts emergency grant fund at

the close of a fiscal year shall remain in the distressed districts

emergency grant fund and shall not lapse to the state school aid

fund or to the general fund.

Sec. 12. It is the intent of the legislature to appropriate

and allocate for the fiscal year ending September 30, ~~2015~~ 2016 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, ~~2014,~~ 2015, as adjusted for changes in

pupil membership, taxable values, special education costs, interest

costs, retirement costs, and available revenue. These adjustments

will be determined after the January ~~2014~~ 2015 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, from the proceeds of a loan to the district

under the emergency municipal loan act, 1980 PA 243, MCL 141.931 to

141.942, or from the proceeds of millage levied or pledged under

section 1211 of the revised school code, MCL 380.1211. State aid

overpayments made in special education or special education

transportation payments may be recovered from subsequent special

education or special education transportation payments, from the

proceeds of a loan to the district under the emergency municipal

loan act, 1980 PA 243, MCL 141.931 to 141.942, or from the proceeds

of millage levied or pledged under section 1211 of the revised

school code, MCL 380.1211.

(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 and may advance payments to the district otherwise

authorized under this article if the district would otherwise

experience a significant hardship in satisfying its financial

obligations.

(3) If, based on an audit by the department or the

department's designee or because of ~~the receipt of~~ new or updated

~~data,~~ information received by the department, the department

determines ~~during a fiscal year~~ that the amount paid to a district

or intermediate district under this article for the current fiscal

year or a prior fiscal year was incorrect, ~~under the law in effect~~

~~for that year,~~ the department ~~may~~ shall 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.~~

in the next apportionment after the adjustment is finalized. The

deduction or payment shall be calculated according to the law in

effect in the fiscal year in which the ~~improper~~ incorrect amount

was paid. If the district does not receive an allocation for the

fiscal year or if the allocation is not sufficient to pay the

amount of any deduction, the amount of any deduction otherwise

applicable shall be satisfied from the proceeds of a loan to the

district under the emergency municipal loan act, 1980 PA 243, MCL

141.931 to 141.942, or from the proceeds of millage levied or

pledged under section 1211 of the revised school code, MCL

380.1211, as determined by the department.

(4) The department may conduct audits, or may direct audits by

designee of the department, for the current fiscal year and the

immediately preceding 3 fiscal years of all records related to a

program for which a district or intermediate district has received

funds under this article.

(5) ~~(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.

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

all programs and services, there is appropriated for ~~2013-2014~~

2014-2015 for obligations in excess of applicable appropriations an

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

amounts available from overpayments.

Sec. 17a. (1) The department may withhold all or part of any

payment that a district or intermediate district is entitled to

receive under this ~~act~~ article to the extent the withholdings are a

component part of a plan, developed and implemented pursuant to the

revised municipal finance act, 2001 PA 34, MCL 141.2101 to

141.2821, the emergency municipal loan act, 1980 PA 243, MCL

141.931 to 141.942, the local financial stability and choice act,

2012 PA 436, MCL 141.1541 to 141.1575, or other statutory

authority, for financing an outstanding obligation upon which the

district or intermediate district defaulted or for other financial

obligations of the district or intermediate district. Amounts

withheld shall be used to pay, on behalf of the district or

intermediate district, unpaid amounts or subsequently due amounts,

or both, of principal and interest on the outstanding obligation

upon which the district or intermediate district defaulted.

(2) The state treasurer may withhold all or part of any

payment that a district or intermediate district is entitled to

receive under this ~~act~~ article to the extent authorized or required

under section 15 of the school bond qualification, approval, and

loan act, 2005 PA 92, MCL 388.1935, the emergency municipal loan

act, 1980 PA 243, MCL 141.931 to 141.942, the local financial

stability and choice act, 2012 PA 436, MCL 141.1541 to 141.1575, or

other statutory authority.

(3) Under an agreement entered into by a district or

intermediate district assigning all or a portion of the payment

that it is eligible to receive under this ~~act~~ article to the

Michigan finance authority or to the trustee of a pooled

arrangement or pledging the amount for payment of an obligation it

incurred with the Michigan finance authority or with the trustee of

a pooled arrangement, the state treasurer shall transmit to the

Michigan finance authority or a trustee designated by the Michigan

finance authority or to the trustee of a pooled arrangement or

other designated depository the amount of the payment that is

assigned or pledged under the agreement.

(4) If a district or intermediate district for which an

emergency manager ~~has been appointed pursuant to~~ is in place under

the local financial stability and choice act, 2012 PA 436, MCL

141.1541 to 141.1575, or that has an approved deficit elimination

plan or an approved enhanced deficit elimination plan under section

102, enters into or has entered into an agreement described in

subsection (3) pursuant to section 1225(2) of the revised school

code, MCL 380.1225, whether the obligation was issued before or

after the effective date of this subsection, the portion of state

school aid paid or to be paid on behalf of the district or

intermediate district directly to the Michigan finance authority,

or to a trustee designated by the Michigan finance authority, for

the sole purpose of paying the principal of and interest on the

obligation is subject to a lien and trust that is a statutory lien

and trust, paramount and superior to all other liens and interests

of any kind, for the sole purpose of paying the principal of and

interest on the obligation. The statutory lien and trust applies to

the state school aid received or to be received by the Michigan

finance authority, or trustee designated by the Michigan finance

authority, on behalf of the district or intermediate district,

immediately upon the later of the effective date of this subsection

or the time when the state school aid is allocated to the district

or intermediate district, but is subject to any subsequent

reduction of the state school aid allocation by operation of law or

executive order. The lien and trust imposed by this section with

respect to state school aid has a priority as established in the

agreement, except that the agreement shall not impair any existing

lien and trust previously created pursuant to this section,

including any lien and trust applicable to a multi-year repayment

agreement under section 1225 of the revised school code, MCL

380.1225. Except as otherwise provided in this subsection, the lien

and trust created under this subsection for the benefit of holders

of the obligation issued pursuant to this section is valid and

binding against a party having a claim of any kind in tort,

contract, or otherwise against the district or intermediate

district that has issued the obligation secured by a pledge of

state school aid pursuant to this section, regardless of whether

that party has notice of the pledge. A pledge made pursuant to this

section for the benefit of the holders of obligations or others is

perfected without delivery, recording, or notice. The state school

aid paid or to be paid on behalf of a district or intermediate

district to the Michigan finance authority, or trustee designated

by the Michigan finance authority, shall be held in trust for the

sole benefit of the holders of the obligation issued pursuant to

this section or section 1225 of the revised school code, MCL

380.1225, and is exempt from being levied upon, taken, sequestered,

or applied toward paying the debts or liabilities of the district

or intermediate district other than for payment of the obligation

to which the lien applies. However, nothing in this subsection

alters the ability of the state treasurer to withhold state school

aid from a district or intermediate district as provided by law.

(5) Notwithstanding the payment dates prescribed by this ~~act~~

article for distributions under this ~~act,~~ article, the state

treasurer may advance all or part of a payment that is dedicated

for distribution or for which the appropriation authorizing the

payment has been made if and to the extent, under the terms of an

agreement entered into by a district or intermediate district and

the Michigan finance authority, the payment that the district or

intermediate district is eligible to receive has been assigned to

or pledged for payment of an obligation it incurred with the

Michigan finance authority.

(6) This section does not require the state to make an

appropriation to any school district or intermediate school

district and shall not be construed as creating an indebtedness of

the state, and any agreement made pursuant to this section shall

contain a statement to that effect.

(7) As used in this section, "trustee of a pooled arrangement"

means the trustee of a trust approved by the state treasurer and,

subject to the conditions and requirements of that approval,

established for the purpose of offering for sale, as part of a

pooled arrangement, certificates representing undivided interests

in notes issued by districts or intermediate districts under

section 1225 of the revised school code, MCL 380.1225.

(8) If a trustee applies to the state treasurer for approval

of a trust for the purposes of this section, the state treasurer

shall approve or disapprove the trust within 10 days after receipt

of the application.

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, 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 under sections 22a

and 22b or received by an intermediate district under ~~this article~~

section 81 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 15 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.

(g) Any deficit elimination plan or enhanced deficit

elimination plan the district was required to submit under this

article.

(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~~ purposes of determining the reasonableness

of expenditures, whether a district or intermediate district has

received the proper amount of funds under this article, 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, and at such other times as determined

by the department, at the expense of the district or intermediate

district, as applicable. , The audits must be performed 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. A district or intermediate district shall retain these

records for the current fiscal year and from at least the 3

immediately preceding fiscal years.

(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 1 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 1 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.

(11) Not later than September 1, ~~2014,~~ 2015, if a district or

intermediate district offers online learning, the district or

intermediate district shall submit to the department a report that

details the per-pupil costs of operating the online learning. The

report shall include at least all of the following information

concerning the operation of online learning for the school fiscal

year ending June 30, ~~2014:~~2015:

(a) The name of the district operating the online learning and

of each district that enrolled students in the online learning.

(b) The total number of students enrolled in the online

learning and the total number of membership pupils enrolled in the

online learning.

the district offering online learning, the name of that district.

(d) The district in which the pupil was enrolled before

enrolling in the district offering online learning.

(e) The number of participating students who had previously

dropped out of school.

(f) The number of participating students who had previously

been expelled from school.

(g) The total cost to enroll a student in the program. This

cost shall be reported on a per-pupil, per-course, per-semester or

trimester basis. The total shall include costs broken down by cost

for training, personnel, hardware and software, payment to each

online learning provider, and other costs associated with operating

online learning.

(h) The name of each online education provider contracted by

the district and the state in which each online education provider

is headquartered.

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 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 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 school or district

accountability designations 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,~~ 2016-2017, statewide standard reporting

requirements for education data 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. A district or intermediate district shall

implement the statewide standard reporting requirements not later

than 2014-2015 or when a district or intermediate district updates

its education data reporting system, whichever is later.

Sec. 20. (1) For ~~2013-2014,~~ 2014-2015, both of the following

apply:

(a) Except as otherwise provided in this subdivision, the

basic foundation allowance is ~~$8,049.00.~~$8,105.00.

(b) The minimum foundation allowance is $7,188.00.

(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,~~

minimum foundation allowance for the immediately preceding state

fiscal year, 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 greater~~

~~of $6,966.00 or~~ 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~~ difference between the basic foundation allowance

for the current state fiscal year and basic foundation allowance

for the immediately preceding state fiscal year ~~to the current~~

~~state fiscal year made in the basic foundation allowance~~ minus

~~$10.00)~~ $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)~~

minimum foundation allowance for the immediately preceding state

fiscal year) 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.~~ minimum 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. For the purposes of this subdivision, for 2014-2015, the

minimum foundation allowance for the immediately preceding state

fiscal year shall be considered to be $7,076.00.

(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~~ 2014-2015 in an amount equal to the ~~district's~~ basic

foundation allowance for ~~2010-2011, minus $470.00.~~2014-2015.

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

allowance for the immediately preceding state fiscal year that was

greater than ~~$6,500.00,~~ the basic foundation allowance for the

immediately preceding state fiscal year, 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.~~

~~(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.~~

(d) ~~(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.~~

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

22c as that section was in effect for ~~2006-2007,~~ 2013-2014, the

district's ~~2006-2007~~ 2013-2014 foundation allowance shall be

considered to have been an amount equal to the sum of the

district's actual ~~2006-2007~~ 2013-2014 foundation allowance as

otherwise calculated under this section plus the per pupil amount

of the district's equity payment for ~~2006-2007~~ 2013-2014 under

section 22c as that section was in effect for ~~2006-2007.~~2013-2014.

~~(h) For 2012-2013, for a district that had a foundation~~

~~allowance for the 2011-2012 state fiscal year of less than~~

~~$6,966.00, the district's foundation allowance is an amount equal~~

~~to $6,966.00.~~

(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~~ local

portion of the district's foundation allowance 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~~ local portion of the district's foundation

allowance divided by the district's membership excluding special

education pupils. For a district that has a millage reduction

required under section 31 of article IX of the state constitution

of 1963, the state portion of the district's foundation allowance

shall be calculated as if that reduction did not occur. For a

receiving district, if school operating taxes continue to be levied

on behalf of a dissolved district that has been attached in whole

or in part to the receiving district to satisfy debt obligations of

the dissolved district under section 12 of the revised school code,

MCL 380.12, the taxable value per membership pupil of property in

the receiving district used for the purposes of this subsection ,

does not include the taxable value of property within the

geographic area of the dissolved district.

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

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

of residence. 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) Except as otherwise provided in this subsection, for

pupils in membership, other than special education pupils, in a

public school academy, the allocation calculated under this section

is an amount per membership pupil other than special education

pupils in the public school academy equal to the foundation

allowance of the district in which the public school academy is

located or the state maximum public school academy allocation,

whichever is less. However, a public school academy 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 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) 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, MCL 380.1280c, 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 lesser of the sum of

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 plus $100.00 or the highest

foundation allowance among the original or affected districts. This

subsection does not apply to a receiving district unless there is a

subsequent consolidation or annexation that affects the district.

(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. If a consensus

index is not determined at the revenue estimating conference, the

House Bill No. 5314 (H-2) as amended May 8, 2014

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) 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 more than $100.00 for a fiscal year as a result of this adjustment.]

~~(12) 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. All of the following apply to districts~~

~~receiving a foundation allowance adjustment under this subsection:~~

~~(a) Except as otherwise provided in this subdivision, 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. For an individual school or~~

~~schools operated by a district qualifying for a foundation~~

~~allowance adjustment 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 subdivision. 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.~~

~~(b) 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.~~

~~(c) Notwithstanding subsection (8), for a district that is~~

~~formed or reconfigured by consolidation of 2 or more districts, 1~~

~~of which received an adjustment under this subsection for 2012-~~

~~2013, the resulting district's foundation allowance for 2013-2014~~

~~and each succeeding fiscal year shall be adjusted to be an amount~~

~~equal to the sum of the resulting district's foundation allowance~~

~~as calculated under subsection (8) excluding any adjustment~~

~~calculated under this subsection plus [(the original district's~~

~~adjustment under this subsection in 2012-2013 times the number of~~

House Bill No. 5314 (H-2) as amended May 8, 2014

~~pupils in the original district's membership for 2012-2013) divided~~

~~by the number of pupils in the resulting district's membership for~~

~~2013-2014].~~

~~(d) Beginning in 2013-2014, for a district that received an~~

~~adjustment for the immediately preceding fiscal year and that had a~~

~~foundation allowance as adjusted by this subsection for the~~

~~immediately preceding fiscal year equal to $6,966.00, the district~~

~~shall not receive an adjustment under this section for the current~~

~~fiscal year.~~

[(13)] Payments to districts, 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.

[(14)] 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.

[(15)] 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) "Dissolved district" means a district that loses its

organization, has its territory attached to 1 or more other

districts, and is dissolved as provided under section 12 of the

revised school code, MCL 380.12.

(f) "Immediately preceding state fiscal year" means the state

fiscal year immediately preceding the current state fiscal year.

(g) "Local portion of the district's foundation allowance"

means an amount that is 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

product of the captured assessed valuation under tax increment

financing acts times the district's certified mills divided by the

district's membership excluding special education pupils).

(h) ~~(g)~~ "Local school operating revenue" means school

operating taxes levied under section 1211 of the revised school

code, MCL 380.1211. For a receiving district, if school operating

taxes are to be levied on behalf of a dissolved district that has

been attached in whole or in part to the receiving district to

satisfy debt obligations of the dissolved district under section 12

of the revised school code, MCL 380.12, local school operating

revenue does not include school operating taxes levied within the

geographic area of the dissolved district.

(i) ~~(h)~~ "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.

(j) ~~(i)~~ "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~~ amount of the difference between the

basic foundation allowance for the current state fiscal year and

the basic foundation for 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~~ amount of

the difference between the basic foundation allowance for the

current state fiscal year and the basic foundation for the

immediately preceding state fiscal year ~~to the current state fiscal~~

~~year made in the basic foundation allowance~~ minus ~~$10.00)~~ $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)~~ minimum foundation allowance for

the immediately preceding state fiscal year) 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].~~minimum foundation allowance for

the immediately preceding state fiscal year]. For the purposes of

this subdivision, for 2014-2015, the minimum foundation allowance

for the immediately preceding state fiscal year shall be considered

to be $7,076.00.

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

(l) ~~(k)~~ "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.

(m) (l) "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.

(n) ~~(m)~~ "Receiving district" means a district to which all or

part of the territory of a dissolved district is attached under

section 12 of the revised school code, MCL 380.12.

(o) ~~(n)~~ "School operating purposes" means the purposes

included in the operation costs of the district as prescribed in

sections 7 and 18 and purposes authorized under section 1211 of the

revised school code, MCL 380.1211.

(p) ~~(o)~~ "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.

(q) ~~(p)~~ "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.

(r) ~~(q)~~ "Taxable value per membership pupil" means taxable

value, as certified by the ~~department of treasury,~~ county treasurer

and reported to the department, 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 ~~2013-2014,~~ 2014-2015, 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. 20f. (1) From the funds appropriated in section 11, there

is allocated an amount not to exceed $6,000,000.00 for ~~2013-2014~~

2014-2015 for payments to eligible districts under this section. A

district is eligible for funding under this section if the district

received a payment under this section as it was in effect for 2013-

2014. A district was eligible for funding in 2013-2014 if the sum

of the following is was less than $5.00:

(a) The increase in the district's foundation allowance or per

pupil payment as calculated under section 20 from 2012-2013 to

2013-2014.

(b) The district's equity payment per membership pupil under

section 22c for 2013-2014.

147a for 2012-2013 divided by the district's membership pupils for

2012-2013 minus the quotient of the district's allocation under

section 147a for 2013-2014 divided by the district's membership

pupils for 2013-2014.

(2) The amount allocated to each eligible district under this

section is an amount per membership pupil equal to ~~$5.00 minus the~~

~~sum of the following:~~the amount per membership pupil the district

received in 2013-2014.

~~(a) The increase in the district's foundation allowance or per~~

~~pupil payment as calculated under section 20 from 2012-2013 to~~

~~2013-2014.~~

~~(b) The district's equity payment per membership pupil under~~

~~section 22c.~~

~~(c) The quotient of the district's allocation under section~~

~~147a for 2012-2013 divided by the district's membership pupils for~~

~~2012-2013 minus the quotient of the district's allocation under~~

~~section 147a for 2013-2014 divided by the district's membership~~

~~pupils for 2013-2014.~~

(3) If the allocation under subsection (1) is insufficient to

fully fund payments as otherwise calculated under this section, the

department shall prorate payments under this section on an equal

per-pupil basis.

Sec. 20g. (1) From the money appropriated under section 11,

~~the following amounts are allocated for 2013-2014:~~

~~(a) From the general fund money,~~ there is allocated an amount

not to exceed $2,200,000.00 for ~~2013-2014~~ 2014-2015 for grants to

eligible districts that first received payments under this section

in 2013-2014 for transition costs related to the enrollment of

pupils who were previously enrolled in a district that was

dissolved under section 12 of the revised school code, MCL 380.12,

allocated as provided under subsection (3). ~~It is the intent of the~~

~~legislature to continue this transition funding~~ Payments under this

section shall continue for a total of 4 fiscal years following the

dissolution of a district, after which the payments shall cease.

~~(b) From the state school aid fund money, an amount not to~~

~~exceed $5,000,000.00 for reimbursements to eligible districts for~~

~~costs incurred by the eligible district associated with the~~

~~transfer of property from a dissolved school district to the~~

~~eligible district, allocated as provided under subsection (4).~~

(2) A receiving school district, as that term is defined in

section 12 of the revised school code, MCL 380.12, is an eligible

district under this section.

(3) The amount allocated to each eligible district under

~~subsection (1)(a)~~ This section is an amount equal to the product of

the number of membership pupils enrolled in the eligible district

who were previously enrolled in the dissolved school district in

the school year immediately preceding the dissolution, or who

reside in the geographic area of the dissolved school district and

are entering kindergarten, times 10.0% of the lesser of the

foundation allowance of the eligible district as calculated under

section 20 or the basic foundation allowance under section 20(1).

~~(4) To allocate funds under subsection (1)(b), the department~~

~~shall develop a reimbursement application process and a~~

~~reimbursement distribution process. Reimbursable costs shall~~

~~include, but are not limited to, the costs of maintenance,~~

~~utilities, security, or insurance associated with, or the~~

~~demolition of, buildings transferred from a dissolved school~~

~~district to the eligible district. However, the reimbursement made~~

~~to eligible districts for all of the property transferred from a~~

~~single dissolved school district shall not exceed the total~~

~~cumulative sum of $2,500,000.00 for all of the eligible districts~~

~~to which property was transferred from that dissolved school~~

~~district.~~

~~(5) The funds allocated under subsection (1)(b) are considered~~

~~work project appropriations and any unexpended funds for 2013-2014~~

~~are carried forward into 2014-2015. The purpose of the work project~~

~~is as described in subsection (1)(b). The total estimated cost of~~

House Bill No. 5314 (H-2) as amended May 8, 2014

~~the work project is $5,000,000.00. The tentative estimated~~

~~completion date for the work project is September 30, 2015.~~

(4) ~~(6)~~ As used in this section, "dissolved school district"

means a school district that has been declared dissolved under

section 12 of the revised school code, 1976 PA 451, MCL 380.12.

[Sec. 20h. From the funds appropriated in section 11, there is allocated the amount of $25,000,000.00 for 2014-2015 only for payments to districts. Payments to districts under this section shall be distributed to districts on an equal per pupil basis.]

Sec. 21f. (1) A pupil enrolled in a district in any of grades

5 7 to 12 is eligible to enroll in an online course as provided for

in this section. ~~However, this section does not apply to a pupil~~

~~enrolled in a school of excellence that is a cyber school, as~~

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

(2) With the consent of the pupil's parent or legal guardian,

a district shall enroll an eligible pupil in up to 2 online courses

as requested by the pupil during an academic term, semester, or

trimester. ~~It is the intent of the legislature to consider~~

~~increasing the limit on the number of online courses that a pupil~~

~~may enroll in beginning in 2014-2015 for pupils who have~~

~~demonstrated previous success with online courses.~~ Unless the pupil

is newly enrolled in the district, the request for online course

enrollment must be made in the academic term, semester, or

trimester immediately preceding the enrollment. A district may not

establish additional requirements that would prohibit a pupil from

taking an online course. If a pupil has demonstrated previous

success with online courses and the school leadership and the

pupil's parent or legal guardian determine that it is in the best

interest of the pupil, a pupil may be enrolled in more than 2

online courses in a specific academic term, semester, or trimester.

Consent of the pupil's parent or legal guardian is not required if

the pupil is at least age 18 or is an emancipated minor.

(3) An eligible pupil may enroll in an online course published

in the pupil's educating district's catalog of online courses

described in subsection (7)(a) or the statewide catalog of online

courses maintained by the Michigan virtual university pursuant to

section 98.

(4) A district shall determine whether or not it has capacity

to accept applications for enrollment from nonresident applicants

in online courses and may use that limit as the reason for refusal

to enroll an applicant. If the number of nonresident applicants

eligible for acceptance in an online course does not exceed the

capacity of the district to provide the online course, the district

shall accept for enrollment all of the nonresident applicants

eligible for acceptance. If the number of nonresident applicants

exceeds the district's capacity to provide the online course, the

district shall use a random draw system, subject to the need to

abide by state and federal antidiscrimination laws and court

orders.

(5) A district may deny a pupil enrollment in an online course

if any of the following apply, as determined by the district:

(a) The pupil has previously gained the credits provided from

the completion of the online course.

(b) The online course is not capable of generating academic

credit.

graduation requirements or career interests of the pupil.

(d) The pupil does not possess the prerequisite knowledge and

skills to be successful in the online course or has demonstrated

failure in previous online coursework in the same subject.

(e) The online course is of insufficient quality or rigor. A

district that denies a pupil enrollment for this reason shall make

a reasonable effort to assist the pupil to find an alternative

course in the same or a similar subject that is of acceptable rigor

and quality.

(f) The cost of the online course exceeds the amount

identified in subsection (8).

(g) The online course enrollment request does not occur within

the same timelines established by the district for enrollment and

schedule changes for regular courses.

(6) If a pupil is denied enrollment in an online course by a

district, the pupil may appeal the denial by submitting a letter to

the superintendent of the intermediate district in which the

pupil's educating district is located. The letter of appeal shall

include the reason provided by the district for not enrolling the

pupil and the reason why the pupil is claiming that the enrollment

should be approved. The intermediate district superintendent or

designee shall respond to the appeal within 5 days after it is

received. If the intermediate district superintendent or designee

determines that the denial of enrollment does not meet 1 or more of

the reasons specified in subsection (5), the district shall allow

the pupil to enroll in the online course.

(7) To offer or provide an online course under this section, a

district or intermediate district shall do all of the following:

(a) Provide the Michigan virtual university with the course

syllabus in a form and method prescribed by the Michigan virtual

university for inclusion in a statewide online course catalog. The

district or intermediate district shall also provide on its

publicly accessible website a link to the course syllabi for all of

the online courses offered by the district or intermediate district

and a link to the statewide catalog of online courses maintained by

the Michigan virtual university.

(b) Offer the online course on an open entry and exit method,

or aligned to a semester, trimester, or accelerated academic term

format.

virtual university with the number of enrollments in each online

course the district or intermediate district offered to pupils

pursuant to this section in the immediately preceding school year,

and the number of enrollments in which the pupil earned 60% or more

of the total course points for each online course.

(8) For a pupil enrolled in 1 or more online courses published

in the pupil's educating district's catalog of online courses under

subsection (7) or in the statewide catalog of online courses

maintained by the Michigan virtual university, the district shall

use foundation allowance or per pupil funds calculated under

section 20 to pay for the expenses associated with the online

course or courses. The district shall pay 80% of the cost of the

online course upon enrollment and 20% upon completion as determined

by the district. A district is not required to pay toward the cost

of an online course an amount that exceeds ~~1/12~~ 6.25% of the

~~district's~~ minimum foundation allowance or per pupil payment for

House Bill No. 5314 (H-2) as amended May 8, 2014

the current fiscal year as calculated under section 20. ~~per~~

~~semester or an amount that exceeds 1/18 of the district's~~

~~foundation allowance or per pupil payment as calculated under~~

~~section 20 per trimester.~~

(9) An online learning pupil shall have the same rights and

access to technology in his or her ~~educating~~ primary district's

school facilities as all other pupils enrolled in the ~~educating~~

pupil's primary district.

(10) If a pupil successfully completes an online course, as

determined by the pupil's primary district, the pupil's primary

district shall grant appropriate academic credit for completion of

the course and shall count that credit toward completion of

graduation and subject area requirements. A pupil's school record

and transcript shall identify the online course title as it appears

in the online course syllabus.

(11) The enrollment of a pupil in 1 or more online courses

shall not result in a pupil being counted as more than 1.0 full-

time equivalent pupils under this ~~act.~~article.

(12) [The portion of the full-time equated pupil membership for

which a pupil is] enrolled in 1 or more online courses under this

section shall not be [TRANSFERRED] under the pupil transfer process under

section 25e.

(13) ~~(12)~~ As used in this section:

(a) "Online course" means a course of study that is capable of

generating a credit or a grade, that is provided in an interactive

internet-connected learning environment, in which pupils are

separated from their teachers by time or location, or both, and in

which a teacher who holds a valid Michigan teaching certificate is

responsible for determining appropriate instructional methods for

each pupil, diagnosing learning needs, assessing pupil learning,

prescribing intervention strategies, reporting outcomes, and

evaluating the effects of instruction and support strategies.

(b) "Online course syllabus" means a document that includes

all of the following:

(i) The state academic standards addressed in an online course.

(ii) The online course content outline.

(iii) The online course required assessments.

(iv) The online course prerequisites.

(v) Expectations for actual instructor contact time with the

online learning pupil and other pupil-to-instructor communications.

(vi) Academic support available to the online learning pupil.

(vii) The online course learning outcomes and objectives.

(viii) The name of the institution or organization providing the

online content.

(ix) The name of the institution or organization providing the

online instructor.

(x) The course titles assigned by the district or intermediate

district and the course titles and course codes from the national

center for education statistics (NCES) school codes for the

exchange of data (SCED).

(xi) The number of eligible nonresident pupils that will be

accepted by the district or intermediate district in the online

course.

(xii) The results of the online course quality review using the

guidelines and model review process published by the Michigan

virtual university.

more online courses.

(d) "Primary district" means the district that enrolls the

pupil and reports the pupil as a full-time equated pupil for pupil

membership purposes.

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

allocated an amount not to exceed ~~$5,526,000,000.00~~

$5,403,000,000.00 for ~~2013-2014~~ 2014-2015 for payments to districts

and qualifying public school academies to guarantee each district

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. For a receiving district, if school

operating taxes are to be levied on behalf of a dissolved district

that has been attached in whole or in part to the receiving

district to satisfy debt obligations of the dissolved district

under section 12 of the revised school code, MCL 380.12, taxable

value per membership pupil of all property in the receiving

district that is nonexempt property and taxable value per

membership pupil of property in the receiving district that is

commercial personal property do not include property within the

geographic area of the dissolved district; ad valorem property tax

revenue of the receiving district captured under tax increment

financing acts does not include ad valorem property tax revenue

captured within the geographic boundaries of the dissolved district

under tax increment financing acts; and certified mills do not

include the certified mills of the dissolved district.

(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. For a receiving district, if school

operating taxes are to be levied on behalf of a dissolved district

that has been attached in whole or in part to the receiving

district to satisfy debt obligations of the dissolved district

under section 12 of the revised school code, MCL 380.12, ad valorem

property tax revenue captured under tax increment financing acts do

not include ad valorem property tax revenue captured within the

geographic boundaries of the dissolved district under tax increment

financing acts.

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

qualifying public school academy, 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 an amount equal to the 1994-95 per pupil

payment to the qualifying public school academy under section 20.

(4) A district or qualifying public school academy may use

funds allocated under this section in conjunction with any federal

funds for which the district or qualifying public school academy

otherwise would be eligible.

(5) Except as otherwise provided in this subsection, 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. This subsection

does not apply to a receiving district unless there is a subsequent

consolidation or annexation that affects the district.

(6) As used in this section:

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

foundation allowance calculated and certified by the department of

treasury or the superintendent under former section 20a as enacted

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

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

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

1993-94.

for which a particular calculation is made.

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

pupil" means the per pupil revenue generated by multiplying a

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

year taxable value per membership pupil. For a receiving district,

if school operating taxes are to be levied on behalf of a dissolved

district that has been attached in whole or in part to the

receiving district to satisfy debt obligations of the dissolved

district under section 12 of the revised school code, MCL 380.12,

taxable value per membership pupil does not include the taxable

value of property within the geographic area of the dissolved

district.

(e) "Dissolved district" means a district that loses its

organization, has its territory attached to 1 or more other

districts, and is dissolved as provided under section 12 of the

revised school code, MCL 380.12.

(f) "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. For a receiving district, if

school operating taxes are to be levied on behalf of a dissolved

district that has been attached in whole or in part to the

receiving district to satisfy debt obligations of the dissolved

district under section 12 of the revised school code, MCL 380.12,

school operating taxes do not include school operating taxes levied

within the geographic area of the dissolved district.

(g) "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.

(h) "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.

(i) "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.

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

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

operation in the current state fiscal year.

(k) "Receiving district" means a district to which all or part

of the territory of a dissolved district is attached under section

12 of the revised school code, MCL 380.12.

(l) "School operating taxes" means local ad valorem property

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

380.1211, and retained for school operating purposes as defined in

section 20.

(m) "Tax increment financing acts" means 1975 PA 197, MCL

125.1651 to 125.1681, the tax increment finance authority act, 1980

PA 450, MCL 125.1801 to 125.1830, the local development financing

act, 1986 PA 281, MCL 125.2151 to 125.2174, the brownfield

redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,

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

125.2871 to 125.2899.

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

following divided by the district's membership:

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

levy of school operating taxes on a homestead, qualified

agricultural property, qualified forest property, supportive

housing property, industrial personal property, and commercial

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

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

qualified agricultural property, qualified forest property,

supportive housing property, industrial personal property, and

commercial personal property for the calendar year ending in the

current state fiscal year. For a receiving district, if school

operating taxes are to be levied on behalf of a dissolved district

that has been attached in whole or in part to the receiving

district to satisfy debt obligations of the dissolved district

under section 12 of the revised school code, MCL 380.12, mills do

not include mills within the geographic area of the dissolved

district.

(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. For a receiving district, if school operating taxes are to be

levied on behalf of a dissolved district that has been attached in

whole or in part to the receiving district to satisfy debt

obligations of the dissolved district under section 12 of the

revised school code, MCL 380.12, school operating taxes do not

include school operating taxes levied within the geographic area of

the dissolved district.

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

allocated an amount not to exceed ~~$3,335,000,000.00~~

$3,569,000,000.00 for ~~2013-2014~~ 2014-2015 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) Comply with section 1280b of the revised school code, MCL

380.1280b.

(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.

(e) Comply with section 21f.

(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

House Bill No. 5314 (H-2) as amended May 8, 2014

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) If it is determined by May 1, 2015 that funds allocated under this section will exceed actual expenditures because pupil membership estimates for 2014-2015, as determined at the May 2014 consensus revenue estimating conference, exceed actual 2014-2015 pupil memberships, an amount equal to the savings from revised pupil memberships, not to exceed $35,000,000.00, is allocated for the purposes of this subsection and shall be distributed according to the following:

(a) The amount allocated under this subsection shall be distributed to eligible districts on an equal per pupil basis.

(b) A district is an eligible district for a payment under this subsection if the district meets all the following:

(i) The district's pupil membership for the current fiscal year is at least 1.2% lower than the district's pupil membership for the immediately preceding fiscal year.

(ii) The district is not eligible for a membership adjustment under section 6(4)(x) or to receive funding under section 22d(2).

(iii) The district has not had 3 consecutive operating deficits for the 3 immediately preceding fiscal years.

(iv) Is not a public school academy or an achievement school.

(c) Notwithstanding section 17b, payments to eligible districts under this subsection shall be paid on a schedule prescribed by the department.]

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

not to exceed ~~$2,584,600.00~~ $2,025,000.00 is allocated for ~~2013-~~

~~2014~~ 2014-2015 for supplemental payments to rural districts under

this section.

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

allocated for ~~2013-2014~~ 2014-2015 an amount not to exceed

~~$957,300.00~~ $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 for ~~2013-2014~~ 2014-2015 an

amount not to exceed ~~$1,627,300.00~~ $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

House Bill No. 5314 (H-2) as amended May 8, 2014

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 ~~2013-2014~~ 2014-2015 an amount not to exceed

~~$80,000,000.00~~ $78,700,000.00 to provide incentive payments to

districts that meet best practices under this section. 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 $52.00 per pupil. A district shall receive an

incentive payment under this section if the district satisfies at

least [6]7 of the following requirements not later than June 1, ~~2014:~~

2015:

(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 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 or a district with

a voluntary employee beneficiary association that pays no more than

the maximum per employee contribution amount and that contributes

no more than the maximum employer contribution percentage of total

annual costs for the medical benefit plans as described in sections

3 and 4 of the publicly funded health insurance contribution act,

2011 PA 152, MCL 15.563 and 15.564, is considered to have satisfied

this requirement.

(b) The district has obtained competitive bids on the

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

more other noninstructional services for ~~2013-2014.~~ 2014-2015. In

comparing competitive bids to the current costs of providing 1 or

more of these services, a district shall exclude the unfunded

accrued liability costs for retirement and other benefits from the

district's current costs.

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 options 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.~~

(v~~) If a district does not offer any high school grades, the~~

~~district informs all pupils and parents of the opportunities that~~

~~are available for postsecondary options during high school.~~

~~(f) The district offers online courses or blended learning~~

~~opportunities to all eligible pupils. In order to satisfy this~~

~~requirement, a district must make all eligible pupils and their~~

~~parents or guardians aware of these opportunities and must publish~~

~~an online course syllabus as described in section 21f for each~~

~~online course that the district offers. For the purposes of this~~

~~subdivision:~~

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

~~model where pupils are provided content, instruction, and~~

~~assessment in part at a supervised educational facility away from~~

~~home where the pupil and a teacher with a valid Michigan teaching~~

~~certificate are in the same physical location and in part through~~

~~internet-connected learning environments with some degree of pupil~~

~~control over time, location, and pace of instruction.~~

(ii~~) "Online course" means a course of study that is capable of~~

~~generating a credit or a grade, that is provided in an interactive~~

~~internet-connected learning environment, in which pupils are~~

~~separated from their teachers by time or location, or both, and in~~

~~which a teacher with a valid Michigan teaching certificate is~~

~~responsible for determining appropriate instructional methods for~~

~~each pupil, diagnosing learning needs, assessing pupil learning,~~

~~prescribing intervention strategies, reporting outcomes, and~~

~~evaluating the effects of instruction and support strategies.~~

(d) ~~(g)~~ 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 revenue and expenditure projections for the district for

~~fiscal year 2013-2014 and~~ fiscal year 2014-2015 and fiscal year

2015-2016, a listing of all debt service obligations, detailed by

project, including anticipated fiscal year ~~2013-2014~~ 2014-2015

payment for each project, a listing of total outstanding debt, and

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

House Bill No. 5314 (H-2) as amended May 8, 2014

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

(vi) General fund balance.

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

(e) The district complies with a method of compensation for

teachers and school administrators that includes job performance

and accomplishments as a significant factor in determining

compensation, as required under section 1250 of the revised school

code, MCL 380.1250.

(f) The district's collective bargaining agreements,

including, but not limited to, appendices, addenda, letters of

agreement, or any other documents reflecting agreements with

collective bargaining representatives, do not contain any

provisions pertaining to, relating to, or that are otherwise

contrary to the prohibited subjects of bargaining enumerated in

section 15(3) of 1947 PA 336, MCL 423.215.

(g) The district implements the Michigan comprehensive

guidance and counseling program.

[~~(h) The district provides physical education or provides~~

~~health education.~~]

(3) 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 ~~2014-2015.~~2015-2016.

(4) If the department determines that funds allocated under

this section will remain unexpended after the initial allocation of

$52.00 per pupil to eligible districts under subsection (2), the

House Bill No. 5314 (H-2) as amended May 8, 2014

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 ~~2013-2014~~ 2014-2015 only an amount not to exceed

$5,000,000.00 for competitive assistance grants to districts and

intermediate districts.

(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 [, the consolidation or

sharing of technology and data operations or services between 50 or more districts or 5 or more intermediate districts,] or the consolidation

of districts or intermediate districts. Grant funding shall be

available for consolidations that occur on or after June 1, ~~2013.~~

2014. The department shall develop an application process and

method of grant distribution. [The department shall give priority to

applicants that propose including at least 1 of the following statewide activities:

(a) A comprehensive, research-based academic early warning indicator and dropout prevention solution.

(b) A data-driven system for identifying early reading challenges and establishing individual reading development plans for every student by the end of grade 3.]

Sec. 22i. (1) From the ~~state school aid fund money~~ funds

appropriated in section 11, there is allocated for ~~2013-2014~~ 2014-

2015 an amount not to exceed ~~$45,000,000.00~~ $50,000,000.00 for the

technology infrastructure grant program for districts or

intermediate districts on behalf of their constituent districts.

Funds received under this subsection shall be used for the

development or improvement of a district's technology

infrastructure, the shared services consolidation of technology and

data, and hardware 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 to eligible districts and

intermediate districts that demonstrate need for grants under

subsection (1). The department may consult with the department of

technology, management, and budget during the grant process and

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 subsection (1),

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.

~~(3) From the general fund money appropriated in section 11,~~

~~there is allocated an amount not to exceed $5,000,000.00 for 2013-~~

~~2014 to be awarded through a competitive bid process to a single~~

~~provider of whole-school technology as described in this~~

~~subsection. The department shall issue a single request for~~

~~proposal with application rules written and administered by the~~

~~department, and with a focus on economic and geographic diversity.~~

~~To be eligible to receive the grant under this section, a provider~~

~~shall meet all of the following:~~

~~(a) Agrees to submit evaluation criteria in a form and manner~~

~~determined by the department.~~

~~(b) Provides at least all of the following:~~

(i~~) One-to-one mobile devices.~~

(ii~~) Laptop or desktop computers for each classroom.~~

(~~iii~~~~) On- and off-campus filtering.~~

(iv~~) Wireless networks and peripherals.~~

(v~~) Wireless audio equipment.~~

(vi~~) Operating software.~~

(~~vii~~~~) Instructional software.~~

(~~viii~~~~) Repairs and replacements.~~

(ix~~) Professional development.~~

(x~~) Ongoing support.~~

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

allocated for 2014-2015 an amount not to exceed $3,500,000.00 for

competitive grants to consortia consisting of 2 or more

intermediate districts or a combination of 2 or more intermediate

districts and districts. Funds received under this subsection may

be used for costs associated with the deployment of shared

technology and data service centers serving large numbers of

intermediate districts and districts. The department shall develop

a competitive application process and grant distribution method

based on the design of technology and data service centers funded

under this section as it was in effect for 2013-2014. The amount of

a grant to a consortium shall not exceed $1,000,000.00. An applying

consortium shall include specifications on providing a single

student data system for use by the entire consortium not later than

June 30, 2016. The department shall prioritize funding to those

applications demonstrating high levels of participation by

intermediate districts and districts and by the number of pupils

that would be included in a single student data system.

(4) The funds allocated under subsection (3) are a work

project appropriation, and any unexpended funds for 2014-2015 are

carried forward into 2015-2016. The purpose of the work project is

to continue to implement the projects described under subsection

(3). The estimated completion date of the work project is September

30, 2016.

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

allocated for ~~2013-2014~~ 2014-2015 an amount not to exceed

~~$46,400,000.00~~ $51,100,000.00 to provide separate incentive

payments to districts that meet student academic performance

funding goals under subsections (2) to (5). Payments received under

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

sections 22a and 22b may be used.

(2) The maximum amount of the incentive payment for student

academic performance is an amount equal to $100.00 per pupil.

Payments calculated and awarded to qualifying districts under

subsections (3) to (5) shall be calculated and awarded separately,

and a district may receive a payment under any or all of

subsections (3) to (5).

(3) An amount not to exceed 30% of the maximum per pupil

amount allocated under subsection (2) shall be used to make

performance incentive payments to qualifying districts under this

subsection based on pupil performance on state assessments in

mathematics in grades 3 to 8. The amount of a payment under this

subsection is an amount equal to $30.00 per pupil for all pupils in

membership in a qualifying district. The department shall determine

the qualifying districts under this subsection as follows:

(a) Using a model determined by the department that

incorporates the most recent cut scores adopted for the Michigan

educational assessment program for each pupil in grades 3 to 8 in

the ~~2011-2012~~ 2012-2013 school year, the department shall calculate

a point score using a metric that assigns points to each of those

pupils as follows:

(i) For each pupil who began the school year not performing

proficiently in mathematics and who declines in proficiency, as

determined by the department, over the school year, 0 points.

(ii) For each pupil who began the school year performing

proficiently in mathematics and declines in proficiency, as

determined by the department, over the school year, 0 points.

(iii) For each pupil who began the school year not performing

proficiently in mathematics and who maintains his or her level of

proficiency, as determined by the department, over the school year,

1 point.

(iv) For each pupil who began the school year performing

proficiently in mathematics and who maintains his or her level of

proficiency, as determined by the department, over the school year,

2 points.

(v) For each pupil who began the school year not performing

proficiently in mathematics and who improves in proficiency, as

determined by the department, over the school year, 3 points.

(vi) For each pupil who began the school year performing

proficiently in mathematics and who improves in proficiency, as

determined by the department, over the school year, 2 points.

(b) The department shall then calculate a district average for

this metric for the ~~2011-2012~~ 2012-2013 school year by totaling the

number of points for all pupils in grades 3 to 8 under subdivision

(a) and dividing that total by the number of those pupils.

this subsection if the district average for the ~~2011-2012~~ 2012-2013

school year under subdivision (b) is at least equal to a factor of

1.5, and the district tested at least 95% of its pupils in

mathematics, and the district had at least 30 full academic year

pupils in grades 3 to 8 with a performance level change designation

in mathematics.

(4) An amount not to exceed 30% of the maximum per pupil

amount allocated under subsection (2) shall be used to make

performance incentive payments to qualifying districts under this

subsection based on pupil performance on state assessments in

reading in grades 3 to 8. The amount of a payment under this

subsection is an amount equal to $30.00 per pupil for all pupils in

membership in the district. The department shall determine the

qualifying districts under this subsection as follows:

(a) Using a model determined by the department that

incorporates the most recent cut scores adopted for the Michigan

educational assessment program for each pupil in grades 3 to 8 in

the ~~2011-2012~~ 2012-2013 school year, the department shall calculate

a point score using a metric that assigns points to each of those

pupils as follows:

(i) For each pupil who began the school year not performing

proficiently in reading and who declines in proficiency, as

determined by the department, over the school year, 0 points.

(ii) For each pupil who began the school year performing

proficiently in reading and declines in proficiency, as determined

by the department, over the school year, 0 points.

(iii) For each pupil who began the school year not performing

proficiently in reading and who maintains proficiency, as

determined by the department, over the school year, 1 point.

(iv) For each pupil who began the school year performing

proficiently in reading and who maintains proficiency, as

determined by the department, over the school year, 2 points.

(v) For each pupil who began the school year not performing

proficiently in reading and who improves in proficiency, as

determined by the department, over the school year, 3 points.

(vi) For each pupil who began the school year performing

proficiently in reading and who improves in proficiency, as

determined by the department, over the school year, 2 points.

(b) The department shall then calculate a district average for

this metric for the ~~2011-2012~~ 2012-2013 school year by totaling the

number of points for all pupils in grades 3 to 8 under subdivision

(a) and dividing that total by the number of those pupils.

this subsection if the district average for the ~~2011-2012~~ 2012-2013

school year under subdivision (b) is at least equal to a factor of

1.5, and the district tested at least 95% of its pupils in reading,

and the district had at least 30 full academic year pupils in

grades 3 to 8 reading with a performance level change designation

in reading.

(5) An amount not to exceed 40% of the maximum per pupil

amount allocated under subsection (2) shall be used to make

performance incentive payments to qualifying districts under this

subsection for high school improvement using a metric based on the

positive trend over a 4-year period in the percentage of high

school pupils in the district testing as proficient in all tested

subject areas on the state assessments of high school pupils. The

amount of a payment under this subsection is an amount equal to

$40.00 per pupil for all pupils in membership in the district. The

department shall determine the qualifying districts under this

subsection as follows:

(a) Calculate a linear regression of the percentage of high

school pupils in the district testing as proficient in all tested

subject areas on state assessments of high school pupils on school

year over the 4-year period ending with the ~~2011-2012~~ 2012-2013

school year as adjusted for changes in cut scores most recently

adopted for the Michigan merit examination.

(b) Calculate a statewide average for all districts operating

a high school of the linear regression of the percentage of high

school pupils testing as proficient in all tested subject areas on

state assessments of high school pupils on school year over the 4-

year period ending with the ~~2011-2012~~ 2012-2013 school year, as

adjusted for changes in cut scores most recently adopted for the

Michigan merit examination as the base year for all comparisons.

this subsection if the district's linear regression over the 4-year

period ending with the ~~2011-2012~~ 2012-2013 school year under

subdivision (a) is at least equal to the statewide average linear

regression over the 4-year period ending with the base year under

subdivision (b), and the district's linear regression over the 4-

year period ending with the ~~2011-2012~~ 2012-2013 school year under

subdivision (a) is positive, and the district tested 95% of high

school pupils in each tested subject on state assessments, and the

district had at least 20 full academic year pupils take all tested

subjects on state assessments of high school pupils over each of

the most recent 4 years.

(6) If the allocation under subsection (1) is insufficient to

fully fund payments as otherwise calculated under this section, the

department shall prorate payments under this section on an equal

percentage basis.

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

allocated for ~~2013-2014~~ 2014-2015 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 article for pupils described in

this section from total costs, as approved by the department, in

whole or in part, for educating those pupils in the on-grounds

education program or in a program approved by the department that

is located on property adjacent to a juvenile detention facility or

child caring institution. Costs reimbursed by federal funds are not

included.

(b) "Department's approved per pupil allocation" for a

district or intermediate district shall be determined by dividing

the total amount allocated under this section for a fiscal year by

the full-time equated membership total for all pupils approved by

the department to be funded under this section for that fiscal year

for the district or intermediate district.

(3) A district or intermediate district educating pupils

described in this section at a residential child caring institution

may operate, and receive funding under this section for, a

department-approved on-grounds educational program for those pupils

that is longer than 181 days, but not longer than 233 days, if the

child caring institution was licensed as a child caring institution

and offered in 1991-92 an on-grounds educational program that was

longer than 181 days but not longer than 233 days and that was

operated by a district or intermediate district.

(4) Special education pupils funded under section 53a shall

not be funded under this section.

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

allocated an amount not to exceed ~~$2,167,500.00~~ $2,195,500.00 for

~~2013-2014~~ 2014-2015 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 $1,500,000.00 for ~~2013-2014~~ 2014-

2015 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

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. 25e. (1) ~~The center shall work with the department,~~

~~districts, and intermediate districts to develop a~~ The pupil

membership transfer application and a pupil transfer process

administered by the center under this section shall be used for

processing pupil transfers. ~~The center shall complete development~~

~~of this pupil membership transfer application not later than~~

~~November 1, 2013.~~

(2) If a pupil counted in membership for the pupil membership

count day transfers from a district or intermediate district to

enroll in another district or intermediate district after the pupil

membership count day and before the supplemental count day and, due

to the pupil's enrollment and attendance status as of the pupil

membership count day, the pupil was not counted in membership in

the educating district or intermediate district, the educating

district or intermediate district may report the enrollment and

House Bill No. 5314 (H-2) as amended May 8, 2014

attendance information to the center through the pupil transfer

process within 30 days after the transfer or within 30 days after

the ~~sixth Wednesday after the~~ pupil membership count ~~day,~~

[CERTIFICATION] date, whichever is later. Pupil transfers may be

submitted no earlier than the first day after the certification

deadline for the pupil membership count day and before the

supplemental count day. Upon receipt of the transfer information

under this subsection indicating that a pupil has enrolled and is

in attendance in an educating district or intermediate district as

described in this subsection, the pupil transfer process shall do

the following:

(a) Notify the district in which the pupil was previously

enrolled.

(b) Notify both the pupil auditing staff of the intermediate

district in which the educating district is located and the pupil

auditing staff of the intermediate district in which the district

that previously enrolled the pupil is located. The pupil auditing

staff shall ~~approve or~~ investigate a representative sample based on

required audit sample sizes in the pupil auditing manual and may

deny the pupil membership transfer.

department for use in adjusting the state aid payment system.

(3) The department shall do all of the following:

(a) Adjust the membership calculation for each district or

intermediate district in which the pupil was previously counted in

membership or that previously received an adjustment in its

membership calculation under this section due to a change in the

pupil's enrollment and attendance 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,

as determined by the financial calendar furnished by the center, in

which the pupil was enrolled and in attendance in the district or

intermediate district an amount equal to 1/105 of a full-time

equated membership claimed in the fall pupil membership count. The

district or intermediate district shall receive a prorated

foundation allowance in an amount equal to the product of the

adjustment under this subdivision for the district or intermediate

district multiplied by 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) Adjust the membership calculation for the educating

district or intermediate district in which the pupil is enrolled

and is in attendance so that the district's or intermediate

district's membership is increased to allow the district or

intermediate district to receive an amount equal to the difference

between the full-time equated membership claimed in the fall pupil

membership count and the sum of the adjustments calculated under

subdivision (a) for each district or intermediate district in which

the pupil was previously enrolled and in attendance. The educating

district or intermediate district shall receive a prorated

foundation allowance in an amount equal to the product of the

adjustment under this subdivision for the educating district or

House Bill No. 5314 (H-2) as amended May 8, 2014

intermediate district multiplied by the foundation allowance or per

pupil payment as calculated under section 20 for the educating

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).

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

under subsection (3) shall take effect as of the date that the

pupil becomes enrolled and in attendance in the educating district

or intermediate district, and the department shall base all

subsequent payments under this article for the fiscal year to the

affected districts or intermediate districts on this recalculation

of state school aid.

(5) If a pupil enrolls in an educating district or

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

or intermediate district in which the pupil is counted in

membership or another educating district or intermediate district

that received an adjustment in its membership calculation under

subsection (3), if any, and the educating district or intermediate

district shall provide to the center and the department all

information they require to comply with this section.

(6) Not later than December 1, 2014, the center in conjunction

with the department shall report to the legislature data related to

the implementation of this section, including, but not limited to,

the number of transfer transactions and the net change in pupil

memberships in 2013-2014 by district and intermediate district.

(7) [The portion of the full-time equated pupil membership for

which a pupil is] enrolled in 1 or more online courses under section

21f shall not be counted or transferred under the pupil transfer

process under this section.

(8) ~~(6)~~ As used in this section: ~~, "educating~~

(a) Educating district or intermediate district" means the

district or intermediate district in which a pupil enrolls after

the pupil membership count day or after an adjustment was made in

another district's or intermediate district's membership

calculation under this section due to the pupil's enrollment and

attendance.

(b) "Pupil" means that term as defined under section 6 and

also children receiving early childhood special education programs

and services.

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

funds appropriated in section 11, there is allocated an amount not

to exceed $26,300,000.00 for ~~2013-2014~~ 2014-2015 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 ~~2013.~~ 2014. 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 $3,200,000.00 for 2013-2014 to~~

~~reimburse public libraries pursuant to section 12 of the Michigan~~

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

~~in 2013. 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 ~~2013-2014~~ 2014-2015 an amount not to exceed

~~$4,009,500.00~~ $4,210,000.00 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. 26c. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$209,400.00 for 2012-2013 and an~~

~~amount not to exceed $266,200.00 for 2013-2014~~ $293,100.00 for

2014-2015 to the promise zone fund created in subsection (3).

(2) Funds allocated to the promise zone fund under this

section shall be used solely for payments to eligible districts and

intermediate districts that have a promise zone development plan

approved by the department of treasury under section 7 of the

Michigan promise zone authority act, 2008 PA 549, MCL 390.1667.

(3) The promise zone fund is created as a separate account

within the state school aid fund to be used solely for the purposes

of the Michigan promise zone authority act, 2008 PA 549, MCL

390.1661 to 390.1679. All of the following apply to the promise

zone fund:

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

promise zone fund. The state treasurer shall credit to the promise

zone fund interest and earnings from fund investments.

(b) Money in the promise zone fund at the close of a fiscal

year shall remain in the promise zone fund and shall not lapse to

the general fund.

(4) Subject to subsection (2), the state treasurer may make

payments from the promise zone fund to eligible districts and

intermediate districts pursuant to the Michigan promise zone

authority act, 2008 PA 549, MCL 390.1661 to 390.1679, to be used

for the purposes of a promise zone authority created under that

act.

Sec. 31a. (1) From the state school aid fund money

appropriated in section 11, there is allocated for ~~2013-2014~~ 2014-

2015 an amount not to exceed $317,695,500.00 for payments to

eligible districts, 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 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.~~for the purposes of ensuring that pupils are proficient in

reading by the end of grade 3 and that high school graduates are

career and college ready.

(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, 42 USC 1751 to

1769, and as reported to the department in the form and manner

prescribed by the department 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 However, 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

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, mental health, or

counseling services, for at-risk pupils; for school health clinics;

and for the purposes of subsection (5), (6), or (7), or (10). 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),~~

(3), 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, 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 ~~2013-2014~~ 2014-2015 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 ~~2013-2014~~ 2014-2015 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 or services performed 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 eligible for free or reduced price school lunch who~~

~~were served by each of those programs, and~~ or services, the total

number of at-risk pupils served by each of those programs or

services, and the data necessary for the department and the

department of human services to verify matching funds for the

temporary assistance for needy families program. 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), and (7), ~~(12), and (13),~~

a 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-12,~~

~~or any combination of those grades, in school buildings in which~~

~~the percentage of pupils described in subsection (1) exceeds the~~

~~district's aggregate percentage of those pupils. Subject to~~

~~subsections (5), (6), (7), (12), and (13), a 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-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 implement

schoolwide reform in schools with 40% or more of their pupils

identified as at-risk pupils by providing supplemental

instructional or noninstructional services consistent with the

school improvement plan.

(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

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.

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.~~

(13) ~~(14)~~ If necessary, and before any proration required

under section 296, 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).~~(3).

(14) ~~(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. In addition, if a district is dissolved

pursuant to section 12 of the revised school code, MCL 380.12, the

intermediate district to which the dissolved school district was

constituent shall determine the estimated number of pupils that

meet the income eligibility criteria for free breakfast, lunch, or

milk, as described under subsection (3), enrolled in each of the

other districts within the intermediate district and provide that

estimate to the department for the purposes of distributing funds

under this section within 60 days after the school district is

declared dissolved.

(15) ~~(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~~ any of the following criteria: ~~is a victim of child~~

~~abuse or neglect; is below grade level in English language arts 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. At-risk pupil also~~

~~includes all pupils in a priority school as defined in the~~

~~elementary and secondary education act of 2001 flexibility request~~

~~approved by the United States department of education. 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, 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, writing, mathematics,~~

~~science, or social studies components 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.~~

(a) The pupil is enrolled in a priority or priority-successor

school, as defined in the elementary and secondary education act of

2001 flexibility waiver approved by the United States department of

education.

(b) The pupil is enrolled in a focus school, as defined in the

elementary and secondary education act of 2001 flexibility waiver

approved by the United States department of education and is in the

bottom 30% of achievement as determined by the department.

on 2 or more state-administered assessments for English language

arts, mathematics, science, or social studies.

(d) The pupil did not receive a satisfactory score on 2 or

more locally administered assessments that are aligned with state

standards for English language arts, mathematics, science, or

social sciences in grades not assessed by the state.

(e) In the absence of state or local assessment data, the

pupil meets at least 2 of the following criteria, as documented in

a form and manner approved by the department:

(i) The pupil is eligible for free breakfast, lunch, or milk.

(ii) The pupil is absent more than 10% of enrolled days or 10

school days during the school year.

(iii) The pupil is homeless.

(iv) The pupil is a migrant.

(v) The pupil is an English language learner.

(vi) The pupil is an immigrant.

(vii) The pupil did not complete high school in 4 years and is

still continuing in school as identified in the Michigan cohort

graduation and dropout report.

(16) Beginning in 2014-2015, if a district or public school

academy or the education achievement system cannot demonstrate to

the satisfaction of the department improvement in the percentage of

at-risk pupils proficient in reading at the end of grade 3 and

improvement in the percentage of at-risk pupils that are career and

college ready as measured by the state-administered assessments

after 3 subsequent school years, the district or public school

academy or the education achievement system shall revise its school

improvement plan regarding the expenditure of funding under this

section.

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

allocated an amount not to exceed $2,000,000.00 for ~~2013-2014~~ 2014-

2015 for grants to at-risk districts for implementing a year-round

instructional program for at least 1 of its schools.

(2) The department shall select districts for grants under

this section from among applicant districts that meet both of the

following:

(a) The district meets 1 or both of the following:

(i) Is eligible in ~~2013-2014~~ 2014-2015 for the community

eligibility option for free and reduced price lunch under 42 USC

1759a.

(ii) At least 50% of the pupils in membership in the district

met the income eligibility criteria for free breakfast, lunch, or

milk in the immediately preceding state fiscal year, as determined

under the Richard B. Russell national school lunch act, 42 USC 1751

to 1769i.

(b) The board of the district has adopted a resolution stating

that the district will implement for the first time a year-round

instructional calendar that will begin in ~~2014-2015~~ 2015-2016 for

at least 1 school operated by the district and committing to

providing the year-round instructional calendar in each of those

schools for at least 3 school years.

(3) A district seeking a grant under this section shall apply

to the department in the form and manner prescribed by the

department not later than ~~May 1, 2014.~~ December 1, 2015. The

department shall select districts for grants and make notification

not later than ~~June 1, 2014.~~February 1, 2015.

(4) The department shall award grants under this section on a

competitive basis, but shall give priority based solely on

consideration of the following criteria:

(a) Giving priority to districts with lower general fund

balances as a percent of revenues.

(b) Giving priority to districts that operate at least 1

school that has been identified by the department as either a

priority school or a focus school.

districts.

(5) The amount of a grant under this section to any 1 district

shall not exceed $750,000.00.

(6) A grant payment under this section to a district shall be

used for necessary modifications to instructional facilities and

other nonrecurring costs of preparing for the operation of a year-

round instructional program as approved by the department.

(7) A district receiving a grant under this section is not

required to provide more than the minimum number of days and hours

of pupil instruction prescribed under section 101, but shall spread

at least those minimum amounts of pupil instruction over the entire

year in each of its schools in which a year-round instructional

calendar is implemented. The district shall commit to providing the

year-round instructional calendar in each of those schools for at

least 3 school years.

(8) For a district receiving a grant under this section,

excessive heat is considered to be a condition not within the

control of school authorities for the purpose of days or hours

being counted as days or hours of pupil instruction under section

101(4).

(9) Notwithstanding section 17b, grant payments to districts

under this section shall be paid on a schedule determined by the

department.

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

allocated an amount not to exceed $22,495,100.00 for ~~2013-2014~~

2014-2015 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 ~~2013-2014~~ 2014-2015 all available federal funding,

estimated at ~~$460,000,000.00~~ $510,000,000.00 for the national

school lunch program and all available federal funding, estimated

at $3,200,000.00 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 $5,625,000.00 for ~~2013-2014~~ 2014-

2015 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

House Bill No. 5314 (H-2) as amended May 8, 2014

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. 31g. (1) From the general fund money appropriated in

section 11, there is allocated to the department for 2014-2015 the

amount of [$100.00] for a contract with a single provider to

provide an online, research-based, secure, personal user health and

nutrition education software platform in a representative sample of

pilot schools in this state, to include schools operated by

districts, public school academies, and intermediate districts, for

3 school years. The contract shall include platform and content

development and evaluation. The department shall oversee a

competitive request for proposals process for the contract, and the

request for proposals shall include, but not be limited to, all of

the following requirements:

(a) A Michigan-based, platform-neutral, technology-driven

online platform that does not require additional information

technology resources beyond Internet access.

(b) A sustainable, interactive health and nutrition education

platform and personal responsibility health behavior record that is

cost-neutral to all participants, including pupils, parents,

guardians, and schools, and that requires an opt-in from the parent

or legal guardian of each pupil participant.

accessible in real time only to the user and those authorized by

the user through a secure online dashboard that meets all federal,

state, and local health information and child online privacy

requirements, including, but not limited to, being in compliance

with the children's online privacy protection act of 1998, 5 USC

6501 to 6505, and the kidSAFE seal program.

(d) A program that provides for age- and developmentally

appropriate self-monitoring through the recording of health habits,

including, but not limited to, dietary intake and physical

activity, that is consistent with current, established standards

for well-child preventive health care, and that provides a personal

responsibility health record.

(e) A program that promotes a healthy lifestyle and reinforces

positive health outcomes while aligning with currently established

school health curricula, physical education and physical activity

curricula, federal school meal programs, school-based health

programs, current United States dietary guidelines for Americans,

and established state-funded and federally funded food, nutrition,

and health promotion programs. The overall goal of the program

shall be improved dietary intake and increased physical activity.

(2) The funds appropriated under this section are to be spent

over 3 years and shall be considered a work project appropriation.

Any unexpended funds for 2014-2015 are carried forward into 2015-

2016. The purpose of the work project is as described under

subsection (1). The total estimated cost of these projects is

$1,800,000.00. The tentative estimated completion date of the work

project is September 30, 2017.

(3) The contract under subsection (1) shall require the

provider to submit a progress report to the legislature by

September 30, 2017. The report shall provide details on the

program's progress and impact, including, but not limited to, all

of the following:

(a) Increase in the number of active registrants in the

program and in the length of participation by registrants in the

program.

(b) Improvement and increase in the number of healthy options

served to pupils by school lunch programs.

physical activities.

(d) Continued alignment with the department of community

health's Michigan Health and Wellness 4x4 plan.

(4) Not later than 1 year after the completion of the work

project under this section, the auditor general shall perform a

performance post-audit of the pilot project and submit a report to

the legislature on the effectiveness of the program in achieving

improvements in child health.

Sec. 32d. (1) 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 ~~$149,275,000.00~~ $214,275,000.00 for ~~2013-2014.~~ 2014-

2015. In addition, from the funds appropriated in section 11, there

is allocated to the great start readiness reserve fund created

under subsection ~~(14)~~ (16) an amount not to exceed $25,000,000.00

for ~~2013-2014.~~ 2014-2015. Funds allocated under this section for

great start readiness programs shall be used to provide part-day,

school-day, or GSRP/head start blended comprehensive free

compensatory classroom programs designed to improve the readiness

and subsequent achievement of educationally disadvantaged children

who meet the participant eligibility and prioritization guidelines

as defined by the department. ~~Beginning in 2013-2014, for~~ For a

child to be eligible to participate in a program under this

section, the child shall be at least 4, but less than 5, years of

age as of the date specified for determining a child's eligibility

to attend school under section 1147 of the revised school code, MCL

380.1147.

(2) Funds allocated under subsection (1) shall be allocated to

intermediate districts or consortia of intermediate districts based

on the formula in section 39. An intermediate district or

consortium of intermediate districts receiving funding under this

section shall act as the fiduciary for the great start readiness

programs. In order to be eligible to receive funds allocated under

this subsection from an intermediate district or consortium of

intermediate districts, a district, a consortium of districts, or a

public or private for-profit or nonprofit legal entity or agency

shall comply with this section and section 39.

(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 ~~2013-2014~~ 2014-

2015 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, 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 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.

supported by federal, state, and local resources as applicable.

(d) ~~Health~~ Physical and dental health and developmental

screening services for all program participants.

(e) Referral services for families of program participants to

community social service agencies, including mental health

services, 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 convened as a workgroup of the great

start collaborative 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 and make recommendations regarding 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.~~The advisory committee also shall make

recommendations to the great start collaborative regarding other

community services designed to improve all children's school

readiness.

(i) The ongoing articulation of the kindergarten and first

grade programs offered by the program provider.

(j) Participation in this state's great start to quality

process with a rating of at least 3 stars.

(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~~ Except as otherwise provided in this subdivision,

ensure that at least 90% of the children participating in an

eligible great start readiness program for whom the ~~provider~~

intermediate district is receiving funds under this section are

children who live with families with a household income that is

equal to or less than 250% of the federal poverty level. For

purposes of this subdivision, all age-eligible children served in

foster care or who are experiencing homelessness or who have

individualized education plans recommending placement in an

inclusive preschool setting shall be considered to live with

families with household income equal to or less than 250% of the

federal poverty level regardless of actual family income.

for this program, as follows:

(i) Teachers possessing proper training. ~~For programs managed~~

~~directly by a district or intermediate district,~~ A lead teacher

must have a valid teaching certificate ~~and~~ with an early childhood

(ZA or ZS) endorsement ~~are required. This provision does not apply~~

~~to 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 or early child

development with specialization in preschool teaching. However, if

an 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 used if the

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

applicant demonstrates to the department that it is unable to fully

comply with this subparagraph after making reasonable efforts to

comply, the applicant may use paraprofessionals who have completed

at least 1 course that earns college credit in early childhood

education or child development if the 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. Eligible costs include transportation costs. 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 received by the applicant to serve children eligible

for a federally funded 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) For a grant recipient that enrolls pupils in a GSRP/head

start blended program, the grant recipient shall ensure that all

head start and GSRP policies and regulations are applied to the

blended slots, with adherence to the highest standard from either

program, to the extent allowable under federal law.

(8) An intermediate district or consortium of intermediate

districts receiving a grant under this section shall designate an

early childhood coordinator, and may provide services directly or

may contract with 1 or more districts or public or private for-

profit or nonprofit providers that meet all requirements of

subsection (4) and retain for administrative services provided by

the intermediate district an amount equal to not more than 7% 5% of

the grant amount. Expenses incurred by subrecipients engaged by the

intermediate district to provide program services shall be

considered a contracted program fee for service. In addition, an

intermediate district or consortium of intermediate districts may

expend not more than 2% of the total grant amount for outreach,

recruiting, and public awareness of the program.

(9) Each grant recipient shall enroll children identified

under subsection (5)(b) according to how far the child's household

House Bill No. 5314 (H-2) as amended May 8, 2014

income is below 250% of the federal poverty level by ranking each

applicant child's household income from lowest to highest and

dividing the applicant children into quintiles based on how far the

child's household income is below 250% of the federal poverty

level, and then enrolling children in the quintile with the lowest

household income before enrolling children in the quintile with the

next lowest household income until slots are completely filled. For

purposes of this subdivision, all age-eligible children served in

foster care or who are experiencing homelessness or who have

individualized education plans recommending placement in an

inclusive preschool setting shall be considered to live with

families with household income equal to or less than 250% of the

federal poverty level regardless of actual family income.

[(10) An intermediate district or consortium of intermediate districts receiving a grant under this section shall allow parents of eligible children who are residents of the intermediate district or within the consortium to choose a program operated by or contracted with another intermediate district or consortium of intermediate districts and shall pay to the educating intermediate district or consortium the per-child amount attributable to each child enrolled pursuant to this sentence, as determined under section 39.

(11)~~(10)~~] An intermediate district or consortium of intermediate

districts receiving a grant under this section shall conduct a

local process to contract with interested and eligible public and

private for-profit and nonprofit community-based providers that

meet all requirements of subsection (4) for at least 30% of its

total slot allocation. [The intermediate district or consortium shall

report to the department, in a manner prescribed by the department, a

detailed list of community-based providers by provider type, including

private for-profit, private nonprofit, community college or university,

head start grantee or delegate, and district or intermediate district,

and the number and proportion of its total slot allocation allocated to

each provider as subrecipient.] If the intermediate district or consortium is not

able to contract for at least 30% of its total slot allocation, the

grant recipient shall notify the department and, if the department

verifies that the intermediate district or consortium attempted to

House Bill No. 5314 (H-2) as amended May 8, 2014

contract for at least 30% of its total slot allocation and was not

able to do so, then the intermediate district or consortium may

retain and use all of its allocated slots as provided under this

section. To be able to use this exemption, the intermediate

district or consortium shall demonstrate to the department that the

intermediate district or consortium increased the percentage of its

total slot allocation for which it contracts with a community-based

provider and the intermediate district or consortium shall submit

evidence satisfactory to the department, and the department must be

able to verify this evidence, demonstrating that the intermediate

district or consortium took measures to contract for at least 30%

of its total slot allocation as required under this subsection,

including, but not limited to, at least all of the following

measures:

[(a) The intermediate district or consortium notified each licensed

child care center located in the service area of the intermediate

district or consortium at least twice regarding the center's eligibility

to participate. One of these notifications may be made electronically,

but at least 1 of these notifications shall be made via hard copy through

the United States mail. At least 1 of these notifications shall be made

within 7 days after the intermediate district or consortium receives

notice from the department of its slot allocations.

(b) The intermediate district or consortium provided to each

licensed child care center located in the service area of the

intermediate district or consortium information regarding great start

readiness program requirements and a description of the application and

selection process for community-based providers.

House Bill No. 5314 (H-2) as amended May 8, 2014

and to participating families a list of community-based great start

readiness program subrecipients with a great start to quality rating of

at least 3 stars.

(12) If an intermediate district or consortium of intermediate

districts receiving a grant under this section fails to submit

satisfactory evidence to demonstrate its effort to contract for at least

30% of its total slot allocation, as required under subsection (1), the

department shall reduce the slots allocated to the intermediate district

or consortium by a percentage equal to the difference between the

percentage of an intermediate district's or consortium's total slot

allocation awarded to community-based providers and 30% of its total slot

allocation.

(13) In order to assist intermediate districts and consortia in

complying with the requirement to contract with community-based providers

for at least 30% of their total slot allocation, the department shall do

all of the following:

(a) Ensure that a great start resource center or the department

provides each intermediate district or consortium receiving a grant under

this section with the contact information for each licensed child care

center located in the service area of the intermediate district or

consortium by March 1 of each year.

(b) Provide, or ensure that an organization with which the

department contracts provides, a community-based provider with a

validated great start to quality rating within 90 days of the provider's

having submitted a request and self-assessment.

House Bill No. 5314 (H-2) as amended May 8, 2014

college or university, head start grantee or delegate, private for-profit, and private nonprofit providers are subject to a single licensing and great start to quality rating system. The rating system shall ensure that regulators process all prospective providers at the same pace on a first-come, first-served basis and shall not allow 1 type of provider to receive a great start to quality rating ahead of any other type of provider.

(d) Not later than November 1 of each year, compile the results of the information reported by each intermediate district or consortium under subsection (10) and report to the legislature a list by intermediate district or consortium with the number and percentage of each intermediate district's or consortium's total slot allocation allocated to community-based providers by provider type, including private for-profit, private nonprofit, community college or university, head start grantee or delegate, and district or intermediate district.]

[(14)] ~~(11)~~ 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 eligibility criteria under subsection (5)(b) and the total

number of children participating in the program. For children

participating in the program who meet the income 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.

[(15)] ~~(12)~~ 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) "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-

House Bill No. 5314 (H-2) as amended May 8, 2014

child contact time per day than a school-day program.

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.

[(16)] ~~(13)~~ An intermediate district or consortium of

intermediate districts receiving funds under this section shall

establish a sliding scale of tuition rates based upon household

income for children participating in an eligible great start

readiness program who live with families with a household income

that is more than 250% of the federal poverty level to be used by

all of its providers, as approved by the department. A grant

recipient shall charge tuition according to that sliding scale of

tuition rates on a uniform basis for any child who does not meet

the income eligibility requirements under this section.

[(17)] ~~(14)~~ The great start readiness reserve 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. Money

available in the great start readiness reserve fund may not be

expended for ~~2013-2014~~ 2014-2015 unless transferred by the

legislature not later than January 31, ~~2014~~ 2015 to the allocation

under subsection (1) for great start readiness programs. Money in

the great start readiness reserve fund shall be expended only for

purposes for which state school aid fund money may be expended. The

state treasurer shall direct the investment of the great start

readiness reserve fund. The state treasurer shall credit to the

House Bill No. 5314 (H-2) as amended May 8, 2014

great start readiness reserve fund interest and earnings from fund

investments. Money in the great start readiness reserve fund at the

close of a fiscal year shall remain in the great start readiness

reserve fund and shall not lapse to the unreserved school aid fund

balance or the general fund.

[(18)] From the amount appropriated in subsection (1), there is

allocated an amount not to exceed $10,000,000.00 for reimbursement

of transportation costs for children attending great start

readiness programs funded under this section. To receive

reimbursement under this subsection, not later than November 1,

2014, a program funded under this section that provides

transportation shall submit to the intermediate district that is

the fiscal agent for the program a projected transportation budget.

The amount of the reimbursement for transportation under this

subsection shall be the lesser of the projected transportation

budget or $150.00 multiplied by the number of slots funded for the

program under this section. If the amount allocated under this

subsection is insufficient to fully reimburse the transportation

costs for all programs that provide transportation and submit the

required information, the reimbursement shall be prorated in an

equal amount per slot funded. Payments shall be made to the

intermediate district that is the fiscal agent for each program,

and the intermediate district shall then reimburse the program

provider for transportation costs as prescribed under this

subsection.

Sec. 32p. (1) From the school aid fund appropriation in

section 11, there is allocated an amount not to exceed

$10,900,000.00 to intermediate districts for ~~2013-2014~~ 2014-2015

for the purpose of providing early childhood funding to

intermediate school districts in block grants, supporting the

activities under subsection (2), and providing early childhood

programs for children from birth through age 8. ~~Beginning in 2013-~~

~~2014, the~~ The funding provided to each intermediate district under

this section shall be determined by the distribution formula

established by the department's office of great start to provide

equitable funding statewide. In order to receive funding under this

section, each intermediate district shall provide an application to

the office of great start not later than September 15 of the

immediately preceding fiscal year indicating the activities planned

to be provided.

(2) Each intermediate district or consortium of intermediate

districts that receives funding under this section shall convene a

local great start collaborative and a parent coalition. The goal of

each great start collaborative and parent coalition shall be to

ensure the coordination and expansion of local early childhood

infrastructure and programs that allow every child in the community

to achieve the following outcomes:

(a) Children born healthy.

(b) Children healthy, thriving, and developmentally on track

from birth to third grade.

time of school entry.

(d) Children prepared to succeed in fourth grade and beyond by

reading proficiently by the end of third grade.

(3) Each local great start collaborative and parent coalition

shall convene ~~a workgroup to serve as a school readiness advisory~~

~~committee as required under section 32d and shall~~ workgroups to

make recommendations about community services designed to achieve

the outcomes described in subsection (2) and to ensure that its

local great start system includes the following supports for

children from birth through age 8:

(a) Physical health.

(b) Social-emotional health.

(d) Parent education and child advocacy.

(e) Early education and care.

(4) Not later than December 1 of each year, each intermediate

district shall provide a report to the department detailing the

activities actually provided during the immediately preceding

school year and the families and children actually served. The

department shall compile and summarize these reports and submit its

summary to the house and senate appropriations subcommittees on

school aid and to the house and senate fiscal agencies not later

than February 15 of each year. ~~The block grants allocated under~~

~~this section implement legislative intent language for this purpose~~

~~enacted in 2011 PA 62.~~

(5) An intermediate district or consortium of intermediate

districts that receives funding 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 through June 30 of

the next fiscal year. A recipient of a grant shall return any

unexpended grant funds to the department in the manner prescribed

by the department not later than September 30 of the next fiscal

year after the fiscal year in which the funds are received.

Sec. 39. (1) An eligible applicant receiving funds under

section 32d shall submit ~~a preapplication,~~ an application, in a

form and manner prescribed by the department, by a date specified

by the department in the immediately preceding state fiscal year.

The ~~preapplication~~ application shall include a comprehensive needs

assessment using aggregated data from the applicant's entire

service area and a community collaboration plan that is endorsed by

the local great start collaborative and is part of the community's

great start strategic plan that includes, but is not limited to,

great start readiness program and head start providers, and shall

identify all of the following:

(a) The estimated total number of children in the community

who meet the criteria of section 32d and how that calculation was

made.

(b) The estimated number of children in the community who meet

the criteria of section 32d and are being served by other early

childhood development programs operating in the community, and how

that calculation was made.

who meet the criteria of section 32d including a verification of

physical facility and staff resources capacity.

(d) The estimated number of children who meet the criteria of

section 32d who will remain unserved after the applicant and

community early childhood programs have met their funded

enrollments. The applicant shall maintain a waiting list of

identified unserved eligible children who would be served when

openings are available.

(2) An After notification of funding allocations, an applicant

receiving funds under section 32d shall also submit ~~a final~~

~~application~~ an implementation plan for approval, in a form and

manner prescribed by the department, by a date specified by the

department, that details how the applicant complies with the

program components established by the department pursuant to

section 32d.

(3) The number of prekindergarten children construed to be in

need of special readiness assistance under section 32d shall be

calculated for each applicant in the following manner: 1/2 of the

percentage of the applicant's pupils in grades 1 to 5 in all

districts served by the applicant who are eligible for free lunch,

as determined using the district's pupil membership count as of the

pupil membership count day in the school year prior to the fiscal

year for which the calculation is made, under the Richard B.

Russell national school lunch act, 42 USC 1751 to 1769i, shall be

multiplied by the average kindergarten enrollment of the districts

served by the applicant on the pupil membership count day of the 2

immediately preceding fiscal years.

(4) The initial allocation for each fiscal year to each

eligible applicant under section 32d shall be determined by

multiplying the number of children determined by the formula under

subsection (3) or the number of children the applicant indicates it

will be able to serve under subsection (1)(c), whichever is less,

by $3,625.00 and shall be distributed among applicants in

decreasing order of concentration of eligible children as

determined by the formula under subsection (3). If the number of

children an applicant indicates it will be able to serve under

subsection (1)(c) includes children able to be served in a school-

day program, then the number able to be served in a school-day

program shall be doubled for the purposes of making this

calculation of the lesser of the number of children determined by

the formula under subsection (3) and the number of children the

applicant indicates it will be able to serve under subsection

(1)(c) and determining the amount of the initial allocation to the

applicant under section 32d. A district may contract with a head

start agency to serve children enrolled in head start with a

school-day program by blending head start funds with a part-day

great start readiness program allocation. All head start and great

start readiness program policies and regulations apply to the

blended program.

(5) If funds allocated for eligible applicants or to the great

start readiness reserve fund under section 32d remain after the

initial allocation under subsection (4), the allocation under this

subsection shall be distributed to each eligible applicant under

section 32d in decreasing order of concentration of eligible

children as determined by the formula under subsection (3). The

allocation shall be determined by multiplying the number of

children each district within the applicant's service area served

in the immediately preceding fiscal year or the number of children

the applicant indicates it will be able to serve under subsection

(1)(c), whichever is less, minus the number of children for which

the applicant received funding in subsection (4) by $3,625.00.

(6) If funds allocated for eligible applicants or to the great

start readiness reserve fund under section 32d remain after the

allocations under subsections (4) and (5), remaining funds shall be

distributed to each eligible applicant under section 32d in

decreasing order of concentration of eligible children as

determined by the formula under subsection (3). If the number of

children the applicant indicates it will be able to serve under

subsection (1)(c) exceeds the number of children for which funds

have been received under subsections (4) and (5), the allocation

under this subsection shall be determined by multiplying the number

of children the applicant indicates it will be able to serve under

subsection (1)(c) less the number of children for which funds have

been received under subsections (4) and (5) by $3,625.00 until the

funds allocated for eligible applicants in section 32d are

distributed.

(7) An applicant that offers supplementary child care funded

by funds other than those received under section 32d and therefore

offers full-day programs as part of its early childhood development

program shall receive priority in the allocation of funds under

section 32d over other eligible applicants. As used in this

subsection, "full-day program" means a program that provides

supplementary child care that totals at least 10 hours of

programming per day.

(8) If, taking into account the total amount to be allocated

to the applicant as calculated under this section, an applicant

determines that it is able to include additional eligible children

in the great start readiness program without additional funds under

section 32d, the applicant may include additional eligible children

but shall not receive additional funding under section 32d for

those children.

Sec. 39a. (1) From the federal funds appropriated in section

11, there is allocated for ~~2013-2014~~ 2014-2015 to districts,

intermediate districts, and other eligible entities all available

federal funding, estimated at ~~$811,828,500.00,~~ $807,969,900.00 for

the federal programs under the no child left behind act of 2001,

Public Law 107-110. These funds are allocated as follows:

(a) An amount estimated at ~~$10,808,600.00~~ $8,000,000.00 to

provide students with drug- and violence-prevention programs and to

implement strategies to improve school safety, funded from DED-

OESE, drug-free schools and communities funds.

(b) An amount estimated at $111,111,900.00 for the purpose of

preparing, training, and recruiting high-quality teachers and class

size reduction, funded from DED-OESE, improving teacher quality

funds.

teach English to limited English proficient (LEP) children, funded

from DED-OESE, language acquisition state grant funds.

(d) An amount estimated at $10,286,500.00 for the Michigan

charter school subgrant program, funded from DED-OESE, charter

school funds.

(e) An amount estimated at $2,393,500.00 for rural and low

income schools, funded from DED-OESE, rural and low income school

funds.

(f) An amount estimated at $591,500,000.00 to provide

supplemental programs to enable educationally disadvantaged

children to meet challenging academic standards, funded from DED-

OESE, title I, disadvantaged children funds.

(g) An amount estimated at $8,878,000.00 for the purpose of

identifying and serving migrant children, funded from DED-OESE,

title I, migrant education funds.

(h) An amount estimated at ~~$40,050,000.00~~ $39,000,000.00 for

the purpose of providing high-quality extended learning

opportunities, after school and during the summer, for children in

low-performing schools, funded from DED-OESE, twenty-first century

community learning center funds.

(i) An amount estimated at $24,600,000.00 to help support

local school improvement efforts, funded from DED-OESE, title I,

local school improvement grants.

(2) From the federal funds appropriated in section 11, there

is allocated for ~~2013-2014~~ 2014-2015 to districts, intermediate

districts, and other eligible entities all available federal

funding, estimated at ~~$31,700,000.00~~ $31,300,000.00 for the

following programs that are funded by federal grants:

(a) An amount estimated at ~~$600,000.00~~ $200,000.00 for

acquired immunodeficiency syndrome education grants, funded from

HHS – center for disease control, AIDS funding.

(b) An amount estimated at $2,600,000.00 to provide services

to homeless children and youth, funded from DED-OVAE, homeless

children and youth funds.

and technical education services to pupils, funded from DED-OVAE,

basic grants to states.

~~(3) To the extent allowed under federal law, the funds~~

~~allocated under subsection (1)(f) and (i) may be used for 1 or more~~

~~reading improvement programs that meet at least 1 of the following:~~

~~(a) A research-based, validated, structured reading program~~

~~that aligns learning resources to state standards and includes~~

~~continuous assessment of pupils and individualized education plans~~

~~for pupils.~~

~~(b) A mentoring program that is a research-based, validated~~

~~program or a statewide 1-to-1 mentoring program and is designed to~~

~~enhance the independence and life quality of pupils who are~~

~~mentally impaired by providing opportunities for mentoring and~~

~~integrated employment.~~

~~(c) A cognitive development program that is a research-based,~~

~~validated educational service program focused on assessing and~~

~~building essential cognitive and perceptual learning abilities to~~

~~strengthen pupil concentration and learning.~~

~~(d) A structured mentoring-tutorial reading program for pupils~~

~~in preschool to grade 4 that is a research-based, validated program~~

~~that develops individualized educational plans based on each~~

~~pupil's age, assessed needs, reading level, interests, and learning~~

~~style.~~

(3) ~~(4)~~ All federal funds allocated under this section shall

be distributed in accordance with federal law and with flexibility

provisions outlined in Public Law 107-116, and in the education

flexibility partnership act of 1999, Public Law 106-25.

Notwithstanding section 17b, payments of federal funds to

districts, intermediate districts, and other eligible entities

under this section shall be paid on a schedule determined by the

department.

(4) ~~(5)~~ For the purposes of applying for federal grants

appropriated under this article, the department shall allow an

intermediate district to submit a consortium application on behalf

of 2 or more districts with the agreement of those districts as

appropriate according to federal rules and guidelines.

(5) ~~(6)~~ As used in this section:

(a) "DED" means the United States department of education.

(b) "DED-OESE" means the DED office of elementary and

secondary education.

education.

(d) "HHS" means the United States department of health and

human services.

(e) "HHS-ACF" means the HHS administration for children and

families.

Sec. 41. (1) From the appropriation in section 11, there is

allocated an amount not to exceed $1,200,000.00 for ~~2013-2014~~ 2014-

2015 to applicant districts and intermediate districts offering

programs of instruction for pupils of limited English-speaking

ability under section 1153 of the revised school code, MCL

380.1153. Subject to subsection (2), reimbursement shall be on a

per-pupil basis and shall be based on the number of pupils of

limited English-speaking ability in membership on the pupil

membership count day. Funds allocated under this section shall be

used solely for instruction in speaking, reading, writing, or

comprehension of English. A pupil shall not be counted under this

section or instructed in a program under this section for more than

3 years.

(2) A district or intermediate district shall not receive

funds under this section if it allows pupils to participate in the

program of instruction who are not residing in the United States

legally.

Sec. 51a. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$919,846,100.00~~ $938,946,100.00

for ~~2013-2014~~ 2014-2015 from state sources and all available

federal funding under sections 611 to 619 of part B of the

individuals with disabilities education act, 20 USC 1411 to 1419,

estimated at $370,000,000.00 for ~~2013-2014,~~ 2014-2015, plus any

carryover federal funds from previous year appropriations. The

allocations under this subsection are for the purpose of

reimbursing districts and intermediate districts for special

education programs, services, and special education personnel as

prescribed in article 3 of the revised school code, MCL 380.1701 to

380.1766; net tuition payments made by intermediate districts to

the Michigan schools for the deaf and blind; and special education

programs and services for pupils who are eligible for special

education programs and services according to statute or rule. For

meeting the costs of special education programs and services not

reimbursed under this article, a district or intermediate district

may use money in general funds or special education funds, not

otherwise restricted, or contributions from districts to

intermediate districts, tuition payments, gifts and contributions

from individuals or other entities, or federal funds that may be

available for this purpose, as determined by the intermediate

district plan prepared pursuant to article 3 of the revised school

code, MCL 380.1701 to 380.1766. ~~All federal funds allocated under~~

~~this section in excess of those allocated under this section for~~

~~2002-2003 may be distributed in accordance with the flexible~~

~~funding provisions of the individuals with disabilities education~~

~~act, Public Law 108-446, including, but not limited to, 34 CFR~~

~~300.206 and 300.208.~~ Notwithstanding section 17b, payments of

federal funds to districts, intermediate districts, and other

eligible entities under this section shall be paid on a schedule

determined by the department.

(2) From the funds allocated under subsection (1), there is

allocated the amount necessary, estimated at ~~$247,000,000.00~~

$252,000,000.00 for ~~2013-2014,~~ 2014-2015, for payments toward

reimbursing districts and intermediate districts for 28.6138% of

total approved costs of special education, excluding costs

reimbursed under section 53a, and 70.4165% of total approved costs

of special education transportation. Allocations under this

subsection shall be made as follows:

(a) The initial amount allocated to a district under this

subsection toward fulfilling the specified percentages shall be

calculated by multiplying the district's special education pupil

membership, excluding pupils described in subsection (11), times

the foundation allowance under section 20 of the pupil's district

of residence, not to exceed the basic foundation allowance under

section 20 for the current fiscal year, or, for a special education

pupil in membership in a district that is a public school academy,

times an amount equal to the amount per membership pupil calculated

under section 20(6) or, for a pupil described in this subsection

who is counted in membership in the education achievement system,

times an amount equal to the amount per membership pupil under

section 20(7). For an intermediate district, the amount allocated

under this subdivision toward fulfilling the specified percentages

shall be an amount per special education membership pupil,

excluding pupils described in subsection (11), and shall be

calculated in the same manner as for a district, using the

foundation allowance under section 20 of the pupil's district of

residence, not to exceed the basic foundation allowance under

section 20 for the current fiscal year.

(b) After the allocations under subdivision (a), districts and

intermediate districts for which the payments calculated under

subdivision (a) do not fulfill the specified percentages shall be

paid the amount necessary to achieve the specified percentages for

the district or intermediate district.

(3) From the funds allocated under subsection (1), there is

allocated for ~~2013-2014~~ 2014-2015 an amount not to exceed

$1,000,000.00 to make payments to districts and intermediate

districts under this subsection. If the amount allocated to a

district or intermediate district for a fiscal year under

subsection (2)(b) is less than the sum of the amounts allocated to

the district or intermediate district for 1996-97 under sections 52

and 58, there is allocated to the district or intermediate district

for the fiscal year an amount equal to that difference, adjusted by

applying the same proration factor that was used in the

distribution of funds under section 52 in 1996-97 as adjusted to

the district's or intermediate district's necessary costs of

special education used in calculations for the fiscal year. This

adjustment is to reflect reductions in special education program

operations or services between 1996-97 and subsequent fiscal years.

Adjustments for reductions in special education program operations

or services shall be made in a manner determined by the department

and shall include adjustments for program or service shifts.

(4) If the department determines that the sum of the amounts

allocated for a fiscal year to a district or intermediate district

under subsection (2)(a) and (b) is not sufficient to fulfill the

specified percentages in subsection (2), then the shortfall shall

be paid to the district or intermediate district during the fiscal

year beginning on the October 1 following the determination and

payments under subsection (3) shall be adjusted as necessary. If

the department determines that the sum of the amounts allocated for

a fiscal year to a district or intermediate district under

subsection (2)(a) and (b) exceeds the sum of the amount necessary

to fulfill the specified percentages in subsection (2), then the

department shall deduct the amount of the excess from the

district's or intermediate district's payments under this article

for the fiscal year beginning on the October 1 following the

determination and payments under subsection (3) shall be adjusted

as necessary. However, if the amount allocated under subsection

(2)(a) in itself exceeds the amount necessary to fulfill the

specified percentages in subsection (2), there shall be no

deduction under this subsection.

(5) State funds shall be allocated on a total approved cost

basis. Federal funds shall be allocated under applicable federal

requirements, except that an amount not to exceed $3,500,000.00 may

be allocated by the department for ~~2013-2014~~ 2014-2015 to

districts, intermediate districts, or other eligible entities on a

competitive grant basis for programs, equipment, and services that

the department determines to be designed to benefit or improve

special education on a statewide scale.

(6) From the amount allocated in subsection (1), there is

allocated an amount not to exceed $2,200,000.00 for ~~2013-2014~~ 2014-

2015 to reimburse 100% of the net increase in necessary costs

incurred by a district or intermediate district in implementing the

revisions in the administrative rules for special education that

became effective on July 1, 1987. As used in this subsection, "net

increase in necessary costs" means the necessary additional costs

incurred solely because of new or revised requirements in the

administrative rules minus cost savings permitted in implementing

the revised rules. Net increase in necessary costs shall be

determined in a manner specified by the department.

(7) For purposes of sections 51a to 58, all of the following

apply:

(a) "Total approved costs of special education" shall be

determined in a manner specified by the department and may include

indirect costs, but shall not exceed 115% of approved direct costs

for section 52 and section 53a programs. The total approved costs

include salary and other compensation for all approved special

education personnel for the program, including payments for social

security and medicare and public school employee retirement system

contributions. The total approved costs do not include salaries or

other compensation paid to administrative personnel who are not

special education personnel as defined in section 6 of the revised

school code, MCL 380.6. Costs reimbursed by federal funds, other

than those federal funds included in the allocation made under this

article, are not included. Special education approved personnel not

utilized full time in the evaluation of students or in the delivery

of special education programs, ancillary, and other related

services shall be reimbursed under this section only for that

portion of time actually spent providing these programs and

services, with the exception of special education programs and

services provided to youth placed in child caring institutions or

juvenile detention programs approved by the department to provide

an on-grounds education program.

(b) Beginning with the 2004-2005 fiscal year, a district or

intermediate district that employed special education support

services staff to provide special education support services in

2003-2004 or in a subsequent fiscal year and that in a fiscal year

after 2003-2004 receives the same type of support services from

another district or intermediate district shall report the cost of

those support services for special education reimbursement purposes

under this article. This subdivision does not prohibit the transfer

of special education classroom teachers and special education

classroom aides if the pupils counted in membership associated with

those special education classroom teachers and special education

classroom aides are transferred and counted in membership in the

other district or intermediate district in conjunction with the

transfer of those teachers and aides.

fiscal year that the amounts allocated for that fiscal year under

subsections (2), (3), (6), and (11) and sections 53a, 54, and 56

will exceed expenditures for that fiscal year under subsections

(2), (3), (6), and (11) and sections 53a, 54, and 56, then for a

district or intermediate district whose reimbursement for that

fiscal year would otherwise be affected by subdivision (b),

subdivision (b) does not apply to the calculation of the

reimbursement for that district or intermediate district and

reimbursement for that district or intermediate district shall be

calculated in the same manner as it was for 2003-2004. If the

amount of the excess allocations under subsections (2), (3), (6),

and (11) and sections 53a, 54, and 56 is not sufficient to fully

fund the calculation of reimbursement to those districts and

intermediate districts under this subdivision, then the

calculations and resulting reimbursement under this subdivision

shall be prorated on an equal percentage basis. This reimbursement

shall not be made after 2014-2015.

(d) Reimbursement for ancillary and other related services, as

defined by R 340.1701c of the Michigan administrative code, shall

not be provided when those services are covered by and available

through private group health insurance carriers or federal

reimbursed program sources unless the department and district or

intermediate district agree otherwise and that agreement is

approved by the state budget director. Expenses, other than the

incidental expense of filing, shall not be borne by the parent. In

addition, the filing of claims shall not delay the education of a

pupil. A district or intermediate district shall be responsible for

payment of a deductible amount and for an advance payment required

until the time a claim is paid.

(e) Beginning with calculations for 2004-2005, if an

intermediate district purchases a special education pupil

transportation service from a constituent district that was

previously purchased from a private entity; if the purchase from

the constituent district is at a lower cost, adjusted for changes

in fuel costs; and if the cost shift from the intermediate district

to the constituent does not result in any net change in the revenue

the constituent district receives from payments under sections 22b

and 51c, then upon application by the intermediate district, the

department shall direct the intermediate district to continue to

report the cost associated with the specific identified special

education pupil transportation service and shall adjust the costs

reported by the constituent district to remove the cost associated

with that specific service.

(8) A pupil who is enrolled in a full-time special education

program conducted or administered by an intermediate district or a

pupil who is enrolled in the Michigan schools for the deaf and

blind shall not be included in the membership count of a district,

but shall be counted in membership in the intermediate district of

residence.

(9) Special education personnel transferred from 1 district to

another to implement the revised school code shall be entitled to

the rights, benefits, and tenure to which the person would

otherwise be entitled had that person been employed by the

receiving district originally.

(10) If a district or intermediate district uses money

received under this section for a purpose other than the purpose or

purposes for which the money is allocated, the department may

require the district or intermediate district to refund the amount

of money received. Money that is refunded shall be deposited in the

state treasury to the credit of the state school aid fund.

(11) From the funds allocated in subsection (1), there is

allocated the amount necessary, estimated at ~~$3,500,000.00~~

$3,300,000.00 for ~~2013-2014,~~ 2014-2015, to pay the foundation

allowances for pupils described in this subsection. The allocation

to a district under this subsection shall be calculated by

multiplying the number of pupils described in this subsection who

are counted in membership in the district times the foundation

allowance under section 20 of the pupil's district of residence,

not to exceed the basic foundation allowance under section 20 for

the current fiscal year, or, for a pupil described in this

subsection who is counted in membership in a district that is a

public school academy, times an amount equal to the amount per

membership pupil under section 20(6) or, for a pupil described in

this subsection who is counted in membership in the education

achievement system, times an amount equal to the amount per

membership pupil under section 20(7). The allocation to an

intermediate district under this subsection shall be calculated in

the same manner as for a district, using the foundation allowance

under section 20 of the pupil's district of residence, not to

exceed the basic foundation allowance under section 20 for the

current fiscal year. This subsection applies to all of the

following pupils:

(a) Pupils described in section 53a.

(b) Pupils counted in membership in an intermediate district

who are not special education pupils and are served by the

intermediate district in a juvenile detention or child caring

facility.

by an intermediate district and provided educational services by

the department of community health.

(12) If it is determined that funds allocated under subsection

(2) or (11) or under section 51c will not be expended, funds up to

the amount necessary and available may be used to supplement the

allocations under subsection (2) or (11) or under section 51c in

order to fully fund those allocations. After payments under

subsections (2) and (11) and section 51c, the remaining

expenditures from the allocation in subsection (1) shall be made in

the following order:

(a) 100% of the reimbursement required under section 53a.

(b) 100% of the reimbursement required under subsection (6).

(d) 100% of the payment required under subsection (3).

(e) 100% of the payments under section 56.

(13) The allocations under subsections (2), (3), and (11)

shall be allocations to intermediate districts only and shall not

be allocations to districts, but instead shall be calculations used

only to determine the state payments under section 22b.

(14) If a public school academy enrolls pursuant to this

section a pupil who resides outside of the intermediate district in

which the public school academy is located and who is eligible for

special education programs and services according to statute or

rule, or who is a child with disabilities, as defined under the

individuals with disabilities education act, Public Law 108-446,

the provision of special education programs and services and the

payment of the added costs of special education programs and

services for the pupil are the responsibility of the district and

intermediate district in which the pupil resides unless the

enrolling district or intermediate district has a written agreement

with the district or intermediate district in which the pupil

resides or the public school academy for the purpose of providing

the pupil with a free appropriate public education and the written

agreement includes at least an agreement on the responsibility for

the payment of the added costs of special education programs and

services for the pupil.

Sec. 51c. As required by the court in the consolidated cases

known as Durant v State of Michigan, Michigan supreme court docket

no. 104458-104492, from the allocation under section 51a(1), there

is allocated for ~~2013-2014~~ 2014-2015 the amount necessary,

estimated at ~~$613,200,000.00,~~ $630,500,000.00, for payments to

reimburse districts for 28.6138% of total approved costs of special

education excluding costs reimbursed under section 53a, and

70.4165% of total approved costs of special education

transportation. Funds allocated under this section that are not

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

determined by the department, may be used to supplement the

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

calculated allocations for the same fiscal year.

Sec. 51d. (1) From the federal funds appropriated in section

11, there is allocated for ~~2013-2014~~ 2014-2015, all available

federal funding, estimated at $74,000,000.00, for special education

programs and services that are funded by federal grants. All

federal funds allocated under this section shall be distributed in

accordance with federal law. Notwithstanding section 17b, payments

of federal funds to districts, intermediate districts, and other

eligible entities under this section shall be paid on a schedule

determined by the department.

(2) From the federal funds allocated under subsection (1), the

following amounts are allocated for ~~2013-2014:~~2014-2015:

(a) An amount estimated at $15,000,000.00 for handicapped

infants and toddlers, funded from DED-OSERS, handicapped infants

and toddlers funds.

(b) An amount estimated at $14,000,000.00 for preschool grants

(Public Law 94-142), funded from DED-OSERS, handicapped preschool

incentive funds.

education programs funded by DED-OSERS, handicapped program,

individuals with disabilities act funds.

(3) As used in this section, "DED-OSERS" means the United

States department of education office of special education and

rehabilitative services.

Sec. 53a. (1) For districts, reimbursement for pupils

described in subsection (2) shall be 100% of the total approved

costs of operating special education programs and services approved

by the department and included in the intermediate district plan

adopted pursuant to article 3 of the revised school code, MCL

380.1701 to 380.1766, minus the district's foundation allowance

calculated under section 20. For intermediate districts,

reimbursement for pupils described in subsection (2) shall be

calculated in the same manner as for a district, using the

foundation allowance under section 20 of the pupil's district of

residence, not to exceed the basic foundation allowance under

section 20 for the current fiscal year.

(2) Reimbursement under subsection (1) is for the following

special education pupils:

(a) Pupils assigned to a district or intermediate district

through the community placement program of the courts or a state

agency, if the pupil was a resident of another intermediate

district at the time the pupil came under the jurisdiction of the

court or a state agency.

(b) Pupils who are residents of institutions operated by the

department of community health.

health institutions for the developmentally disabled who are placed

in community settings other than the pupil's home.

(d) Pupils enrolled in a department-approved on-grounds

educational program longer than 180 days, but not longer than 233

days, at a residential child care institution, if the child care

institution offered in 1991-92 an on-grounds educational program

longer than 180 days but not longer than 233 days.

(e) Pupils placed in a district by a parent for the purpose of

seeking a suitable home, if the parent does not reside in the same

intermediate district as the district in which the pupil is placed.

(3) Only those costs that are clearly and directly

attributable to educational programs for pupils described in

subsection (2), and that would not have been incurred if the pupils

were not being educated in a district or intermediate district, are

reimbursable under this section.

(4) The costs of transportation shall be funded under this

section and shall not be reimbursed under section 58.

(5) Not more than ~~$13,500,000.00~~ $10,500,000.00 of the

allocation for ~~2013-2014~~ 2014-2015 in section 51a(1) shall be

allocated under this section.

Sec. 54. Each intermediate district shall receive an amount

per pupil for each pupil in attendance at the Michigan schools for

the deaf and blind. The amount shall be proportionate to the total

instructional cost at each school. Not more than $1,688,000.00 of

the allocation for ~~2013-2014~~ 2014-2015 in section 51a(1) shall be

allocated under this section.

Sec. 56. (1) For the purposes of this section:

(a) "Membership" means for a particular fiscal year the total

membership for the immediately preceding fiscal year of the

intermediate district and the districts constituent to the

intermediate district.

(b) "Millage levied" means the millage levied for special

education pursuant to part 30 of the revised school code, MCL

380.1711 to 380.1743, including a levy for debt service

obligations.

districts constituent to an intermediate district, except that if a

district has elected not to come under part 30 of the revised

school code, MCL 380.1711 to 380.1743, membership and taxable value

of the district shall not be included in the membership and taxable

value of the intermediate district.

(2) From the allocation under section 51a(1), there is

allocated an amount not to exceed $37,758,100.00 for ~~2013-2014~~

2014-2015 to reimburse intermediate districts levying millages for

special education pursuant to part 30 of the revised school code,

MCL 380.1711 to 380.1743. The purpose, use, and expenditure of the

reimbursement shall be limited as if the funds were generated by

these millages and governed by the intermediate district plan

adopted pursuant to article 3 of the revised school code, MCL

380.1701 to 380.1766. As a condition of receiving funds under this

section, an intermediate district distributing any portion of

special education millage funds to its constituent districts shall

submit for departmental approval and implement a distribution plan.

(3) Reimbursement for those millages levied in ~~2012-2013~~ 2013-

2014 shall be made in ~~2013-2014~~ 2014-2015 at an amount per ~~2012-~~

~~2013~~ 2013-2014 membership pupil computed by subtracting from

~~$169,900.00~~ $172,200.00 the ~~2012-2013~~ 2013-2014 taxable value

behind each membership pupil and multiplying the resulting

difference by the ~~2012-2013~~ 2013-2014 millage levied.

(4) The amount paid to a single intermediate district under

this section shall not exceed 62.9% of the total amount allocated

under subsection (2).

(5) The amount paid to a single intermediate district under

this section shall not be less than 75% of the amount allocated to

the intermediate district under this section for the immediately

preceding fiscal year.

Sec. 61a. (1) From the appropriation in section 11, there is

allocated an amount not to exceed ~~$26,611,300.00~~ $27,611,300.00 for

~~2013-2014~~ 2014-2015 to reimburse on an added cost basis districts,

except for a district that served as the fiscal agent for a

vocational education consortium in the 1993-94 school year, and

secondary area vocational-technical education centers for

secondary-level career and technical education programs according

to rules approved by the superintendent. Applications for

participation in the programs shall be submitted in the form

prescribed by the department. The department shall determine the

added cost for each career and technical education program area.

The allocation of added cost funds shall be based on the type of

career and technical education programs provided, the number of

pupils enrolled, and the length of the training period provided,

and shall not exceed 75% of the added cost of any program. With the

approval of the department, the board of a district maintaining a

secondary career and technical education program may offer the

program for the period from the close of the school year until

September 1. The program shall use existing facilities and shall be

operated as prescribed by rules promulgated by the superintendent.

(2) Except for a district that served as the fiscal agent for

a vocational education consortium in the 1993-94 school year,

districts and intermediate districts shall be reimbursed for local

career and technical education administration, shared time career

and technical education administration, and career education

planning district career and technical education administration.

The definition of what constitutes administration and reimbursement

shall be pursuant to guidelines adopted by the superintendent. Not

more than $800,000.00 of the allocation in subsection (1) shall be

distributed under this subsection.

(3) In addition to the funds allocated in subsection (1), from

the appropriation in section 11, there is allocated an amount not

to exceed $1,000,000.00 for ~~2013-2014~~ 2014-2015 to districts or

intermediate districts for area career and technical education

centers for the purpose of integrating the Michigan merit

curriculum content standards under sections 1278a and 1278b of the

revised school code, MCL 380.1278a and 380.1278b, into state-

approved career and technical education instructional programs for

the purpose of awarding academic credit. The department shall

determine the allocation to each career and technical education

center in a manner that provides for maximum integration of

Michigan merit curriculum content standards statewide.

Sec. 62. (1) For the purposes of this section:

(a) "Membership" means for a particular fiscal year the total

membership for the immediately preceding fiscal year of the

intermediate district and the districts constituent to the

intermediate district or the total membership for the immediately

preceding fiscal year of the area vocational-technical program.

(b) "Millage levied" means the millage levied for area

vocational-technical education pursuant to sections 681 to 690 of

the revised school code, MCL 380.681 to 380.690, including a levy

for debt service obligations incurred as the result of borrowing

for capital outlay projects and in meeting capital projects fund

requirements of area vocational-technical education.

districts constituent to an intermediate district or area

vocational-technical education program, except that if a district

has elected not to come under sections 681 to 690 of the revised

school code, MCL 380.681 to 380.690, the membership and taxable

value of that district shall not be included in the membership and

taxable value of the intermediate district. However, the membership

and taxable value of a district that has elected not to come under

sections 681 to 690 of the revised school code, MCL 380.681 to

380.690, shall be included in the membership and taxable value of

the intermediate district if the district meets both of the

following:

(i) The district operates the area vocational-technical

education program pursuant to a contract with the intermediate

district.

(ii) The district contributes an annual amount to the operation

of the program that is commensurate with the revenue that would

have been raised for operation of the program if millage were

levied in the district for the program under sections 681 to 690 of

the revised school code, MCL 380.681 to 380.690.

(2) From the appropriation in section 11, there is allocated

an amount not to exceed $9,190,000.00 for ~~2013-2014~~ 2014-2015 to

reimburse intermediate districts and area vocational-technical

education programs established under section 690(3) of the revised

school code, MCL 380.690, levying millages for area vocational-

technical education pursuant to sections 681 to 690 of the revised

school code, MCL 380.681 to 380.690. The purpose, use, and

expenditure of the reimbursement shall be limited as if the funds

were generated by those millages.

(3) Reimbursement for the millages levied in ~~2012-2013~~ 2013-

2014 shall be made in ~~2013-2014~~ 2014-2015 at an amount per ~~2012-~~

~~2013~~ 2013-2014 membership pupil computed by subtracting from

~~$186,500.00~~ $188,100.00 the ~~2012-2013~~ 2013-2014 taxable value

behind each membership pupil and multiplying the resulting

difference by the ~~2012-2013~~ 2013-2014 millage levied.

(4) The amount paid to a single intermediate district under

this section shall not exceed 38.4% of the total amount allocated

under subsection (2).

(5) The amount paid to a single intermediate district under

this section shall not be less than 75% of the amount allocated to

the intermediate district under this section for the immediately

preceding fiscal year.

House Bill No. 5314 (H-2) as amended May 8, 2014

[Sec. 64b. (1) From the appropriation in section 11, there is

allocated an amount not to exceed $1,750,000.00 for 2014-2015 for

supplemental payments to districts that support the attendance of

district pupils in grades 9 to 12 under the postsecondary enrollment

options act, 1996 PA 160, MCL 388.511 to 388.524, or under the career

and technical preparation act, 2000 PA 258, MCL 388.1901 to 388.1913,

consistent with section 21b, or that support the attendance of district

pupils in a concurrent enrollment program if the district meets the

requirements under subsection (3).

(2) To be eligible for payments under this section for supporting

the attendance of district pupils under the postsecondary enrollment

options act, 1996 PA 160, MCL 388.511 to 388.524, or under the career and

technical preparation act, 2000 PA 258, MCL 388.1901 to 388.1913, a

district shall do all of the following:

(a) Provide information to all high school pupils on postsecondary

enrollment options, including enrollment eligibility, the institutions

and types of courses that are eligible for participation, the decision-

making process for granting academic credit, and an explanation of

eligible charges that will be paid by the district.

(b) Enter into a written agreement with a postsecondary institution

before the enrollment of district pupils.

(d) Award high school credit for the postsecondary course if the

pupil successfully completes the course.

(3) To be eligible for payments under this section for pupils

enrolled in a concurrent enrollment program, a district shall do all of the following:

House Bill No. 5314 (H-2) as amended May 8, 2014

(a) Provide information to all high school pupils on postsecondary

enrollment options, including enrollment eligibility, the institutions

and types of courses that are eligible for participation, the decision-

making process for granting academic credit, and an explanation of

eligible charges that will be paid by the district.

(b) Enter into a written agreement with a postsecondary institution

establishing the concurrent enrollment program before the enrollment of

district pupils in a postsecondary course through the postsecondary

institution.

teacher or postsecondary faculty pursuant to standards established by the

postsecondary institution with which the district has entered into a

written agreement to operate the concurrent enrollment program.

(d) Ensure that the written agreement provides that the

postsecondary institution agrees not to charge the pupil for any cost of

the program.

(e) Ensure that the course is taught in the local district or

intermediate district.

(f) Ensure that the pupil is awarded both high school and college credit upon successful completion of the course as outlined in the agreement with the postsecondary institution.

(4) Funds shall be awarded to eligible districts under this section in the following manner:

(a) A payment of $10.00 per credit, for up to 3 credits, for a credit-bearing course in which a pupil enrolls during the 2014-2015 school year as described under either subsection (2) or (3).

(b) An additional payment of $30.00 per pupil per course identified in subdivision (a), if the pupil successfully completes, and is awarded both high school and postsecondary credit for, the course during the 2014-2015 school year.

(5) A district requesting payment under this section shall submit an application to the department in the form and manner prescribed by the department. Notwithstanding section 17b, payments under this section shall be made on a schedule determined by the department.]

Sec. 74. (1) From the amount appropriated in section 11, there

is allocated an amount not to exceed ~~$3,299,000.00 for 2013-2014~~

$3,316,500.00 for 2014-2015 for the purposes of this section.

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

for each fiscal year the amount necessary for payments to state

supported colleges or universities and intermediate districts

providing school bus driver safety instruction pursuant to section

51 of the pupil transportation act, 1990 PA 187, MCL 257.1851. The

payments shall be in an amount determined by the department not to

exceed the actual cost of instruction and driver compensation for

each public or nonpublic school bus driver attending a course of

instruction. For the purpose of computing compensation, the hourly

rate allowed each school bus driver shall not exceed the hourly

rate received for driving a school bus. Reimbursement compensating

the driver during the course of instruction shall be made by the

department to the college or university or intermediate district

providing the course of instruction.

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

~~each fiscal year~~ for 2014-2015 the amount necessary to pay the

reasonable costs of nonspecial education auxiliary services

transportation provided pursuant to section 1323 of the revised

school code, MCL 380.1323. Districts funded under this subsection

shall not receive funding under any other section of this article

for nonspecial education auxiliary services transportation.

(4) From the funds allocated in subsection (1), there is

allocated an amount not to exceed ~~$1,674,000.00 for 2013-2014~~

$1,691,500.00 for 2014-2015 for reimbursement to districts and

intermediate districts for costs associated with the inspection of

school buses and pupil transportation vehicles by the department of

state police as required under section 715a of the Michigan vehicle

code, 1949 PA 300, MCL 257.715a, and section 39 of the pupil

transportation act, 1990 PA 187, MCL 257.1839. The department of

state police shall prepare a statement of costs attributable to

each district for which bus inspections are provided and submit it

to the department and to an intermediate district serving as

fiduciary in a time and manner determined jointly by the department

and the department of state police. Upon review and approval of the

statement of cost, the department shall forward to the designated

intermediate district serving as fiduciary the amount of the

reimbursement on behalf of each district and intermediate district

for costs detailed on the statement within 45 days after receipt of

the statement. The designated intermediate district shall make

payment in the amount specified on the statement to the department

of state police within 45 days after receipt of the statement. The

total reimbursement of costs under this subsection shall not exceed

the amount allocated under this subsection. Notwithstanding section

17b, payments to eligible entities under this subsection shall be

paid on a schedule prescribed by the department.

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

from the appropriation in section 11, there is allocated ~~each~~

~~fiscal year for 2012-2013 and for 2013-2014~~ for 2014-2015 to the

intermediate districts the sum necessary, but not to exceed

~~$64,115,100.00 each fiscal year,~~ $62,115,000.00 to provide state

aid to intermediate districts under this section.

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

for 2014-2015 an amount not to exceed $62,108,000.00 for

allocations to each intermediate district ~~for 2012-2013 in an~~

~~amount equal to 100% of the amount allocated to the intermediate~~

~~district under this subsection for 2011-2012. From the allocation~~

~~in subsection (1), there is allocated an amount not to exceed~~

~~$62,108,000.00 for allocations to each intermediate district for~~

~~2013-2014~~ in an amount equal to 100.0% of the amount allocated to

the intermediate district under this ~~subsection for 2012-2013.~~

section, excluding the amount under subsection (4), for 2013-2014.

Funding provided under this section shall be used to comply with

requirements of this article and the revised school code that are

applicable to intermediate districts, and for which funding is not

provided elsewhere in this article, and to provide technical

assistance to districts as authorized by the intermediate school

board.

(3) Intermediate districts receiving funds under subsection

(2) shall collaborate with the department to develop expanded

professional development opportunities for teachers to update and

expand their knowledge and skills needed to support the Michigan

merit curriculum.

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

to an intermediate district, formed by the consolidation or

annexation of 2 or more intermediate districts or the attachment of

a total intermediate district to another intermediate school

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

of a previously existing intermediate school district which has

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

for each intermediate district included in the new intermediate

district for 3 years following consolidation, annexation, or

attachment. From the allocation in subsection (1), there is

allocated $7,000.00 for purposes of this subsection for 2012-2013,

for 2013-2014, and for 2014-2015, after which the payment under

this subsection will cease.

(5) In order to receive funding under subsection (2), an

intermediate district shall do all of the following:

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

intermediate district employs at least 1 person who is trained in

pupil accounting and auditing procedures, rules, and regulations.

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

intermediate district employs at least 1 person who is trained in

rules, regulations, and district reporting procedures for the

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

calculation of the district and high school graduation and dropout

rates.

code, MCL 380.1278a and 380.1278b.

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

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

specified by the center or the department, as applicable.

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

380.1230g.

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

380.761.

~~(6) From the allocation in subsection (1), there is allocated~~

~~an amount not to exceed $2,000,000.00 for 2012-2013 for an~~

~~incentive payment to each intermediate district that meets best~~

~~practices as determined by the department under this subsection.~~

~~The amount of the incentive payment is an amount equal to 3.2% of~~

~~the amount allocated to the intermediate district under subsection~~

~~(2). An intermediate district is eligible for an incentive payment~~

~~under this subsection if the intermediate district satisfies at~~

~~least 4 of the following requirements not later than June 1, 2013:~~

~~(a) The intermediate district enters into an agreement with~~

~~the department to do all of the following:~~

(i~~) Develop a service consolidation plan in 2012-2013 to reduce~~

~~operating costs that is in compliance with guidelines that were~~

~~developed by the department for former section 11d as that section~~

~~was in effect for 2010-2011.~~

(ii~~) Implement the service consolidation plan in 2013-2014 and~~

~~report to the department not later than February 1, 2014 on the~~

~~intermediate district's progress in implementing the service~~

~~consolidation plan.~~

~~(b) The intermediate district has obtained competitive bids on~~

~~the provision of 1 or more noninstructional services for the~~

~~intermediate district or its constituent districts with a value of~~

~~at least $50,000.00.~~

~~(c) The intermediate district develops a technology plan in~~

~~accordance with department policy on behalf of all constituent~~

~~districts within the intermediate district that integrates~~

~~technology into the classroom and prepares teachers to use digital~~

~~technologies as part of the instructional program of each of its~~

~~constituent districts.~~

~~(d) The intermediate district provides to parents and~~

~~community members a dashboard or report card demonstrating the~~

~~intermediate 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~~) A list of services offered by the intermediate district~~

~~that are shared by other local or intermediate districts and a list~~

~~of the districts or intermediate districts that participate.~~

(ii~~) The total cost savings to local or other intermediate~~

~~districts that share services with the intermediate district.~~

(~~iii~~~~) The number and percentage of teachers in the intermediate~~

~~district service area that are trained to integrate technology into~~

~~the classroom.~~

(iv~~) The total funds received from levying special education~~

~~and vocational education millages, and the number of special~~

~~education and vocational education pupils served with those~~

~~dollars.~~

(v~~) The number and percentage of individualized education~~

~~programs developed for special education pupils that contain~~

~~academic goals.~~

~~(e) The intermediate district works in a consortium with 1 or~~

~~more other intermediate districts to develop information management~~

~~system requirements and bid specifications that can be used as~~

~~statewide models. At a minimum, these specifications shall include~~

~~pupil management systems for both general and special education,~~

~~learning management tools, and business services.~~

~~(7) From the allocation in subsection (1), there is allocated~~

~~an amount not to exceed $2,000,000.00 for 2013-2014 for an~~

~~incentive payment to each intermediate district that meets best~~

~~practices as determined by the department under this subsection.~~

~~The amount of the incentive payment is an amount equal to 3.2% of~~

~~the amount allocated to the intermediate district under subsection~~

~~(2). An intermediate district is eligible for an incentive payment~~

~~under this subsection if the intermediate district satisfies at~~

~~least 5 of the following requirements not later than June 1, 2014:~~

~~(a) The intermediate district enters into an agreement with~~

~~the department to comply with all of the following:~~

(i~~) If the intermediate district developed a service~~

~~consolidation plan in 2012-2013, implement the service~~

~~consolidation plan in 2013-2014 and report to the department not~~

~~later than February 1, 2014 on the intermediate district's progress~~

~~in implementing the service consolidation plan.~~

(ii~~) If the intermediate district did not develop a service~~

~~consolidation plan in 2012-2013, develop a service consolidation~~

~~plan in 2013-2014 to reduce operating costs that is in compliance~~

~~with guidelines that were developed by the department for former~~

~~section 11d as that section was in effect for 2010-2011.~~

(~~iii~~~~) If the intermediate district developed a service~~

~~consolidation plan in 2013-2014, implement the service~~

~~consolidation plan in 2014-2015 and report to the department not~~

~~later than February 1, 2015 on the intermediate district's progress~~

~~in implementing the service consolidation plan.~~

(iv~~) Make the intermediate district's service consolidation~~

~~plan publicly available on the intermediate district's website.~~

~~(b) The intermediate district has obtained competitive bids on~~

~~the provision of 1 or more noninstructional services for the~~

~~intermediate district or its constituent districts with a value of~~

~~at least $50,000.00. The unfunded accrued liability costs for~~

~~retirement and other benefits shall be excluded from the~~

~~intermediate district's current costs for the purpose of comparing~~

~~competitive bids to the current costs of providing services.~~

~~(c) The intermediate district develops a technology plan in~~

~~accordance with department policy on behalf of all constituent~~

~~districts within the intermediate district that integrates~~

~~technology into the classroom and prepares teachers to use digital~~

~~technologies as part of the instructional program of each of its~~

~~constituent districts. An intermediate district that developed a~~

~~technology plan in 2012-2013 shall begin implementing that~~

~~technology plan in 2013-2014.~~

~~(d) The intermediate district provides to parents and~~

~~community members a dashboard or report card demonstrating the~~

~~intermediate district's efforts to manage its finances responsibly.~~

~~The dashboard or report card shall include revenue and expenditure~~

~~projections for the intermediate district for 2013-2014 and 2014-~~

~~2015, a listing of all debt service obligations, detailed by~~

~~project, including anticipated 2013-2014 payment for each project,~~

~~a listing of total outstanding debt, and at least all of the~~

~~following for the 3 most recent school years for which the data are~~

~~available:~~

(i~~) A list of services offered by the intermediate district~~

~~that are shared by other local or intermediate districts and a list~~

~~of the districts or intermediate districts that participate.~~

(ii~~) The total cost savings to local or other intermediate~~

~~districts that share services with the intermediate district.~~

(~~iii~~~~) The number and percentage of teachers in the intermediate~~

~~district service area that are trained to integrate technology into~~

~~the classroom.~~

(iv~~) The total funds received from levying special education~~

~~and vocational education millages, and the number of special~~

~~education and vocational education pupils served with those~~

~~dollars.~~

(v~~) The number and percentage of individualized education~~

~~programs developed for special education pupils that contain~~

~~academic goals.~~

~~(e) The intermediate district works in a consortium with 1 or~~

~~more other intermediate districts and the center to develop local~~

~~information management system requirements and bid specifications~~

~~that result in a recommended model information system that supports~~

~~interoperability to ensure linkage and connectivity in a manner~~

~~that facilitates the efficient exchange of data among districts,~~

~~intermediate districts, and the center. At a minimum, these~~

~~specifications shall include pupil management systems for both~~

~~general and special education, learning management tools, and~~

~~business services.~~

~~(f) If an intermediate 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 intermediate district is the~~

~~policyholder for each of its insurance policies that covers 1 or~~

~~more of these benefits. An intermediate district that does not~~

~~directly employ its staff or an intermediate district with a~~

~~voluntary employee beneficiary association that pays no more than~~

~~the maximum per employee contribution amount and that contributes~~

~~no more than the maximum employer contribution percentage of total~~

~~annual costs for the medical benefit plans as described in sections~~

~~3 and 4 of the publicly funded health insurance contribution act,~~

~~2011 PA 152, MCL 15.563 and 15.564, is considered to have satisfied~~

~~this requirement.~~

Sec. 94. (1) From the general fund appropriation in section

11, there is allocated to the department for ~~2013-2014~~ 2014-2015 an

amount not to exceed $250,000.00 for efforts to increase the number

of pupils who participate and succeed in advanced placement and

international baccalaureate programs.

(2) From the funds allocated under this section, the

department shall award funds to cover all or part of the costs of

advanced placement test fees or international baccalaureate test

fees for low-income pupils who take an advanced placement or an

international baccalaureate test. Payments shall not exceed $20.00

per test completed.

(3) The department shall only award funds under this section

if the department determines that all of the following criteria are

met:

(a) Each pupil for whom payment is made meets eligibility

requirements of the federal advanced placement test fee program

under section 1701 of the no child left behind act of 2001, Public

Law 107-110.

(b) The tests are administered by the college board, the

international baccalaureate organization, or another test provider

approved by the department.

toward the cost of each test for which payment is made.

(4) The department shall establish procedures for awarding

funds under this section.

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

shall be made on a schedule determined by the department.

Sec. 94a. (1) There is created within the state budget office

in the department of technology, management, and budget the center

for educational performance and information. The center shall do

all of the following:

(a) Coordinate the collection of all data required by state

and federal law from districts, intermediate districts, and

postsecondary institutions.

(b) Create, maintain, and enhance this state's P-20

longitudinal data system and ensure that it meets the requirements

of subsection (4).

order to reduce the administrative burden on reporting entities,

including, but not limited to, electronic transcript services.

(d) Create, maintain, and enhance this state's web-based

educational portal to provide information to school leaders,

teachers, researchers, and the public in compliance with all

federal and state privacy laws. Data shall include, but are not

limited to, all of the following:

(i) Data sets that link teachers to student information,

allowing districts to assess individual teacher impact on student

performance and consider student growth factors in teacher and

principal evaluation systems.

(ii) Data access or, if practical, data sets, provided for

regional data warehouses that, in combination with local data, can

improve teaching and learning in the classroom.

(iii) Research-ready data sets for researchers to perform

research that advances this state's educational performance.

(e) Provide data in a useful manner to allow state and local

policymakers to make informed policy decisions.

(f) Provide public reports to the citizens of this state to

allow them to assess allocation of resources and the return on

their investment in the education system of this state.

(g) Other functions as assigned by the state budget director.

(2) Each state department, officer, or agency that collects

information from districts, intermediate districts, or

postsecondary institutions as required under state or federal law

shall make arrangements with the center to ensure that the state

department, officer, or agency is in compliance with subsection

(1). This subsection does not apply to information collected by the

department of treasury under the uniform budgeting and accounting

act, 1968 PA 2, MCL 141.421 to 141.440a; the revised municipal

finance act, 2001 PA 34, MCL 141.2101 to 141.2821; the school bond

qualification, approval, and loan act, 2005 PA 92, MCL 388.1921 to

388.1939; or section 1351a of the revised school code, MCL

380.1351a.

(3) The center may enter into any interlocal agreements

necessary to fulfill its functions.

(4) The center shall ensure that the P-20 longitudinal data

system required under subsection (1)(b) meets all of the following:

(a) Includes data at the individual student level from

preschool through postsecondary education and into the workforce.

(b) Supports interoperability by using standard data

structures, data formats, and data definitions to ensure linkage

and connectivity in a manner that facilitates the exchange of data

among agencies and institutions within the state and between

states.

records so that an individual student may be matched with those

teachers providing instruction to that student.

(d) Enables the matching of individual teachers with

information about their certification and the institutions that

prepared and recommended those teachers for state certification.

(e) Enables data to be easily generated for continuous

improvement and decision-making, including timely reporting to

parents, teachers, and school leaders on student achievement.

(f) Ensures the reasonable quality, validity, and reliability

of data contained in the system.

(g) Provides this state with the ability to meet federal and

state reporting requirements.

(h) For data elements related to preschool through grade 12

and postsecondary, meets all of the following:

(i) Contains a unique statewide student identifier that does

not permit a student to be individually identified by users of the

system, except as allowed by federal and state law.

(ii) Contains student-level enrollment, demographic, and

program participation information.

(iii) Contains student-level information about the points at

which students exit, transfer in, transfer out, drop out, or

complete education programs.

(iv) Has the capacity to communicate with higher education data

systems.

(i) For data elements related to preschool through grade 12

only, meets all of the following:

(i) Contains yearly test records of individual students for

assessments approved by DED-OESE for accountability purposes under

section 1111(b) of the elementary and secondary education act of

1965, 20 USC 6311, including information on individual students not

tested, by grade and subject.

(ii) Contains student-level transcript information, including

information on courses completed and grades earned.

(iii) Contains student-level college readiness test scores.

(j) For data elements related to postsecondary education only:

(i) Contains data that provide information regarding the extent

to which individual students transition successfully from secondary

school to postsecondary education, including, but not limited to,

all of the following:

(A) Enrollment in remedial coursework.

(B) Completion of 1 year's worth of college credit applicable

to a degree within 2 years of enrollment.

(ii) Contains data that provide other information determined

necessary to address alignment and adequate preparation for success

in postsecondary education.

(5) From the general fund appropriation in section 11, there

is allocated an amount not to exceed ~~$9,535,100.00 for 2013-2014~~

$12,022,800.00 for 2014-2015 to the department of technology,

management, and budget to support the operations of the center. In

addition, from the federal funds appropriated in section 11 there

is allocated for ~~2013-2014~~ 2014-2015 the amount necessary,

estimated at $193,500.00, to support the operations of the center

and to establish a P-20 longitudinal data system as provided under

this section in compliance with the assurance provided to the

United States department of education in order to receive state

fiscal stabilization funds. The center shall cooperate with the

department to ensure that this state is in compliance with federal

law and is maximizing opportunities for increased federal funding

to improve education in this state.

(6) From the funds allocated in subsection (5), there is

allocated for ~~2013-2014~~ 2014-2015 an amount not to exceed

$850,000.00 for competitive grants to support collaborative efforts

on the P-20 longitudinal data system. All of the following apply to

grants awarded under this subsection:

(a) The center shall award competitive grants to eligible

intermediate districts or a consortium of intermediate districts

based on criteria established by the center.

(b) Activities funded under the grant shall support the P-20

longitudinal data system portal and may include portal hosting,

hardware and software acquisition, maintenance, enhancements, user

support and related materials, and professional learning tools and

activities aimed at improving the utility of the P-20 longitudinal

data system.

for the immediately preceding fiscal year shall receive priority

for funding under this section. However, after 3 fiscal years of

continuous funding, an applicant is required to compete openly with

new applicants.

~~(7) From the funds allocated in subsection (5), there is~~

~~allocated for 2013-2014 an amount not to exceed $100,000.00 for the~~

~~center to develop the pupil transfer application as required under~~

~~section 25e.~~

(7) ~~(8)~~ Funds allocated under this section that are not

expended in the fiscal year in which they were allocated may be

carried forward to a subsequent fiscal year and are appropriated

for the purposes for which the funds were originally allocated.

~~(9) It is the intent of the legislature that, beginning in~~

~~2014-2015, a district shall report to the center by June 30, in a~~

~~manner prescribed by the center, the number of pupils in the~~

~~district who have had 10 or more unexcused absences each school~~

~~year. For pupils in grades 9 to 12, the report shall include both~~

~~the total number of unexcused absences in any single course and the~~

~~total number of unexcused absences in all courses. Each district~~

~~shall define unexcused absence. It is the intent of the legislature~~

~~that a district that reports false information under this~~

~~subsection shall forfeit an amount equal to 5% of its total state~~

~~aid allocation under this act.~~

(8) ~~(10)~~ The center may bill departments as necessary in order

to fulfill reporting requirements of state and federal law. The

center may also enter into agreements to supply custom data,

analysis, and reporting to other principal executive departments,

state agencies, local units of government, and other individuals

and organizations. The center may receive and expend funds in

addition to those authorized in subsection (5) to cover the costs

associated with salaries, benefits, supplies, materials, and

equipment necessary to provide such data, analysis, and reporting

services.

(9) ~~(11)~~ As used in this section:

(a) "DED-OESE" means the United States department of education

office of elementary and secondary education.

(b) "State education agency" means the department.

Sec. 95a. From the appropriation in section 11, there is

House Bill No. 5314 (H-2) as amended May 8, 2014

allocated for 2014-2015 an amount not to exceed $100.00 for the

purpose of implementing evaluation systems for teachers and school

administrators if the 97th Legislature enacts legislation requiring

implementation of a new educator evaluation system.

[Sec. 97. From the money appropriated in section 11, there is allocated for 2014-2015 the amount of $100.00 for a grant to 1 school district under this section. The department shall award a grant under this section to a school district for the purpose of collaborating with a postsecondary institution in this state that provides a postsecondary program specializing in educating children in urban schools. To qualify for the grant, a school district and the postsecondary program must meet all of the following, as determined by the department:

(a) The program's focus for recruiting students is primarily in the city where the school district is located.

(b) The postsecondary institution provides a master's level degree for completion of the program.

(c) The program provides training in a range of social, emotional, and health-related issues that can be unique to an urban school district.

(d) At least 90% of the school district's pupils qualify for a federal free or reduced-price school lunch subsidy.

(e) The school district and the postsecondary institution work in collaboration to place teachers who graduate from the program in teaching positions in the school district where the postsecondary institution is located.]

Sec. 98. (1) From the general fund money appropriated in

section 11, there is allocated an amount not to exceed

~~$9,387,500.00 for 2013-2014~~ $7,387,500.00 for 2014-2015 for the

purposes described in this section.

(2) The Michigan virtual university shall operate the Michigan

virtual learning research institute. The Michigan virtual learning

research institute shall do all of the following:

(a) Support and accelerate innovation in education through the

following activities:

(i) Test, evaluate, and recommend as appropriate new

technology-based instructional tools and resources.

(ii) Research, design, and recommend digital education delivery

models for use by pupils and teachers that include age-appropriate

multimedia instructional content.

(~~iii~~~~) Research, design, and recommend competency-based online~~

~~assessments.~~

(iii) (iv) Research, develop, and recommend annually to the

department criteria by which cyber schools and online course

providers should be monitored and evaluated to ensure a quality

education for their pupils.

(iv) (v) Based on pupil completion and performance data

reported to the department or the center for educational

performance and information from cyber schools and other online

course providers operating in this state, analyze the effectiveness

of online learning delivery models in preparing pupils to be

college- and career-ready and publish a report that highlights

enrollment totals, completion rates, and the overall impact on

pupils. The report shall be submitted to the house and senate

appropriations subcommittees on state school aid, the state budget

director, the house and senate fiscal agencies, and the department

not later than December 1, ~~2014.~~2015.

(v) (vi) Before August 31, ~~2014,~~ 2015, provide an extensive

professional development program to at least 500 educational

personnel, including teachers, school administrators, and school

board members, that focuses on the effective integration of digital

learning into curricula and instruction. Not later than December 1,

~~2014,~~ 2015, the Michigan virtual learning research institute shall

submit a report to the house and senate appropriations

subcommittees on state school aid, the state budget director, the

house and senate fiscal agencies, and the department on the number

and percentage of teachers, school administrators, and school board

members who have received professional development services from

the Michigan virtual university. The report shall also identify

barriers and other opportunities to encourage the adoption of

digital learning in the public education system.

(vi) (~~vii~~) Identify and share best practices for planning,

implementing, and evaluating online and blended education delivery

models with intermediate districts, districts, and public school

academies to accelerate the adoption of innovative education

delivery models statewide.

(b) Provide leadership for this state's system of digital

learning education by doing the following activities:

(i) Develop and report policy recommendations to the governor

and the legislature that accelerate the expansion of effective

online learning in this state's schools.

(ii) Provide a clearinghouse for research reports, academic

studies, evaluations, and other information related to online

learning.

(iii) Promote and distribute the most current instructional

design standards and guidelines for online teaching.

(iv) In collaboration with the department and interested

colleges and universities in this state, ~~recommend to the~~

~~superintendent guidelines and standards for a new teacher~~

~~endorsement credential~~ support implementation and improvements

related to effective digital learning instruction.

(v) Pursue public/private partnerships that include districts

to study and implement competency-based technology-rich online

learning models.

(vi) Convene focus groups and conduct annual surveys of

teachers, administrators, pupils, parents, and others to identify

barriers and opportunities related to online learning.

(vii) Produce an annual consumer awareness report for schools

and parents about effective online education providers and

education delivery models, performance data, cost structures, and

research trends.

(viii) Research and establish an internet-based platform that

educators can use to create student-centric learning tools and

resources and facilitate a user network that assists educators in

using the platform. As part of this initiative, the Michigan

virtual university shall work collaboratively with districts and

intermediate districts to establish a plan to make available online

resources that align to Michigan's K-12 curriculum standards for

use by students, educators, and parents.

(ix) Create and maintain a public statewide catalog of online

learning courses being offered by all public schools in this state.

The Michigan virtual learning research institute shall identify and

develop a list of nationally recognized best practices for online

learning and use this list to ~~provide~~ support reviews of online

course vendors, courses, and instructional practices. The Michigan

virtual learning research institute shall also provide a mechanism

for intermediate districts to use the identified best practices to

review content offered by constituent districts. The Michigan

virtual learning research institute shall review the online course

offerings of the Michigan virtual university, and make the results

from these reviews available to the public as part of the statewide

catalog. The Michigan virtual learning research institute shall

ensure that the statewide catalog is made available to the public

on the Michigan virtual university website and ~~linked~~ shall allow

the ability to link it to each district's website as provided for

in section 21f. Beginning in 2014-2015, the statewide catalog shall

also contain all of the following:

(A) The number of ~~pupils enrolled~~ enrollments in each online

course in the ~~2012-2013~~ immediately preceding school year.

(B) The number of ~~pupils who successfully completed~~

enrollments that earned 60% or more of the total course points for

each online course in the ~~2012-2013~~ immediately preceding school

year.

(x) Collaborate with key stakeholders to examine the need and

process for incorporating registration, payment services, and

transcript functionality to the statewide catalog.

(xi) Collaborate with key stakeholders to examine district

level accountability and teacher effectiveness issues related to

online learning under section 21f and make findings and

recommendations publicly available.

(3) In order for the Michigan virtual university to receive

any funds allocated under this section, the Michigan virtual school

must maintain its accreditation status from recognized national and

international accrediting entities.

(4) If the course offerings are included in the statewide

catalog of online courses under subsection (2)(b)(ix), the Michigan

virtual school operated by the Michigan virtual university may

offer online course offerings, including, but not limited to, all

of the following:

(a) Information technology courses.

(b) College level equivalent courses, as defined in section

1471 of the revised school code, MCL 380.1471.

(d) Programs and services for at-risk pupils.

(e) General education development test preparation courses for

adjudicated youth.

(f) Special interest courses.

(g) Professional development programs for teachers, school

administrators, other school employees, and school board members.

(5) If a home-schooled or nonpublic school student is a

resident of a district that subscribes to services provided by the

Michigan virtual school, the student may use the services provided

by the Michigan virtual school to the district without charge to

the student beyond what is charged to a district pupil using the

same services.

(6) Not later than December 1 of each fiscal year, the

Michigan virtual university shall provide a report to the house and

senate appropriations subcommittees on state school aid, the state

budget director, the house and senate fiscal agencies, and the

department that includes at least all of the following information

related to the Michigan virtual school for the preceding state

fiscal year:

(a) A list of the districts served by the Michigan virtual

school.

(b) A list of online course titles available to districts.

information on registrations and completions by course.

(d) The overall course completion rate percentage.

(7) The governor may appoint an advisory group for the

Michigan virtual learning research institute established under

subsection (2). The members of the advisory group shall serve at

the pleasure of the governor and shall serve without compensation.

The purpose of the advisory group is to make recommendations to the

governor, the legislature, and the president and board of the

Michigan virtual university that will accelerate innovation in this

state's education system in a manner that will prepare elementary

and secondary students to be career and college ready and that will

promote the goal of increasing the percentage of citizens of this

state with high-quality degrees and credentials to at least 60% by

2025.

(8) Not later than November 1, ~~2013,~~ 2014, the Michigan

virtual university shall submit to the house and senate

appropriations subcommittees on state school aid, the state budget

director, and the house and senate fiscal agencies a detailed

budget for the ~~2013-2014~~ 2014-2015 fiscal year that includes a

breakdown on its projected costs to deliver online educational

services to districts and a summary of the anticipated fees to be

paid by districts for those services. Beginning in 2013-2014, not

later than February 1, the Michigan virtual university shall submit

to the house and senate appropriations subcommittees on state

school aid, the state budget director, and the house and senate

fiscal agencies a breakdown on its actual costs to deliver online

educational services to districts and a summary of the actual fees

paid by districts for those services based on audited financial

statements for the immediately preceding fiscal year.

(9) As used in this section:

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

model where pupils are provided content, instruction, and

assessment, in part at a supervised educational facility away from

home where the pupil and a teacher with a valid Michigan teaching

certificate are in the same physical location and in part through

internet-connected learning environments with some degree of pupil

control over time, location, and pace of instruction.

(b) "Cyber school" means a full-time instructional program of

online courses for pupils that may or may not require attendance at

a physical school location.

based educational delivery system that uses various information

technologies to provide a structured learning environment,

including online and blended learning instructional methods.

(d) "Online course" means a course of study that is capable of