HOUSE BILL No. 5089 September 24, 1997, Introduced by Reps. Gilmer, Oxender, Gernaat, Birkholz, DeVuyst, Rhead, Johnson, LeTarte, Walberg, Brackenridge, Sikkema, McNutt, Cassis, Scranton, Rocca, Middleton, Dalman, Bobier, Bodem, Raczkowski, Kukuk, Godchaux, Byl, Law, Jansen, Middaugh, Kaza, London, Jelinek, Hammerstrom, Fitzgerald, Dobb, Jellema, Richner, Horton, Gustafson, Geiger, Perricone, Voorhees and Llewellyn and referred to the Committee on Appropriations. A bill to amend 1979 PA 94, entitled "The state school aid act of 1979," by amending sections 6, 31a, 51a, and 53a (MCL 388.1606, 388.1631a, 388.1651a, and 388.1653a), sections 6, 51a, and 53a as amended by 1997 PA 93 and section 31a as amended by 1997 PA 24, and by adding section 31c. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 6. (1) "Center program" means a program operated by a 2 district or intermediate district for special education pupils 3 from several districts in programs for the autistically impaired, 4 trainable mentally impaired, severely mentally impaired, severely 5 multiply impaired, hearing impaired, physically and otherwise 6 health impaired, and visually impaired. Programs for emotionally 7 impaired pupils housed in buildings that do not serve regular 8 education pupils also qualify. Unless otherwise approved by the 04451'97 ** TAV 2 1 department, a center program either shall serve all constituent 2 districts within an intermediate district or shall serve several 3 districts with less than 50% of the pupils residing in the oper- 4 ating district. In addition, special education center program 5 pupils placed part-time in noncenter programs to comply with the 6 least restrictive environment provisions of section 612 of part B 7 of the individuals with disabilities education act, title VI of 8 Public Law 91-230, 20 U.S.C. 1412, may be considered center pro- 9 gram pupils for pupil accounting purposes for the time scheduled 10 in either a center program or a noncenter program. 11 (2) "District pupil retention rate" means the proportion of 12 pupils who have not dropped out of school in the immediately pre- 13 ceding school year and is equal to 1 minus the quotient of the 14 number of pupils unaccounted for in the immediately preceding 15 school year, as determined pursuant to subsection (3), divided by 16 the pupils of the immediately preceding school year. 17 (3) "District pupil retention report" means a report of the 18 number of pupils, excluding migrant and adult, in the district 19 for the immediately preceding school year, adjusted for those 20 pupils who have transferred into the district, transferred out of 21 the district, transferred to alternative programs, and have grad- 22 uated, to determine the number of pupils who are unaccounted 23 for. The number of pupils unaccounted for shall be calculated as 24 determined by the department. 25 (4) "MEMBERSHIP", EXCEPT AS OTHERWISE PROVIDED IN THIS ACT, 26 MEANS FOR A DISTRICT, PUBLIC SCHOOL ACADEMY, UNIVERSITY SCHOOL, 27 OR INTERMEDIATE DISTRICT THE SUM OF THE PRODUCT OF .6 TIMES THE 04451'97 ** 3 1 NUMBER OF FULL-TIME EQUATED PUPILS IN GRADES K TO 12 ACTUALLY 2 ENROLLED AND IN REGULAR DAILY ATTENDANCE ON THE PUPIL MEMBERSHIP 3 COUNT DAY FOR THE CURRENT SCHOOL YEAR, PLUS THE PRODUCT OF .4 4 TIMES THE FINAL AUDITED COUNT FROM THE SUPPLEMENTAL COUNT DAY FOR 5 THE IMMEDIATELY PRECEDING SCHOOL YEAR, AS DETERMINED BY THE 6 DEPARTMENT AND CALCULATED BY ADDING THE NUMBER OF PUPILS REGIS- 7 TERED FOR ATTENDANCE PLUS PUPILS RECEIVED BY TRANSFER AND MINUS 8 PUPILS LOST AS DEFINED BY RULES PROMULGATED BY THE STATE BOARD, 9 AND AS CORRECTED BY A SUBSEQUENT DEPARTMENT AUDIT. THE AMOUNT OF 10 THE FOUNDATION ALLOWANCE FOR A PUPIL IN MEMBERSHIP IS DETERMINED 11 UNDER SECTION 20. In making the calculation of membership, all of 12 the following, as applicable, apply to determining the membership 13 of a district, public school academy, university school, or 14 intermediate district: 15 (a) Except as otherwise provided in this subsection, a pupil 16 shall be counted in membership in the pupil's educating district 17 or districts. An individual pupil shall not be counted for more 18 than a total of 1.0 full-time equated membership. 19 (b) If a pupil is educated in a district other than the 20 pupil's district of residence and the educating district is not 21 in the same intermediate district as the pupil's district of res- 22 idence, if the pupil is not being educated as part of a coopera- 23 tive education program, if the pupil's district of residence does 24 not give the educating district its approval to count the pupil 25 in membership in the educating district, and if the pupil is not 26 covered by an exception specified in subsection (6) to the 27 requirement that the educating district must have the approval of 04451'97 ** 4 1 the pupil's district of residence to count the pupil in 2 membership, the pupil shall not be counted in membership in any 3 district. 4 (c) A special education pupil educated by the intermediate 5 district shall be counted in membership in the intermediate 6 district. 7 (d) A pupil placed by a court or state agency in an 8 on-grounds program of a juvenile detention facility, a child 9 caring institution, or a mental health institution, or a pupil 10 funded under section 53a, shall be counted in membership in the 11 district or intermediate district approved by the department to 12 operate the program. 13 (e) A pupil enrolled in the Michigan schools for the deaf 14 and blind shall be counted in membership in the pupil's interme- 15 diate district of residence. 16 (f) A pupil enrolled in a vocational education program sup- 17 ported by a millage levied over an area larger than a single dis- 18 trict or in an area vocational-technical education program estab- 19 lished pursuant to section 690 of the revised school code, MCL 20 380.690, shall be counted only in the pupil's district of 21 residence. 22 (g) A pupil enrolled in a university school shall be counted 23 in membership in the university school. 24 (h) A pupil enrolled in a public school academy shall be 25 counted in membership in the public school academy. 26 (i) For a new district, university school, or public school 27 academy beginning its operation after December 31, 1994, 04451'97 ** 5 1 membership for the first 2 full or partial fiscal years of 2 operation shall be determined as follows: 3 (i) If operations begin before the pupil membership count 4 day for the fiscal year, membership is the average number of 5 full-time equated pupils in grades K to 12 actually enrolled and 6 in regular daily attendance on the pupil membership count day for 7 the current school year and on the supplemental count day for the 8 current school year, as determined by the department and calcu- 9 lated by adding the number of pupils registered for attendance on 10 the pupil membership count day plus pupils received by transfer 11 and minus pupils lost as defined by rules promulgated by the 12 state board, and as corrected by a subsequent department audit, 13 plus the final audited count from the supplemental count day for 14 the current school year, and dividing that sum by 2. 15 (ii) If operations begin after the pupil membership count 16 day for the fiscal year and not later than the supplemental count 17 day for the fiscal year, membership is the final audited count of 18 the number of full-time equated pupils in grades K to 12 actually 19 enrolled and in regular daily attendance on the supplemental 20 count day for the current school year. 21 (j) If a district is the authorizing body for a public 22 school academy, then, in the first school year in which pupils 23 are counted in membership on the pupil membership count day in 24 the public school academy, the determination of the district's 25 membership shall exclude from the district's pupil count for the 26 immediately preceding supplemental count day any pupils who are 27 counted in the public school academy on that first pupil 04451'97 ** 6 1 membership count day who were also counted in the district on the 2 immediately preceding supplemental count day. 3 (k) In a district, public school academy, university school, 4 or intermediate district operating an extended school year pro- 5 gram approved by the state board, a pupil enrolled, but not 6 scheduled to be in regular daily attendance on a pupil membership 7 count day, shall be counted. 8 (l) Pupils to be counted in membership shall be not less 9 than 5 years of age on December 1 and less than 20 years of age 10 on September 1 of the school year except a special education 11 pupil who is enrolled and receiving instruction in a special edu- 12 cation program approved by the department and not having a high 13 school diploma who is less than 26 years of age as of September 1 14 of the current school year shall be counted in membership. 15 (m) An individual who has obtained a high school diploma 16 shall not be counted in membership. An individual who has 17 obtained a general education development (G.E.D.) certificate 18 shall not be counted in membership. An individual participating 19 in a job training program funded under former section 107a or a 20 jobs program funded under former section 107b, both administered 21 by the Michigan jobs commission, or participating in any succes- 22 sor of either of those 2 programs, shall not be counted in 23 membership. 24 (n) If a pupil counted in membership in a public school 25 academy is also educated by a district or intermediate district 26 as part of a cooperative education program, the pupil shall be 27 counted in membership only in the public school academy, and the 04451'97 ** 7 1 instructional time scheduled for the pupil in the district or 2 intermediate district shall be included in the full-time equated 3 membership determination under subdivision (q). However, for 4 pupils receiving instruction in both a public school academy and 5 in a district or intermediate district but not as a part of a 6 cooperative education program, the following apply: 7 (i) If the public school academy provides instruction for at 8 least 1/2 of the class hours specified in subdivision (q), the 9 public school academy shall receive as its prorated share of the 10 full-time equated membership for each of those pupils an amount 11 equal to 1 times the product of the hours of instruction the 12 public school academy provides divided by the number of hours 13 specified in subdivision (q) for full-time equivalency, and the 14 remainder of the full-time membership for each of those pupils 15 shall be allocated to the district or intermediate district pro- 16 viding the remainder of the hours of instruction. 17 (ii) If the public school academy provides instruction for 18 less than 1/2 of the class hours specified in subdivision (q), 19 the district or intermediate district providing the remainder of 20 the hours of instruction shall receive as its prorated share of 21 the full-time equated membership for each of those pupils an 22 amount equal to 1 times the product of the hours of instruction 23 the district or intermediate district provides divided by the 24 number of hours specified in subdivision (q) for full-time equiv- 25 alency, and the remainder of the full-time membership for each of 26 those pupils shall be allocated to the public school academy. 04451'97 ** 8 1 (o) An individual less than 16 years of age as of September 2 1 of the current school year who is being educated in an 3 alternative education program shall not be counted in membership 4 if there are also adult education participants being educated in 5 the same program or classroom. 6 (p) The department shall give a uniform interpretation of 7 full-time and part-time memberships. 8 (q) The number of class hours used to calculate full-time 9 equated memberships shall be consistent with section 1284 of the 10 revised school code, MCL 380.1284. In determining full-time 11 equated memberships for pupils who are enrolled in a postsecond- 12 ary institution under the postsecondary enrollment options act, 13 1996 PA 160, MCL 388.511 to 388.524, a pupil shall not be consid- 14 ered to be less than a full-time equated pupil solely because of 15 the effect of his or her postsecondary enrollment, including nec- 16 essary travel time, on the number of class hours provided by the 17 district to the pupil. 18 (r) Full-time equated memberships for pupils in kindergarten 19 shall be determined by dividing the number of class hours sched- 20 uled and provided per year per kindergarten pupil by a number 21 equal to 1/2 the number used for determining full-time equated 22 memberships for pupils in grades 1 to 12. 23 (s) For a district that has qualified currently migrant 24 pupils enrolled in the district as of the pupil membership count 25 day who were not counted in membership in the district on the 26 supplemental count day for the immediately preceding school year, 27 as determined by the department using the criteria used for 04451'97 ** 9 1 eligibility for the migrant education program under the improving 2 America's schools act of 1994, Public Law 103-382, 108 3 Stat. 3518, the number of those pupils counted in the district's 4 membership is 3/4 of the number of those pupils counted on the 5 pupil membership count day only. 6 (t) For a district, university school, or public school 7 academy that has pupils enrolled in a grade level that was not 8 offered by the district, university school, or public school 9 academy in the immediately preceding school year, the number of 10 pupils enrolled in that grade level to be counted in membership 11 is the average of the number of those pupils enrolled and in reg- 12 ular daily attendance on the pupil membership count day and the 13 supplemental count day of the current school year, as determined 14 by the department. Membership shall be calculated by adding the 15 number of pupils registered for attendance in that grade level on 16 the pupil membership count day plus pupils received by transfer 17 and minus pupils lost as defined by rules promulgated by the 18 state board, and as corrected by subsequent department audit, 19 plus the final audited count from the supplemental count day for 20 the current school year, and dividing that sum by 2. 21 (u) A pupil enrolled in a cooperative education program may 22 be counted in membership in the pupil's district of residence 23 with the written approval of all parties to the cooperative 24 agreement. 25 (v) If, as a result of a disciplinary action, a district 26 determines through the district's alternative education program 27 that the best instructional placement for a pupil is in the 04451'97 ** 10 1 pupil's home, if that placement is authorized in writing by the 2 district superintendent and district alternative education super- 3 visor, and if the district provides appropriate instruction as 4 described in this subdivision to the pupil at the pupil's home, 5 the district may count the pupil in membership on a pro rata 6 basis, with the proration based on the number of hours of 7 instruction the district actually provides to the pupil divided 8 by the number of hours specified in subdivision (q) for full-time 9 equivalency. For the purposes of this subdivision, a district 10 shall be considered to be providing appropriate instruction if 11 all of the following are met: 12 (i) The district provides at least 2 nonconsecutive hours of 13 instruction per week to the pupil at the pupil's home under the 14 supervision of a certificated teacher. 15 (ii) The district provides instructional materials, 16 resources, and supplies, except computers, that are comparable to 17 those otherwise provided in the district's alternative education 18 program. 19 (iii) Course content is comparable to that in the district's 20 alternative education program. 21 (iv) Credit earned is awarded to the pupil and placed on the 22 pupil's transcript. 23 (w) A pupil enrolled in an alternative education program 24 described in section 25 shall be counted in membership in the 25 district or public school academy that expelled the pupil. 04451'97 ** 11 1 (5) "Public school academy" means a public school academy 2 operating under part 6a or 6b of the revised school code, MCL 3 380.501 to 380.507 and 380.511 to 380.518. 4 (6) "Pupil" means a person in membership in a public 5 school. A district must have the approval of the pupil's dis- 6 trict of residence to count the pupil in membership, except 7 approval by the pupil's district of residence shall not be 8 required for nonpublic part-time pupils, for pupils receiving 1/2 9 or less of their instruction in a district other than their dis- 10 trict of residence, for pupils enrolled in a public school acad- 11 emy or university school, for pupils enrolled in a district other 12 than their district of residence under an intermediate district 13 schools of choice pilot program as described in section 91a or 14 former section 91 if the intermediate district and its constitu- 15 ent districts have been exempted from section 105, for pupils 16 enrolled in a district other than their district of residence but 17 within the same intermediate district if the educating district 18 enrolls nonresident pupils in accordance with section 105, or for 19 pupils enrolled in a district other than their district of resi- 20 dence if the pupils have been continuously enrolled in the edu- 21 cating district since a school year in which the pupils enrolled 22 in the educating district under section 105 and in which the edu- 23 cating district enrolled nonresident pupils in accordance with 24 section 105. In addition, if a district that is not a first 25 class district educates pupils who reside in a first class dis- 26 trict and if the primary instructional site for those pupils is 27 located within the boundaries of the first class district, the 04451'97 ** 12 1 educating district must have the approval of the first class 2 district to count those pupils in membership. As used in this 3 subsection, "first class district" means a district organized as 4 a school district of the first class under the revised school 5 code. 6 (7) "Pupil membership count day" of a district or intermedi- 7 ate district means: 8 (a) Except as provided in subdivision (b), the fourth 9 Wednesday in September each school year. 10 (b) For a district or intermediate district maintaining 11 school during the entire school year, the following days: 12 (i) Fourth Wednesday in July. 13 (ii) Fourth Wednesday in September. 14 (iii) Second Wednesday in February. 15 (iv) Fourth Wednesday in April. 16 (8) "Rule" means a rule promulgated pursuant to the adminis- 17 trative procedures act of 1969, 1969 PA 306, MCL 24.201 to 18 24.328. 19 (9) "The revised school code" means 1976 PA 451, MCL 380.1 20 to 380.1852. 21 (10) "School fiscal year" means a fiscal year that commences 22 July 1 and continues through June 30. 23 (11) "State board" means the state board of education. 24 (12) "Supplemental count day" means the day on which the 25 supplemental pupil count is conducted under section 6a. 26 (13) "Tuition pupil" means a pupil of school age attending 27 school in a district other than the pupil's district of residence 04451'97 ** 13 1 for whom tuition may be charged. Tuition pupil does not include 2 a pupil who is a special education pupil; a pupil enrolled in a 3 district other than the pupil's district of residence but within 4 the same intermediate district if the educating district enrolls 5 nonresident pupils in accordance with section 105; a pupil 6 enrolled in a district other than the pupil's district of resi- 7 dence if the pupil has been continuously enrolled in the educat- 8 ing district since a school year in which the pupil enrolled in 9 the educating district under section 105 and in which the educat- 10 ing district enrolled nonresident pupils in accordance with sec- 11 tion 105; or a pupil served by an intermediate district schools 12 of choice pilot program as described in section 91a or former 13 section 91 if the intermediate district and its constituent dis- 14 tricts have been exempted from section 105. A pupil's district 15 of residence shall not require a high school tuition pupil, as 16 provided under section 111, to attend another school district 17 after the pupil has been assigned to a school district. 18 (14) "State school aid fund" means the state school aid fund 19 established in section 11 of article IX of the state constitution 20 of 1963. 21 (15) "Taxable value" means the taxable value of property as 22 determined under section 27a of the general property tax act, 23 1893 PA 206, MCL 211.27a. 24 (16) "Total state aid" or "total state school aid" means the 25 total combined amount of all funds due to a district, intermedi- 26 ate district, or other entity under all of the provisions of this 27 act. 04451'97 ** 14 1 (17) "University school" means an instructional program 2 operated by a public university under section 23 that meets the 3 requirements of section 23. 4 Sec. 31a. (1) From the appropriation in section 11, there 5 is allocated for1996-971997-98 an amount not to exceed 6$230,000,000.00$252,000,000.00 for payments to eligible dis- 7 tricts and eligible public school academies under this section. 8 Subject to subsection(11)(10), the amount of the additional 9 allowance under this section shall be based on the number of 10 actual pupils in membership in the district or public school 11 academy who met the income eligibility criteria for free break- 12 fast, lunch, or milk in the immediately preceding state fiscal 13 year, as determined under the national school lunch act, chapter 14 281, 60 Stat. 230, 42 U.S.C. 1751 to 1753, 1755 to 1761, 1762a, 15 1765 to 1766b, 1769, 1769b to 1769c, and 1769f to 1769h, and 16 reported to the department by October 31 of the immediately pre- 17 ceding fiscal year and adjusted not later than December 31 of the 18 immediately preceding fiscal year or, for reporting in 1996-97 19 only, adjusted not later than June 30 of the immediately preced- 20 ing fiscal year. However, for a public school academy that began 21 operations as a public school academy after the pupil membership 22 count day of the immediately preceding school year, the basis for 23 the additional allowance under this section shall be the number 24 of actual pupils in membership in the public school academy who 25 met the income eligibility criteria for free breakfast, lunch, or 26 milk in the current state fiscal year, as determined under the 27 national school lunch act. 04451'97 ** 15 1 (2) To be eligible to receive funding under this section, a 2 district or public school academy that has not been previously 3 determined to be eligible shall apply to the department, in a 4 form and manner prescribed by the department, and a district or 5 public school academy must meet all of the following: 6 (a) The district's or public school academy's combined state 7 and local revenue per membership pupil in the current state 8 fiscal year, as calculated under section 20, is less than or 9 equal to $6,500.00 adjusted by the dollar amount of the differ- 10 ence between the basic foundation allowance under section 20 for 11 the current state fiscal year and $5,000.00,.OR BOTH OF THE 12 FOLLOWING APPLY TO THE DISTRICT OR PUBLIC SCHOOL ACADEMY: 13 (i) AT LEAST 1/3 OF THE PUPILS IN MEMBERSHIP IN THE DISTRICT 14 OR PUBLIC SCHOOL ACADEMY MET THE INCOME ELIGIBILITY CRITERIA FOR 15 FREE BREAKFAST, LUNCH, OR MILK IN THE IMMEDIATELY PRECEDING STATE 16 FISCAL YEAR, AS DETERMINED AND REPORTED AS DESCRIBED IN 17 SUBSECTION (1). 18 (ii) AT LEAST 5,000 OF THE PUPILS IN MEMBERSHIP IN THE DIS- 19 TRICT OR PUBLIC SCHOOL ACADEMY MET THE INCOME ELIGIBILITY CRI- 20 TERIA FOR FREE BREAKFAST, LUNCH, OR MILK IN THE IMMEDIATELY PRE- 21 CEDING STATE FISCAL YEAR, AS DETERMINED AND REPORTED AS DESCRIBED 22 IN SUBSECTION (1). 23 (b) The district or public school academy agrees to use the 24 funding only for purposes allowed under this section and to 25 comply with the program and accountability requirements under 26 this section. 04451'97 ** 16 1 (3)AnEXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION, AN 2 eligible district or eligible public school academy shall receive 3 under this section for each membership pupil in the district or 4 public school academy who met the income eligibility criteria for 5 free breakfast, lunch, or milk, as determined under the national 6 school lunch act and as reported to the department by October 31 7 of the immediately preceding fiscal year and adjusted not later 8 than December 31 of the immediately preceding fiscal year or, for 9 reporting in 1996-97 only, adjusted not later than June 30 of the 10 immediately preceding fiscal year, an amount per pupil equal to 11 11.5% of the district's foundation allowance, not to exceed 12 $6,500.00 adjusted by the dollar amount of the difference between 13 the basic foundation allowance under section 20 for the current 14 state fiscal year and $5,000.00, or of the public school 15 academy's per membership pupil allocation under section 20 for 16 the current state fiscal year.However, aA public school 17 academy that began operations as a public school academy after 18 the pupil membership count day of the immediately preceding 19 school year shall receive under this section for each membership 20 pupil in the public school academy who met the income eligibility 21 criteria for free breakfast, lunch, or milk, as determined under 22 the national school lunch act and as reported to the department 23 by October 31 of the current fiscal year and adjusted not later 24 than December 31 of the current fiscal year, an amount per pupil 25 equal to 11.5% of the public school academy's per membership 26 pupil allocation under section 20 for the current state fiscal 27 year.For reporting occurring in 1996-97, if a district or04451'97 ** 17 1public school academy submits an adjustment to the department2after December 31, 1996 in the number of pupils used for deter-3mining payments under this section, the district or public school4academy shall include with the submission an explanation for the5adjustment and documentation satisfactory to the department to6justify the adjustment.A DISTRICT THAT IS ELIGIBLE FOR FUNDING 7 UNDER THIS SECTION BECAUSE THE DISTRICT MEETS THE REQUIREMENTS OF 8 SUBSECTION (2)(A)(i) AND (ii) SHALL RECEIVE UNDER THIS SECTION 9 FOR EACH MEMBERSHIP PUPIL IN THE DISTRICT WHO MET THE INCOME ELI- 10 GIBILITY CRITERIA FOR FREE BREAKFAST, LUNCH, OR MILK IN THE IMME- 11 DIATELY PRECEDING FISCAL YEAR, AS DETERMINED AND REPORTED AS 12 DESCRIBED IN SUBSECTION (1), AN AMOUNT PER PUPIL EQUAL TO 5.75% 13 OF THE DISTRICT'S FOUNDATION ALLOWANCE, NOT TO EXCEED $6,500.00 14 ADJUSTED BY THE DOLLAR AMOUNT OF THE DIFFERENCE BETWEEN THE BASIC 15 FOUNDATION ALLOWANCE UNDER SECTION 20 FOR THE CURRENT STATE 16 FISCAL YEAR AND $5,000.00. 17 (4) Except as otherwise provided in this section, a district 18 or public school academy receiving funding under this section 19 shall use that money only to provide instructional programs and 20 direct noninstructional services, including, but not limited to, 21 medical or counseling services, for at-risk pupils and for the 22 purposes of subsection (5) and shall not use any of that money 23 for administrative costs or to supplant ANOTHER PROGRAM OR OTHER 24 funds, except for funds allocated to the district or public 25 school academy under this section in the immediately preceding 26 year and already being used by the district or public school 27 academy for at-risk pupils. The instruction or direct 04451'97 ** 18 1 noninstructional services provided under this section may be 2 conducted before or after regular school hours or by adding extra 3 school days to the school year and may be conducted using a tuto- 4 rial method, with paraprofessionals working under the supervision 5 of a certificated teacher. The ratio of pupils to paraprofes- 6 sionals shall be between 10:1 and 15:1. Only 1 certificated 7 teacher is required to supervise instruction using a tutorial 8 method. AS USED IN THIS SUBSECTION, "TO SUPPLANT ANOTHER 9 PROGRAM" MEANS TO TAKE THE PLACE OF A PREVIOUSLY EXISTING 10 INSTRUCTIONAL PROGRAM OR DIRECT NONINSTRUCTIONAL SERVICES FUNDED 11 FROM A FUNDING SOURCE OTHER THAN FUNDING UNDER THIS SECTION. 12 (5) A district or public school academy that receives funds 13 under this section and that operates a school breakfast program 14 under section 1272a of the revised school code, MCL 380.1272a, 15 shall use from those funds an amount, not to exceed $10.00 per 16 pupil for whom the district or public school academy receives 17 funds under this section, necessary to operate the school break- 18 fast program. 19 (6)In order to provide accountability for the program20funded under this section, the superintendent of a district or21chief executive of a public school academy shall submit to the22department, in a succinct form and manner prescribed by the23department, a written assurance of the district's or public24school academy's compliance with all provisions of this section25by May 20 of the current fiscal year. In addition, eachEACH 26 district or public school academy receiving funds under this 27 section shall submit to the department bythat dateMAY 20 OF 04451'97 ** 19 1 EACH FISCAL YEAR a report, not to exceed 10 pages, on the usage 2 by the district or public school academy of funds under this sec- 3 tion, which report shall include at least a brief description of 4 each program conducted by the district or public school academy 5 using funds under this section, the amount of funds under this 6 section allocated to each of those programs, and the number of 7 at-risk pupils served by each of those programs. If a district 8 or public school academy does not comply with this subsection, 9 the department shall withhold an amount equal to the June payment 10 due under this section until the district or public school acad- 11 emy complies with this subsection. If the district or public 12 school academy does not comply with this subsection by the end of 13 the state fiscal year, the withheld funds shall be forfeited to 14 the school aid fund. 15 (7) In order to receive funds under this section, a district 16 or public school academy shall allow access for the department or 17 the department's designee to audit all records related to the 18 program for which it receives those funds. The district or 19 public school academy shall reimburse the state for all disallow- 20 ances found in the audit. 21 (8) Subject to subsection (5), any district may use up to 22 100% of the funds it receives under this section to reduce the 23 ratio of pupils to teachers in grades K-6, or any combination of 24 those grades, in school buildings in which the percentage of 25 pupils described in subsection (1) exceeds the district's aggre- 26 gate percentage of those pupils. Subject to subsection (5), if a 27 district obtains a waiver from the department, the district may 04451'97 ** 20 1 use up to 100% of the funds it receives under this section to 2 reduce the ratio of pupils to teachers in grades K-6, or any com- 3 bination of those grades, in school buildings in which the per- 4 centage of pupils described in subsection (1) is at least 60% of 5 the district's aggregate percentage of those pupils and at least 635%30% of the total number of pupils enrolled in the school 7 building. To obtain a waiver, a district must apply to the 8 department and demonstrate to the satisfaction of the department 9 that the class size reductions would be in the best interests of 10 the district's at-risk pupils. 11(9) As a pilot project for a period of 3 fiscal years, a12district that is located in a county with a population of more13than 350,000 and less than 480,000 and that has more than 10,00014pupils in membership shall expend funds received under this sec-15tion, other than the amount described in subsection (5), attrib-16utable to pupils enrolled in grades K-3 for the purpose of reduc-17ing class size in grades K-3 in the district to an average of not18more than 17 pupils per class, with not more than 19 pupils in19any particular class, in each school building in the district in20which pupils described in subsection (1) constitute a specified21percentage of the total number of pupils in the building. That22specified percentage is as follows:23(a) For the 1994-95 school year, 59%.24(b) For the 1995-96 school year, 50%.25(c) For the 1996-97 school year, 25%.26 (9)(10)A district or public school academy may use funds 27 received under this section for adult high school completion, 04451'97 ** 21 1 general education development (G.E.D.) test preparation, or 2 adult basic education programs described in section 107. 3 (10)(11)If necessary, and before any proration required 4 under section 11, the department shall prorate payments under 5 this section by reducing the amount of the per pupil payment 6 under this section by a dollar amount calculated by determining 7 the amount by which the amount necessary to fully fund the 8 requirements of this section exceeds the maximum amount allocated 9 under this section and then dividing that amount by the total 10 statewide number of pupils who met the income eligibility cri- 11 teria for free breakfast, lunch, or milk in the immediately pre- 12 ceding fiscal year, as described in subsection (1). 13 (11)(12)If a district is formed by consolidation after 14 June 1, 1995, and if 1 or more of the original districts was not 15 eligible before the consolidation for an additional allowance 16 under this section, the amount of the additional allowance under 17 this section for the consolidated district shall be based on the 18 number of pupils described in subsection (1) enrolled in the con- 19 solidated district who reside in the territory of an original 20 district that was eligible before the consolidation for an addi- 21 tional allowance under this section. 22 (12)(13)As used in this section, "at-risk pupil" means a 23 pupil for whom the district has documentation that the pupil 24 meets at least 2 of the following criteria: is a victim of child 25 abuse or neglect; is below grade level in English language and 26 communication skills or mathematics; is a pregnant teenager or 27 teenage parent; is eligible for a federal free or reduced-price 04451'97 ** 22 1 lunch subsidy; has atypical behavior or attendance patterns; or 2 has a family history of school failure, incarceration, or sub- 3 stance abuse. For pupils for whom the results of at least the 4 applicable MEAP test have been received, at-risk pupil also 5 includes a pupil who does not meet the other criteria under this 6 subsection but who did not achieve at least a score of moderate 7 on the most recent MEAP reading test for which results for the 8 pupil have been received, did not achieve at least a score of 9 moderate on the most recent MEAP mathematics test for which 10 results for the pupil have been received, or achieved less than 11 50% of the objectives on the most recent MEAP science test for 12 which results for the pupil have been received. For pupils in 13 grades K-3, at-risk pupil also includes a pupil who is at risk of 14 not meeting the district's core academic curricular objectives in 15 English language, communication skills, or mathematics. 16 SEC. 31C. FROM THE GENERAL FUND APPROPRIATION UNDER SECTION 17 11, THERE IS ALLOCATED TO THE DEPARTMENT FOR 1997-98 AN AMOUNT 18 NOT TO EXCEED $250,000.00 FOR A STUDY OF THE EFFECTIVENESS OF 19 SMALL CLASSES IN IMPROVING PUPIL PERFORMANCE. THE DEPARTMENT 20 SHALL SUBMIT A REPORT OF ITS FINDINGS TO THE LEGISLATURE NOT 21 LATER THAN MARCH 1, 1998. 22 Sec. 51a. (1) From the appropriation in section 11, there 23 is allocated$752,086,700.00$818,786,700.00 for 1997-98 to 24 consist of an amount not to exceed$656,153,300.0025 $722,853,300.00 from state sources and $95,933,400.00 in federal 26 funding under sections 611 to 620 of part B of the individuals 27 with disabilities education act, title VI of Public Law 91-230, 04451'97 ** 23 1 20 U.S.C. 1411 to 1420, plus any carryover federal funds from 2 previous year appropriations, for the purpose of reimbursing dis- 3 tricts and intermediate districts for special education programs, 4 services, and special education personnel as prescribed in arti- 5 cle 3 of the revised school code, MCL 380.1701 to 380.1766; net 6 tuition payments made by intermediate districts to the Michigan 7 schools for the deaf and blind; and programs for pupils with 8 handicaps as defined by the department. For meeting the costs of 9 special education programs and services not reimbursed under this 10 article, a district or intermediate district may use money in 11 general funds or special education funds, not otherwise 12 restricted, or contributions from districts to intermediate dis- 13 tricts, tuition payments, gifts and contributions from individu- 14 als, or federal funds that may be available for this purpose, as 15 determined by the intermediate district plan prepared pursuant to 16 article 3 of the revised school code, MCL 380.1701 to 380.1766. 17 (2) From the funds allocated under subsection (1), there is 18 allocated for 1997-98 an amount not to exceed$591,801,400.0019 $658,501,400.00 for payments toward reimbursing districts and 20 intermediate districts for 28.6138% of total approved costs of 21 special education, excluding costs reimbursed under section 53a, 22 and 70.4165% of total approved costs of special education 23 transportation. Allocations under this subsection shall be made 24 as follows: 25 (a) The initial amount allocated to a districtor interme-26diate districtunder this subsection toward fulfilling the 27 specified percentages shall be calculated by multiplying the 04451'97 ** 24 1 district'sor intermediate district'sspecial education pupil 2 membership times the district'sor intermediate district's3 foundation allowance under section 20 OR PAYMENT UNDER 4 SECTION 20(6), not to exceed $6,500.00 adjusted by the dollar 5 amount of the difference between the 1997-98 basic foundation 6 allowance under section 20 and $5,000.00. For an intermediate 7 district, the amount allocated under this subdivision toward ful- 8 filling the specified percentages shall be an amount per special 9 education membership pupil and shall be calculated IN THE SAME 10 MANNER AS FOR A DISTRICT, using the foundation allowance under 11 section 20 of the pupil's district of residence not to exceed 12 $6,500.00 adjusted by the dollar amount of the difference between 13 the 1997-98 basic foundation allowance under section 20 and 14 $5,000.00. 15 (b) After the allocations under subdivision (a), the remain- 16 ing funds available under this subsection shall be distributed to 17 districts and intermediate districts for which the payments under 18 subdivision (a) do not fulfill the specified percentages. The 19 payment to a district or intermediate district under this subdi- 20 vision shall be in an amount that ensures that the district or 21 intermediate district receives its proportionate share of these 22 remaining funds based on the proportion of the total statewide 23 shortfall from the specified percentages that is attributable to 24 the district or intermediate district. 25(c) If the aggregate revenue received by a district or26intermediate district under subdivisions (a) and (b) is less than27the sum of 28.6138% of the district's or intermediate district's04451'97 ** 25 1total approved costs of special education, excluding costs2reimbursed under section 53a, and 70.4165% of total approved3costs of special education transportation, there is allocated for41997-98 to the district or intermediate district from the alloca-5tion under section 20 or section 81, as applicable, the amount6necessary to satisfy this remaining amount. If a district other7than a public school academy or university school educates a non-8resident special education pupil, the district may bill the9pupil's district of residence for the portion of the costs asso-10ciated with educating the nonresident special education pupil11that is paid from the educating district's allocation under12section 20.13 (3) IF THE AMOUNT ALLOCATED TO A DISTRICT OR INTERMEDIATE 14 DISTRICT FOR 1997-98 UNDER SUBSECTION (2)(B) IS LESS THAN THE SUM 15 OF THE AMOUNTS ALLOCATED TO THE DISTRICT OR INTERMEDIATE DISTRICT 16 FOR 1996-97 UNDER SECTIONS 52 AND 58, THERE IS ALLOCATED TO THE 17 DISTRICT OR INTERMEDIATE DISTRICT FOR 1997-98 AN AMOUNT EQUAL TO 18 THAT DIFFERENCE, ADJUSTED BY APPLYING THE SAME PRORATION FACTOR 19 THAT WAS USED IN THE DISTRIBUTION OF FUNDS UNDER SECTION 52 IN 20 1996-97 TO THE DISTRICT'S OR INTERMEDIATE DISTRICT'S NECESSARY 21 COSTS OF SPECIAL EDUCATION USED IN CALCULATIONS FOR 1997-98. 22 THIS ADJUSTMENT IS TO REFLECT REDUCTIONS IN SPECIAL EDUCATION 23 PROGRAM OPERATIONS BETWEEN 1996-97 AND 1997-98. 24 (4) IF THE DEPARTMENT DETERMINES THAT THE SUM OF THE AMOUNTS 25 ALLOCATED FOR A FISCAL YEAR TO A DISTRICT OR INTERMEDIATE DIS- 26 TRICT UNDER SUBSECTION (2)(A) AND (B) IS NOT SUFFICIENT TO 27 FULFILL THE SPECIFIED PERCENTAGES IN SUBSECTION (2), THEN THE 04451'97 ** 26 1 SHORTFALL SHALL BE PAID TO THE DISTRICT OR INTERMEDIATE DISTRICT 2 DURING THE FISCAL YEAR BEGINNING ON THE OCTOBER 1 FOLLOWING THE 3 DETERMINATION. IF THE DEPARTMENT DETERMINES THAT THE SUM OF THE 4 AMOUNTS ALLOCATED FOR A FISCAL YEAR TO A DISTRICT OR INTERMEDIATE 5 DISTRICT UNDER SUBSECTION (2)(A) AND (B) EXCEEDS THE SUM OF THE 6 AMOUNT NECESSARY TO FULFILL THE SPECIFIED PERCENTAGES IN SUBSEC- 7 TION (2) PLUS THE ADJUSTED AMOUNT DUE UNDER SUBSECTION (3), THEN 8 THE DEPARTMENT SHALL DEDUCT THE AMOUNT OF THE EXCESS FROM THE 9 DISTRICT'S OR INTERMEDIATE DISTRICT'S PAYMENTS UNDER THIS ACT FOR 10 THE FISCAL YEAR BEGINNING ON THE OCTOBER 1 FOLLOWING THE 11 DETERMINATION. HOWEVER, IF THE AMOUNT ALLOCATED UNDER SUBSECTION 12 (2)(A) IN ITSELF EXCEEDS THE AMOUNT NECESSARY TO FULFILL THE 13 SPECIFIED PERCENTAGES IN SUBSECTION (2), THERE SHALL BE NO DEDUC- 14 TION UNDER THIS SUBSECTION. 15 (5)(3)State funds shall be allocated on a total approved 16 cost basis. Federal funds shall be allocated under applicable 17 federal requirements, except that an amount not to exceed 18 $3,100,000.00 may be allocated by the department to districts or 19 intermediate districts on a competitive grant basis for programs, 20 equipment, and services that the department determines to be 21 designed to benefit or improve special education on a statewide 22 scale. 23 (6)(4)From the amount allocated in subsection (1), there 24 is allocated an amount not to exceed $1,700,000.00 for 1997-98 to 25 reimburse 100% of the net increase in necessary costs incurred by 26 a district or intermediate district in implementing the revisions 27 in the administrative rules for special education that became 04451'97 ** 27 1 effective on July 1, 1987. As used in this subsection, "net 2 increase in necessary costs" means the necessary additional costs 3 incurred solely because of new or revised requirements in the 4 administrative rules minus cost savings permitted in implementing 5 the revised rules. Net increase in necessary costs shall be 6 determined in a manner specified by the department. 7 (7)(5)For purposes of this article, all of the following 8 apply: 9 (a) "Total approved costs of special education" shall be 10 determined in a manner specified by the department and may 11 include indirect costs, but shall not exceed 115% of approved 12 direct costs for section 52 and section 53a programs. The total 13 approved costs include salary and other compensation for all 14 approved special education personnel for the program, including 15 payments for social security and medicare and public school 16 employee retirement system contributions. The total approved 17 costs do not include salaries or other compensation paid to 18 administrative personnel who are not special education personnel 19 as defined in section 6 of the revised school code, MCL 380.6. 20 Costs reimbursed by federal funds, other than those federal funds 21 included in the allocation made under this article, are not 22 included. Special education approved personnel not utilized full 23 time in the evaluation of students or in the delivery of special 24 education programs, ancillary, and other related services shall 25 be reimbursed under this section only for that portion of time 26 actually spent providing these programs and services, with the 27 exception of special education programs and services provided to 04451'97 ** 28 1 youth placed in child caring institutions or juvenile detention 2 programs approved by the department to provide an on-grounds edu- 3 cation program. 4 (b) Reimbursement for ancillary and other related services, 5 as defined by R 340.1701 of the Michigan administrative code, 6 shall not be provided when those services are covered by and 7 available through private group health insurance carriers or fed- 8 eral reimbursed program sources unless the department and dis- 9 trict or intermediate district agree otherwise and that agreement 10 is approved by the department of management and budget. 11 Expenses, other than the incidental expense of filing, shall not 12 be borne by the parent. In addition, the filing of claims shall 13 not delay the education of a pupil. A district or intermediate 14 district shall be responsible for payment of a deductible amount 15 and for an advance payment required until the time a claim is 16 paid. 17 (8)(6)From the allocation in subsection (1), there is 18 allocated for 1997-98 an amount not to exceed $15,313,900.00 to 19 intermediate districts. The payment under this subsection to 20 each intermediate district shall be equal to the amount of the 21 1996-97 allocation to the intermediate district under this 22 subsection. 23 (9)(7)A pupil who is enrolled in a full-time special 24 education program conducted or administered by an intermediate 25 district or a pupil who is enrolled in the Michigan schools for 26 the deaf and blind shall not be included in the membership count 04451'97 ** 29 1 of a district, but shall be counted in membership in the 2 intermediate district of residence. 3 (10) NOTWITHSTANDING SECTION 6(4), FOR PURPOSES OF CALCULAT- 4 ING SPECIAL EDUCATION MEMBERSHIP FOR 1997-98 ONLY, THE DEPARTMENT 5 SHALL USE FOR THE FEBRUARY 1997 SUPPLEMENTAL COUNT THE DEFINITION 6 OF MEMBERSHIP THAT IS IN EFFECT ON THE 1997-98 PUPIL MEMBERSHIP 7 COUNT DAY. 8 (11)(8)Special education personnel transferred from 1 9 district to another to implement the revised school code shall be 10 entitled to the rights, benefits, and tenure to which the person 11 would otherwise be entitled had that person been employed by the 12 receiving district originally. 13 (12)(9)If a district or intermediate district uses money 14 received under this section for a purpose other than the purpose 15 or purposes for which the money is allocated, the department may 16 require the district or intermediate district to refund the 17 amount of money received. Money that is refunded shall be depos- 18 ited in the state treasury to the credit of the state school aid 19 fund. 20 (13)(10)After payments undersubsection21 SUBSECTIONS (2) AND (3), the remaining expenditures from the 22 allocation in subsection (1) shall be made in the following 23 order: 24 (a) 100% of the reimbursement required under section 53a. 25 (b) 100% of the reimbursement required under 26 subsection(4)(6). 04451'97 ** 30 1 (c) 100% of the payment required under section 54. 2 (d) 100% of the payment required under subsection(6)3 (8). 4 (e) 100% of the payments under section 56. 5 (f) If the department determines that a balance remains 6 after all expenditures described in subdivisions (a) to (e), the 7 department shall use that balance to increase the proportional 8 distributions under subsection (2)(b). 9 Sec. 53a. (1) Reimbursement shall be 100% of the total 10 approved costs of operating special education programs and serv- 11 ices approved by the department and included in the intermediate 12 district plan adopted pursuant to article 3 of the revised school 13 code, MCL 380.1701 to 380.1766, minus the foundation allowance 14 calculated under section 20, for the following special education 15 pupils: 16 (a) Pupils assigned to a district or intermediate district 17 through the community placement program of the courts or a state 18 agency, if the pupil was a resident of another intermediate dis- 19 trict at the time the pupil came under the jurisdiction of the 20 court or a state agency. 21 (b) Pupils who are residents of institutions operated by the 22 department of community health. 23 (c) Pupils who are former residents of department of commu- 24 nity health institutions for the developmentally disabled who are 25 placed in community settings other than the pupil's home. 26 (d) Pupils who are dependents of foreign diplomats who 27 reside in this state and who are placed in a center program. 04451'97 ** 31 1 (e) Pupils enrolled in a department-approved on-grounds 2 educational program longer than 181 days, but not longer than 233 3 days, at a residential child care institution, if the child care 4 institution offered in 1991-92 an on-grounds educational program 5 longer than 181 days but not longer than 233 days. 6 (f) Pupils placed in a district by a parent for the purpose 7 of seeking a suitable home, if the parent does not reside in the 8 same intermediate district as the district in which the pupil is 9 placed. 10 (2) Only those costs that are clearly and directly attribut- 11 able to educational programs for pupils described in subsection 12 (1), and that would not have been incurred if the pupils were not 13 being educated in a district or intermediate district, are reim- 14 bursable under this section. 15 (3) The costs of transportation shall be funded under this 16 section but shall not be reimbursed under section 58. 17 (4) Not more than$15,000,000.00$23,600,000.00 for 18 1997-98 of the allocation in section 51a(1) shall be allocated 19 under this section. 20 Enacting section 1. This amendatory act takes effect 21 October 1, 1997. 04451'97 ** Final page. TAV