SENATE BILL NO. 363 EXECUTIVE BUDGET BILL February 23, 1999, Introduced by Senators BENNETT, STEIL, GOUGEON, GOSCHKA and MC MANUS and referred to the Committee on Appropriations. A bill to make appropriations for the department of education and certain other purposes relating to education for the fiscal year ending September 30, 2000 to provide for the expenditure of the appropriations; to prescribe the powers and duties of certain state departments, school districts, and other governmental bodies; and to provide for the disposition of fees and other income received by certain legal entities and state agencies. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: PART 1 LINE-ITEM APPROPRIATIONS Sec. 101. Subject to the conditions set forth in this bill, the amounts listed in this part are appropriated for the department of education for the fiscal year ending September 30, 2000, from the funds indicated in this part. The following is a summary of the appropriations in this part: DEPARTMENT OF EDUCATION APPROPRIATION SUMMARY: Full-time equated unclassified positions . . . . . . .6.0 Full-time equated classified positions . . . . 542.6 GROSS APPROPRIATION . . . . . . . . $ 983,215,900 Total interdepartmental grants and intradepartmental transfers. . . . . . . 1,056,700 ADJUSTED GROSS APPROPRIATION. . . . . . $ 982,159,200 Federal revenues: Total federal revenues. . . . . . . 910,165,900 Special revenue funds: Total local revenues. . . . . . . . 6,244,300 Total private revenues. . . . . . . 587,300 Total state restricted revenues . . . . . . . 27,294,700 State general fund/general purpose. . . . . . . . $ 37,867,000 Sec. 102. STATE BOARD OF EDUCATION/OFFICE OF THE SUPERINTENDENT Full-time equated unclassified positions . . . . . . .6.0 Full-time equated classified positions . . . . .16.0 State board of education, per diem payments . . . . . . $ 19,400 Unclassified positions. . . . . . . 505,500 State board/superintendent operations--16.0 FTE positions . . . . . . 2,369,500 GROSS APPROPRIATION . . . . . . . . $ 2,894,400 Appropriated from: Federal revenues: Federal revenues. . . . . . . 567,000 Special revenue funds: Private revenues. . . . . . . 8,000 State general fund/general purpose. . . . . . . . $ 2,319,400 . . . . . .Sec. 103. CENTRAL SUPPORT Full-time equated classified positions . . . . . . 56.2 Central support--47.2 FTE positions . . . . . . . $ 5,369,500 Worker's compensation. . . . . . . 76,500 Education commission of the states. . . . . . . . 92,700 Building occupancy charges - property management services . . . . . . 1,285,200 Training and orientation workshops. . . . . . . . 100,000 Terminal leave payments . . . . . . 500,000 State tenure commission, per diem . . . . . . 11,100 Administrative law operations--9.0 FTE positions. . . . . . 817,000 GROSS APPROPRIATION . . . . . . . . $ 8,252,000 Appropriated from: Interdepartmental grant revenues: Interdepartmental grant from consumer and industry services. . . . . . . 2,300 Interdepartmental grant from career development . . . . . . 1,200 Interdepartmental grant from treasury . . . . . . 900 Federal revenues: Federal revenues. . . . . . . 4,082,200 Special revenue funds: Local cost sharing. . . . . . 60,800 Certification fees. . . . . . 139,700 Commodity distribution fees . . . . . . 4,500 Driver fees . . . . . . . 17,800 Motorcycle license fees . . . . . . 3,500 Private occupational school license fees. . . . . . . . 12,800 Safety education fund . . . . . . . 2,100 School loan exception fees. . . . . . . 32,900 Teacher testing fees. . . . . . . . 8,000 Training and orientation workshop fees. . . . . . 100,000 State general fund/general purpose. . . . . . . . $ 3,783,300 . . . . Sec. 104. SCHOOL SUPPORT SERVICES Full-time equated classified positions . . . . .41.4 School support operations--41.4 FTE positions . . . . . . . $ 4,847,400 GROSS APPROPRIATION . . . . . . . . $ 4,847,400 Appropriated from: Federal revenues: Federal revenues. . . . . . . 3,879,500 Special revenue funds: Commodity distribution fees . . . . . . 41,300 Driver fees . . . . . . . 470,400 Motorcycle license fees . . . . . . 136,700 Safety education fund . . . . . . . 115,300 State general fund/general purpose. . . . . . . . $ 204,200 . . . . . .Sec. 105. DATA AND TECHNOLOGY SERVICES Full-time equated classified positions . . . . .37.2 Data and technology operations--37.2 positions. . . . . . . $ 6,421,700 GROSS APPROPRIATION . . . . . . . . $ 6,421,700 Appropriated from: Interdepartmental grant revenues: Interdepartmental grant from consumer and industry services. . . . . . . 402,300 Interdepartmental grant from career development . . . . . . 100,000 Interdepartmental grant from treasury . . . . . . 100,000 Federal revenues: Federal revenues . . . . . . . 3,198,000 Special revenue funds: Certification fees. . . . . . 250,900 Driver fees . . . . . . . 10,600 State general fund/general purpose. . . . . . . . $ 2,359,900 . . . . Sec. 106. STANDARDS, ASSESSMENT, AND ACCREDITATION SERVICES Full-time equated classified positions . . . . .44.7 Standards, assessment, and accreditation operations--44.7 FTE positions . . . . . . . $ 3,548,300 Test development and administration . . . . . . . 13,002,100 GROSS APPROPRIATION . . . . . . . . $ 16,550,400 Appropriated from: Federal revenues: Federal revenues. . . . . . . 780,800 Special revenue funds: Michigan merit award trust fund . . . . . . . 13,002,100 State general fund/general purpose. . . . . . . . $ 2,767,500 . . . . Sec. 107. SPECIAL EDUCATION SERVICES Full-time equated classified positions . . . . .55.6 Special education operations--55.6 FTE positions. . . . . . $ 6,313,800 GROSS APPROPRIATION . . . . . . . . $ 6,313,800 Appropriated from: Federal revenues: Federal revenues. . . . . . . 6,150,100 Special revenue funds: Certification fees. . . . . . 19,500 State general fund/general purpose. . . . . . . . $ 144,200 . . . . Sec. 108. LANSING, MICHIGAN SCHOOL FOR THE BLIND FORMER SITE General services. . . . . . . $ 1,227,000 GROSS APPROPRIATION . . . . . . . . $ 1,227,000 Appropriated from: Interdepartmental grant revenues: Interdepartmental grant from corrections academy lease. . . . . . 450,000 Special revenue funds: Private gifts, bequests, and donations. . . . . . 10,000 Lansing, Michigan school for the blind rent. . . . . . 767,000 State general fund/general purpose. . . . . . . . $ 0 . . . . . .Sec. 109. MICHIGAN SCHOOLS FOR THE DEAF AND BLIND Full-time equated classified positions . . . . 120.3 Michigan schools for the deaf and blind operations--117.0 FTE positions. . . . . . . $ 10,876,700 Technical resource and reproduction center. . . . . . . 1,100,000 Summer institute. . . . . . . 312,100 Michigan deaf/blind center--2.3 FTE positions . . . . . . . 306,400 Camp Tuhsmeheta - 1.0 FTE position. . . . . . . . 250,100 Private gifts - blind . . . . . . . 90,000 Private gifts - deaf. . . . . . . . 50,000 GROSS APPROPRIATION . . . . . . . . $ 12,985,300 Appropriated from: Federal revenues: Federal revenues. . . . . . . 2,420,800 Special revenue funds: Local cost sharing (schools for blind/deaf) . . . . . . 6,080,900 Local school district service fees. . . . . . . . 102,600 Private gifts, bequests, and donations. . . . . . 460,100 Student insurance revenue . . . . . . . 205,100 State general fund/general purpose. . . . . . . . $ 3,715,800 . . . . . .Sec. 110. CAREER, CURRICULUM, AND POSTSECONDARY SERVICES Full-time equated classified positions . . . . .73.9 Career and curriculum operations--51.9 FTE positions. . . . . . . . $ 5,948,000 Postsecondary operations--22.0 FTE positions. . . . . . . . 2,204,400 GROSS APPROPRIATION . . . . . . . . $ 8,152,400 Appropriated from: Federal revenues: Federal revenues. . . . . . . 5,620,100 Special revenue funds: Private revenues. . . . . . . 14,400 Defaulted loan collection fees. . . . . . . . 100,000 Private occupational school license fees. . . . . . . . 255,500 State general fund/general purpose. . . . . . . . $ 2,162,400 . . . . Sec. 111. PROFESSIONAL PREPARATION SERVICES Full-time equated classified positions . . . . .26.5 Professional preparation operations-- 26.5 FTE positions . . . . . . $ 3,104,100 Teacher quality enhancement . . . . . . 2,500,000 Department of attorney general. . . . . . . . 50,000 GROSS APPROPRIATION . . . . . . . . $ 5,654,100 Appropriated from: Federal revenues: Federal revenues. . . . . . . 2,716,700 Special revenue funds: Certification fees. . . . . . 2,681,900 Teacher testing fees. . . . . . . . 255,500 State general fund/general purpose. . . . . . . . $ 0 . . . . . .Sec. 112. FIELD SERVICES Full-time equated classified positions . . . . .41.0 Field services operations--41.0 FTE positions . . . . . . . $ 3,922,900 GROSS APPROPRIATION . . . . . . . . $ 3,922,900 Appropriated from: Federal revenues: Federal revenues. . . . . . . 3,511,500 Special revenue funds: State general fund/general purpose. . . . . . . . $ 411,400 . . . . Sec. 113. INNOVATION AND COMMUNITY SERVICES Full-time equated classified positions . . . . .29.8 Innovation and community services operations--29.8 FTE positions . . . . . . . $ 3,310,000 GROSS APPROPRIATION . . . . . . . . $ 3,310,000 Appropriated from: Federal revenues: Federal revenues. . . . . . . 2,442,100 Special revenue funds: State general fund/general purpose. . . . . . . . $ 867,900 . . . . Sec. 114. GRANTS AND DISTRIBUTIONS FEDERAL PROGRAMS: Adult basic education . . . . . . . $ 10,024,100 Acquired immunodeficiency syndrome education grants . . . . . . . 600,000 Class size reduction grants . . . . . . 50,275,700 Competitive child care and development. . . . . . 500,000 Drug-free schools grant . . . . . . 16,758,400 Eisenhower mathematics and science grants . . . . . . . 12,940,000 Emergency immigrant . . . . . . . . 1,455,000 Gear-up grants. . . . . . . . 2,000,000 Goals 2000 grants . . . . . . 17,082,200 Handicapped infants and toddlers. . . . . . . 16,000,000 Homeless children and youth . . . . . . 1,041,000 Job training partnership act. . . . . . 7,952,700 Michigan charter school subgrant program. . . . . . . . 5,000,000 Migrant technology. . . . . . 576,300 Preschool grants (PL 94-142). . . . . . 12,400,000 School-age child care grants. . . . . . 301,500 School lunch program - federal share. . . . . . . 237,300,000 School-to-work. . . . . . . . 1,800,000 Serve America grants. . . . . . . . 840,000 Special education . . . . . . 20,089,800 Statewide systemic initiative grant . . . . . . . 50,000 Surplus commodity . . . . . . 2,506,000 Technology literacy challenge grant . . . . . . . 17,784,300 Title I, disadvantaged children . . . . . . . 346,000,000 Title I, even start . . . . . . . . 5,300,000 Title I, migrant. . . . . . . 12,000,000 Title I, comprehensive school reform. . . . . . . 5,889,200 Title VI, innovative strategies . . . . . . . 13,480,900 Vocational education act of 1963. . . . . . . 39,500,000 STATE PROGRAMS: Christa McAuliffe grants. . . . . . . . 94,800 Driver education. . . . . . . 7,600,000 School readiness grants . . . . . . 12,083,000 Motorcycle safety education . . . . . . 867,300 National board certification. . . . . . 20,000 Off-road vehicle safety training grant. . . . . . 194,300 Reading plan for Michigan grants. . . . . . . 17,350,000 School lunch and breakfast. . . . . . . 6,728,000 Fast track program. . . . . . 300,000 GROSS APPROPRIATION . . . . . . . . $ 902,684,500 Appropriated from: Interdepartmental grant revenues: Federal revenues: DAG-FCS, national school lunch. . . . . . . . 237,300,000 DAG, the emergency food assistance program. . . . . . . 2,506,000 DED, grants and contracts service, school-to-work . . . . . . . . 1,800,000 DED-OBEMLA, emergency immigrant education assistance . . . . . . . 1,455,000 DED-OESE, charter schools . . . . . . . 5,000,000 DED-OESE, class size reduction. . . . . . . . 50,275,700 DED-OESE, drug-free schools and communities . . . . . . 16,758,400 DED-OESE, gear-up . . . . . . 2,000,000 DED-OESE, goals 2000. . . . . . . . 22,082,200 DED-OESE, Eisenhower mathematics and science administration . . . . . . 12,940,000 DED-OESE, migrant technology. . . . . . 576,300 DED-OESE, reading excellence act. . . . . . . 12,350,000 DED-OESE, technology literacy challenge fund. . . . . . . . 17,784,300 DED-OESE, title I, disadvantaged children . . . . . . . 346,000,000 DED-OESE, title I, even start . . . . . . . . 5,300,000 DED-OESE, title I, migrant education. . . . . . . 12,000,000 DED-OESE, title I, comprehensive school reform. . . . . . . 5,031,900 DED-OESE, title VI, innovative strategies. . . . . . . . . . 13,480,900 DED-OESE, title X, comprehensive school reform. . . . . . . 857,300 DED-OSERS, handicapped infants and toddlers . . . . . . 16,000,000 DED-OSERS, handicapped preschool incentive grants . . . . . . . . 12,400,000 DED-OSERS, handicapped program, individuals with disabilities act. . . . . . . 20,089,800 DED-OVAE, adult education, state administered program . . . . . . . 10,024,100 DED-OVAE, basic grants to states . . . . . . 39,500,000 DED-OVAE, homeless children and youth . . . . . . 1,041,000 DOL, job training partnership act . . . . . . 7,952,700 HHS-ACF, at-risk child care . . . . . . 500,000 HHS-CDC, AIDS education . . . . . . 600,000 HHS-ACF, dependent care block grant . . . . . . . 301,500 National science foundation . . . . . . 50,000 Corporation for national and community service. . . . . . . 840,000 Special revenue funds: Private revenues. . . . . . . 94,800 Driver fees . . . . . . . 7,600,000 Motorcycle license fees . . . . . . 867,300 Safety education fund . . . . . . . 194,300 State general fund/general purpose. . . . . . . . $ 19,131,000 PART 2 PROVISIONS CONCERNING APPROPRIATIONS GENERAL SECTIONS Sec. 201. (1) Pursuant to section 30 of article IX of the state constitution of 1963, total state spending under part 1 for fiscal year 1999-2000 is $65,161,700.00 and state appropriations to be paid to local units of government are as follows: GRANTS AND DISTRIBUTIONS STATE PROGRAMS: Driver education. . . . . . . $ 7,600,000 School readiness grants . . . . . . 12,083,000 Motorcycle safety education . . . . . . 867,300 Off-road vehicle safety training grant. . . . . . 194,300 School lunch and breakfast. . . . . . . 6,728,000 TOTAL . . . . . . . $ 27,472,600 (2) If it appears to the principal executive officer of a department or branch that state spending to local units of government will be less than the amount that was projected to be expended under subsection (1), the principal executive officer shall immediately give notice of the approximate shortfall to the state budget director. Sec. 202. The expenditures and funding sources authorized under this bill are subject to the management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594. Sec. 203. (1) Beginning October 1, 1999, a hiring freeze is imposed on the state classified civil service. State departments and agencies are prohibited from hiring any new full-time state classified civil service employees and prohibited from filling any vacant state classified civil service positions. This hiring freeze does not apply to internal transfers of classified employees from one position to another within a department or to positions that are funded with 80% or more federal or restricted funds. (2) The state budget director shall grant exceptions to this hiring freeze when the state budget director believes that the hiring freeze will result in rendering a state department or agency unable to deliver basic services. Sec. 204. The department of civil service shall bill departments and agencies at the end of the first fiscal quarter for the 1% charge authorized by section 5 of article XI of the state constitution of 1963. Payments shall be made for the total amount of the billing by the end of the second fiscal quarter. Sec. 205. As used in this bill: (a) "DAG" means the United States department of agriculture. (b) "DAG-FCS" means the DAG food and consumer service. (c) "DED" means the United States department of education. (d) "DED-OBEMLA" means the DED office of bilingual education and minority languages affairs. (e) "DED-OERI" means the DED office of educational research and improvement. (f) "DED-OESE" means the DED office of elementary and secondary education. (g) "DED-OPSE" means the DED office of postsecondary education. (h) "DED-OSERS" means the DED office of special education and rehabilitative services. (i) "DED-OVAE" means the DED office of vocational and adult education. (j) "Department" means the Michigan department of education. (k) "District" means a local school district as defined in section 6 of the revised school code, 1976 PA 451, MCL 380.6. (l) "DOL" means the United States department of labor. (m) "DOL-ETA" means the DOL employment and training act. (n) "HHS" means the United States department of health and human services. (o) "HHS-ACF" means the HHS administration for children and families. (p) "HHS-CDCP" means the HHS center for disease control and prevention. (q) "HHS-OHDS" means the HHS office of human development services. (r) "RPM" means reading plan for Michigan. Sec. 206. (1) In addition to the funds appropriated in part 1, there is appropriated an amount not to exceed $10,000,000.00 for federal contingency funds. These funds are not available for expenditure until they have been transferred to another line item in this bill under section 393(2) of the management and budget act, 1984 PA 431, MCL 18.1393. (2) In addition to the funds appropriated in part 1, there is appropriated an amount not to exceed $700,000.00 for state restricted contingency funds. These funds are not available for expenditure until they have been transferred to another line item in this bill under section 393(2) of the management and budget act, 1984 PA 431, MCL 18.1393. (3) In addition to the funds appropriated in part 1, there is appropriated an amount not to exceed $250,000.00 for local contingency funds. These funds are not available for expenditure until they have been transferred to another line item in this bill under section 393(2) of the management and budget act, 1984 PA 431, MCL 18.1393. (4) In addition to the funds appropriated in part 1, there is appropriated an amount not to exceed $3,000,000.00 for private contingency funds. These funds are not available for expenditure until they have been transferred to another line item in this bill under section 393(2) of the management and budget act, 1984 PA 431, MCL 18.1393. Sec. 207. The department may carry into the succeeding fiscal year unexpended federal pass-through funds to local institutions and governments that do not require additional state matching funds. Federal pass-through funds to local institutions and governments that are received in amounts in addition to those included in part 1 and that do not require additional state matching funds are appropriated for the purposes intended. Sec. 208. The department shall provide the state budget director and the senate and house fiscal agencies with copies of the state board of education agenda and all supporting documents at the time the agenda and supporting documents are provided to state board of education members. Sec. 209. Money in the school loan exception fee fund that is unexpended at the end of the fiscal year shall not revert to the general fund but shall be carried over to the succeeding fiscal year. Sec. 210. The department is appropriated an amount not to exceed $100,000.00 from collection of defaulted loans in the Martin Luther King, Jr. - Cesar Chavez - Rosa Parks programs to offset costs of administering the loan collections. STATE BOARD/OFFICE OF THE SUPERINTENDENT Sec. 301. (1) The appropriations in part 1 for state board of education, per diem payments may be used for payments to members of boards, committees, and commissions for each day's board, committee, or commission work at which a quorum is present; for attending a hearing as authorized by the respective board, committee, or commission; or for performing official business as authorized by the respective board, committee, or commission. The per diem payments shall be at a rate as follows: (a) State board of education - president . . . . . . . $110.00 per day (b) State board of education - member other than president. . . . . . $100.00 per day (c) State tenure commission - member . . . . . . . $ 50.00 per day (2) A state board of education member shall not be paid a per diem for more than 24 days per year. (3) The administrative secretary of the state board of education shall report to the public, the senate and house fiscal agencies, and the state budget director the previous quarter's expenses by fund source for members of the state board of education related to the performance of their responsibilities. Sec. 302. (1) From the amount appropriated in part 1 to the state board of education, not more than $27,500.00 shall be expended for travel. (2) The state board of education shall not expend amounts for travel appropriated from DED-OVAE, basic grants to states. Sec. 303. (1) From the amount appropriated in part 1 for innovation and community service operations, there is allocated $500,000.00 and 5.0 FTE positions to operate a charter school office to administer charter school legislation and associated regulations, and to coordinate the activities of the department relating to charter schools. (2) From the amount appropriated in part 1 for state board/superintendent operations, there is allocated up to $250,000.00 to fund an exchange program between teachers in Michigan school districts and public school academies and teachers in Michigan's sister state of Shiga in Japan. TECHNOLOGY AND INFORMATION SERVICES Sec. 401. Included in the appropriation for technology and information services in part 1 is $50,000.00 to publish and distribute the Michigan school report. Sec. 402. The department shall coordinate with the Michigan information center on the development of an educational information system. STANDARDS, ASSESSMENT, AND ACCREDITATION SERVICES Sec. 501. (1) From the allocations in part 1 for test development and administration, the department shall provide tests to nonpublic schools and home-schooled students upon request. The department shall notify nonpublic schools that they are eligible to receive the tests without cost to them. (2) The department shall release test results at the same time to all private schools and public school districts taking the tests. MICHIGAN SCHOOLS FOR THE DEAF AND BLIND Sec. 601. The employees at the Michigan schools for the deaf and blind who work on a school year basis shall be considered annual employees for purposes of service credits, retirement, and insurance benefits. Sec. 602. For each student enrolled at the Michigan schools for the deaf and blind, the department shall assess the intermediate school district of residence 100% of the cost of operating the student's instructional program. The amount shall exclude room and board related costs and the cost of weekend transportation between the school and the student's home. Sec. 603. (1) The department may assess rent to any state government agency for the use of facilities at the Michigan school for the blind's former site in Lansing. The rental rates and all leasing arrangements shall be subject to the approval of the department of management and budget. In addition, the facilities at the Lansing site may also be available for rent to private or publicly funded organizations. (2) In addition to those funds appropriated in part 1, the department may receive and expend additional funds from lease agreements at the Michigan school for the blind's former site in Lansing that have been negotiated with the approval of the department of management and budget. These funds are appropriated to the department for operation, maintenance, and renovation expenses associated with the leased space. (3) The unexpended balances of appropriations and any surplus restricted revenue for Michigan school for the blind's former site in Lansing shall not lapse to the state general fund at the end of the fiscal year. Any unexpended and unencumbered funds remaining on September 30, 2000, shall be carried forward as a work project or as restricted revenue and expended for special maintenance and repairs of facilities at the Michigan school for the blind's former site in Lansing. The work shall be carried out by state employees, or by contract as necessary, at an estimated cost of $100,000.00. The estimated completion date of the work is September 30, 2001. Sec. 604. (1) The department may assess rent or lease excess property located on the campus of the Michigan schools for the deaf and blind in Flint to private or publicly funded organizations. (2) In addition to those funds appropriated in part 1, the department may receive and expend additional funds from lease agreements at the Michigan schools for the deaf and blind Flint campus that have been negotiated with the approval of the department of management and budget. These funds are appropriated to the department for the operation, maintenance, and renovation expenses associated with the leased space. (3) Proceeds from the sale of surplus property and facilities at the Michigan schools for the deaf and blind or at camp Tuhsmeheta are hereby appropriated for the purposes of repairs, renovations, and maintenance of the Flint campus. (4) The unexpended balances of appropriations for school for deaf and blind operations, and from proceeds of the sale of surplus property and facilities at the Michigan schools for the deaf and blind and at camp Tuhsmeheta shall not lapse to the state general fund at the end of the fiscal year. Any unexpended and unencumbered funds remaining on September 30, 2000, shall be carried forward as a work project or as restricted revenue and expended for special maintenance and repairs of facilities at the campus of the Michigan schools for the deaf and blind in Flint. The work shall be carried out by state employees, or by contract as necessary, at an estimated cost of $250,000.00. The estimated completion date of the work is September 30, 2001. Sec. 605. The department may assist the department of community health, other departments, and local school districts to secure reimbursement for eligible services provided in Michigan schools from the federal medicaid program. The department may submit reports of direct expenses related to this effort to the department of community health for reimbursement. PROFESSIONAL PREPARATION SERVICES Sec. 701. From the funds appropriated in part 1 for professional preparation services, the department shall maintain the professional personnel register and certificate revocation/felony conviction files. GRANTS AND DISTRIBUTIONS Sec. 801. The department shall disburse the funds to a general fund grantee in accordance with the same standards of timing and amount that apply to disbursements made by the department to a federal fund grantee. The disbursement shall be restricted to the minimum amount needed for immediate disbursement by the grantee. The department may waive this section if extenuating circumstances warrant and are substantiated in the grantee's application or other appropriate documentation. A waiver granted pursuant to this section shall not be effective until 15 days after written notice of the proposed waiver is given to the state budget director and the chairpersons of the senate and house appropriations subcommittees having jurisdiction over the department budget. Sec. 802. (1) The funds appropriated in part 1 for school breakfast programs shall be made available to all eligible applicant public school districts and public school academies as follows: (a) The district or public school academy participates in the federal school breakfast program and meets all standards as prescribed by 7 C.F.R. parts 220 and 245. (b) Payment is made for each breakfast served meeting standards prescribed in subdivision (a). (c) The payment for a district or public school academy is at a per meal rate equal to the lesser of the district's or public school academy's actual cost, or 100% of the cost of a breakfast served by an efficiently operated breakfast program as determined by the department, less federal reimbursement, participant payments, and other state reimbursement. Determination of efficient cost by the department shall be determined by using a statistical sampling of statewide and regional cost as reported in a manner approved by the department for the preceding school year. (d) The payment determined under subdivision (c) is prorated if the appropriation in part 1 is not sufficient to fund all payments determined under this section. Sec. 803. (1) The funds appropriated in part 1 for school readiness programs shall be made available through a competitive application process as follows: (a) An applicant may be any public or private nonprofit legal entity or agency other than a local or intermediate school district except a local or intermediate school district acting as a fiscal agent for a child caring organization regulated under 1973 PA 116, MCL 722.111 to 722.128. (b) Applications shall be submitted in a form and manner as required by the department. (c) Applications shall be reviewed by a diverse interagency committee composed of representatives of the department, appropriate community, volunteer, and social service agencies and organizations, and parents. (d) Priority in the recommendation for awarding of grants by the state board of education to applicants shall be based upon the following criteria: (i) Compliance with standards for early childhood development consistent with programs for 4-year-olds, as approved by the state board of education. (ii) Active and continuous involvement of the parents or guardians of the children participating in the program. (iii) Employment of teachers possessing proper training in early childhood development, including an early childhood (ZA) endorsement or child development associate, and trained support staff. (iv) Evidence of collaboration with the community of providers in early childhood development programs including documentation of the total number of children in the community who would meet the criteria established in subparagraph (vi), and who are being served by other providers, and the number of children who will remain unserved by other community early childhood programs if this program is funded. (v) The extent to which these funds will supplement other federal, state, local, or private funds. (vi) The extent to which these funds will be targeted to children who will be at least 4, but less than 5, years of age as of December 1 of the year in which the programs are offered and who show evidence of 2 or more "at-risk" factors as defined in the state board of education report entitled, "Children At Risk" that was adopted by the state board on April 5, 1988. (e) Whether the application contains a comprehensive evaluation plan that includes implementation of all program components required and an assessment of the gains of children participating in an early childhood development program. (f) Applications shall provide for the establishment of a school readiness advisory committee that shall be involved in the planning and evaluation of the program and provides for the involvement of parents and appropriate community, volunteer, and social service agencies and organizations. There shall be on the committee at least 1 parent or guardian of a program participant for every 18 children enrolled in the program, with a minimum of 2 parent or guardian representatives. The committee shall do all of the following: (i) Review the mechanisms and criteria used to determine referrals for participation in the school readiness program. (ii) Review the health screening program for all participants. (iii) Review the nutritional services provided to all participants. (iv) Review the mechanisms in place for the referral of families to community social service agencies, as appropriate. (v) Review the collaboration with and the involvement of appropriate community, volunteer, and social service agencies and organizations in addressing all aspects of education disadvantage. (vi) Review, evaluate, and make recommendations for changes in the school readiness program. (g) More than 50% of the children participating in the program shall meet the income eligibility criteria for free or reduced price lunch, as determined under the national school lunch act, chapter 281, 60 Stat. 230, 42 U.S.C. 1751 to 1753, 1755 to 1761, 1762a, 1765 to 1766b, and 1769 to 1769h, or meet income and all other eligibility criteria for participation in the Michigan family independence agency unified child day care program. (2) Grant awards by the state board of education may be at whatever level the board determines appropriate. A grant, when combined with other sources of state revenue for this program, shall not exceed $3,100.00 per child or the cost of the program, whichever is less. (3) Except as otherwise provided, an applicant that received a grant under this section in the 1998-1999 fiscal year shall receive priority for funding in 1999-2000. However, continuation of funding is contingent on the availability of funds and documented evidence of grantee compliance with standards for early childhood development consistent with programs for 4-year-olds, as approved by the state board of education, and with all operational, fiscal, administrative, and other program requirements. After 3 years of funding, a program that received a grant under this section may reapply for funding, but will compete for available funds with other new programs and other programs also completing their third year of funding under this section. A program which offers supplementary day care and thereby offers full-day programs as part of its early childhood development program shall receive priority in the allocation of these competitive funds. Sec. 804. (1) The reading plan for Michigan (RPM) is a series of elementary education strategies created for the purpose of improving reading skills of K-3 students so that all students are reading at an appropriate grade level prior to the start of the fourth grade. The RPM shall be developed by the department in consultation with the RPM advisory council as created by Executive Order 1998-4. (2) In order to implement the RPM, the department shall do at least all of the following: (a) Develop a model summer reading program for students who will be attending grades 1 through 4 in the following school year and who have demonstrated the need for additional reading skills training, as evidenced by standardized test results on tests approved by the department for this purpose. The model reading program shall be in conformance with the national education goals and shall also meet criteria for DED-OESE, Title I program funding. (b) Recommend diagnostic tools and student assessments to local districts to determine reading readiness and ensure progress in reading skills. (c) Develop and disseminate reading readiness kits to parents of students in preschool and kindergarten to provide parents with information about how they can prepare their children for reading success. (d) Develop and make available a statewide resource guide of public and private service providers to assist parents in improving their children's reading skills. (3) The funds appropriated in part 1 for the reading plan for Michigan grants shall be allocated by the department on a competitive grant basis to districts, intermediate districts, or consortia of districts which meet the following criteria: (a) The district must offer a summer reading program based upon the model reading program developed by the department pursuant to subsection (2) beginning after the close of the 1998-99 school year. (b) The district must identify money from other sources available to the district which will be used to support at least 50% of the total costs of the summer reading program. (4) Applications for funding must be submitted to the department no later than December 31, 1999. The department shall notify recipients of the grants no later than March 30, 2000. (5) Not later than the 2002-2003 school year, a pupil shall not be promoted to the next grade level at the end of the school year if the pupil has not met the standards for pupil promotion adopted by the local school district. Sec. 805. From the funds appropriated in part 1 for national board certification, the department shall pay 1/2 of the application fee for teachers who are deemed by the department by March 1, 1998 to be qualified to apply to the national board for professional teaching standards for professional teaching certificates or licenses and to provide grants to recognize and reward teachers who receive certification or licensure. Final page.