February 9, 2016, Introduced by Senators SCHMIDT, KNOLLENBERG, PROOS, PAVLOV, HILDENBRAND and MARLEAU and referred to the Committee on Education.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending sections 51a and 58 (MCL 388.1651a and 388.1658),
section 51a as amended by 2015 PA 85 and section 58 as amended by
1997 PA 93.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 51a. (1) From the appropriation in section 11, there is
allocated
an amount not to exceed $901,946,100.00 for 2014-2015 and
an
amount not to exceed $918,546,100.00
for 2015-2016 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 each fiscal year for
2014-2015
and for 2015-2016, 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. 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 $248,100,000.00 for
2014-2015
and estimated at $251,800,000.00
for 2015-2016, 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 2014-2015 an amount not to exceed $1,000,000.00 and
there is allocated for 2015-2016 an amount not to exceed
$1,300,000.00 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 each fiscal year for 2014-2015 and
for 2015-2016 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 each fiscal year
for
2014-2015 and for 2015-2016 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 employees'
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.
(c) If the department determines before bookclosing for a
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. Beginning in 2015-
2016, the amount of reimbursement under this subdivision for a
fiscal year shall not exceed $2,000,000.00 for any district or
intermediate district.
(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 $3,400,000.00 for
2014-2015
and estimated at $3,300,000.00 for
2015-2016, 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.
(c) Pupils with an emotional impairment counted in membership
by an intermediate district and provided educational services by
the department of health and human services.
(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).
(c) 100% of the payment required under section 54.
(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.
(15) It is the intent of the legislature that, beginning in
2016-2017, a district, public school academy, or intermediate
district that fails to comply with subsection (14) or with the
requirements of federal regulations regarding the treatment of
public school academies and public school academy pupils for the
purposes of special education, 34 CFR 300.209, forfeits from its
total state aid an amount equal to 10% of its total state aid.
(16) For the purposes of this section, the department or the
center shall only require a district or intermediate district to
report information that is not already available from the financial
information database maintained by the center.
Sec. 58. Allocations to districts and intermediate districts
under section 51a for providing special education transportation
services shall be based on data reported by the districts and
intermediate districts for the current school year. For the
purposes of this section, the department or the center shall only
require a district or intermediate district to report information
that is not already available from the financial information
database maintained by the center.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.