WORKING DRAFT A

SB-1107, As Passed House, June 10, 2008

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1107

A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 3, 4, 6, 11, 11a, 11g, 11j, 11k, 11m, 15, 18b,

19, 20, 20d, 20j, 22a, 22b, 22d, 24, 24a, 24c, 25b, 25c, 26a, 26b,

29, 31a, 31d, 31f, 32b, 32c, 32d, 32j, 32l, 37, 38, 39, 39a, 41,

51a, 51c, 51d, 53a, 54, 54a, 54c, 56, 57, 61a, 62, 64, 65, 74, 81,

94a, 98, 99, 99c, 99e, 99i, 99j, 99k, 99n, 99p, 104, 104b, 105,

105c, 107, 147, 151, 164c, 166b, and 166e (MCL 388.1603, 388.1604,

388.1606, 388.1611, 388.1611a, 388.1611g, 388.1611j, 388.1611k,

388.1611m, 388.1615, 388.1618b, 388.1619, 388.1620, 388.1620d,

388.1620j, 388.1622a, 388.1622b, 388.1622d, 388.1624, 388.1624a,

388.1624c, 388.1625b, 388.1625c, 388.1626a, 388.1626b, 388.1629,

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

388.1632j, 388.1632l, 388.1637, 388.1638, 388.1639, 388.1639a,

388.1641, 388.1651a, 388.1651c, 388.1651d, 388.1653a, 388.1654,

388.1654a, 388.1654c, 388.1656, 388.1657, 388.1661a, 388.1662,

388.1664, 388.1665, 388.1674, 388.1681, 388.1694a, 388.1698,

388.1699, 388.1699c, 388.1699e, 388.1699i, 388.1699j, 388.1699k,

388.1699n, 388.1699p, 388.1704, 388.1704b, 388.1705, 388.1705c,

388.1707, 388.1747, 388.1751, 388.1764c, 388.1766b, and 388.1766e),

sections 3, 6, 11a, 11g, 11k, 11m, 15, 19, 20, 20j, 24, 24a, 24c,

26a, 26b, 29, 31a, 31d, 31f, 32b, 32c, 32d, 32j, 32l, 37, 39, 39a,

41, 51d, 53a, 54, 54a, 57, 61a, 64, 65, 74, 81, 94a, 98, 99, 99c,

99e, 107, and 151 as amended and sections 99i, 99j, and 99k as

added by 2007 PA 137, sections 4 and 164c as amended by 2005 PA

155, sections 11, 11j, 22a, 22b, 22d, 51a, 51c, 56, 62, and 104 as

amended and sections 54c, 99n, and 99p as added by 2008 PA 112,

section 18b as added by 2000 PA 297, section 20d as amended and

section 166e as added by 1997 PA 93, section 25b as amended and

section 25c as added by 2001 PA 121, section 38 as amended by 2003

PA 158, section 104b as added by 2004 PA 593, sections 105 and 105c

as amended by 2006 PA 342, section 147 as amended by 2007 PA 92,

and section 166b as amended by 1999 PA 119, and by adding sections

11n, 22e, 31h, 32g, 32h, 98d, 99h, 99m, 99o, 99q, and 99r; and to

repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

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

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

6(7).

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

school academy.

(3) "Center" means the center for educational performance and

information created in section 94a.

(4) "Cooperative education program" means a written voluntary

agreement between and among districts to provide certain

educational programs for pupils in certain groups of districts. The

written agreement shall be approved by all affected districts at

least annually and shall specify the educational programs to be

provided and the estimated number of pupils from each district who

will participate in the educational programs.

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

of education.

(6) "District" means a local school district established under

the revised school code, a local act school district, or, except in

sections 6(4), 6(6), 11n, 13, 20, 22a, 23, 29, 31a, ~~99j, 99k,~~

51a(15), 105, and 105c, a public school academy. Except in sections

6(4), 6(6), 11n, 13, 20, 22a, 29, ~~99j, 99k,~~ 51a(15), 105, and 105c,

district also includes a university school.

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

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

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

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

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

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

shall be considered to be the district or intermediate district in

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

pupil under court jurisdiction who is placed outside the district

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

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

be the educating district or educating intermediate district.

(8) "District superintendent" means the superintendent of a

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

the chief administrator of a university school.

Sec. 4. (1) "Elementary pupil" means a pupil in membership in

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

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

above the eighth grade. For the purposes of calculating universal

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

children enrolled in a preschool program operated by a district in

its facilities.

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

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

necessarily in attendance on the pupil membership count day in an

extended year program. The mandatory clock hours shall be completed

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

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

shall prescribe pupil, personnel, and other reporting requirements

for the educational program.

(3) "Fiscal year" means the state fiscal year that commences

October 1 and continues through September 30.

(4) "General educational development testing preparation

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

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

that prepares a person to successfully complete the general

educational development (GED) test.

(5) "High school pupil" means a pupil in membership in grades

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

eighth grade.

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

district or intermediate district for special education pupils from

several districts in programs for pupils with autism spectrum

disorder, pupils with severe cognitive impairment, pupils with

moderate cognitive impairment, pupils with severe multiple

impairments, pupils with hearing impairment, pupils with visual

impairment, and pupils with physical impairment or other health

impairment. Programs for pupils with emotional impairment housed in

buildings that do not serve regular education pupils also qualify.

Unless otherwise approved by the department, a center program

either shall serve all constituent districts within an intermediate

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

pupils residing in the operating district. In addition, special

education center program pupils placed part-time in noncenter

programs to comply with the least restrictive environment

provisions of section 612 of part B of the individuals with

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

program pupils for pupil accounting purposes for the time scheduled

in either a center program or a noncenter program.

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

annual completion and pupil dropout rate that is calculated by the

center pursuant to nationally recognized standards.

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

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

the district for the immediately preceding school year, adjusted

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

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

credential of equal status.

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

means for a district, public school academy, university school, or

intermediate district the sum of the product of .75 times the

number of full-time equated pupils in grades K to 12 actually

enrolled and in regular daily attendance on the pupil membership

count day for the current school year, plus the product of .25

times the final audited count from the supplemental count day for

the immediately preceding school year. All pupil counts used in

this subsection are as determined by the department and calculated

by adding the number of pupils registered for attendance plus

pupils received by transfer and minus pupils lost as defined by

rules promulgated by the superintendent, and as corrected by a

subsequent department audit. The amount of the foundation allowance

for a pupil in membership is determined under section 20. In making

the calculation of membership, all of the following, as applicable,

apply to determining the membership of a district, public school

academy, university school, or intermediate district:

(a) Except as otherwise provided in this subsection, and

pursuant to subsection (6), a pupil shall be counted in membership

in the pupil's educating district or districts. An individual pupil

shall not be counted for more than a total of 1.0 full-time equated

membership.

(b) If a pupil is educated in a district other than the

pupil's district of residence, if the pupil is not being educated

as part of a cooperative education program, if the pupil's district

of residence does not give the educating district its approval to

count the pupil in membership in the educating district, and if the

pupil is not covered by an exception specified in subsection (6) to

the requirement that the educating district must have the approval

of the pupil's district of residence to count the pupil in

membership, the pupil shall not be counted in membership in any

district.

district shall be counted in membership in the intermediate

district.

(d) A pupil placed by a court or state agency in an on-grounds

program of a juvenile detention facility, a child caring

institution, or a mental health institution, or a pupil funded

under section 53a, shall be counted in membership in the district

or intermediate district approved by the department to operate the

program.

(e) A pupil enrolled in the Michigan schools for the deaf and

blind shall be counted in membership in the pupil's intermediate

district of residence.

(f) A pupil enrolled in a vocational education program

supported by a millage levied over an area larger than a single

district or in an area vocational-technical education program

established pursuant to section 690 of the revised school code, MCL

380.690, shall be counted only in the pupil's district of

residence.

(g) A pupil enrolled in a university school shall be counted

in membership in the university school.

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

counted in membership in the public school academy.

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

academy beginning its operation after December 31, 1994, membership

for the first 2 full or partial fiscal years of operation shall be

determined as follows:

(i) If operations begin before the pupil membership count day

for the fiscal year, membership is the average number of full-time

equated pupils in grades K to 12 actually enrolled and in regular

daily attendance on the pupil membership count day for the current

school year and on the supplemental count day for the current

school year, as determined by the department and calculated by

adding the number of pupils registered for attendance on the pupil

membership count day plus pupils received by transfer and minus

pupils lost as defined by rules promulgated by the superintendent,

and as corrected by a subsequent department audit, plus the final

audited count from the supplemental count day for the current

school year, and dividing that sum by 2.

(ii) If operations begin after the pupil membership count day

for the fiscal year and not later than the supplemental count day

for the fiscal year, membership is the final audited count of the

number of full-time equated pupils in grades K to 12 actually

enrolled and in regular daily attendance on the supplemental count

day for the current school year.

(j) If a district is the authorizing body for a public school

academy, then, in the first school year in which pupils are counted

in membership on the pupil membership count day in the public

school academy, the determination of the district's membership

shall exclude from the district's pupil count for the immediately

preceding supplemental count day any pupils who are counted in the

public school academy on that first pupil membership count day who

were also counted in the district on the immediately preceding

supplemental count day.

(k) In a district, public school academy, university school,

or intermediate district operating an extended school year program

approved by the superintendent, a pupil enrolled, but not scheduled

to be in regular daily attendance on a pupil membership count day,

shall be counted.

(l) Pupils to be counted in membership shall be not less than 5

years of age on December 1 and less than 20 years of age on

September 1 of the school year except a special education pupil who

is enrolled and receiving instruction in a special education

program or service approved by the department and not having a high

school diploma who is less than 26 years of age as of September 1

of the current school year shall be counted in membership.

(m) An individual who has obtained a high school diploma shall

not be counted in membership. An individual who has obtained a

general educational development (G.E.D.) certificate shall not be

counted in membership. An individual participating in a job

training program funded under former section 107a or a jobs program

funded under former section 107b, administered by the Michigan

strategic fund or the department of labor and economic growth, or

participating in any successor of either of those 2 programs, shall

not be counted in membership.

(n) If a pupil counted in membership in a public school

academy is also educated by a district or intermediate district as

part of a cooperative education program, the pupil shall be counted

in membership only in the public school academy unless a written

agreement signed by all parties designates the party or parties in

which the pupil shall be counted in membership, and the

instructional time scheduled for the pupil in the district or

intermediate district shall be included in the full-time equated

membership determination under subdivision (q). However, for pupils

receiving instruction in both a public school academy and in a

district or intermediate district but not as a part of a

cooperative education program, the following apply:

(i) If the public school academy provides instruction for at

least 1/2 of the class hours specified in subdivision (q), the

public school academy shall receive as its prorated share of the

full-time equated membership for each of those pupils an amount

equal to 1 times the product of the hours of instruction the public

school academy provides divided by the number of hours specified in

subdivision (q) for full-time equivalency, and the remainder of the

full-time membership for each of those pupils shall be allocated to

the district or intermediate district providing the remainder of

the hours of instruction.

(ii) If the public school academy provides instruction for less

than 1/2 of the class hours specified in subdivision (q), the

district or intermediate district providing the remainder of the

hours of instruction shall receive as its prorated share of the

full-time equated membership for each of those pupils an amount

equal to 1 times the product of the hours of instruction the

district or intermediate district provides divided by the number of

hours specified in subdivision (q) for full-time equivalency, and

the remainder of the full-time membership for each of those pupils

shall be allocated to the public school academy.

(o) An individual less than 16 years of age as of September 1

of the current school year who is being educated in an alternative

education program shall not be counted in membership if there are

also adult education participants being educated in the same

program or classroom.

(p) The department shall give a uniform interpretation of

full-time and part-time memberships.

(q) The number of class hours used to calculate full-time

equated memberships shall be consistent with section 101(3). In

determining full-time equated memberships for pupils who are

enrolled in a postsecondary institution, a pupil shall not be

considered to be less than a full-time equated pupil solely because

of the effect of his or her postsecondary enrollment, including

necessary travel time, on the number of class hours provided by the

district to the pupil.

(r) Full-time equated memberships for pupils in kindergarten

shall be determined by dividing the number of class hours scheduled

and provided per year per kindergarten pupil by a number equal to

1/2 the number used for determining full-time equated memberships

for pupils in grades 1 to 12. Beginning in 2009-2010, full-time

equated memberships for pupils in kindergarten shall be determined

by dividing the number of class hours scheduled and provided per

year per kindergarten pupil by the number used for determining

full-time equated memberships for pupils in grades 1 to 12.

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

academy that has pupils enrolled in a grade level that was not

offered by the district, university school, or public school

academy in the immediately preceding school year, the number of

pupils enrolled in that grade level to be counted in membership is

the average of the number of those pupils enrolled and in regular

daily attendance on the pupil membership count day and the

supplemental count day of the current school year, as determined by

the department. Membership shall be calculated by adding the number

of pupils registered for attendance in that grade level on the

pupil membership count day plus pupils received by transfer and

minus pupils lost as defined by rules promulgated by the

superintendent, and as corrected by subsequent department audit,

plus the final audited count from the supplemental count day for

the current school year, and dividing that sum by 2.

(t) A pupil enrolled in a cooperative education program may be

counted in membership in the pupil's district of residence with the

written approval of all parties to the cooperative agreement.

(u) If, as a result of a disciplinary action, a district

determines through the district's alternative or disciplinary

education program that the best instructional placement for a pupil

is in the pupil's home or otherwise apart from the general school

population, if that placement is authorized in writing by the

district superintendent and district alternative or disciplinary

education supervisor, and if the district provides appropriate

instruction as described in this subdivision to the pupil at the

pupil's home or otherwise apart from the general school population,

the district may count the pupil in membership on a pro rata basis,

with the proration based on the number of hours of instruction the

district actually provides to the pupil divided by the number of

hours specified in subdivision (q) for full-time equivalency. For

the purposes of this subdivision, a district shall be considered to

be providing appropriate instruction if all of the following are

met:

(i) The district provides at least 2 nonconsecutive hours of

instruction per week to the pupil at the pupil's home or otherwise

apart from the general school population under the supervision of a

certificated teacher.

(ii) The district provides instructional materials, resources,

and supplies, except computers, that are comparable to those

otherwise provided in the district's alternative education program.

(iii) Course content is comparable to that in the district's

alternative education program.

(iv) Credit earned is awarded to the pupil and placed on the

pupil's transcript.

(v) ~~A pupil enrolled in an alternative or disciplinary~~

~~education program described in section 25 shall be counted in~~

~~membership in the district or public school academy that expelled~~

~~the pupil.~~ For the first year in which a pupil is counted in

membership on the pupil membership count day in a middle college

program described in section 64, the membership is the average of

the full-time equated membership on the pupil membership count day

and on the supplemental count day for the current school year, as

determined by the department. If a pupil was counted by the

operating district on the immediately preceding supplemental count

day, the pupil shall be excluded from the district's immediately

preceding supplemental count for purposes of determining the

district's membership.

(w) If a pupil was enrolled in a public school academy on the

pupil membership count day, if the public school academy's contract

with its authorizing body is revoked or the public school academy

otherwise ceases to operate, and if the pupil enrolls in a district

within 45 days after the pupil membership count day, the department

shall adjust the district's pupil count for the pupil membership

count day to include the pupil in the count.

(x) For a public school academy that has been in operation for

at least 2 years and that suspended operations for at least 1

semester and is resuming operations, membership is the sum of the

product of .75 times the number of full-time equated pupils in

grades K to 12 actually enrolled and in regular daily attendance on

the first pupil membership count day or supplemental count day,

whichever is first, occurring after operations resume, plus the

product of .25 times the final audited count from the most recent

pupil membership count day or supplemental count day that occurred

before suspending operations, as determined by the superintendent.

(y) If a district's membership for a particular fiscal year,

as otherwise calculated under this subsection, would be less than

1,550 pupils and the district has 4.5 or fewer pupils per square

mile, as determined by the department, and, beginning in 2007-2008,

if the district does not receive funding under section ~~22d~~ 22d(2),

the district's membership shall be considered to be the membership

figure calculated under this subdivision. If a district educates

and counts in its membership pupils in grades 9 to 12 who reside in

a contiguous district that does not operate grades 9 to 12 and if 1

or both of the affected districts request the department to use the

determination allowed under this sentence, the department shall

include the square mileage of both districts in determining the

number of pupils per square mile for each of the districts for the

purposes of this subdivision. The membership figure calculated

under this subdivision is the greater of the following:

(i) The average of the district's membership for the 3-fiscal-

year period ending with that fiscal year, calculated by adding the

district's actual membership for each of those 3 fiscal years, as

otherwise calculated under this subsection, and dividing the sum of

those 3 membership figures by 3.

(ii) The district's actual membership for that fiscal year as

otherwise calculated under this subsection.

(z) If a public school academy that is not in its first or

second year of operation closes at the end of a school year and

does not reopen for the next school year, the department shall

adjust the membership count of the district in which a former pupil

of the public school academy enrolls and is in regular daily

attendance for the next school year to ensure that the district

receives the same amount of membership aid for the pupil as if the

pupil were counted in the district on the supplemental count day of

the preceding school year.

(aa) Full-time equated memberships for preprimary-aged special

education pupils who are not enrolled in kindergarten but are

enrolled in a classroom program under R 340.1754 of the Michigan

administrative code shall be determined by dividing the number of

class hours scheduled and provided per year by 450. Full-time

equated memberships for preprimary-aged special education pupils

who are not enrolled in kindergarten but are receiving nonclassroom

services under R 340.1755 of the Michigan administrative code shall

be determined by dividing the number of hours of service scheduled

and provided per year per pupil by 180.

(bb) A pupil of a district that begins its school year after

Labor day who is enrolled in an intermediate district program that

begins before Labor day shall not be considered to be less than a

full-time pupil solely due to instructional time scheduled but not

attended by the pupil before Labor day.

(5) "Public school academy" means a public school academy,

urban high school academy, or strict discipline academy operating

under the revised school code.

(6) "Pupil" means a person in membership in a public school. A

district must have the approval of the pupil's district of

residence to count the pupil in membership, except approval by the

pupil's district of residence is not required for any of the

following:

(a) A nonpublic part-time pupil enrolled in grades 1 to 12 in

accordance with section 166b.

(b) A pupil receiving 1/2 or less of his or her instruction in

a district other than the pupil's district of residence.

school.

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

district of residence under an intermediate district schools of

choice pilot program as described in section 91a or former section

91 if the intermediate district and its constituent districts have

been exempted from section 105.

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

district of residence if the pupil is enrolled in accordance with

section 105 or 105c.

(f) A pupil who has made an official written complaint or

whose parent or legal guardian has made an official written

complaint to law enforcement officials and to school officials of

the pupil's district of residence that the pupil has been the

victim of a criminal sexual assault or other serious assault, if

the official complaint either indicates that the assault occurred

at school or that the assault was committed by 1 or more other

pupils enrolled in the school the pupil would otherwise attend in

the district of residence or by an employee of the district of

residence. A person who intentionally makes a false report of a

crime to law enforcement officials for the purposes of this

subdivision is subject to section 411a of the Michigan penal code,

1931 PA 328, MCL 750.411a, which provides criminal penalties for

that conduct. As used in this subdivision:

(i) "At school" means in a classroom, elsewhere on school

premises, on a school bus or other school-related vehicle, or at a

school-sponsored activity or event whether or not it is held on

school premises.

(ii) "Serious assault" means an act that constitutes a felony

violation of chapter XI of the Michigan penal code, 1931 PA 328,

MCL 750.81 to 750.90g, or that constitutes an assault and

infliction of serious or aggravated injury under section 81a of the

Michigan penal code, 1931 PA 328, MCL 750.81a.

(g) A pupil whose district of residence changed after the

pupil membership count day and before the supplemental count day

and who continues to be enrolled on the supplemental count day as a

nonresident in the district in which he or she was enrolled as a

resident on the pupil membership count day of the same school year.

(h) A pupil enrolled in an alternative education program

operated by a district other than his or her district of residence

who meets 1 or more of the following:

(i) The pupil has been suspended or expelled from his or her

district of residence for any reason, including, but not limited

to, a suspension or expulsion under section 1310, 1311, or 1311a of

the revised school code, MCL 380.1310, 380.1311, and 380.1311a.

(ii) The pupil had previously dropped out of school.

(iii) The pupil is pregnant or is a parent.

(iv) The pupil has been referred to the program by a court.

(v) The pupil is enrolled in an alternative or disciplinary

education program described in section 25.

(i) A pupil enrolled in the Michigan virtual high school, for

the pupil's enrollment in the Michigan virtual high school.

(j) A pupil who is the child of a person who is employed by

the district. As used in this subdivision, "child" includes an

adopted child, stepchild, or legal ward.

(k) An expelled pupil who has been denied reinstatement by the

expelling district and is reinstated by another school board under

section 1311 or 1311a of the revised school code, MCL 380.1311 and

380.1311a.

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

district of residence in a program described in section 64 if the

pupil's district of residence and the enrolling district are both

constituent districts of the same intermediate district.

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

district of residence who attends a United States Olympic education

center.

However, if a district that is not a district of the first

class ~~district~~ educates pupils who reside in a district of the

first class ~~district~~ and if the primary instructional site for

those pupils is located within the boundaries of the district of

the first class, ~~district,~~ the educating district must have the

approval of the district of the first class ~~district~~ to count those

pupils in membership. ~~As used in this subsection, "first class~~

~~district" means a district organized as a school district of the~~

~~first class under the revised school code.~~

(7) "Pupil membership count day" of a district or intermediate

district means:

(a) Except as provided in subdivision (b), the fourth

Wednesday after Labor day each school year or, for a district or

building in which school is not in session on that Wednesday due to

conditions not within the control of school authorities, with the

approval of the superintendent, the immediately following day on

which school is in session in the district or building.

(b) For a district or intermediate district maintaining school

during the entire school year, the following days:

(i) Fourth Wednesday in July.

(ii) Fourth Wednesday after Labor day.

(iii) Second Wednesday in February.

(iv) Fourth Wednesday in April.

(8) "Pupils in grades K to 12 actually enrolled and in regular

daily attendance" means pupils in grades K to 12 in attendance and

receiving instruction in all classes for which they are enrolled on

the pupil membership count day or the supplemental count day, as

applicable. Except as otherwise provided in this subsection, a

pupil who is absent from any of the classes in which the pupil is

enrolled on the pupil membership count day or supplemental count

day and who does not attend each of those classes during the 10

consecutive school days immediately following the pupil membership

count day or supplemental count day, except for a pupil who has

been excused by the district, shall not be counted as 1.0 full-time

equated membership. A pupil who is excused from attendance on the

pupil membership count day or supplemental count day and who fails

to attend each of the classes in which the pupil is enrolled within

30 calendar days after the pupil membership count day or

supplemental count day shall not be counted as 1.0 full-time

equated membership. In addition, a pupil who was enrolled and in

attendance in a district, intermediate district, or public school

academy before the pupil membership count day or supplemental count

day of a particular year but was expelled or suspended on the pupil

membership count day or supplemental count day shall only be

counted as 1.0 full-time equated membership if the pupil resumed

attendance in the district, intermediate district, or public school

academy within 45 days after the pupil membership count day or

supplemental count day of that particular year. Pupils not counted

as 1.0 full-time equated membership due to an absence from a class

shall be counted as a prorated membership for the classes the pupil

attended. For purposes of this subsection, "class" means a period

of time in 1 day when pupils and a certificated teacher or legally

qualified substitute teacher are together and instruction is taking

place.

(9) "Rule" means a rule promulgated pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(10) "The revised school code" means 1976 PA 451, MCL 380.1 to

380.1852.

(11) "School district of the first class", "first class school

district", and "district of the first class" mean the district that

had the most pupils in membership for the immediately preceding

fiscal year among all districts.

(12) ~~(11)~~ "School fiscal year" means a fiscal year that

commences July 1 and continues through June 30.

(13) ~~(12)~~ "State board" means the state board of education.

(14) ~~(13)~~ "Superintendent", unless the context clearly refers

to a district or intermediate district superintendent, means the

superintendent of public instruction described in section 3 of

article VIII of the state constitution of 1963.

(15) ~~(14)~~ "Supplemental count day" means the day on which the

supplemental pupil count is conducted under section 6a.

(16) ~~(15)~~ "Tuition pupil" means a pupil of school age

attending school in a district other than the pupil's district of

residence for whom tuition may be charged. Tuition pupil does not

include a pupil who is a special education pupil or a pupil

described in subsection ~~(6)(d) to (k)~~ (6)(c) to (m). A pupil's

district of residence shall not require a high school tuition

pupil, as provided under section 111, to attend another school

district after the pupil has been assigned to a school district.

(17) ~~(16)~~ "State school aid fund" means the state school aid

fund established in section 11 of article IX of the state

constitution of 1963.

(18) ~~(17)~~ "Taxable value" means the taxable value of property

as determined under section 27a of the general property tax act,

1893 PA 206, MCL 211.27a.

(19) ~~(18)~~ "Textbook" means a book that is selected and

approved by the governing board of a district and that contains a

presentation of principles of a subject, or that is a literary work

relevant to the study of a subject required for the use of

classroom pupils, or another type of course material that forms the

basis of classroom instruction.

(20) ~~(19)~~ "Total state aid" or "total state school aid" means

the total combined amount of all funds due to a district,

intermediate district, or other entity under all of the provisions

of this act.

(21) ~~(20)~~ "University school" means an instructional program

operated by a public university under section 23 that meets the

requirements of section 23.

Sec. 11. (1) For the fiscal year ending September 30, 2008,

there is appropriated for the public schools of this state and

certain other state purposes relating to education the sum of

$11,386,866,600.00 from the state school aid fund established by

section 11 of article IX of the state constitution of 1963 and the

sum of $34,909,600.00 from the general fund. For the fiscal year

ending September 30, 2009, there is appropriated for the public

schools of this state and certain other state purposes relating to

education the sum of $11,810,371,000.00 from the state school aid

fund established by section 11 of article IX of the state

constitution of 1963 and the sum of $43,000,300.00 from the general

fund. In addition, available federal funds are appropriated for the

fiscal year ending September 30, 2008 and for the fiscal year

ending September 30, 2009.

(2) The appropriations under this section shall be allocated

as provided in this act. Money appropriated under this section from

the general fund shall be expended to fund the purposes of this act

before the expenditure of money appropriated under this section

from the state school aid fund. If the maximum amount appropriated

under this section from the state school aid fund for a fiscal year

exceeds the amount necessary to fully fund allocations under this

act from the state school aid fund, that excess amount shall not be

expended in that state fiscal year and shall not lapse to the

general fund, but instead shall be deposited into the school aid

stabilization fund created in section 11a.

(3) If the maximum amount appropriated under this section from

the state school aid fund and the school aid stabilization fund for

a fiscal year exceeds the amount available for expenditure from the

state school aid fund for that fiscal year, payments under sections

11f, 11g, 11j, 11n, 22a, 26a, 26b, 31d, 31f, 51a(2), 51a(12), 51c,

53a, and 56 shall be made in full. In addition, for districts

beginning operations after 1994-95 that qualify for payments under

section 22b, payments under section 22b shall be made so that the

qualifying districts receive the lesser of an amount equal to the

1994-95 foundation allowance of the district in which the district

beginning operations after 1994-95 is located or $5,500.00. The

amount of the payment to be made under section 22b for these

qualifying districts shall be as calculated under section 22a, with

the balance of the payment under section 22b being subject to the

proration otherwise provided under this subsection and subsection

(4). If proration is necessary, state payments under each of the

other sections of this act from all state funding sources shall be

prorated in the manner prescribed in subsection (4) as necessary to

reflect the amount available for expenditure from the state school

aid fund for the affected fiscal year. However, if the department

of treasury determines that proration will be required under this

subsection, or if the department of treasury determines that

further proration is required under this subsection after an

initial proration has already been made for a fiscal year, the

department of treasury shall notify the state budget director, and

the state budget director shall notify the legislature at least 30

calendar days or 6 legislative session days, whichever is more,

before the department reduces any payments under this act because

of the proration. During the 30 calendar day or 6 legislative

session day period after that notification by the state budget

director, the department shall not reduce any payments under this

act because of proration under this subsection. The legislature may

prevent proration from occurring by, within the 30 calendar day or

6 legislative session day period after that notification by the

state budget director, enacting legislation appropriating

additional funds from the general fund, countercyclical budget and

economic stabilization fund, state school aid fund balance, or

another source to fund the amount of the projected shortfall.

(4) If proration is necessary under subsection (3), the

department shall calculate the proration in district and

intermediate district payments that is required under subsection

(3) as follows:

(a) The department shall calculate the percentage of total

state school aid allocated under this act for the affected fiscal

year for each of the following:

(i) Districts.

(ii) Intermediate districts.

(iii) Entities other than districts or intermediate districts.

(b) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(i) for districts by

reducing payments to districts. This reduction shall be made by

calculating an equal dollar amount per pupil as necessary to

recover this percentage of the proration amount and reducing each

district's total state school aid from state sources, other than

payments under sections 11f, 11g, 11j, 11n, 22a, 26a, 26b, 31d,

31f, 51a(2), 51a(12), 51c, and 53a, by that amount.

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(ii) for intermediate

districts by reducing payments to intermediate districts. This

reduction shall be made by reducing the payments to each

intermediate district, other than payments under sections 11f, 11g,

11n, 26a, 26b, 51a(2), 51a(12), 53a, and 56, on an equal percentage

basis.

(d) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(iii) for entities other

than districts and intermediate districts by reducing payments to

these entities. This reduction shall be made by reducing the

payments to each of these entities, other than payments under

sections 11j, 26a, and 26b, on an equal percentage basis.

(5) Except for the allocation under section 26a, any general

fund allocations under this act that are not expended by the end of

the state fiscal year are transferred to the school aid

stabilization fund created under section 11a.

Sec. 11a. (1) The school aid stabilization fund is created as

a separate account within the state school aid fund established by

section 11 of article IX of the state constitution of 1963.

(2) The state treasurer may receive money or other assets from

any source for deposit into the school aid stabilization fund. The

state treasurer shall deposit into the school aid stabilization

fund all of the following:

(a) Unexpended and unencumbered state school aid fund revenue

for a fiscal year that remains in the state school aid fund as of

the bookclosing for that fiscal year.

(b) Money statutorily dedicated to the school aid

stabilization fund.

(3) Money available in the school aid stabilization fund may

not be expended without a specific appropriation from the school

aid stabilization fund. Money in the school aid stabilization fund

shall be expended only for purposes for which state school aid fund

money may be expended.

(4) The state treasurer shall direct the investment of the

school aid stabilization fund. The state treasurer shall credit to

the school aid stabilization fund interest and earnings from fund

investments.

(5) Money in the school aid stabilization fund at the close of

a fiscal year shall remain in the school aid stabilization fund and

shall not lapse to the unreserved school aid fund balance or the

general fund.

(6) If the maximum amount appropriated under section 11 from

the state school aid fund for a fiscal year exceeds the amount

available for expenditure from the state school aid fund for that

fiscal year, there is appropriated from the school aid

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

the projected shortfall as determined by the department of

treasury, but not to exceed available money in the school aid

stabilization fund. If the money in the school aid stabilization

fund is insufficient to fully fund an amount equal to the projected

shortfall, the state budget director shall notify the legislature

as required under section 11(3) and state payments in an amount

equal to the remainder of the projected shortfall shall be prorated

in the manner provided under section 11(4).

(7) For ~~2007-2008~~ 2008-2009, there is appropriated from the

school aid stabilization fund to the state school aid fund the

amount necessary to fully fund the allocations under this act.

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

allocated for this section an amount not to exceed ~~$141,000.00 for~~

~~the fiscal year ending September 30, 2008, and an amount not to~~

~~exceed~~ $42,000,000.00 for the fiscal year ending September 30, 2009

and for each succeeding fiscal year through the fiscal year ending

September 30, 2015, after which these payments will cease. These

allocations are for paying the amounts described in subsection (3)

to districts and intermediate districts, other than those receiving

a lump-sum payment under section 11f(2), that were not plaintiffs

in the consolidated cases known as Durant v State of Michigan,

Michigan supreme court docket no. 104458-104492 and that, on or

before March 2, 1998, submitted to the state treasurer a waiver

resolution described in section 11f. The amounts paid under this

section represent offers of settlement and compromise of any claim

or claims that were or could have been asserted by these districts

and intermediate districts, as described in this section.

(2) This section does not create any obligation or liability

of this state to any district or intermediate district that does

not submit a waiver resolution described in section 11f. This

section, any other provision of this act, and section 353e of the

management and budget act, 1984 PA 431, MCL 18.1353e, are not

intended to admit liability or waive any defense that is or would

be available to this state or its agencies, employees, or agents in

any litigation or future litigation with a district or intermediate

district regarding these claims or potential claims.

(3) The amount paid each fiscal year to each district or

intermediate district under this section shall be 1 of the

following:

(a) If the district or intermediate district does not borrow

money and issue bonds under section 11i, 1/30 of the total amount

listed in section 11h for the district or intermediate district

through the fiscal year ending September 30, 2013.

(b) If the district or intermediate district borrows money and

issues bonds under section 11i, an amount in each fiscal year

calculated by the department of treasury that is equal to the debt

service amount in that fiscal year on the bonds issued by that

district or intermediate district under section 11i and that will

result in the total payments made to all districts and intermediate

districts in each fiscal year under this section being no more than

the amount appropriated under this section in each fiscal year.

(4) The entire amount of each payment under this section each

fiscal year shall be paid on May 15 of the applicable fiscal year

or on the next business day following that date. If a district or

intermediate district borrows money and issues bonds under section

11i, the district or intermediate district shall use funds received

under this section to pay debt service on bonds issued under

section 11i. If a district or intermediate district does not borrow

money and issue bonds under section 11i, the district or

intermediate district shall use funds received under this section

only for the following purposes, in the following order of

priority:

(a) First, to pay debt service on voter-approved bonds issued

by the district or intermediate district before the effective date

of this section.

(b) Second, to pay debt service on other limited tax

obligations.

district or intermediate district under the revised school code.

(5) To the extent payments under this section are used by a

district or intermediate district to pay debt service on debt

payable from millage revenues, and to the extent permitted by law,

the district or intermediate district may make a corresponding

reduction in the number of mills levied for debt service.

(6) A district or intermediate district may pledge or assign

payments under this section as security for bonds issued under

section 11i, but shall not otherwise pledge or assign payments

under this section.

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

allocated an amount not to exceed $3,900,000.00 for 2007-2008 and

an amount not to exceed $39,000,000.00 for 2008-2009 for payments

to the school loan bond redemption fund in the department of

treasury on behalf of districts and intermediate districts.

Notwithstanding section 11 or any other provision of this act,

funds allocated under this section are not subject to proration and

shall be paid in full.

Sec. 11k. For ~~2007-2008~~ 2008-2009, there is appropriated from

the general fund to the school loan revolving fund an amount equal

to the amount of school bond loans assigned to the Michigan

municipal bond authority, not to exceed the total amount of school

bond loans held in reserve as long-term assets. As used in this

section, "school loan revolving fund" means that fund created in

section 16c of the shared credit rating act, 1985 PA 227, MCL

141.1066c.

Sec. 11m. From the appropriations in section 11, there is

allocated for ~~2007-2008~~ 2008-2009 an amount not to exceed

~~$22,800,000.00~~ $30,800,000.00 for fiscal year cash-flow borrowing

costs solely related to the state school aid fund established by

section 11 of article IX of the state constitution of 1963.

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

allocated $32,000,000.00 for the fiscal year ending September 30,

2009 and for each succeeding fiscal year through the fiscal year

ending September 30, 2028, after which these allocations will

cease. These allocations shall be deposited in the 21st century

schools fund on November 15 of the applicable fiscal year or on the

next business day following that date and shall be distributed in

each fiscal year as follows:

(a) To each district or intermediate district that borrows

money and issues bonds under subsection (7), an amount in each

fiscal year calculated by the department of treasury that is equal

to the debt service amount in that fiscal year on the bonds issued

by that district or intermediate district under subsection (7). The

amounts paid under this subdivision shall be paid on the dates that

the corresponding debt service payments are required to be made. A

district or intermediate district that receives funds under this

subdivision shall use these funds only to pay debt service on bonds

issued under subsection (7) and for no other purpose.

(b) Amounts not needed to make payments under subdivision (a),

determined by the superintendent, may be used to fund awards made

under subsections (5) and (6) in each fiscal year.

(2) The 21st century schools fund is established in the

department of treasury. Money in the 21st century schools fund at

the end of each fiscal year shall remain in the 21st century

schools fund and shall not lapse to the school aid fund or the

general fund.

(3) Money in the 21st century schools fund is appropriated for

the creation of small high schools that provide contextual learning

environments designed to support student academic achievement that

prepares students for postsecondary education and employment, and

for the payment of debt service on bonds issued pursuant to

subsection (7).

(4) An eligible district or intermediate district may apply to

the superintendent for start-up grants. An eligible district may

apply to the superintendent for facility grants. Applications for

start-up grants and facility grants shall be made in a manner and

form as determined by the superintendent.

(5) The superintendent may award start-up grants of up to

$2,000,000.00 in total to eligible districts and intermediate

districts for each small high school for which the district or

intermediate district is applying. Total start-up grants shall be

distributed to each eligible district or intermediate district in

declining amounts over 4 years, as determined by the

superintendent, beginning in the school year prior to the first

year of operations. If a small high school does not begin or ceases

operations for which a district or intermediate district received

any portion of start-up grants funding, that district or

intermediate district shall repay all of the funds received to the

department of treasury for deposit into the 21st century schools

fund, in a manner determined by the superintendent. Start-up grants

shall be used for all of the following purposes:

(a) Planning and implementation of site-based management for

each proposed small high school for which the eligible district or

intermediate district receives an award. Implementation of site-

based management may include the authorization of a public school

academy or contract school by the eligible district or intermediate

district.

(b) Planning and implementation of high school curricula

consistent with the credit requirements contained in sections 1278a

and 1278b of the revised school code, MCL 380.1278a and 380.1278b,

and organized in accordance with career clusters that prepare

students for postsecondary education and employment.

opportunities for high school students that provide college or

college equivalent coursework, including, but not limited to, dual

enrollment, advanced placement, and early or middle college.

(d) Planning and implementation of teacher and administrative

professional development that will lead to successful student

achievement in small high school contextual learning environments.

(e) Planning and implementation of a digital learning

environment using innovative digital access, creation, and content

distribution tools.

(6) An eligible district may apply for a facility grant to

renovate or replace existing high school buildings in order to

create small high schools that improve educational opportunities

for students being educated in high-priority high school buildings.

Facility grants shall not be used for land purchases or building a

new facility on currently vacant land. A facility grant for an

approved small high school may be awarded by the superintendent

under either of the following subdivisions, but not both:

(a) Eligible districts may apply to the superintendent for

grants of up to $8,000,000.00 to be matched by private revenues on

at least a 1-to-1 basis for the total costs of renovating or

replacing an existing high school.

(b) Eligible districts may also apply for annual millage

equalization grants not to exceed a total of 20 annual payments.

The superintendent shall award the annual millage equalization

grants to an eligible district so that funds generated by millages

approved by the voters and actually levied plus the millage

equalization grant awarded to the eligible district for each small

high school equals the state average taxable value behind each

membership pupil for 2006-2007. Local revenues from the levied

millage plus state millage equalization grants shall not exceed

more than $16,000,000.00 for each small high school over the life

of the millage authorization.

(7) In addition to any other authority granted under law, an

eligible district or eligible intermediate district may borrow, to

the extent permitted by the award, from the Michigan municipal bond

authority created under the shared credit rating act, 1985 PA 227,

MCL 141.1051 to 141.1076, an amount not greater than the amount

awarded to the district or intermediate district under subsections

(5) and (6), in anticipation of the receipt of the payments

appropriated under subsection (1), and may authorize by resolution

of its governing body and issue its bonds to evidence its

obligations to the Michigan municipal bond authority on the terms

and with those provisions as are provided by resolution of the

board of the district or intermediate district and as are

acceptable to the Michigan municipal bond authority. A district or

intermediate district may pledge and assign to the Michigan

municipal bond authority, as security for the bonds, all of the

payments appropriated to it under subsection (1)(a) but may not

otherwise pledge or assign those payments. Bonds issued under this

subsection are not subject to the revised municipal finance act,

2001 PA 34, MCL 141.2101 to 141.2821, or the agency financing

reporting act, 2002 PA 470, MCL 129.171 to 129.177. This subsection

shall be construed as cumulative authority for the exercise of the

powers granted in this subsection and shall not be construed to

repeal any existing law. The purpose of this subsection is to

create full and complete additional and alternate methods for the

exercise of existing powers, and the powers conferred by this

section are not affected or limited by any other statute or by any

charter or incorporating document.

(8) Proceeds of bonds issued under subsection (7) shall be

made available to districts and intermediate districts on or after

October 1, 2008. Each district and intermediate district shall use

proceeds of bonds issued by it under subsection (7) only for a

purpose for which awards are made under subsections (5) and (6),

including reimbursement of advances from the 21st century schools

fund.

(9) Bonds issued under subsection (7) do not constitute a

general obligation or debt of a district or intermediate district

within the meaning of any constitutional or statutory debt

limitation.

(10) A pledge made by a district or intermediate district

under subsection (7) is valid and binding from the time the pledge

is made. The revenue or other money pledged under subsection (7)

and thereafter received by a district or intermediate district is

immediately subject to the lien of the pledge without physical

delivery of the revenue or money or any further act. The lien of

such a pledge is valid and binding against a party having a claim

of any kind in tort, contract, or otherwise against the district or

intermediate district, irrespective of whether that party has

notice of the pledge. The resolution or any other instrument by

which a pledge is created is not required to be filed or recorded

in order to establish and perfect a lien or security interest in

the property pledged.

(11) Bonds issued under subsection (7) are not in any way a

debt or liability of this state; do not create or constitute any

indebtedness, liability, or obligation of this state; are not and

do not constitute a pledge of the faith and credit of this state;

and shall contain on their face a statement to that effect.

(12) As used in this section:

(a) "Career cluster" means a broad grouping of careers that

share similar competency requirements, as defined by the

department.

(b) "Eligible district" means a district containing at least 1

high school building that has not made adequate yearly progress for

at least 2 years as determined by the department. In addition, for

a district applying for a facility grant, eligible district means a

district that is otherwise an eligible district and that has at

least 800 pupils in membership in grades 9 to 12 in 2007-2008,

including those pupils attending alternative education.

district that applies for start-up funding under subsection (5) for

the purpose of establishing regional small high schools that

primarily serve students who would have attended high schools not

achieving adequate yearly progress. The regional small high schools

shall provide early postsecondary opportunities for high school

students that lead to postsecondary degrees or certifications and

employment. Intermediate districts are not eligible to apply for

facility grants under subsection (6).

(d) "High-priority high school building" means a high school

building that has not achieved adequate yearly progress for at

least 2 years and is in a sanction phase, as determined by the

department.

(e) "Small high school" means a school educating a maximum

average of 450 pupils per high school building for any combination

of grades 9 to 12.

Sec. 15. (1) If a district or intermediate district fails to

receive its proper apportionment, the department, upon satisfactory

proof that the district or intermediate district was entitled

justly, shall apportion the deficiency in the next apportionment.

Subject to subsections (2) and (3), if a district or intermediate

district has received more than its proper apportionment, the

department, upon satisfactory proof, shall deduct the excess in the

next apportionment. Notwithstanding any other provision in this

act, state aid overpayments to a district, other than overpayments

in payments for special education or special education

transportation, may be recovered from any payment made under this

act other than a special education or special education

transportation payment. State aid overpayments made in special

education or special education transportation payments may be

recovered from subsequent special education or special education

transportation payments.

(2) If the result of an audit conducted by or for the

department affects the current fiscal year membership, affected

payments shall be adjusted in the current fiscal year. A deduction

due to an adjustment made as a result of an audit conducted by or

for the department, or as a result of information obtained by the

department from the district, an intermediate district, the

department of treasury, or the office of auditor general, shall be

deducted from the district's apportionments when the adjustment is

finalized. At the request of the district and upon the district

presenting evidence satisfactory to the department of the hardship,

the department may grant up to an additional 4 years for the

adjustment if the district would otherwise experience a significant

hardship.

(3) If, because of the receipt of new or updated data, the

department determines during a fiscal year that the amount paid to

a district or intermediate district under this act for a prior

fiscal year was incorrect under the law in effect for that year,

the department may make the appropriate deduction or payment in the

district's or intermediate district's allocation for the fiscal

year in which the determination is made. The deduction or payment

shall be calculated according to the law in effect in the fiscal

year in which the improper amount was paid.

(4) Expenditures made by the department under this act that

are caused by the write-off of prior year accruals may be funded by

revenue from the write-off of prior year accruals.

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

programs and services, there is appropriated for ~~2007-2008~~ 2008-

2009 for obligations in excess of applicable appropriations , an

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

amounts available from overpayments.

Sec. 18b. (1) Property of a public school academy that was

acquired substantially with funds appropriated under this act shall

be transferred to this state by the public school academy

corporation if any of the following occur:

(a) The public school academy has been ineligible to receive

funding under this act for 18 consecutive months.

(b) The public school academy's contract has been revoked or

terminated for any reason.

by the authorizing body.

(2) Property required to be transferred to this state under

this section includes title to all real and personal property,

interests in real or personal property, and other assets owned by

the public school academy corporation that were substantially

acquired with funds appropriated under this act.

(3) The state treasurer, or his or her designee, is authorized

to dispose of property transferred to this state under this

section. Except as otherwise provided in this section, the state

treasurer shall deposit in the state school aid fund any money

included in that property and the net proceeds from the sale of the

property or interests in property, after payment by the state

treasurer of any public school academy debt secured by the property

or interest in property.

(4) This section does not impose any liability on this state,

any agency of this state, or an authorizing body for any debt

incurred by a public school academy.

(5) As used in this section and section 18c, "authorizing

body" means an authorizing body defined under section 501 or 1311b

of the revised school code, MCL 380.501 and 380.1311b.

Sec. 19. (1) A district shall comply with any requirements of

sections 1204a, 1277, 1278, and 1280 of the revised school code,

MCL 380.1204a, 380.1277, 380.1278, and 380.1280, commonly referred

to as "public act 25 of 1990" that are not also required by the no

child left behind act of 2001, Public Law 107-110, as determined by

the department.

(2) Each district and intermediate district shall provide to

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

information necessary for the development of an annual progress

report on the required implementation of sections 1204a, 1277,

1278, and 1280 of the revised school code, MCL 380.1204a, 380.1277,

380.1278, and 380.1280, commonly referred to as "public act 25 of

1990".

(3) A district or intermediate district shall comply with all

applicable reporting requirements specified in state and federal

law. Data provided to the center, in a form and manner prescribed

by the center, shall be aggregated and disaggregated as required by

state and federal law.

(4) Each district shall furnish to the center not later than 7

5 weeks after the pupil membership count day, in a manner

prescribed by the center, the information necessary for the

preparation of the district and high school graduation report. This

information shall meet requirements established in the pupil

auditing manual approved and published by the department. The

center shall calculate an annual graduation and pupil dropout rate

for each high school, each district, and this state, in compliance

with nationally recognized standards for these calculations. The

center shall report all graduation and dropout rates to the senate

and house education committees and appropriations committees, the

state budget director, and the department not later than 30 days

after the publication of the list described in subsection (8).

(5) By the first business day in December and by June 30 of

each year, a district shall furnish to the center, in a manner

prescribed by the center, information related to educational

personnel as necessary for reporting required by state and federal

law.

(6) By June 30 of each year, a district shall furnish to the

center, in a manner prescribed by the center, information related

to safety practices and criminal incidents as necessary for

reporting required by state and federal law.

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

requirements of subsection (2), (3), (4), (5), or (6), the

department shall withhold 5% of the total funds for which the

district or intermediate district qualifies under this act until

the district or intermediate district complies with all of those

subsections. If the district or intermediate district does not

comply with all of those subsections by the end of the fiscal year,

the department shall place the amount withheld in an escrow account

until the district or intermediate district complies with all of

those subsections.

(8) Before publishing a list of schools or districts

determined to have failed to make adequate yearly progress as

required by the no child left behind act of 2001, Public Law 107-

110, the department shall allow a school or district to appeal that

determination. The department shall consider and act upon the

appeal within 30 days after it is submitted and shall not publish

the list until after all appeals have been considered and decided.

Sec. 20. (1) ~~For 2006-2007, the basic foundation allowance is~~

~~$7,085.00.~~ For 2007-2008, the basic foundation allowance is

$8,433.00. For 2008-2009, the basic foundation allowance is

$8,488.00.

(2) The amount of each district's foundation allowance shall

be calculated as provided in this section, using a basic foundation

allowance in the amount specified in subsection (1).

(3) Except as otherwise provided in this section, the amount

of a district's foundation allowance shall be calculated as

follows, using in all calculations the total amount of the

district's foundation allowance as calculated before any proration:

(a) For 2007-2008, for a district that had a foundation

allowance for 2006-2007, including any adjustment under subdivision

(f), that was at least equal to $7,108.00 but less than $8,385.00,

the district shall receive a foundation allowance in an amount

equal to the sum of the district's foundation allowance for 2006-

2007 plus the difference between $96.00 and [($48.00 minus $20.00)

times (the difference between the district's foundation allowance

for 2006-2007, including any adjustment under subdivision (f), and

$7,108.00) divided by $1,325.00]. Beginning in 2008-2009, for a

district that had a foundation allowance for the immediately

preceding state fiscal year that was at least equal to the sum of

$7,108.00 plus the total dollar amount of all adjustments made from

2006-2007 to the immediately preceding state fiscal year in the

lowest foundation allowance among all districts, but less than the

basic foundation allowance for the immediately preceding state

fiscal year, the district shall receive a foundation allowance in

an amount equal to the sum of the district's foundation allowance

for the immediately preceding state fiscal year plus the difference

between twice the dollar amount of the adjustment from the

immediately preceding state fiscal year to the current state fiscal

year made in the basic foundation allowance and [(the dollar amount

of the adjustment from the immediately preceding state fiscal year

to the current state fiscal year made in the basic foundation

allowance minus ~~$50.00~~ $20.00) times (the difference between the

district's foundation allowance for the immediately preceding state

fiscal year and the sum of $7,108.00 plus the total dollar amount

of all adjustments made from 2006-2007 to the immediately preceding

state fiscal year in the lowest foundation allowance among all

districts) divided by the difference between the basic foundation

allowance for the current state fiscal year and the sum of

$7,108.00 plus the total dollar amount of all adjustments made from

2006-2007 to the immediately preceding state fiscal year in the

lowest foundation allowance among all districts]. However, the

foundation allowance for a district that had less than the basic

foundation allowance for the immediately preceding state fiscal

year shall not exceed the basic foundation allowance for the

current state fiscal year.

(b) Except as otherwise provided in this subsection, beginning

in 2008-2009, for a district that in the immediately preceding

state fiscal year had a foundation allowance in an amount at least

equal to the amount of the basic foundation allowance for the

immediately preceding state fiscal year, the district shall receive

a foundation allowance in an amount equal to the sum of the

district's foundation allowance for the immediately preceding state

fiscal year plus the dollar amount of the adjustment from the

immediately preceding state fiscal year to the current state fiscal

year in the basic foundation allowance.

foundation allowance greater than $6,500.00, the district's

foundation allowance is an amount equal to the sum of the

district's foundation allowance for the immediately preceding state

fiscal year plus the lesser of the increase in the basic foundation

allowance for the current state fiscal year, as compared to the

immediately preceding state fiscal year, or the product of the

district's foundation allowance for the immediately preceding state

fiscal year times the percentage increase in the United States

consumer price index in the calendar year ending in the immediately

preceding fiscal year as reported by the May revenue estimating

conference conducted under section 367b of the management and

budget act, 1984 PA 431, MCL 18.1367b. ~~For 2002-2003, for a~~

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

~~allowance greater than $6,500.00, the district's foundation~~

~~allowance is an amount equal to the sum of the district's~~

~~foundation allowance for the immediately preceding state fiscal~~

~~year plus the lesser of $200.00 or the product of the district's~~

~~foundation allowance for the immediately preceding state fiscal~~

~~year times the percentage increase in the United States consumer~~

~~price index in the calendar year ending in the immediately~~

~~preceding fiscal year as reported by the May revenue estimating~~

~~conference conducted under section 367b of the management and~~

~~budget act, 1984 PA 431, MCL 18.1367b. For 2007-2008, for a~~

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

~~allowance greater than $6,500.00, the district's foundation~~

~~allowance is an amount equal to the district's foundation allowance~~

~~for the immediately preceding state fiscal year plus $48.00.~~

(d) For a district that has a foundation allowance that is not

a whole dollar amount, the district's foundation allowance shall be

rounded up to the nearest whole dollar.

(e) For a district that received a payment under section 22c

as that section was in effect for 2001-2002, the district's 2001-

2002 foundation allowance shall be considered to have been an

amount equal to the sum of the district's actual 2001-2002

foundation allowance as otherwise calculated under this section

plus the per pupil amount of the district's equity payment for

2001-2002 under section 22c as that section was in effect for 2001-

2002.

(f) ~~Beginning in 2007-2008, for~~ For a district that received a

payment under section 22c as that section was in effect for 2006-

2007, the district's 2006-2007 foundation allowance shall be

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

district's actual 2006-2007 foundation allowance as otherwise

calculated under this section plus the per pupil amount of the

district's equity payment for 2006-2007 under section 22c as that

section was in effect for 2006-2007.

(4) Except as otherwise provided in this subsection, the state

portion of a district's foundation allowance is an amount equal to

the district's foundation allowance or the basic foundation

allowance for the current state fiscal year, whichever is less,

minus the difference between the sum of the product of the taxable

value per membership pupil of all property in the district that is

~~not a principal residence or qualified agricultural~~ nonexempt

property times the ~~lesser of 18 mills or the number of mills of~~

~~school operating taxes levied by the district in 1993-94~~ district's

certified mills and, for a district with certified mills exceeding

12, the product of the taxable value per membership pupil of

property in the district that is commercial personal property times

the certified mills minus 12 mills and the quotient of the ad

valorem property tax revenue of the district captured under ~~1975 PA~~

~~197, MCL 125.1651 to 125.1681, the tax increment finance authority~~

~~act, 1980 PA 450, MCL 125.1801 to 125.1830, the local development~~

~~financing act, 1986 PA 281, MCL 125.2151 to 125.2174, the~~

~~brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651~~

~~to 125.2672, or the corridor improvement authority act, 2005 PA~~

~~280, MCL 125.2871 to 125.2899,~~ tax increment financing acts divided

by the district's membership excluding special education pupils.

For a district described in subsection (3)(c), the state portion of

the district's foundation allowance is an amount equal to $6,962.00

plus the difference between the district's foundation allowance for

the current state fiscal year and the district's foundation

allowance for 1998-99, minus the difference between the sum of the

product of the taxable value per membership pupil of all property

in the district that is ~~not a principal residence or qualified~~

~~agricultural~~ nonexempt property times the ~~lesser of 18 mills or the~~

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

~~1993-94~~ district's certified mills and, for a district with

certified mills exceeding 12, the product of the taxable value per

membership pupil of property in the district that is commercial

personal property times the certified mills minus 12 mills and the

quotient of the ad valorem property tax revenue of the district

captured under ~~1975 PA 197, MCL 125.1651 to 125.1681, the tax~~

~~increment finance authority act, 1980 PA 450, MCL 125.1801 to~~

~~125.1830, the local development financing act, 1986 PA 281, MCL~~

~~125.2151 to 125.2174, the brownfield redevelopment financing act,~~

~~1996 PA 381, MCL 125.2651 to 125.2672, or the corridor improvement~~

~~authority act, 2005 PA 280, MCL 125.2871 to 125.2899,~~ tax increment

financing acts divided by the district's membership excluding

special education pupils. For a district that has a millage

reduction required under section 31 of article IX of the state

constitution of 1963, the state portion of the district's

foundation allowance shall be calculated as if that reduction did

not occur.

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

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

of residence. However, for a pupil enrolled in a district other

than the pupil's district of residence, if the foundation allowance

of the pupil's district of residence has been adjusted pursuant to

subsection (19), the allocation calculated under this section shall

not include the adjustment described in subsection (19). For a

pupil enrolled pursuant to section 105 or 105c in a district other

than the pupil's district of residence, the allocation calculated

under this section shall be based on the lesser of the foundation

allowance of the pupil's district of residence or the foundation

allowance of the educating district. For a pupil in membership in a

K-5, K-6, or K-8 district who is enrolled in another district in a

grade not offered by the pupil's district of residence, the

allocation calculated under this section shall be based on the

foundation allowance of the educating district if the educating

district's foundation allowance is greater than the foundation

allowance of the pupil's district of residence. The calculation

under this subsection shall take into account a district's per

pupil allocation under section 20j(2).

(6) For 2007-2008, subject to subsection (7) and section

22b(3) and except as otherwise provided in this subsection, for

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

public school academy or a university school, the allocation

calculated under this section is an amount per membership pupil

other than special education pupils in the public school academy or

university school equal to the sum of the local school operating

revenue per membership pupil other than special education pupils

for the district in which the public school academy or university

school is located and the state portion of that district's

foundation allowance, or $7,475.00, whichever is less. Beginning in

2008-2009, subject to subsection (7) and section 22b(3) and except

as otherwise provided in this subsection, for pupils in membership,

other than special education pupils, in a public school academy or

a university school, the allocation calculated under this section

is an amount per membership pupil other than special education

pupils in the public school academy or university school equal to

the sum of the local school operating revenue per membership pupil

other than special education pupils for the district in which the

public school academy or university school is located and the state

portion of that district's foundation allowance, or the state

maximum public school academy allocation, whichever is less.

Notwithstanding section 101(2), for a public school academy that

begins operations after the pupil membership count day, the amount

per membership pupil calculated under this subsection shall be

adjusted by multiplying that amount per membership pupil by the

number of hours of pupil instruction provided by the public school

academy after it begins operations, as determined by the

department, divided by the minimum number of hours of pupil

instruction required under section 101(3). The result of this

calculation shall not exceed the amount per membership pupil

otherwise calculated under this subsection.

(7) If more than 25% of the pupils residing within a district

are in membership in 1 or more public school academies located in

the district, then the amount per membership pupil calculated under

this section for a public school academy located in the district

shall be reduced by an amount equal to the difference between the

sum of the product of the taxable value per membership pupil of all

property in the district that is ~~not a principal residence or~~

~~qualified agricultural~~ nonexempt property times the ~~lesser of 18~~

~~mills or the number of mills of school operating taxes levied by~~

~~the district in 1993-94~~ district's certified mills and, for a

district with certified mills exceeding 12, the product of the

taxable value per membership pupil of property in the district that

is commercial personal property times the certified mills minus 12

mills and the quotient of the ad valorem property tax revenue of

the district captured under ~~1975 PA 197, MCL 125.1651 to 125.1681,~~

~~the tax increment finance authority act, 1980 PA 450, MCL 125.1801~~

~~to 125.1830, the local development financing act, 1986 PA 281, MCL~~

~~125.2151 to 125.2174, the brownfield redevelopment financing act,~~

~~1996 PA 381, MCL 125.2651 to 125.2672, or the corridor improvement~~

~~authority act, 2005 PA 280, MCL 125.2871 to 125.2899,~~ tax increment

financing acts divided by the district's membership excluding

special education pupils, in the school fiscal year ending in the

current state fiscal year, calculated as if the resident pupils in

membership in 1 or more public school academies located in the

district were in membership in the district. In order to receive

state school aid under this act, a district described in this

subsection shall pay to the authorizing body that is the fiscal

agent for a public school academy located in the district for

forwarding to the public school academy an amount equal to that

local school operating revenue per membership pupil for each

resident pupil in membership other than special education pupils in

the public school academy, as determined by the department.

(8) If a district does not receive an amount calculated under

subsection (9); if the number of mills the district may levy on a

principal residence, ~~and~~ qualified agricultural property, qualified

forest property, industrial personal property, and commercial

personal property under section ~~1211(1)~~ 1211 of the revised school

code, MCL 380.1211, is 0.5 mills or less; and if the district

elects not to levy those mills, the district instead shall receive

a separate supplemental amount calculated under this subsection in

an amount equal to the amount the district would have received had

it levied those mills, as determined by the department of treasury.

A district shall not receive a separate supplemental amount

calculated under this subsection for a fiscal year unless in the

calendar year ending in the fiscal year the district levies 18

~~mills or the number of mills of school operating taxes levied by~~

~~the district in 1993, whichever is less,~~ the district's certified

mills on property that is ~~not a principal residence or qualified~~

~~agricultural~~ nonexempt property.

(9) For a district that had combined state and local revenue

per membership pupil in the 1993-94 state fiscal year of more than

$6,500.00 and that had fewer than 350 pupils in membership, if the

district elects not to reduce the number of mills from which a

principal residence, ~~and~~ qualified agricultural property, qualified

forest property, industrial personal property, and commercial

personal property are exempt and not to levy school operating taxes

on a principal residence, ~~and~~ qualified agricultural property,

qualified forest property, industrial personal property, and

commercial personal property as provided in section ~~1211(1)~~ 1211 of

the revised school code, MCL 380.1211, and not to levy school

operating taxes on all property as provided in section 1211(2) of

the revised school code, MCL 380.1211, there is calculated under

this subsection for 1994-95 and each succeeding fiscal year a

separate supplemental amount in an amount equal to the amount the

district would have received per membership pupil had it levied

school operating taxes on a principal residence, ~~and~~ qualified

agricultural property, qualified forest property, industrial

personal property, and commercial personal property at the rate

authorized for the district under section ~~1211(1)~~ 1211 of the

revised school code, MCL 380.1211, and levied school operating

taxes on all property at the rate authorized for the district under

section 1211(2) of the revised school code, MCL 380.1211, as

determined by the department of treasury. If in the calendar year

ending in the fiscal year a district does not levy ~~18 mills or the~~

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

~~1993, whichever is less,~~ the district's certified mills on property

that is ~~not a principal residence or qualified agricultural~~

nonexempt property, the amount calculated under this subsection

will be reduced by the same percentage as the millage actually

levied compares to the ~~18 mills or the number of mills levied in~~

~~1993, whichever is less~~ district's certified mills.

(10) Subject to subsection (4), for a district that is formed

or reconfigured after June 1, 2002 by consolidation of 2 or more

districts or by annexation, the resulting district's foundation

allowance under this section beginning after the effective date of

the consolidation or annexation shall be the average of the

foundation allowances of each of the original or affected

districts, calculated as provided in this section, weighted as to

the percentage of pupils in total membership in the resulting

district who reside in the geographic area of each of the original

or affected districts. The calculation under this subsection shall

take into account a district's per pupil allocation under section

20j(2).

(11) Each fraction used in making calculations under this

section shall be rounded to the fourth decimal place and the dollar

amount of an increase in the basic foundation allowance shall be

rounded to the nearest whole dollar.

(12) State payments related to payment of the foundation

allowance for a special education pupil are not calculated under

this section but are instead calculated under section 51a.

(13) To assist the legislature in determining the basic

foundation allowance for the subsequent state fiscal year, each

revenue estimating conference conducted under section 367b of the

management and budget act, 1984 PA 431, MCL 18.1367b, shall

calculate a pupil membership factor, a revenue adjustment factor,

and an index as follows:

(a) The pupil membership factor shall be computed by dividing

the estimated membership in the school year ending in the current

state fiscal year, excluding intermediate district membership, by

the estimated membership for the school year ending in the

subsequent state fiscal year, excluding intermediate district

membership. If a consensus membership factor is not determined at

the revenue estimating conference, the principals of the revenue

estimating conference shall report their estimates to the house and

senate subcommittees responsible for school aid appropriations not

later than 7 days after the conclusion of the revenue conference.

(b) The revenue adjustment factor shall be computed by

dividing the sum of the estimated total state school aid fund

revenue for the subsequent state fiscal year plus the estimated

total state school aid fund revenue for the current state fiscal

year, adjusted for any change in the rate or base of a tax the

proceeds of which are deposited in that fund and excluding money

transferred into that fund from the countercyclical budget and

economic stabilization fund under section 353e of the management

and budget act, 1984 PA 431, MCL 18.1353e, by the sum of the

estimated total school aid fund revenue for the current state

fiscal year plus the estimated total state school aid fund revenue

for the immediately preceding state fiscal year, adjusted for any

change in the rate or base of a tax the proceeds of which are

deposited in that fund. If a consensus revenue factor is not

determined at the revenue estimating conference, the principals of

the revenue estimating conference shall report their estimates to

the house and senate subcommittees responsible for school aid

appropriations not later than 7 days after the conclusion of the

revenue conference.

membership factor by the revenue adjustment factor. ~~However, for~~

~~2007-2008, the index shall be 1.00.~~ If a consensus index is not

determined at the revenue estimating conference, the principals of

the revenue estimating conference shall report their estimates to

the house and senate subcommittees responsible for school aid

appropriations not later than 7 days after the conclusion of the

revenue conference.

(14) If the principals at the revenue estimating conference

reach a consensus on the index described in subsection (13)(c), the

~~basic~~ lowest foundation allowance among all districts for the

subsequent state fiscal year shall be at least the amount of that

consensus index multiplied by the ~~basic~~ lowest foundation allowance

~~specified in subsection (1)~~ among all districts for the immediately

preceding state fiscal year.

(15) If at the January revenue estimating conference it is

estimated that pupil membership, excluding intermediate district

membership, for the subsequent state fiscal year will be greater

than 101% of the pupil membership, excluding intermediate district

membership, for the current state fiscal year, then it is the

intent of the legislature that the executive budget proposal for

the school aid budget for the subsequent state fiscal year include

a general fund/general purpose allocation sufficient to support the

membership in excess of 101% of the current year pupil membership.

(16) For a district that had combined state and local revenue

per membership pupil in the 1993-94 state fiscal year of more than

$6,500.00, that had fewer than 7 pupils in membership in the 1993-

94 state fiscal year, that has at least 1 child educated in the

district in the current state fiscal year, and that levies the

number of mills of school operating taxes authorized for the

district under section 1211 of the revised school code, MCL

380.1211, a minimum amount of combined state and local revenue

shall be calculated for the district as provided under this

subsection. The minimum amount of combined state and local revenue

for 1999-2000 shall be $67,000.00 plus the district's additional

expenses to educate pupils in grades 9 to 12 educated in other

districts as determined and allowed by the department. The minimum

amount of combined state and local revenue under this subsection,

before adding the additional expenses, shall increase each fiscal

year by the same percentage increase as the percentage increase in

the basic foundation allowance from the immediately preceding

fiscal year to the current fiscal year. The state portion of the

minimum amount of combined state and local revenue under this

subsection shall be calculated by subtracting from the minimum

amount of combined state and local revenue under this subsection

the sum of the district's local school operating revenue and an

amount equal to the product of the sum of the state portion of the

district's foundation allowance plus the amount calculated under

section 20j times the district's membership. As used in this

subsection, "additional expenses" means the district's expenses for

tuition or fees, not to exceed the basic foundation allowance for

the current state fiscal year, plus a room and board stipend not to

exceed $10.00 per school day for each pupil in grades 9 to 12

educated in another district, as approved by the department.

(17) For a district in which 7.75 mills levied in 1992 for

school operating purposes in the 1992-93 school year were not

renewed in 1993 for school operating purposes in the 1993-94 school

year, the district's combined state and local revenue per

membership pupil shall be recalculated as if that millage reduction

did not occur and the district's foundation allowance shall be

calculated as if its 1994-95 foundation allowance had been

calculated using that recalculated 1993-94 combined state and local

revenue per membership pupil as a base. A district is not entitled

to any retroactive payments for fiscal years before 2000-2001 due

to this subsection.

(18) For a district in which an industrial facilities

exemption certificate that abated taxes on property with a state

equalized valuation greater than the total state equalized

valuation of the district at the time the certificate was issued or

$700,000,000.00, whichever is greater, was issued under 1974 PA

198, MCL 207.551 to 207.572, before the calculation of the

district's 1994-95 foundation allowance, the district's foundation

allowance for 2002-2003 is an amount equal to the sum of the

district's foundation allowance for 2002-2003, as otherwise

calculated under this section, plus $250.00.

(19) For a district that received a grant under former section

32e for 2001-2002, the district's foundation allowance for 2002-

2003 and each succeeding fiscal year shall be adjusted to be an

amount equal to the sum of the district's foundation allowance, as

otherwise calculated under this section, plus the quotient of 100%

of the amount of the grant award to the district for 2001-2002

under former section 32e divided by the number of pupils in the

district's membership for 2001-2002 who were residents of and

enrolled in the district. Except as otherwise provided in this

subsection, a district qualifying for a foundation allowance

adjustment under this subsection shall use the funds resulting from

this adjustment for at least 1 of grades K to 3 for purposes

allowable under former section 32e as in effect for 2001-2002, and

may also use these funds for an early intervening program described

in subsection (20). For an individual school or schools operated by

a district qualifying for a foundation allowance under this

subsection that have been determined by the department to meet the

adequate yearly progress standards of the federal no child left

behind act of 2001, Public Law 107-110, in both mathematics and

English language arts at all applicable grade levels for all

applicable subgroups, the district may submit to the department an

application for flexibility in using the funds resulting from this

adjustment that are attributable to the pupils in the school or

schools. The application shall identify the affected school or

schools and the affected funds and shall contain a plan for using

the funds for specific purposes identified by the district that are

designed to reduce class size, but that may be different from the

purposes otherwise allowable under this subsection. The department

shall approve the application if the department determines that the

purposes identified in the plan are reasonably designed to reduce

class size. If the department does not act to approve or disapprove

an application within 30 days after it is submitted to the

department, the application is considered to be approved. If an

application for flexibility in using the funds is approved, the

district may use the funds identified in the application for any

purpose identified in the plan.

(20) An early intervening program that uses funds resulting

from the adjustment under subsection (19) shall meet either or both

of the following:

(a) Shall monitor individual pupil learning for pupils in

grades K to 3 and provide specific support or learning strategies

to pupils in grades K to 3 as early as possible in order to reduce

the need for special education placement. The program shall include

literacy and numeracy supports, sensory motor skill development,

behavior supports, instructional consultation for teachers, and the

development of a parent/school learning plan. Specific support or

learning strategies may include support in or out of the general

classroom in areas including reading, writing, math, visual memory,

motor skill development, behavior, or language development. These

would be provided based on an understanding of the individual

child's learning needs.

(b) Shall provide early intervening strategies for pupils in

grades K to 3 using schoolwide systems of academic and behavioral

supports and shall be scientifically research-based. The strategies

to be provided shall include at least pupil performance indicators

based upon response to intervention, instructional consultation for

teachers, and ongoing progress monitoring. A schoolwide system of

academic and behavioral support should be based on a support team

available to the classroom teachers. The members of this team could

include the principal, special education staff, reading teachers,

and other appropriate personnel who would be available to

systematically study the needs of the individual child and work

with the teacher to match instruction to the needs of the

individual child.

(21) For a district that levied 1.9 mills in 1993 to finance

an operating deficit, the district's foundation allowance shall be

calculated as if those mills were included as operating mills in

the calculation of the district's 1994-1995 foundation allowance. A

district is not entitled to any retroactive payments for fiscal

years before 2006-2007 due to this subsection. A district receiving

an adjustment under this subsection shall not receive more than

$800,000.00 for a fiscal year as a result of this adjustment.

(22) For a district that levied 2.23 mills in 1993 to finance

an operating deficit, the district's foundation allowance shall be

calculated as if those mills were included as operating mills in

the calculation of the district's 1994-1995 foundation allowance. A

district is not entitled to any retroactive payments for fiscal

years before 2006-2007 due to this subsection. A district receiving

an adjustment under this subsection shall not receive more than

$500,000.00 for a fiscal year as a result of this adjustment.

(23) Payments to districts, university schools, or public

school academies shall not be made under this section. Rather, the

calculations under this section shall be used to determine the

amount of state payments under section 22b. A district or public

school academy may use foundation allowance or per pupil amount

payments as calculated under this section for programs that prepare

children from birth to 5 years of age for success in school.

(24) If an amendment to section 2 of article VIII of the state

constitution of 1963 allowing state aid to some or all nonpublic

schools is approved by the voters of this state, each foundation

allowance or per pupil payment calculation under this section may

be reduced.

(25) As used in this section:

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

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

1993-94.

(b) ~~(a)~~ "Combined state and local revenue" means the aggregate

of the district's state school aid received by or paid on behalf of

the district under this section and the district's local school

operating revenue.

pupil" means the district's combined state and local revenue

divided by the district's membership excluding special education

pupils.

(d) ~~(c)~~ "Current state fiscal year" means the state fiscal

year for which a particular calculation is made.

(e) ~~(d)~~ "Immediately preceding state fiscal year" means the

state fiscal year immediately preceding the current state fiscal

year.

(f) ~~(e)~~ "Local school operating revenue" means school

operating taxes levied under section 1211 of the revised school

code, MCL 380.1211.

(g) ~~(f)~~ "Local school operating revenue per membership pupil"

means a district's local school operating revenue divided by the

district's membership excluding special education pupils.

(h) ~~(g)~~ "Maximum public school academy allocation" means the

maximum per-pupil allocation as calculated by adding the highest

per-pupil allocation among all public school academies for the

immediately preceding state fiscal year plus the difference between

twice the dollar amount of the adjustment from the immediately

preceding state fiscal year to the current state fiscal year made

in the basic foundation allowance and [(the dollar amount of the

adjustment from the immediately preceding state fiscal year to the

current state fiscal year made in the basic foundation allowance

minus $50.00) times (the difference between the highest per-pupil

allocation among all public school academies for the immediately

preceding state fiscal year and the sum of $7,108.00 plus the total

dollar amount of all adjustments made from 2006-2007 to the

immediately preceding state fiscal year in the lowest per-pupil

allocation among all public school academies) divided by the

difference between the basic foundation allowance for the current

state fiscal year and the sum of $7,108.00 plus the total dollar

amount of all adjustments made from 2006-2007 to the immediately

preceding state fiscal year in the lowest per-pupil allocation

among all public school academies].

(i) ~~(h)~~ "Membership" means the definition of that term under

section 6 as in effect for the particular fiscal year for which a

particular calculation is made.

(j) "Nonexempt property" means property that is not a

principal residence, qualified agricultural property, qualified

forest property, industrial personal property, or commercial

personal property.

(k) ~~(i)~~ "Principal residence", ~~and~~ "qualified agricultural

property", "qualified forest property", "industrial personal

property", and "commercial personal property" mean those terms as

defined in section 7dd of the general property tax act, 1893 PA

206, MCL 211.7dd, and section 1211 of the revised school code, MCL

380.1211.

(l) ~~(j)~~ "School operating purposes" means the purposes included

in the operation costs of the district as prescribed in sections 7

and 18.

(m) ~~(k)~~ "School operating taxes" means local ad valorem

property taxes levied under section 1211 of the revised school

code, MCL 380.1211, and retained for school operating purposes.

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

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

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

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

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

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

125.2871 to 125.2899.

(o) (l) "Taxable value per membership pupil" means taxable

value, as certified by the department of treasury, for the calendar

year ending in the current state fiscal year divided by the

district's membership excluding special education pupils for the

school year ending in the current state fiscal year.

Sec. 20d. In making the final determination required under

former section 20a of a district's combined state and local revenue

per membership pupil in 1993-94 and in making calculations under

section 20 for 2008-2009, the department and the department of

treasury shall comply with all of the following:

(a) For a district that had combined state and local revenue

per membership pupil in the 1994-95 state fiscal year of $6,500.00

or more and served as a fiscal agent for a state board designated

area vocational education center in the 1993-94 school year, total

state school aid received by or paid on behalf of the district

pursuant to this act in 1993-94 shall exclude payments made under

former section 146 and under section 147 on behalf of the

district's employees who provided direct services to the area

vocational education center. Not later than June 30, 1996, the

department shall make an adjustment under this subdivision to the

district's combined state and local revenue per membership pupil in

the 1994-95 state fiscal year and the department of treasury shall

make a final certification of the number of mills that may be

levied by the district under section 1211 of the revised school

code, MCL 380.1211, as a result of the adjustment under this

subdivision.

(b) If a district had an adjustment made to its 1993-94 total

state school aid that excluded payments made under former section

146 and under section 147 on behalf of the district's employees who

provided direct services for intermediate district center programs

operated by the district under article 5, if nonresident pupils

attending the center programs were included in the district's

membership for purposes of calculating the combined state and local

revenue per membership pupil for 1993-94, and if there is a signed

agreement by all constituent districts of the intermediate district

that an adjustment under this subdivision shall be made, the

foundation allowances for 1995-96 and 1996-97 of all districts that

had pupils attending the intermediate district center program

operated by the district that had the adjustment shall be

calculated as if their combined state and local revenue per

membership pupil for 1993-94 included resident pupils attending the

center program and excluded nonresident pupils attending the center

program.

Sec. 20j. (1) Foundation allowance supplemental payments for

~~2007-2008~~ 2008-2009 to districts that in the 1994-95 state fiscal

year had a foundation allowance greater than $6,500.00 shall be

calculated under this section.

(2) The per pupil allocation to each district under this

section shall be the difference between the basic foundation

allowance for the 1998-99 state fiscal year and ~~$7,108.00~~ $7,204.00

less $223.00 minus the dollar amount of the adjustment from the

1998-99 state fiscal year to ~~2006-2007~~ 2007-2008 in the district's

foundation allowance.

(3) If a district's local revenue per pupil does not exceed

the sum of its foundation allowance under section 20 plus the per

pupil allocation under subsection (2), the total payment to the

district calculated under this section shall be the product of the

per pupil allocation under subsection (2) multiplied by the

district's membership excluding special education pupils. If a

district's local revenue per pupil exceeds the foundation allowance

under section 20 but does not exceed the sum of the foundation

allowance under section 20 plus the per pupil allocation under

subsection (2), the total payment to the district calculated under

this section shall be the product of the difference between the sum

of the foundation allowance under section 20 plus the per pupil

allocation under subsection (2) minus the local revenue per pupil

multiplied by the district's membership excluding special education

pupils. If a district's local revenue per pupil exceeds the sum of

the foundation allowance under section 20 plus the per pupil

allocation under subsection (2), there is no payment calculated

under this section for the district.

(4) Payments to districts shall not be made under this

section. Rather, the calculations under this section shall be made

and used to determine the amount of state payments under section

22b.

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

allocated an amount not to exceed $5,951,000,000.00 for 2007-2008

and an amount not to exceed $6,092,000,000.00 for 2008-2009 for

payments to districts, qualifying university schools, and

qualifying public school academies to guarantee each district,

qualifying university school, and qualifying public school academy

an amount equal to its 1994-95 total state and local per pupil

revenue for school operating purposes under section 11 of article