SB-0866, As Passed House, March 22, 2006
November 9, 2005, Introduced by Senator GILBERT and referred to the Committee on Education.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending section 51a (MCL 388.1651a), as amended by 2005 PA 155.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 51a. (1) From the appropriation in section 11, there is
allocated for 2004-2005 an amount not to exceed $896,383,000.00
from state sources and all available federal funding under sections
611 to 619 of part B of the individuals with disabilities education
act, 20 USC 1411 to 1419, estimated at $329,850,000.00 plus any
carryover federal funds from previous year appropriations. From the
appropriation in section 11, there is allocated for 2005-2006 an
amount not to exceed $955,883,000.00 from state sources and all
available federal funding under sections 611 to 619 of part B of
the individuals with disabilities education act, 20 USC 1411 to
1419, estimated at $345,850,000.00, plus any carryover federal
funds from previous year appropriations. The allocations under this
subsection are for the purpose of reimbursing districts and
intermediate districts for special education programs, services,
and special education personnel as prescribed in article 3 of the
revised school code, MCL 380.1701 to 380.1766; net tuition payments
made by intermediate districts to the Michigan schools for the deaf
and blind; and special education programs and services for pupils
who are eligible for special education programs and services
according to statute or rule. For meeting the costs of special
education programs and services not reimbursed under this article,
a district or intermediate district may use money in general funds
or special education funds, not otherwise restricted, or
contributions from districts to intermediate districts, tuition
payments, gifts and contributions from individuals, or federal
funds that may be available for this purpose, as determined by the
intermediate district plan prepared pursuant to article 3 of the
revised school code, MCL 380.1701 to 380.1766. All federal funds
allocated under this section in excess of those allocated under
this section for 2002-2003 may be distributed in accordance with
the flexible funding provisions of the individuals with
disabilities education act, title VI of Public Law 91-230,
including, but not limited to, 34 CFR 300.234 and 300.235.
Notwithstanding section 17b, payments of federal funds to
districts, intermediate districts, and other eligible entities
under this section shall be paid on a schedule determined by the
department.
(2) From the funds allocated under subsection (1), there is
allocated each fiscal year for 2004-2005 and for 2005-2006 the
amount necessary, estimated at $175,500,000.00 for 2004-2005 and
$187,700,000.00 for 2005-2006, for payments toward reimbursing
districts and intermediate districts for 28.6138% of total approved
costs of special education, excluding costs reimbursed under
section 53a, and 70.4165% of total approved costs of special
education transportation. Allocations under this subsection shall
be made as follows:
(a) The initial amount allocated to a district under this
subsection toward fulfilling the specified percentages shall be
calculated by multiplying the district's special education pupil
membership, excluding pupils described in subsection (12), times
the sum of the foundation allowance under section 20 of the pupil's
district of residence plus the amount of the district's per pupil
allocation under section 20j(2), not to exceed $6,500.00 adjusted
by the dollar amount of the difference between the basic foundation
allowance under section 20 for the current fiscal year and
$5,000.00 minus $200.00, or, for a special education pupil in
membership in a district that is a public school academy or
university school, times an amount equal to the amount per
membership pupil calculated under section 20(6). For an
intermediate district, the amount allocated under this subdivision
toward fulfilling the specified percentages shall be an amount per
special education membership pupil, excluding pupils described in
subsection (12), and shall be calculated in the same manner as for
a district, using the foundation allowance under section 20 of the
pupil's district of residence, not to exceed $6,500.00 adjusted by
the dollar amount of the difference between the basic foundation
allowance under section 20 for the current fiscal year and
$5,000.00 minus $200.00, and that district's per pupil allocation
under section 20j(2).
(b) After the allocations under subdivision (a), districts and
intermediate districts for which the payments under subdivision (a)
do not fulfill the specified percentages shall be paid the amount
necessary to achieve the specified percentages for the district or
intermediate district.
(3) From the funds allocated under subsection (1), there is
allocated each fiscal year for 2004-2005 and for 2005-2006 the
amount necessary, estimated at $3,000,000.00 for 2004-2005 and
$2,500,000.00 for 2005-2006, to make payments to districts and
intermediate districts under this subsection. If the amount
allocated to a district or intermediate district for a fiscal year
under subsection (2)(b) is less than the sum of the amounts
allocated to the district or intermediate district for 1996-97
under sections 52 and 58, there is allocated to the district or
intermediate district for the fiscal year an amount equal to that
difference, adjusted by applying the same proration factor that was
used in the distribution of funds under section 52 in 1996-97 as
adjusted to the district's or intermediate district's necessary
costs of special education used in calculations for the fiscal
year. This adjustment is to reflect reductions in special education
program operations or services between 1996-97 and subsequent
fiscal years. Adjustments for reductions in special education
program operations or services shall be made in a manner determined
by the department and shall include adjustments for program or
service shifts.
(4) If the department determines that the sum of the amounts
allocated for a fiscal year to a district or intermediate district
under subsection (2)(a) and (b) is not sufficient to fulfill the
specified percentages in subsection (2), then the shortfall shall
be paid to the district or intermediate district during the fiscal
year beginning on the October 1 following the determination and
payments under subsection (3) shall be adjusted as necessary. If
the department determines that the sum of the amounts allocated for
a fiscal year to a district or intermediate district under
subsection (2)(a) and (b) exceeds the sum of the amount necessary
to fulfill the specified percentages in subsection (2), then the
department shall deduct the amount of the excess from the
district's or intermediate district's payments under this act for
the fiscal year beginning on the October 1 following the
determination and payments under subsection (3) shall be adjusted
as necessary. However, if the amount allocated under subsection
(2)(a) in itself exceeds the amount necessary to fulfill the
specified percentages in subsection (2), there shall be no
deduction under this subsection.
(5) State funds shall be allocated on a total approved cost
basis. Federal funds shall be allocated under applicable federal
requirements, except that an amount not to exceed $3,500,000.00 may
be allocated by the department each fiscal year for 2004-2005 and
for 2005-2006 to districts, intermediate districts, or other
eligible entities on a competitive grant basis for programs,
equipment, and services that the department determines to be
designed to benefit or improve special education on a statewide
scale.
(6) From the amount allocated in subsection (1), there is
allocated an amount not to exceed $2,200,000.00 each fiscal year
for 2004-2005 and for 2005-2006 to reimburse 100% of the net
increase in necessary costs incurred by a district or intermediate
district in implementing the revisions in the administrative rules
for special education that became effective on July 1, 1987. As
used in this subsection, "net increase in necessary costs" means
the necessary additional costs incurred solely because of new or
revised requirements in the administrative rules minus cost savings
permitted in implementing the revised rules. Net increase in
necessary costs shall be determined in a manner specified by the
department.
(7) For purposes of this article, all of the following apply:
(a) "Total approved costs of special education" shall be
determined in a manner specified by the department and may include
indirect costs, but shall not exceed 115% of approved direct costs
for section 52 and section 53a programs. The total approved costs
include salary and other compensation for all approved special
education personnel for the program, including payments for social
security and medicare and public school employee retirement system
contributions. The total approved costs do not include salaries or
other compensation paid to administrative personnel who are not
special education personnel as defined in section 6 of the revised
school code, MCL 380.6. Costs reimbursed by federal funds, other
than those federal funds included in the allocation made under this
article, are not included. Special education approved personnel not
utilized full time in the evaluation of students or in the delivery
of special education programs, ancillary, and other related
services shall be reimbursed under this section only for that
portion of time actually spent providing these programs and
services, with the exception of special education programs and
services provided to youth placed in child caring institutions or
juvenile detention programs approved by the department to provide
an on-grounds education program.
(b) Except as otherwise provided in subdivision (c), beginning
with the 2004-2005 fiscal year, a district or intermediate district
that employed special education support services staff to provide
special education support services in 2003-2004 or in a subsequent
fiscal year and that in a fiscal year after 2003-2004 receives the
same type of support services from another district or intermediate
district shall report the cost of those support services for
special education reimbursement purposes under this act. This
subdivision does not prohibit the transfer of special education
classroom teachers and special education classroom aides if the
pupils counted in membership associated with those special
education classroom teachers and special education classroom aides
are transferred and counted in membership in the other district or
intermediate district in conjunction with the transfer of those
teachers and aides.
(c) If the department determines before bookclosing for 2004-
2005 that the amounts allocated under this section for 2004-2005
will exceed expenditures under this section for 2004-2005, then for
2004-2005 only, for a district or intermediate district whose
reimbursement for 2004-2005 would otherwise be affected by
subdivision (b), subdivision (b) does not apply to the calculation
of the reimbursement for that district or intermediate district and
reimbursement for that district or intermediate district shall be
calculated in the same manner as it was for 2003-2004. If the
amount of the excess allocations under this section is not
sufficient to fully fund the calculation of reimbursement to those
districts and intermediate districts under this subdivision, then
the calculations and resulting reimbursement under this subdivision
shall be prorated on an equal percentage basis.
(d) Reimbursement for ancillary and other related services, as
defined by R 340.1701c of the Michigan administrative code, shall
not be provided when those services are covered by and available
through private group health insurance carriers or federal
reimbursed program sources unless the department and district or
intermediate district agree otherwise and that agreement is
approved by the state budget director. Expenses, other than the
incidental expense of filing, shall not be borne by the parent. In
addition, the filing of claims shall not delay the education of a
pupil. A district or intermediate district shall be responsible for
payment of a deductible amount and for an advance payment required
until the time a claim is paid.
(e) Beginning with calculations for 2004-2005, if an
intermediate district purchases a special education pupil
transportation service from a constituent district that was
previously purchased from a private entity; if the purchase from
the constituent district is at a lower cost, adjusted for changes
in fuel costs; and if the cost shift from the intermediate district
to the constituent district does not result in any net change in
the revenue the constituent district receives from payments under
sections 22b and 51c, then upon application by the intermediate
district, the department shall direct the intermediate district to
continue to report the cost associated with the specific identified
special education pupil transportation service and shall adjust the
costs reported by the constituent district to remove the cost
associated with that specific service.
(8) From the allocation in subsection (1), there is allocated
each fiscal year for 2004-2005 and for 2005-2006 an amount not to
exceed $15,313,900.00 to intermediate districts. The payment under
this subsection to each intermediate district shall be equal to the
amount of the 1996-97 allocation to the intermediate district under
subsection (6) of this section as in effect for 1996-97.
(9) A pupil who is enrolled in a full-time special education
program conducted or administered by an intermediate district or a
pupil who is enrolled in the Michigan schools for the deaf and
blind shall not be included in the membership count of a district,
but shall be counted in membership in the intermediate district of
residence.
(10) Special education personnel transferred from 1 district
to another to implement the revised school code shall be entitled
to the rights, benefits, and tenure to which the person would
otherwise be entitled had that person been employed by the
receiving district originally.
(11) If a district or intermediate district uses money
received under this section for a purpose other than the purpose or
purposes for which the money is allocated, the department may
require the district or intermediate district to refund the amount
of money received. Money that is refunded shall be deposited in the
state treasury to the credit of the state school aid fund.
(12) From the funds allocated in subsection (1), there is
allocated each fiscal year for 2004-2005 and for 2005-2006 the
amount necessary, estimated at $7,000,000.00 for 2004-2005 and
$6,600,000.00 for 2005-2006, to pay the foundation allowances for
pupils described in this subsection. The allocation to a district
under this subsection shall be calculated by multiplying the number
of pupils described in this subsection who are counted in
membership in the district times the sum of the foundation
allowance under section 20 of the pupil's district of residence
plus the amount of the district's per pupil allocation under
section 20j(2), not to exceed $6,500.00 adjusted by the dollar
amount of the difference between the basic foundation allowance
under section 20 for the current fiscal year and $5,000.00 minus
$200.00, or, for a pupil described in this subsection who is
counted in membership in a district that is a public school academy
or university school, times an amount equal to the amount per
membership pupil under section 20(6). The allocation to an
intermediate district under this subsection shall be calculated in
the same manner as for a district, using the foundation allowance
under section 20 of the pupil's district of residence, not to
exceed $6,500.00 adjusted by the dollar amount of the difference
between the basic foundation allowance under section 20 for the
current fiscal year and $5,000.00 minus $200.00, and that
district's per pupil allocation under section 20j(2). This
subsection applies to all of the following pupils:
(a) Pupils described in section 53a.
(b) Pupils counted in membership in an intermediate district
who are not special education pupils and are served by the
intermediate district in a juvenile detention or child caring
facility.
(c) Emotionally impaired pupils counted in membership by an
intermediate district and provided educational services by the
department of community health.
(13) After payments under subsections (2) and (12) and section
51c, the remaining expenditures from the allocation in subsection
(1) shall be made in the following order:
(a) 100% of the reimbursement required under section 53a.
(b) 100% of the reimbursement required under subsection (6).
(c) 100% of the payment required under section 54.
(d) 100% of the payment required under subsection (3).
(e) 100% of the payment required under subsection (8).
(f) 100% of the payments under section 56.
(14) The allocations under subsection (2), subsection (3), and
subsection (12) shall be allocations to intermediate districts only
and shall not be allocations to districts, but instead shall be
calculations used only to determine the state payments under
section 22b.