SB-0866, As Passed House, March 22, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 866

 

 

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.