SUBSTITUTE FOR

 

HOUSE BILL NO. 5372

 

 

 

 

 

 

 

 

 

 

 

     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, 12, 15,

 

18, 18c, 19, 20, 20d, 22a, 22b, 22d, 22f, 24, 24a, 24c, 25, 26a,

 

26b, 31a, 31d, 31f, 32d, 39, 39a, 51a, 51c, 51d, 53a, 54, 56, 61a,

 

62, 74, 81, 93, 94a, 98, 99, 101, 102, 104, 107, 147, 147a, 147b,

 

152a, 201, 201a, 202, 203, 204, 205, 206, 207, 208, 209, 210, 210a,

 

212, 213, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226,

 

227, 228, 229, 230, 236, 236a, 237, 238, 239, 239a, 241, 242, 243,

 

244, 245, 251, 252, 253, 254, 255, 256, 257, 258, 261, 263, 263a,

 

264, 265, 267, 268, 269, 270, 273, 274, 274a, 275, 275a, 276, 277,

 

278, 279, 280, 281, 282, 283, 284, 285, 286, 289, 290, 291, and 293

 

(MCL 388.1603, 388.1604, 388.1606, 388.1611, 388.1611a, 388.1611g,

 

388.1611j, 388.1611k, 388.1611m, 388.1612, 388.1615, 388.1618,

 

388.1618c, 388.1619, 388.1620, 388.1620d, 388.1622a, 388.1622b,

 

388.1622d, 388.1622f, 388.1624, 388.1624a, 388.1624c, 388.1625,

 

388.1626a, 388.1626b, 388.1631a, 388.1631d, 388.1631f, 388.1632d,

 

388.1639, 388.1639a, 388.1651a, 388.1651c, 388.1651d, 388.1653a,

 

388.1654, 388.1656, 388.1661a, 388.1662, 388.1674, 388.1681,

 

388.1693, 388.1694a, 388.1698, 388.1699, 388.1701, 388.1702,

 

388.1704, 388.1707, 388.1747, 388.1747a, 388.1747b, 388.1752a,

 

388.1801, 388.1801a, 388.1802, 388.1803, 388.1804, 388.1805,

 

388.1806, 388.1807, 388.1808, 388.1809, 388.1810, 388.1810a,

 

388.1812, 388.1813, 388.1816, 388.1817, 388.1818, 388.1819,

 

388.1820, 388.1821, 388.1822, 388.1823, 388.1824, 388.1825,

 

388.1826, 388.1827, 388.1828, 388.1829, 388.1830, 388.1836,

 

388.1836a, 388.1837, 388.1838, 388.1839, 388.1839a, 388.1841,

 

388.1842, 388.1843, 388.1844, 388.1845, 388.1851, 388.1852,

 

388.1853, 388.1854, 388.1855, 388.1856, 388.1857, 388.1858,

 

388.1861, 388.1863, 388.1863a, 388.1864, 388.1865, 388.1867,

 

388.1868, 388.1869, 388.1870, 388.1873, 388.1874, 388.1874a,

 

388.1875, 388.1875a, 388.1876, 388.1877, 388.1878, 388.1879,

 

388.1880, 388.1881, 388.1882, 388.1883, 388.1884, 388.1885,

 

388.1886, 388.1889, 388.1890, 388.1891, and 388.1893), sections 3,

 

19, and 101 as amended by 2010 PA 110, section 4 as amended by 2008

 

PA 268, sections 6, 11, 11a, 11m, 22a, 22b, 24a, 24c, 26b, 51a,

 

51c, 74, and 104 as amended by 2012 PA 29, sections 11g, 11k, 15,

 

18, 20, 20d, 22d, 24, 31a, 32d, 39, 39a, 51d, 54, 56, 61a, 81, 93,

 

94a, 98, 99, 107, 147, and 152a as amended  sections 12, 22f, 147a,

 

147b, 201, 201a, 202, 203, 204, 205, 206, 207, 208, 209, 210, 210a,

 

212, 213, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226,

 

227, 228, 229, 230, 236, 236a, 237, 238, 239, 239a, 241, 242, 243,

 

244, 245, 251, 252, 253, 254, 255, 256, 257, 258, 261, 263, 263a,

 

264, 265, 267, 268, 269, 270, 273, 274, 274a, 275, 275a, 276, 277,

 

278, 279, 280, 281, 282, 283, 284, 285, 286, 289, 290, 291, and 293

 

as added by 2011 PA 62, sections 11j, 26a, 31d, 31f, 53a, and 62 as

 

amended by 2011 PA 299, section 18c as added by 2000 PA 297,

 

section 25 as amended by 2011 PA 322, and section 102 as amended by

 

2010 PA 204, and by adding sections 11t, 11u, 22g, 22i, 22j, 26c,

 

32p, 95, 101a, 147c, 202a, 229a, 236b, 237b, 246, 265a, 273a, and

 

293a; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) "Achievement authority" means the education

 

achievement authority, the public body corporate and special

 

authority initially created under section 5 of article III and

 

section 28 of article VII of the state constitution of 1963 and the

 

urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to

 

124.512, by an interlocal agreement effective August 11, 2011,

 

between the school district of the city of Detroit and the board of

 

regents of eastern Michigan university, a state public university.

 

     (2) "Achievement school" means a public school within the

 

education achievement system operated, managed, authorized,

 

established, or overseen by the achievement authority.

 

     (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).

 

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

 

public school academy.

 

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

 

and information created in section 94a.

 

     (6) (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.

 

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

 

department of education.

 

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

 

under the revised school code or, except in sections 6(4), 6(6),

 

13, 20, 22a, 23, 29, 31a, 51a(15), 51a(14), 105, 105c, and 166b, a

 

public school academy. Except in sections 6(4), 6(6), 13, 20, 22a,

 

29, 51a(15), 105, 105c, and 166b, district also includes a

 

university school.Except in sections 6(4), 6(6), 6(8), 13, 20, 22a,

 

31a, 105, 105c, and 166b, district also includes the education

 

achievement system.

 

     (9) (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.

 

     (10) (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.chancellor of the

 

achievement authority.

 

     Sec. 4. (1) "Education achievement system" means the

 

achievement authority and all achievement schools.

 

     (2) (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.

 

     (3) (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.

 

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

 

commences October 1 and continues through September 30.

 

     (5) (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.

 

     (6) (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 by an 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

 

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

 

school, the education achievement system, or an intermediate

 

district the sum of the product of .90 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 .10 times the final

 

audited count from the supplemental count day for the immediately

 

preceding school year. A district's, public school academy's, or

 

intermediate district's membership shall be adjusted as provided

 

under section 25 for pupils who enroll in the district, public

 

school academy, or intermediate district after the pupil membership

 

count day. 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.

 

For the purposes of this section and section 6a, for a school of

 

excellence that is a cyber school, as defined in section 551 of the

 

revised school code, MCL 380.551, and is in compliance with section

 

553a of the revised school code, MCL 380.553a, or for the education

 

achievement system, a pupil's participation in the cyber school's

 

educational program or in an online educational program of the

 

education achievement system or of an achievement school is

 

considered regular daily attendance. 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, a

 

public school academy, university school, the education achievement

 

system, or an 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.

 

     (c) A special education pupil educated by the intermediate

 

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 career and technical 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.

 

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

 

counted in membership in the public school academy.

 

     (h) A pupil enrolled in an achievement school shall be counted

 

in membership in the education achievement system.

 

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

 

academy beginning its operation after December 31, 1994, or for the

 

education achievement system or an achievement school, 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, a public school academy, university school,

 

the education achievement system, or an 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 as follows:

 

     (i) A special education pupil who is enrolled and receiving

 

instruction in a special education program or service approved by

 

the department, who does not have a high school diploma, and who is

 

less than 26 years of age as of September 1 of the current school

 

year shall be counted in membership.

 

     (ii) A pupil who is determined by the department to meet all of

 

the following may be counted in membership:

 

     (A) Is enrolled in a public school academy or an alternative

 

education high school diploma program, that is primarily focused on

 

educating homeless pupils and that is located in a city with a

 

population of more than 500,000.

 

     (B) Had dropped out of school for more than 1 year and has re-

 

entered school.

 

     (C) Is less than 22 years of age as of September 1 of the

 

current school year.

 

     (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 unless the individual is a student pupil with

 

a disability as defined in R 340.1702 of the Michigan

 

administrative code. 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 workforce development agency, 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 or the education achievement system 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 or the education achievement system

 

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 or the

 

education achievement system 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 or the education achievement

 

system provides instruction for at least 1/2 of the class hours

 

specified in subdivision (q), the public school academy or the

 

education achievement system 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 or the education achievement system 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 or the education achievement

 

system 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 or the education achievement system.

 

     (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. However, beginning Beginning in 2012-

 

2013, full-time equated memberships for pupils in kindergarten

 

shall be determined by dividing the number of class instructional

 

hours scheduled and provided per year per kindergarten pupil by the

 

same number used for determining full-time equated memberships for

 

pupils in grades 1 to 12. However, to the extent allowable under

 

federal law, for a district or public school academy that provides

 

evidence satisfactory to the department that it used federal title

 

I money in the 2 immediately preceding school fiscal years to fund

 

full-time kindergarten, 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. Not later than

 

December 1, 2012, the department shall seek a clarification from

 

the federal department of education as to whether this is an

 

allowable use of federal title I money. The change in the counting

 

of full-time equated memberships for pupils in kindergarten that

 

takes effect in 2012-2013 is not a mandate. Not later than the

 

fifth Wednesday after the pupil membership count day, each district

 

or public school academy and the education achievement system shall

 

report to the department and the center the number of instructional

 

hours scheduled per kindergarten pupil for 2012-2013. If the number

 

of instructional hours scheduled per kindergarten pupil is not

 

equal for all kindergarten pupils in the district, the district or

 

public school academy and the education achievement system shall

 

report the number of kindergarten pupils who were scheduled to

 

receive each of the different numbers of instructional hours

 

scheduled.

 

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

 

academy, or the education achievement system that has pupils

 

enrolled in a grade level that was not offered by the district,

 

university school, or the public school academy, or the education

 

achievement system 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 the public school academy, or the

 

education achievement system that is educating the pupil.

 

     (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

 

or the education achievement system within 45 days after the pupil

 

membership count day, the department shall adjust the district's or

 

the education achievement system'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 .90 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 .10 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(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 or the education

 

achievement system 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 or the education

 

achievement system receives the same amount of membership aid for

 

the pupil as if the pupil were counted in the district or the

 

education achievement system 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 early

 

childhood special education 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.

 

     (cc) For the first year in which a pupil is counted in

 

membership on the pupil membership count day in a middle college

 

program, 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.

 

     (dd) A district, a public school academy, or the education

 

achievement system that educates a pupil who attends a United

 

States Olympic education center may count the pupil in membership

 

regardless of whether or not the pupil is a resident of this state.

 

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

 

district of residence pursuant to section 1148(2) of the revised

 

school code, MCL 380.1148, shall be counted in the educating

 

district or the education achievement system.

 

     (5) "Public school academy" means that term as defined in 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.

 

     (c) A pupil enrolled in a public school academy or university

 

school.the education achievement system.

 

     (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 works at the

 

district or who is the child of a person who worked at the district

 

as of the time the pupil first enrolled in the district but who no

 

longer works at the district due to a workforce reduction. 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 middle college program 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.

 

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

 

district of residence pursuant to section 1148(2) of the revised

 

school code, MCL 380.1148.

 

     (o) A pupil who enrolls in a district other than the pupil's

 

district of residence as a result of the pupil's school not making

 

adequate yearly progress under the no child left behind act of

 

2001, Public Law 107-110.

 

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

 

district of residence as a qualifying pupil under section 22h(2).

 

     However, if a district educates pupils who reside in another

 

district and if the primary instructional site for those pupils is

 

established by the educating district after 2009-2010 and is

 

located within the boundaries of that other district, the educating

 

district must have the approval of that other district to count

 

those pupils in membership.

 

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

 

district means:

 

     (a) Except as provided in subdivision (b), the first Wednesday

 

in October 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) First Wednesday in October.

 

     (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, an intermediate district, or a public

 

school academy, or the education achievement system 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, or education achievement system 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 a district that

 

had at least 60,000 pupils in membership for the immediately

 

preceding fiscal year.

 

     (12) "School fiscal year" means a fiscal year that commences

 

July 1 and continues through June 30.

 

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

 

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

 

supplemental pupil count is conducted under section 6a.

 

     (16) "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)(c) to (o). 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) "State school aid fund" means the state school aid fund

 

established in section 11 of article IX of the state constitution

 

of 1963.

 

     (18) "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) "Textbook" means a book, electronic book, or other

 

instructional print or electronic resource that is selected and

 

approved by the governing board of a district or, for an

 

achievement school, by the chancellor of the achievement authority

 

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) "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

 

article.

 

     (21) "University school" means an instructional program

 

operated by a public university under section 23 that meets the

 

requirements of section 23.

 

     Sec. 11. (1) Subject to subsection (3), for the fiscal year

 

ending September 30, 2012, there is appropriated for the public

 

schools of this state and certain other state purposes relating to

 

education the sum of $10,967,333,600.00 $11,010,210,400.00 from the

 

state school aid fund and the sum of $118,642,400.00 $78,642,400.00

 

from the general fund. Subject to subsection (3), for the fiscal

 

year ending September 30, 2013, there is appropriated for the

 

public schools of this state and certain other state purposes

 

relating to education the sum of $10,961,087,100.00 from the state

 

school aid fund and the sum of $282,400,000.00 from the general

 

fund. In addition, all other available federal funds, except those

 

otherwise appropriated under section 11p, are appropriated each

 

fiscal year for the fiscal year ending September 30, 2012 and for

 

the fiscal year ending September 30, 2013.

 

     (2) The appropriations under this section shall be allocated

 

as provided in this article. Money appropriated under this section

 

from the general fund shall be expended to fund the purposes of

 

this article before the expenditure of money appropriated under

 

this section from the state school aid fund.

 

     (3) Any general fund allocations under this article 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.

 

     (c) Money appropriated 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 2011-2012, 2012-2013, in addition to the

 

appropriations in section 11, 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 article.

 

     (8) Effective on the effective date of this subsection,

 

February 24, 2012, in addition to any amounts otherwise deposited

 

into the school aid stabilization fund, there is transferred from

 

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

 

amount equal to $100,000,000.00.

 

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

 

allocated for this section an amount not to exceed $39,000,000.00

 

for the fiscal year ending September 30, 2012 2013, 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 and any other provision of this article 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.

 

     (c) Third, for deposit into a sinking fund established by the

 

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 $2,837,800.00 for 2010-2011 and

 

an amount not to exceed $93,575,300.00 for 2011-2012

 

$120,390,000.00 for 2012-2013 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 2011-2012, 2012-2013, 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 finance

 

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 2011-2012 an amount not to exceed $8,500,000.00

 

$2,100,000.00 and there is allocated for 2012-2013 an amount not to

 

exceed $3,200,000.00 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. 11t. It is the intent of the legislature to enact

 

legislation as necessary to change the name of the state school aid

 

fund to the "comprehensive education fund".

 

     Sec. 11u. It is the intent of the legislature to examine the

 

existing structure of funding under this article and to determine

 

to what extent, if any, categorical funding under this article may

 

instead be used for funding foundation allowances and other basic

 

per pupil payments.

 

     Sec. 12. It is the intent of the legislature to appropriate

 

and allocate for the fiscal year ending September 30, 2013 2014 the

 

same amounts of money from the same sources for the same purposes

 

as are appropriated and allocated under this article for the fiscal

 

year ending September 30, 2012, 2013, as adjusted for changes in

 

pupil membership, taxable values, special education costs, interest

 

costs, and available revenue. These adjustments will be determined

 

after the January 2012 2013 consensus revenue estimating

 

conference.

 

     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

 

article, 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

 

article 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 article 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 article

 

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 2011-2012 2012-

 

2013 for obligations in excess of applicable appropriations an

 

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

 

amounts available from overpayments.

 

     Sec. 18. (1) Except as provided in another section of this

 

article, each district or other entity shall apply the money

 

received by the district or entity under this article to salaries

 

and other compensation of teachers and other employees, tuition,

 

transportation, lighting, heating, ventilation, water service, the

 

purchase of textbooks, which are designated by the board to be used

 

in the schools under the board's charge, other supplies, and any

 

other school operating expenditures defined in section 7. However,

 

not more than 20% of the total amount received by a district or

 

intermediate district under this article may be transferred by the

 

board to either the capital projects fund or to the debt retirement

 

fund for debt service. The money shall not be applied or taken for

 

a purpose other than as provided in this section. The department

 

shall determine the reasonableness of expenditures and may withhold

 

from a recipient of funds under this article the apportionment

 

otherwise due upon a violation by the recipient.

 

     (2) Within 30 days after a board adopts its annual operating

 

budget for the following school fiscal year, or after a board

 

adopts a subsequent revision to that budget, the district shall

 

make all of the following available through a link on its website

 

home page, or may make the information available through a link on

 

its intermediate district's website home page, in a form and manner

 

prescribed by the department:

 

     (a) The annual operating budget and subsequent budget

 

revisions.

 

     (b) Using data that have already been collected and submitted

 

to the department, a summary of district expenditures for the most

 

recent fiscal year for which they are available, expressed in the

 

following 2 pie charts:

 

     (i) A chart of personnel expenditures, broken into the

 

following subcategories:

 

     (A) Salaries and wages.

 

     (B) Employee benefit costs, including, but not limited to,

 

medical, dental, vision, life, disability, and long-term care

 

benefits.

 

     (C) Retirement benefit costs.

 

     (D) All other personnel costs.

 

     (ii) A chart of all district expenditures, broken into the

 

following subcategories:

 

     (A) Instruction.

 

     (B) Support services.

 

     (C) Business and administration.

 

     (D) Operations and maintenance.

 

     (c) Links to all of the following:

 

     (i) The current collective bargaining agreement for each

 

bargaining unit.

 

     (ii) Each health care benefits plan, including, but not limited

 

to, medical, dental, vision, disability, long-term care, or any

 

other type of benefits that would constitute health care services,

 

offered to any bargaining unit or employee in the district.

 

     (iii) The audit report of the audit conducted under subsection

 

(4) for the most recent fiscal year for which it is available.

 

     (iv) The bids required under section 5 of the public employee

 

health benefits act, 2007 PA 106, MCL 124.75.

 

     (d) The total salary and a description and cost of each fringe

 

benefit included in the compensation package for the superintendent

 

of the district and for each employee of the district whose salary

 

exceeds $100,000.00.

 

     (e) The annual amount spent on dues paid to associations.

 

     (f) The annual amount spent on lobbying or lobbying services.

 

As used in this subdivision, "lobbying" means that term as defined

 

in section 5 of 1978 PA 472, MCL 4.415.

 

     (3) For the information required under subsection (2)(a),

 

(2)(b)(i), and (2)(c), an intermediate district shall provide the

 

same information in the same manner as required for a district

 

under subsection (2).

 

     (4) For the purpose of determining the reasonableness of

 

expenditures and whether a violation of this article has occurred,

 

all of the following apply:

 

     (a) The department shall require that each district and

 

intermediate district have an audit of the district's or

 

intermediate district's financial and pupil accounting records

 

conducted at least annually at the expense of the district or

 

intermediate district, as applicable, by a certified public

 

accountant or by the intermediate district superintendent, as may

 

be required by the department, or in the case of a district of the

 

first class by a certified public accountant, the intermediate

 

superintendent, or the auditor general of the city.

 

     (b) If a district operates in a single building with fewer

 

than 700 full-time equated pupils, if the district has stable

 

membership, and if the error rate of the immediately preceding 2

 

pupil accounting field audits of the district is less than 2%, the

 

district may have a pupil accounting field audit conducted

 

biennially but must continue to have desk audits for each pupil

 

count. The auditor must document compliance with the audit cycle in

 

the pupil auditing manual. As used in this subdivision, "stable

 

membership" means that the district's membership for the current

 

fiscal year varies from the district's membership for the

 

immediately preceding fiscal year by less than 5%.

 

     (c) A district's or intermediate district's annual financial

 

audit shall include an analysis of the financial and pupil

 

accounting data used as the basis for distribution of state school

 

aid.

 

     (d) The pupil and financial accounting records and reports,

 

audits, and management letters are subject to requirements

 

established in the auditing and accounting manuals approved and

 

published by the department.

 

     (e) All of the following shall be done not later than November

 

15 each year:

 

     (i) A district shall file the annual financial audit reports

 

with the intermediate district and the department.

 

     (ii) The intermediate district shall file the annual financial

 

audit reports for the intermediate district with the department.

 

     (iii) The intermediate district shall enter the pupil membership

 

audit reports for its constituent districts and for the

 

intermediate district, for the pupil membership count day and

 

supplemental count day, in the Michigan student data system.

 

     (f) The annual financial audit reports and pupil accounting

 

procedures reports shall be available to the public in compliance

 

with the freedom of information act, 1976 PA 442, MCL 15.231 to

 

15.246.

 

     (g) Not later than January 31 of each year, the department

 

shall notify the state budget director and the legislative

 

appropriations subcommittees responsible for review of the school

 

aid budget of districts and intermediate districts that have not

 

filed an annual financial audit and pupil accounting procedures

 

report required under this section for the school year ending in

 

the immediately preceding fiscal year.

 

     (5) By November 15 of each year, each district and

 

intermediate district shall submit to the center, in a manner

 

prescribed by the center, annual comprehensive financial data

 

consistent with accounting manuals and charts of accounts approved

 

and published by the department. For an intermediate district, the

 

report shall also contain the website address where the department

 

can access the report required under section 620 of the revised

 

school code, MCL 380.620. The department shall ensure that the

 

prescribed Michigan public school accounting manual chart of

 

accounts includes standard conventions to distinguish expenditures

 

by allowable fund function and object. The functions shall include

 

at minimum categories for instruction, pupil support, instructional

 

staff support, general administration, school administration,

 

business administration, transportation, facilities operation and

 

maintenance, facilities acquisition, and debt service; and shall

 

include object classifications of salary, benefits, including

 

categories for active employee health expenditures, purchased

 

services, supplies, capital outlay, and other. Districts shall

 

report the required level of detail consistent with the manual as

 

part of the comprehensive annual financial report.

 

     (6) By September 30 of each year, each district and

 

intermediate district shall file with the department the special

 

education actual cost report, known as "SE-4096", on a form and in

 

the manner prescribed by the department.

 

     (7) By October 7 of each year, each district and intermediate

 

district shall file with the center the transportation expenditure

 

report, known as "SE-4094", on a form and in the manner prescribed

 

by the center.

 

     (8) The department shall review its pupil accounting and pupil

 

auditing manuals at least annually and shall periodically update

 

those manuals to reflect changes in this article.

 

     (9) If a district that is a public school academy purchases

 

property using money received under this article, the public school

 

academy shall retain ownership of the property unless the public

 

school academy sells the property at fair market value.

 

     (10) If a district or intermediate district does not comply

 

with subsections (4), (5), (6), and (7), the department shall

 

withhold all state school aid due to the district or intermediate

 

district under this article, beginning with the next payment due to

 

the district or intermediate district, until the district or

 

intermediate district complies with subsections (4), (5), (6), and

 

(7). If the district or intermediate district does not comply with

 

subsections (4), (5), (6), and (7) by the end of the fiscal year,

 

the district or intermediate district forfeits the amount withheld.

 

     (11) Not later than October 1, 2012, if a district or

 

intermediate district offers online learning, the district or

 

intermediate district shall submit to the department a report that

 

details the per-pupil costs of operating the online learning. The

 

report shall include, on a per-pupil basis, at least all of the

 

following costs:

 

     (a) Textbooks, instructional materials, and supplies,

 

including electronic instructional material.

 

     (b) Computer and other electronic equipment, including

 

internet and telephone access.

 

     (c) Salaries and benefits for the online learning employees.

 

     (d) Purchased courses and curricula.

 

     (e) Fees associated with oversight and regulation.

 

     (f) Travel costs associated with school activities and

 

testing.

 

     (g) Facilities costs.

 

     (h) Costs associated with special education.

 

     (12) Not later than December 31, 2012, the department shall

 

issue a report to the legislature including the following:

 

     (a) A review of the data submitted under subsection (11).

 

     (b) A comparison with costs of substantially similar programs

 

in other states and relevant national research on the costs of

 

online learning.

 

     (c) Any conclusions concerning factors or characteristics of

 

online learning programs that make a difference in the costs of

 

operating the programs.

 

     Sec. 18c. Any contract, mortgage, loan, or other instrument of

 

indebtedness entered into by a public school academy, the

 

achievement authority, or an achievement school receiving funds

 

under this act and a third party does not constitute an obligation,

 

either general, special, or moral, of this state or of an

 

authorizing body. The full faith and credit or the taxing power of

 

this state or any agency of this state, or the full faith and

 

credit of an authorizing body, shall not be pledged for the payment

 

of any contract, mortgage, loan, or other instrument of

 

indebtedness entered into by a public school academy, the

 

achievement authority, or an achievement school.

 

     Sec. 19. (1) 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. In addition, a district or

 

intermediate district shall cooperate with all measures taken by

 

the center to comply with the provisions of the American recovery

 

and reinvestment act of 2009, Public Law 111-5, requiring the

 

establishment of establish and maintain a statewide P-20

 

longitudinal data system.

 

     (2) Each district shall furnish to the center not later than 5

 

weeks after the pupil membership count day and by June 30 of the

 

school fiscal year ending in the fiscal year, 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 (6).

 

     (3) 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.

 

     (4) 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.

 

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

 

requirements of this section, the department shall withhold 5% of

 

the total funds for which the district or intermediate district

 

qualifies under this act article 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.

 

     (6) 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.

 

     (7) It is the intent of the legislature to implement not later

 

than 2014-2015 statewide standard reporting requirements for

 

education data approved by the department in conjunction with the

 

center. The department shall work with the center, intermediate

 

districts, districts, and other interested stakeholders to develop

 

recommendations on the implementation of this policy change. A

 

district or intermediate district shall implement the statewide

 

standard reporting requirements not later than 2014-2015 or when a

 

district or intermediate district updates its education data

 

reporting system, whichever is later.

 

     Sec. 20. (1) For 2011-2012, and for 2012-2013, the basic

 

foundation allowance is $8,019.00.

 

     (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 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 $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]. For 2011-2012, 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 district's

 

foundation allowance for 2010-2011, minus $470.00. Except as

 

otherwise provided in subdivision (h), for 2012-2013, 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 district's foundation allowance for the

 

immediately preceding state fiscal year. 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, 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 for

 

2011-2012 in an amount equal to the district's foundation allowance

 

for 2010-2011, minus $470.00. For 2012-2013, except as otherwise

 

provided in this subsection, 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 for 2012-2013 in an amount equal to

 

the district's foundation allowance for the immediately preceding

 

state fiscal year.

 

     (c) Except as otherwise provided in subdivision (d), 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 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. Except as otherwise provided

 

in subdivision (d), for 2011-2012, for a district that in the 1994-

 

1995 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 2010-2011 fiscal

 

year minus $470.00. For 2012-2013, except as otherwise provided in

 

subdivision (d), for a district that in the 1994-1995 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.

 

     (d) For a district that in the 1994-95 state fiscal year had a

 

foundation allowance greater than $6,500.00 and that had a

 

foundation allowance for the 2009-2010 state fiscal year, as

 

otherwise calculated under this section, that was less than the

 

basic foundation allowance, the district's foundation allowance for

 

2011-2012 and each succeeding fiscal year shall be considered to be

 

an amount equal to the basic foundation allowance.

 

     (e) 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.

 

     (f) 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.

 

     (g) 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.

 

     (h) For 2012-2013, for a district that had a foundation

 

allowance for the 2011-2012 state fiscal year of less than

 

$6,966.00, the district's foundation allowance is an amount equal

 

to $6,966.00.

 

     (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

 

nonexempt property times the 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 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 nonexempt property times the 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 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 (15), the allocation calculated under this section shall

 

not include the adjustment described in subsection (15). 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.

 

     (6) Subject to subsection (7) and except 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

 

foundation allowance of the district in which the public school

 

academy or university school is located or the state maximum public

 

school academy allocation, whichever is less. However, a public

 

school academy or university school that had an allocation under

 

this subsection before 2009-2010 that was 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 shall not have that

 

allocation reduced as a result of the 2010 amendment to this

 

subsection. Notwithstanding section 101, 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 nonexempt property times the

 

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 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 article, 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.

 

     (7) Except as otherwise provided in this subsection, for

 

pupils attending an achievement school and in membership in the

 

education achievement system, other than special education pupils,

 

the allocation calculated under this section is an amount per

 

membership pupil other than special education pupils equal to the

 

foundation allowance of the district in which the achievement

 

school is located, not to exceed the basic foundation allowance.

 

Notwithstanding section 101, for an achievement school that begins

 

operation 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 achievement school 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. For the purposes of this subsection, if a public school

 

is transferred from a district to the state school reform/redesign

 

district or the achievement authority under section 1280c of the

 

revised school code, that public school is considered to be an

 

achievement school within the education achievement system and not

 

a school that is part of a district, and a pupil attending that

 

public school is considered to be in membership in the education

 

achievement system and not in membership in the district that

 

operated the school before the transfer.

 

     (8) 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.

 

     (9) 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.

 

     (10) 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.

 

     (11) 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 the management and budget act,

 

1984 PA 431, MCL 18.1101 to 18.1594, 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.

 

     (c) The index shall be calculated by multiplying the pupil

 

membership factor by the revenue adjustment factor. However, for

 

2011-2012, the index shall be 0.93575 and for 2012-2013, 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.

 

     (12) If the principals at the revenue estimating conference

 

reach a consensus on the index described in subsection (11)(c), the

 

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 lowest foundation allowance among all

 

districts for the immediately preceding state fiscal year.

 

     (12) (13) 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. A district receiving an adjustment under this

 

subsection shall not receive as a result of this adjustment an

 

amount that exceeds 50% of the amount the district received as a

 

result of this adjustment for 2010-2011. This adjustment shall not

 

be made after 2011-2012.

 

     (13) (14) 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. A district receiving

 

an adjustment under this subsection shall not receive as a result

 

of this adjustment an amount that exceeds 50% of the amount the

 

district received as a result of this adjustment for 2010-2011.

 

This adjustment shall not be made after 2011-2012.

 

     (14) (15) 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. A district receiving an adjustment

 

under this subsection shall not receive as a result of this

 

adjustment an amount that exceeds 68.5% of the amount the district

 

received as a result of this adjustment for 2010-2011. This

 

adjustment shall not be made after 2011-2012.

 

     (15) (16) 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. A district receiving an adjustment under this

 

subsection shall not receive as a result of this adjustment an

 

amount that exceeds 50% of the amount the district received as a

 

result of this adjustment for 2010-2011. This adjustment shall not

 

be made after 2011-2012.

 

     (16) (17) 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. A district receiving an adjustment under this

 

subsection shall not receive as a result of this adjustment an

 

amount that exceeds 50% of the amount the district received as a

 

result of this adjustment for 2010-2011. This adjustment shall not

 

be made after 2011-2012.

 

     (17) (18) Payments to districts, university schools, or public

 

school academies, or the education achievement system 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.

 

     (18) (19) 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.

 

     (19) (20) 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) "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.

 

     (c) "Combined state and local revenue per membership pupil"

 

means the district's combined state and local revenue divided by

 

the district's membership excluding special education pupils.

 

     (d) "Current state fiscal year" means the state fiscal year

 

for which a particular calculation is made.

 

     (e) "Immediately preceding state fiscal year" means the state

 

fiscal year immediately preceding the current state fiscal year.

 

     (f) "Local school operating revenue" means school operating

 

taxes levied under section 1211 of the revised school code, MCL

 

380.1211.

 

     (g) "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) "Maximum public school academy allocation", except as

 

otherwise provided in this subdivision, 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 $20.00)

 

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]. For 2011-2012 and 2012-2013, maximum public

 

school academy allocation means $7,110.00.

 

     (i) "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, supportive housing property, industrial personal

 

property, or commercial personal property.

 

     (k) "Principal residence", "qualified agricultural property",

 

"qualified forest property", "supportive housing property",

 

"industrial personal property", and "commercial personal property"

 

mean those terms as defined in section 1211 of the revised school

 

code, MCL 380.1211.

 

     (l) "School operating purposes" means the purposes included in

 

the operation costs of the district as prescribed in sections 7 and

 

18.

 

     (m) "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) "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 2011-2012, 2012-2013, 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. 22a. (1) From the appropriation in section 11, there is

 

allocated an amount not to exceed $5,769,000,000.00

 

$5,776,000,000.00 for 2011-2012 and there is allocated an amount

 

not to exceed $5,712,000,000.00 for 2012-2013 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 IX of the state

 

constitution of 1963. Pursuant to section 11 of article IX of the

 

state constitution of 1963, this guarantee does not apply to a

 

district in a year in which the district levies a millage rate for

 

school district operating purposes less than it levied in 1994.

 

However, subsection (2) applies to calculating the payments under

 

this section. Funds allocated under this section that are not

 

expended in the state fiscal year for which they were allocated, as

 

determined by the department, may be used to supplement the

 

allocations under sections 22b and 51c in order to fully fund those

 

calculated allocations for the same fiscal year.

 

     (2) To ensure that a district receives an amount equal to the

 

district's 1994-95 total state and local per pupil revenue for

 

school operating purposes, there is allocated to each district a

 

state portion of the district's 1994-95 foundation allowance in an

 

amount calculated as follows:

 

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

 

portion of a district's 1994-95 foundation allowance is an amount

 

equal to the district's 1994-95 foundation allowance or $6,500.00,

 

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 nonexempt property times the 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 tax

 

increment financing acts divided by the district's membership. 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.

 

     (b) For a district that had a 1994-95 foundation allowance

 

greater than $6,500.00, the state payment under this subsection

 

shall be the sum of the amount calculated under subdivision (a)

 

plus the amount calculated under this subdivision. The amount

 

calculated under this subdivision shall be equal to the difference

 

between the district's 1994-95 foundation allowance minus $6,500.00

 

and the current year hold harmless school operating taxes per

 

pupil. If the result of the calculation under subdivision (a) is

 

negative, the negative amount shall be an offset against any state

 

payment calculated under this subdivision. If the result of a

 

calculation under this subdivision is negative, there shall not be

 

a state payment or a deduction under this subdivision. The taxable

 

values per membership pupil used in the calculations under this

 

subdivision are as adjusted by ad valorem property tax revenue

 

captured under tax increment financing acts divided by the

 

district's membership.

 

     (3) Beginning in 2003-2004, for pupils in membership in a

 

qualifying public school academy, or qualifying university school,

 

there is allocated under this section to the authorizing body that

 

is the fiscal agent for the qualifying public school academy for

 

forwarding to the qualifying public school academy , or to the

 

board of the public university operating the qualifying university

 

school, an amount equal to the 1994-95 per pupil payment to the

 

qualifying public school academy or qualifying university school

 

under section 20.

 

     (4) A district , qualifying university school, or qualifying

 

public school academy may use funds allocated under this section in

 

conjunction with any federal funds for which the district ,

 

qualifying university school, or qualifying public school academy

 

otherwise would be eligible.

 

     (5) For a district that is formed or reconfigured after June

 

1, 2000 by consolidation of 2 or more districts or by annexation,

 

the resulting district's 1994-95 foundation allowance under this

 

section beginning after the effective date of the consolidation or

 

annexation shall be the average of the 1994-95 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

 

in the state fiscal year in which the consolidation takes place who

 

reside in the geographic area of each of the original districts. If

 

an affected district's 1994-95 foundation allowance is less than

 

the 1994-95 basic foundation allowance, the amount of that

 

district's 1994-95 foundation allowance shall be considered for the

 

purpose of calculations under this subsection to be equal to the

 

amount of the 1994-95 basic foundation allowance.

 

     (6) Subject to conditions set forth in this subsection, from

 

the allocation in subsection (1), there is allocated for 2011-2012

 

only an amount not to exceed $6,000,000.00 for payments to