Bill Text: MI HB4815 | 2013-2014 | 97th Legislature | Introduced
Bill Title: School aid; other; implementation of district dissolution; provide for in school aid act, and adjust appropriations for districts affected by dissolution. Amends secs. 7, 11, 11g, 17a, 20 & 22a of 1979 PA 94 (MCL 388.1607 et seq.) and adds section 20g. TIE BAR WITH: HB 4813'13
Spectrum: Bipartisan Bill
Status: (Passed) 2013-07-03 - Assigned Pa 97'13 With Immediate Effect [HB4815 Detail]
Download: Michigan-2013-HB4815-Introduced.html
HOUSE BILL No. 4815
June 6, 2013, Introduced by Reps. Rogers and Rutledge and referred to the Committee on Education.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending sections 7, 11g, 17a, 20, and 22a (MCL 388.1607,
388.1611g, 388.1617a, 388.1620, and 388.1622a), section 7 as
amended by 1996 PA 300, sections 11g, 20, and 22a as amended by
2012 PA 201, and section 17a as amended by 2012 PA 2.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7. Costs for school operating purposes include all
expenditures necessary to carry out the powers and the financial
obligations of the district or intermediate district under the
revised school code.
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, 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.
(7) If a district eligible for payments under this section is
dissolved under section 12 of the revised school code, MCL 380.12,
each receiving district to which some or all of the dissolved
district was attached shall receive an amount otherwise payable to
the dissolved district proportionate to the receiving district's
share of the state equalized value of the dissolved district
attached to the receiving district. The receiving district that
received the largest share of the state equalized valuation of the
dissolved district shall perform any functions and responsibilities
of the board and other officers of the dissolved district necessary
under this section on behalf of the dissolved district.
Sec. 17a. (1) The department may withhold all or part of any
payment that a district or intermediate district is entitled to
receive under this act to the extent the withholdings are a
component part of a plan, developed and implemented pursuant to the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, or other statutory authority, for financing an
outstanding obligation upon which the district or intermediate
district defaulted. Amounts withheld shall be used to pay, on
behalf of the district or intermediate district, unpaid amounts or
subsequently due amounts, or both, of principal and interest on the
outstanding obligation upon which the district or intermediate
district defaulted.
(2) The state treasurer may withhold all or part of any
payment that a district or intermediate district is entitled to
receive under this act to the extent authorized or required under
section 15 of the school bond qualification, approval, and loan
act, 2005 PA 92, MCL 388.1935.
(3) Under an agreement entered into by a district or
intermediate district assigning all or a portion of the payment
that it is eligible to receive under this act to the Michigan
finance authority or to the trustee of a pooled arrangement or
pledging the amount for payment of an obligation it incurred with
the Michigan finance authority or with the trustee of a pooled
arrangement, the state treasurer shall transmit to the Michigan
finance authority or a trustee designated by the Michigan finance
authority or to the trustee of a pooled arrangement the amount of
the payment that is assigned or pledged under the agreement.
(4) If a district or intermediate district for which an
emergency
manager has been appointed pursuant to the local
government
and school district fiscal accountability act, 2011 PA
4,
MCL 141.1501 to 141.1531, local
financial stability and choice
act, 2012 PA 436, MCL 141.1541 to 141.1575, or that has an approved
deficit elimination plan under section 102, enters into or has
entered into an agreement described in subsection (3) pursuant to
section 1225(2) of the revised school code, MCL 380.1225, whether
the obligation was issued before or after the effective date of
this subsection, the portion of state school aid paid or to be paid
on behalf of the district or intermediate district directly to the
Michigan finance authority, or to a trustee designated by the
Michigan finance authority, for the sole purpose of paying the
principal of and interest on the obligation is subject to a lien
and trust that is a statutory lien and trust, paramount and
superior to all other liens and interests of any kind, for the sole
purpose of paying the principal of and interest on the obligation.
The statutory lien and trust applies to the state school aid
received or to be received by the Michigan finance authority, or
trustee designated by the Michigan finance authority, on behalf of
the district or intermediate district, immediately upon the later
of the effective date of this subsection or the time when the state
school aid is allocated to the district or intermediate district,
but is subject to any subsequent reduction of the state school aid
allocation by operation of law or executive order. The lien and
trust imposed by this section with respect to state school aid has
a priority as established in the agreement, except that the
agreement shall not impair any existing lien and trust previously
created pursuant to this section, including any lien and trust
applicable to a multi-year repayment agreement under section 1225
of
the revised school code, 1976 PA 451, MCL 380.1225. Except as
otherwise provided in this subsection, the lien and trust created
under this subsection for the benefit of holders of the obligation
issued pursuant to this section is valid and binding against a
party having a claim of any kind in tort, contract, or otherwise
against the district or intermediate district that has issued the
obligation secured by a pledge of state school aid pursuant to this
section, regardless of whether that party has notice of the pledge.
A pledge made pursuant to this section for the benefit of the
holders of obligations or others is perfected without delivery,
recording, or notice. The state school aid paid or to be paid on
behalf of a district or intermediate district to the Michigan
finance authority, or trustee designated by the Michigan finance
authority, shall be held in trust for the sole benefit of the
holders of the obligation issued pursuant to this section or
section 1225 of the revised school code, MCL 380.1225, and is
exempt from being levied upon, taken, sequestered, or applied
toward paying the debts or liabilities of the district or
intermediate district other than for payment of the obligation to
which the lien applies. However, nothing in this subsection alters
the ability of the state treasurer to withhold state school aid
from a district or intermediate district as provided by law.
(5) Notwithstanding the payment dates prescribed by this act
for distributions under this act, the state treasurer may advance
all or part of a payment that is dedicated for distribution or for
which the appropriation authorizing the payment has been made if
and to the extent, under the terms of an agreement entered into by
a district or intermediate district and the Michigan finance
authority, the payment that the district or intermediate district
is eligible to receive has been assigned to or pledged for payment
of an obligation it incurred with the Michigan finance authority.
(6) This section does not require the state to make an
appropriation to any school district or intermediate school
district and shall not be construed as creating an indebtedness of
the state, and any agreement made pursuant to this section shall
contain a statement to that effect.
(7) As used in this section, "trustee of a pooled arrangement"
means the trustee of a trust approved by the state treasurer and,
subject to the conditions and requirements of that approval,
established for the purpose of offering for sale, as part of a
pooled arrangement, certificates representing undivided interests
in notes issued by districts or intermediate districts under
section
1225 of the revised school code, 1976 PA 451, MCL 380.1225.
(8) If a trustee applies to the state treasurer for approval
of a trust for the purposes of this section, the state treasurer
shall approve or disapprove the trust within 10 days after receipt
of the application.
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. For a receiving district, if school operating taxes
continue to be levied on behalf of a dissolved district to satisfy
debt obligations of the dissolved district under section 12 of the
revised school code, MCL 380.12, when calculating the taxable value
per membership pupil of property in the receiving district under
this subsection, the taxable value of property within the
geographic area of the dissolved district shall be excluded.
(5) The allocation calculated under this section for a pupil
shall be based on the foundation allowance of the pupil's district
of residence. 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) Except as otherwise provided in this subsection, for
pupils in membership, other than special education pupils, in a
public school academy, the allocation calculated under this section
is an amount per membership pupil other than special education
pupils in the public school academy equal to the foundation
allowance of the district in which the public school academy is
located or the state maximum public school academy allocation,
whichever is less. However, a public school academy 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 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) 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) For the 4 fiscal years following the dissolution of a
dissolved district, a receiving district may elect to receive
either of the following foundation allowances under this section
for each resident of the geographic area of the dissolved school
district enrolled in and in membership in the receiving school
district:
(a) A foundation allowance equal to the foundation allowance
under this section for a resident of the receiving district
enrolled in and in membership in the receiving school district
multiplied by 1.1.
(b) A foundation allowance equal to the foundation allowance
under this section for a resident of the dissolved school district
enrolled in and in membership in the dissolved school district had
the dissolved district not been dissolved and continued to educate
directly on its own residents of the dissolved district multiplied
by 1.1.
(9) (8)
Subject to subsection subsections (4) and (8), 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. Subject to
subsection (4), after the 4 fiscal years following the dissolution
of a dissolved district when the payment of a foundation allowance
for a receiving district is calculated under subsection (8), the
receiving district's foundation allowance under this section shall
be the average of the foundation allowances of the receiving
district and the dissolved district, calculated as provided in this
section, weighted as to the percentage of pupils in total
membership in the receiving district who reside in the geographic
area of the portion of the dissolved district attached to the
receiving district.
(10) (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.
(11) (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.
(12) (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)
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)
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.
(13) (14)
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. 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.
(15)
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)
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.
(14) (17)
Payments to districts, 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.
(15) (18)
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.
(16) (19)
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) "Dissolved district" means a district that loses its
organization, is attached to 1 or more other school districts, and
is dissolved as provided under section 12 of the revised school
code, MCL 380.12.
(f) (e)
"Immediately preceding state
fiscal year" means the
state fiscal year immediately preceding the current state fiscal
year.
(g) (f)
"Local school operating
revenue" means school
operating taxes levied under section 1211 of the revised school
code, MCL 380.1211. For a receiving district, if school operating
taxes are to be levied on behalf of a dissolved district to satisfy
debt obligations of the dissolved district under section 12 of the
revised school code, MCL 380.12, local school operating revenue
does not include school operating taxes levied within the
geographic area of the dissolved district.
(h) (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.
(i) (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.
(j) (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.
(k) (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.
(l) (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.
(m) "Receiving district" means a school district to which some
or all of a dissolved district was attached under section 12 of the
revised school code, MCL 380.12.
(n) (l) "School
operating purposes" means the purposes included
in the operation costs of the district as prescribed in sections 7
and 18 and purposes authorized under section 1211 of the revised
school code, MCL 380.1211.
(o) (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.
(p) (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.
(q) (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. 22a. (1) From the appropriation in section 11, there is
allocated an amount not to exceed $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 and qualifying public
school academies to guarantee each district 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. For a receiving district, if school
operating taxes are to be levied on behalf of a dissolved district
to satisfy debt obligations of the dissolved district under section
12 of the revised school code, MCL 380.12, taxable value per
membership pupil of all property in the district that is nonexempt
property and taxable value per membership pupil of property in the
district that is commercial personal property do not include
property within the geographic area of the dissolved district; ad
valorem property tax revenue of the district captured under tax
increment financing acts does not include ad valorem property tax
revenue captured within the geographic boundaries of the dissolved
district under tax increment financing acts; and certified mills do
not include the certified mills of the dissolved district.
(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. For a receiving district, if school
operating taxes are to be levied on behalf of a dissolved district
to satisfy debt obligations of the dissolved district under section
12 of the revised school code, MCL 380.12, ad valorem property tax
revenue captured under tax increment financing acts does not include
ad valorem property tax revenue captured within the geographic
boundaries of the dissolved district under tax increment financing
acts.
(3) Beginning in 2003-2004, for pupils in membership in a
qualifying public school academy, 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 an amount equal to the 1994-95 per pupil
payment to the qualifying public school academy under section 20.
(4) A district or qualifying public school academy may use
funds allocated under this section in conjunction with any federal
funds for which the district or qualifying public school academy
otherwise would be eligible.
(5)
For Except as otherwise
provided in this subsection, 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. This subsection
shall not apply to a receiving district.
(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
districts that meet the eligibility requirements under this
subsection, for the reduction in school operating revenues
resulting from a settlement or other disposition of appeals
described in subdivision (a). A payment may only be made under this
subsection if a settlement agreement is signed by all applicable
parties. Payments made under this subsection shall be in accordance
with the settlement agreement. All of the following apply to
payments under this subsection:
(a) To be eligible for a payment under this subsection, a
district shall be determined by the department and the department
of treasury to meet all of the following:
(i) The district does not receive any state portion of its
foundation allowance, as calculated under section 20(4).
(ii) Before January 1, 2011, the owner of a natural-gas-powered
power plant located in a renaissance zone within the district's
geographic boundaries for 2009 and 2010 appealed to the Michigan
tax tribunal an order of the state tax commission for tax years
2009 and 2010 pursuant to section 154 of the general property tax
act, 1893 PA 206, MCL 211.154, and appealed to the state tax
commission the 2011 classification and valuation of the power
plant.
(iii) The district received a reduced amount of local school
operating revenue for tax years 2009, 2010, and 2011 as a result of
the exemptions of industrial personal property and commercial
personal property under section 1211 of the revised school code,
MCL 380.1211.
(iv) A settlement agreement has been signed to resolve the
Michigan tax tribunal appeal described in subparagraph (ii) and a
memorandum of understanding that stipulates terms of the settlement
has been executed by the parties.
(b) A payment made under this subsection shall be in addition
to renaissance zone reimbursement amounts paid in the 2009-2010 and
2010-2011 state fiscal years under section 26a to districts
eligible for payment under this subsection. The 2009-2010 and 2010-
2011 state fiscal year payments under section 26a to a district
receiving a payment under this subsection shall not be reduced as a
result of the reduction to the district's 2009 and 2010 taxable
value of real property under the appeals described in subdivision
(a)(ii).
(7) As used in this section:
(a) "1994-95 foundation allowance" means a district's 1994-95
foundation allowance calculated and certified by the department of
treasury or the superintendent under former section 20a as enacted
in 1993 PA 336 and as amended by 1994 PA 283.
(b) "Certified mills" means the lesser of 18 mills or the
number of mills of school operating taxes levied by the district in
1993-94.
(c) "Current state fiscal year" means the state fiscal year
for which a particular calculation is made.
(d) "Current year hold harmless school operating taxes per
pupil" means the per pupil revenue generated by multiplying a
district's 1994-95 hold harmless millage by the district's current
year taxable value per membership pupil. For a receiving district,
if school operating taxes are to be levied on behalf of a dissolved
district to satisfy debt obligations of the dissolved district
under section 12 of the revised school code, MCL 380.12, taxable
value per membership pupil does not include the taxable value of
property within the geographic area of the dissolved district.
(e) "Dissolved district" means a district that loses its
organization, is attached to 1 or more other school districts, and
is dissolved as provided under section 12 of the revised school
code, MCL 380.12.
(f) (e)
"Hold harmless millage"
means, for a district with a
1994-95 foundation allowance greater than $6,500.00, the number of
mills by which the exemption from the levy of school operating
taxes on a homestead, qualified agricultural property, qualified
forest property, supportive housing property, industrial personal
property, and commercial personal property could be reduced as
provided in section 1211 of the revised school code, MCL 380.1211,
and the number of mills of school operating taxes that could be
levied on all property as provided in section 1211(2) of the
revised school code, MCL 380.1211, as certified by the department
of treasury for the 1994 tax year. For a receiving district, if
school operating taxes are to be levied on behalf of a dissolved
district to satisfy debt obligations of the dissolved district
under section 12 of the revised school code, MCL 380.12, school
operating taxes do not include school operating taxes levied within
the geographic area of the dissolved district.
(g) (f)
"Homestead",
"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.
(h) (g)
"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.
(i) (h)
"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.
(j) (i)
"Qualifying public school
academy" means a public
school academy that was in operation in the 1994-95 school year and
is in operation in the current state fiscal year.
(k) "Receiving district" means a school district to which some
or all of a dissolved district was attached under section 12 of the
revised school code, MCL 380.12.
(l) (j)
"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 as
defined in section 20.
(m) (k)
"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.
(n) (l) "Taxable
value per membership pupil" means each of the
following divided by the district's membership:
(i) For the number of mills by which the exemption from the
levy of school operating taxes on a homestead, qualified
agricultural property, qualified forest property, supportive
housing property, industrial personal property, and commercial
personal property may be reduced as provided in section 1211 of the
revised school code, MCL 380.1211, the taxable value of homestead,
qualified agricultural property, qualified forest property,
supportive housing property, industrial personal property, and
commercial personal property for the calendar year ending in the
current state fiscal year. For a receiving district, if school
operating taxes are to be levied on behalf of a dissolved district
to satisfy debt obligations of the dissolved district under section
12 of the revised school code, MCL 380.12, mills do not include
mills within the geographic area of the dissolved district.
(ii) For the number of mills of school operating taxes that may
be levied on all property as provided in section 1211(2) of the
revised school code, MCL 380.1211, the taxable value of all
property for the calendar year ending in the current state fiscal
year. For a receiving district, if school operating taxes are to be
levied on behalf of a dissolved district to satisfy debt
obligations of the dissolved district under section 12 of the
revised school code, MCL 380.12, school operating taxes do not
include school operating taxes levied within the geographic area of
the dissolved district.