Bill Text: MI HB5224 | 2011-2012 | 96th Legislature | Introduced
Bill Title: School aid; foundation allowance; per-pupil funding formula; revise to provide greater equity. Amends sec. 20 of 1979 PA 94 (MCL 388.1620).
Spectrum: Partisan Bill (Republican 14-0)
Status: (Introduced - Dead) 2011-12-14 - Printed Bill Filed 12/14/2011 [HB5224 Detail]
Download: Michigan-2011-HB5224-Introduced.html
HOUSE BILL No. 5224
December 13, 2011, Introduced by Reps. Johnson, McBroom, Foster, Shirkey, Rendon, Potvin, Wayne Schmidt, Daley, Callton, Goike, Damrow, Muxlow, Opsommer and MacMaster and referred to the Committee on Appropriations.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending section 20 (MCL 388.1620), as amended by 2011 PA 62.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 20. (1) For 2011-2012, the basic foundation allowance is
$8,019.00. For 2012-2013, the basic foundation allowance shall be
$7,745.00. For 2013-2014, the basic foundation allowance shall be
$7,470.00. For 2014-2015, the basic foundation allowance shall be
$7,195.00.
(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. For 2012-2013,
for a district that had a foundation allowance as calculated under
this subdivision for 2011-2012 that was less than $6,955.00, the
district's foundation allowance shall be $6,955.00. For 2012-2013,
for a district that had a foundation allowance as calculated under
this subdivision for 2011-2012 that was at least equal to
$6,955.00, the district's foundation allowance shall be the same as
the district's foundation allowance for 2011-2012. For 2013-2014,
for a district that had a foundation allowance as calculated under
this subdivision for 2012-2013 that was less than $7,070.00, the
district's foundation allowance shall be $7,070.00. For 2013-2014,
for a district that had a foundation allowance as calculated under
this subdivision for 2012-2013 that was at least equal to
$7,070.00, the district's foundation allowance shall be the same as
the district's foundation allowance for 2012-2013. For 2014-2015,
for a district that had a foundation allowance as calculated under
this subdivision for 2013-2014 that was less than $7,195.00, the
district's foundation allowance shall be $7,195.00. For 2014-2015,
for a district that had a foundation allowance as calculated under
this subdivision for 2013-2014 that was at least equal to
$7,195.00, the district's foundation allowance shall be the same as
the district's foundation allowance for 2013-2014. However, the
foundation allowance for a district that had a foundation allowance
in an amount 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, for a district that in
the immediately preceding state fiscal year had a foundation
allowance as calculated under this subdivision 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 2011-2012, minus $274.00. For
2013-2014, for a district that in the immediately preceding state
fiscal year had a foundation allowance as calculated under this
subdivision 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 2013-
2014 in an amount equal to the district's foundation allowance for
2012-2013, minus $275.00. For 2014-2015, for a district that in the
immediately preceding state fiscal year had a foundation allowance
as calculated under this subdivision 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 2014-2015 in an amount equal to the
district's foundation allowance for 2013-2014, minus $275.00.
(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 immediately preceding
state fiscal year had a foundation allowance as calculated under
this subdivision 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 2011-2012, minus $274.00. For 2013-2014, except as otherwise
provided in subdivision (d), for a district that in the immediately
preceding state fiscal year had a foundation allowance as
calculated under this subdivision 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 2013-2014 in an amount equal to the
district's foundation allowance for 2012-2013, minus $275.00. For
2014-2015, except as otherwise provided in subdivision (d), for a
district that in the immediately preceding state fiscal year had a
foundation allowance as calculated under this subdivision 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 2014-2015 in an
amount equal to the district's foundation allowance for 2013-2014,
minus $275.00.
(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 former
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 former section 22c as that section was in
effect for 2001-2002.
(g) For a district that received a payment under former
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 former section 22c as that section was in
effect for 2006-2007.
(4) Except as otherwise provided in this subsection, the state
portion of a district's foundation allowance is an amount equal to
the district's foundation allowance or the basic foundation
allowance for the current state fiscal year, whichever is less,
minus the difference between the sum of the product of the taxable
value per membership pupil of all property in the district that is
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 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.
(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. 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.
(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.
(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.
(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.
(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.
(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.
(18) Payments to districts, university schools, or public
school academies shall not be made under this section. Rather, the
calculations under this section shall be used to determine the
amount of state payments under section 22b.
(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.
(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, 2012-2013, and 2013-2014, maximum
public school academy allocation means $7,110.00. For 2014-2015,
maximum public school academy allocation means $7,195.00.
(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.
