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THE STATE SCHOOL AID ACT OF 1979 (EXCERPT)
Act 94 of 1979

388.1651a Allocations for reimbursement to districts and intermediate districts for special education programs, services, and personnel; net tuition payments for Michigan Schools for the Deaf and Blind; programs for pupils eligible for special education programs and services; allocations; reimbursement; shortfall; adjustments; total approved costs; rights, benefits, and tenure of transferred personnel; refund; foundation allowance; order of expenditures; responsibility for added costs of special education programs and services for pupil enrolled in public school academy; receipt of federal allocation by cyber school; report of certain information.

Sec. 51a.

  (1) From the state school aid fund money in section 11, there is allocated an amount not to exceed $1,079,296,100.00 for 2020-2021 and there is allocated an amount not to exceed $1,123,696,100.00 for 2021-2022 from state sources and all available federal funding under sections 1411 to 1419 of part B of the individuals with disabilities education act, 20 USC 1411 to 1419, estimated at $456,752,000.00 for 2020-2021 and $380,000,000.00 for 2021-2022, plus any carryover federal funds from previous year appropriations. The allocations under this subsection are for the purpose of reimbursing districts and intermediate districts for special education programs, services, and special education personnel as prescribed in article 3 of the revised school code, MCL 380.1701 to 380.1761; net tuition payments made by intermediate districts to the Michigan Schools for the Deaf and Blind; and special education programs and services for pupils who are eligible for special education programs and services according to statute or rule. For meeting the costs of special education programs and services not reimbursed under this article, a district or intermediate district may use money in general funds or special education funds, not otherwise restricted, or contributions from districts to intermediate districts, tuition payments, gifts and contributions from individuals or other entities, or federal funds that may be available for this purpose, as determined by the intermediate district plan prepared under article 3 of the revised school code, MCL 380.1701 to 380.1761. Notwithstanding section 17b, the department shall make payments of federal funds to districts, intermediate districts, and other eligible entities under this section on a schedule determined by the department.

  (2) From the funds allocated under subsection (1), there is allocated the amount necessary, estimated at $319,000,000.00 for 2020-2021 and estimated at $332,000,000.00 for 2021-2022, for payments toward reimbursing districts and intermediate districts for 28.6138% of total approved costs of special education, excluding costs reimbursed under section 53a, and 70.4165% of total approved costs of special education transportation. Allocations under this subsection are made as follows:

  (a) The department shall calculate the initial amount allocated to a district under this subsection toward fulfilling the specified percentages by multiplying the district’s special education pupil membership, excluding pupils described in subsection (11), times the foundation allowance under section 20 of the pupil’s district of residence, plus the amount of the district’s per-pupil allocation under section 20m, not to exceed the target foundation allowance for the current fiscal year, or, for a special education pupil in membership in a district that is a public school academy, times an amount equal to the amount per membership pupil calculated under section 20(6). For an intermediate district, the amount allocated under this subdivision toward fulfilling the specified percentages is an amount per special education membership pupil, excluding pupils described in subsection (11), and is calculated in the same manner as for a district, using the foundation allowance under section 20 of the pupil’s district of residence, not to exceed the target foundation allowance for the current fiscal year, and that district’s per-pupil allocation under section 20m.

  (b) After the allocations under subdivision (a), the department shall pay a district or intermediate district for which the payments calculated under subdivision (a) do not fulfill the specified percentages the amount necessary to achieve the specified percentages for the district or intermediate district.

  (3) From the funds allocated under subsection (1), there is allocated for 2020-2021 an amount not to exceed $1,000,000.00 and there is allocated for 2021-2022 an amount not to exceed $1,000,000.00 to make payments to districts and intermediate districts under this subsection. If the amount allocated to a district or intermediate district for a fiscal year under subsection (2)(b) is less than the sum of the amounts allocated to the district or intermediate district for 1996-97 under sections 52 and 58, there is allocated to the district or intermediate district for the fiscal year an amount equal to that difference, adjusted by applying the same proration factor that was used in the distribution of funds under section 52 in 1996-97 as adjusted to the district’s or intermediate district’s necessary costs of special education used in calculations for the fiscal year. This adjustment is to reflect reductions in special education program operations or services between 1996-97 and subsequent fiscal years. The department shall make adjustments for reductions in special education program operations or services in a manner determined by the department and shall include adjustments for program or service shifts.

  (4) If the department determines that the sum of the amounts allocated for a fiscal year to a district or intermediate district under subsection (2)(a) and (b) is not sufficient to fulfill the specified percentages in subsection (2), then the department shall pay the shortfall to the district or intermediate district during the fiscal year beginning on the October 1 following the determination and shall adjust payments under subsection (3) as necessary. If the department determines that the sum of the amounts allocated for a fiscal year to a district or intermediate district under subsection (2)(a) and (b) exceeds the sum of the amount necessary to fulfill the specified percentages in subsection (2), then the department shall deduct the amount of the excess from the district’s or intermediate district’s payments under this article for the fiscal year beginning on the October 1 following the determination and shall adjust payments under subsection (3) as necessary. However, if the amount allocated under subsection (2)(a) in itself exceeds the amount necessary to fulfill the specified percentages in subsection (2), there is no deduction under this subsection.

  (5) State funds are allocated on a total approved cost basis. Federal funds are allocated under applicable federal requirements.

  (6) From the amount allocated in subsection (1), there is allocated an amount not to exceed $2,200,000.00 for 2020-2021 and there is allocated an amount not to exceed $2,200,000.00 for 2021-2022 to reimburse 100% of the net increase in necessary costs incurred by a district or intermediate district in implementing the revisions in the administrative rules for special education that became effective on July 1, 1987. As used in this subsection, “net increase in necessary costs” means the necessary additional costs incurred solely because of new or revised requirements in the administrative rules minus cost savings permitted in implementing the revised rules. The department shall determine net increase in necessary costs in a manner specified by the department.

  (7) For purposes of this section and sections 51b to 58, all of the following apply:

  (a) “Total approved costs of special education” are determined in a manner specified by the department and may include indirect costs, but must not exceed 115% of approved direct costs for section 52 and section 53a programs. The total approved costs include salary and other compensation for all approved special education personnel for the program, including payments for Social Security and Medicare and public school employee retirement system contributions. The total approved costs do not include salaries or other compensation paid to administrative personnel who are not special education personnel as that term is defined in section 6 of the revised school code, MCL 380.6. Costs reimbursed by federal funds, other than those federal funds included in the allocation made under this article, are not included. Special education approved personnel not utilized full time in the evaluation of students or in the delivery of special education programs, ancillary, and other related services are reimbursed under this section only for that portion of time actually spent providing these programs and services, with the exception of special education programs and services provided to youth placed in child caring institutions or juvenile detention programs approved by the department to provide an on-grounds education program.

  (b) Beginning with the 2004-2005 fiscal year, a district or intermediate district that employed special education support services staff to provide special education support services in 2003-2004 or in a subsequent fiscal year and that in a fiscal year after 2003-2004 receives the same type of support services from another district or intermediate district shall report the cost of those support services for special education reimbursement purposes under this article. This subdivision does not prohibit the transfer of special education classroom teachers and special education classroom aides if the pupils counted in membership associated with those special education classroom teachers and special education classroom aides are transferred and counted in membership in the other district or intermediate district in conjunction with the transfer of those teachers and aides.

  (c) If the department determines before bookclosing for a fiscal year that the amounts allocated for that fiscal year under subsections (2), (3), (6), and (11) and sections 53a, 54, and 56 will exceed expenditures for that fiscal year under subsections (2), (3), (6), and (11) and sections 53a, 54, and 56, then for a district or intermediate district whose reimbursement for that fiscal year would otherwise be affected by subdivision (b), subdivision (b) does not apply to the calculation of the reimbursement for that district or intermediate district and the department shall calculate reimbursement for that district or intermediate district in the same manner as it was for 2003-2004. If the amount of the excess allocations under subsections (2), (3), (6), and (11) and sections 53a, 54, and 56 is not sufficient to fully fund the calculation of reimbursement to those districts and intermediate districts under this subdivision, then the department shall prorate calculations and resulting reimbursement under this subdivision on an equal percentage basis. Beginning in 2015-2016, the amount of reimbursement under this subdivision for a fiscal year must not exceed $2,000,000.00 for any district or intermediate district.

  (d) Reimbursement for ancillary and other related services, as that term is defined by R 340.1701c of the Michigan Administrative Code, is not provided when those services are covered by and available through private group health insurance carriers or federal reimbursed program sources unless the department and district or intermediate district agree otherwise and that agreement is approved by the state budget director. Expenses, other than the incidental expense of filing, must not be borne by the parent. In addition, the filing of claims must not delay the education of a pupil. A district or intermediate district is responsible for payment of a deductible amount and for an advance payment required until the time a claim is paid.

  (e) Beginning with calculations for 2004-2005, if an intermediate district purchases a special education pupil transportation service from a constituent district that was previously purchased from a private entity; if the purchase from the constituent district is at a lower cost, adjusted for changes in fuel costs; and if the cost shift from the intermediate district to the constituent does not result in any net change in the revenue the constituent district receives from payments under sections 22b and 51c, then upon application by the intermediate district, the department shall direct the intermediate district to continue to report the cost associated with the specific identified special education pupil transportation service and shall adjust the costs reported by the constituent district to remove the cost associated with that specific service.

  (8) A pupil who is enrolled in a full-time special education program conducted or administered by an intermediate district or a pupil who is enrolled in the Michigan Schools for the Deaf and Blind is not included in the membership count of a district, but is counted in membership in the intermediate district of residence.

  (9) Special education personnel transferred from 1 district to another to implement the revised school code are entitled to the rights, benefits, and tenure to which the person would otherwise be entitled had that person been employed by the receiving district originally.

  (10) If a district or intermediate district uses money received under this section for a purpose other than the purpose or purposes for which the money is allocated, the department may require the district or intermediate district to refund the amount of money received. The department shall deposit money that is refunded in the state treasury to the credit of the state school aid fund.

  (11) From the funds allocated in subsection (1), there is allocated the amount necessary, estimated at $2,400,000.00 for 2020-2021 and estimated at $2,900,000.00 for 2021-2022, to pay the foundation allowances for pupils described in this subsection. The department shall calculate the allocation to a district under this subsection by multiplying the number of pupils described in this subsection who are counted in membership in the district times the sum of the foundation allowance under section 20 of the pupil’s district of residence, plus the amount of the district’s per-pupil allocation under section 20m, not to exceed the target foundation allowance for the current fiscal year, or, for a pupil described in this subsection who is counted in membership in a district that is a public school academy, times an amount equal to the amount per membership pupil under section 20(6). The department shall calculate the allocation to an intermediate district under this subsection in the same manner as for a district, using the foundation allowance under section 20 of the pupil’s district of residence not to exceed the target foundation allowance for the current fiscal year and that district’s per-pupil allocation under section 20m. This subsection applies to all of the following pupils:

  (a) Pupils described in section 53a.

  (b) Pupils counted in membership in an intermediate district who are not special education pupils and are served by the intermediate district in a juvenile detention or child caring facility.

  (c) Pupils with an emotional impairment counted in membership by an intermediate district and provided educational services by the department of health and human services.

  (12) If it is determined that funds allocated under subsection (2) or (11) or under section 51c will not be expended, funds up to the amount necessary and available may be used to supplement the allocations under subsection (2) or (11) or under section 51c in order to fully fund those allocations. After payments under subsections (2) and (11) and section 51c, the department shall expend the remaining funds from the allocation in subsection (1) in the following order:

  (a) 100% of the reimbursement required under section 53a.

  (b) 100% of the reimbursement required under subsection (6).

  (c) 100% of the payment required under section 54.

  (d) 100% of the payment required under subsection (3).

  (e) 100% of the payments under section 56.

  (13) The allocations under subsections (2), (3), and (11) are allocations to intermediate districts only and are not allocations to districts, but instead are calculations used only to determine the state payments under section 22b.

  (14) If a public school academy that is not a cyber school, as that term is defined in section 551 of the revised school code, MCL 380.551, enrolls under this section a pupil who resides outside of the intermediate district in which the public school academy is located and who is eligible for special education programs and services according to statute or rule, or who is a child with a disability, as that term is defined under the individuals with disabilities education act, Public Law 108-446, the intermediate district in which the public school academy is located and the public school academy shall enter into a written agreement with the intermediate district in which the pupil resides for the purpose of providing the pupil with a free appropriate public education, and the written agreement must include at least an agreement on the responsibility for the payment of the added costs of special education programs and services for the pupil. If the public school academy that enrolls the pupil does not enter into an agreement under this subsection, the public school academy shall not charge the pupil’s resident intermediate district or the intermediate district in which the public school academy is located the added costs of special education programs and services for the pupil, and the public school academy is not eligible for any payouts based on the funding formula outlined in the resident or nonresident intermediate district’s plan. If a pupil is not enrolled in a public school academy under this subsection, the provision of special education programs and services and the payment of the added costs of special education programs and services for a pupil described in this subsection are the responsibility of the district and intermediate district in which the pupil resides.

  (15) For the purpose of receiving its federal allocation under part B of the individuals with disabilities education act, Public Law 108-446, a public school academy that is a cyber school, as that term is 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, directly receives the federal allocation under part B of the individuals with disabilities education act, Public Law 108-446, from the intermediate district in which the cyber school is located, as the subrecipient. If the intermediate district does not distribute the funds described in this subsection to the cyber school by the part B application due date of July 1, the department may distribute the funds described in this subsection directly to the cyber school according to the formula prescribed in 34 CFR 300.705 and 34 CFR 300.816.

  (16) For a public school academy that is a cyber school, as that term is 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, that enrolls a pupil under this section, the intermediate district in which the cyber school is located shall ensure that the cyber school complies with sections 1701a, 1703, 1704, 1751, 1752, 1756, and 1757 of the revised school code, MCL 380.1701a, 380.1703, 380.1704, 380.1751, 380.1752, 380.1756, and 380.1757; applicable rules; and the individuals with disabilities education act, Public Law 108-446.

  (17) For the purposes of this section, the department or the center shall only require a district or intermediate district to report information that is not already available from the financial information database maintained by the center.

  

  

History: Add. 1996, Act 300, Eff. Oct. 1, 1996 ;– Am. 1997, Act 93, Eff. Oct. 1, 1997 ;– Am. 1997, Act 142, Imd. Eff. Nov. 19, 1997 ;– Am. 1998, Act 339, Imd. Eff. Oct. 13, 1998 ;– Am. 1998, Act 553, Imd. Eff. Jan. 27, 1999 ;– Am. 1999, Act 119, Imd. Eff. July 20, 1999 ;– Am. 2000, Act 297, Imd. Eff. July 26, 2000 ;– Am. 2001, Act 121, Imd. Eff. Sept. 28, 2001 ;– Am. 2002, Act 191, Imd. Eff. Apr. 26, 2002 ;– Am. 2002, Act 521, Imd. Eff. July 25, 2002 ;– Am. 2003, Act 158, Eff. Oct. 1, 2003 ;– Am. 2004, Act 351, Eff. Oct. 1, 2004 ;– Am. 2004, Act 518, Imd. Eff. Jan. 3, 2005 ;– Am. 2005, Act 98, Imd. Eff. July 22, 2005 ;– Am. 2005, Act 155, Eff. Oct. 1, 2005 ;– Am. 2006, Act 90, Imd. Eff. Apr. 4, 2006 ;– Am. 2006, Act 342, Imd. Eff. Aug. 15, 2006 ;– Am. 2007, Act 6, Imd. Eff. Apr. 30, 2007 ;– Am. 2007, Act 137, Imd. Eff. Nov. 8, 2007 ;– Am. 2008, Act 112, Imd. Eff. Apr. 29, 2008 ;– Am. 2008, Act 268, Eff. Oct. 1, 2008 ;– Am. 2009, Act 73, Imd. Eff. July 9, 2009 ;– Am. 2009, Act 121, Imd. Eff. Oct. 19, 2009 ;– Am. 2010, Act 110, Imd. Eff. July 8, 2010 ;– Am. 2010, Act 217, Imd. Eff. Dec. 3, 2010 ;– Am. 2011, Act 62, Imd. Eff. June 21, 2011 ;– Am. 2011, Act 299, Imd. Eff. Dec. 22, 2011 ;– Am. 2012, Act 29, Imd. Eff. Feb. 24, 2012 ;– Am. 2012, Act 201, Imd. Eff. June 26, 2012 ;– Am. 2013, Act 60, Imd. Eff. June 13, 2013 ;– Am. 2014, Act 116, Imd. Eff. Apr. 11, 2014 ;– Am. 2014, Act 196, Eff. Oct. 1, 2014 ;– Am. 2015, Act 5, Imd. Eff. Mar. 10, 2015 ;– Am. 2015, Act 85, Imd. Eff. June 17, 2015 ;– Am. 2016, Act 249, Imd. Eff. June 27, 2016 ;– Am. 2016, Act 534, Eff. Apr. 9, 2017 ;– Am. 2017, Act 108, Imd. Eff. July 14, 2017 ;– Am. 2018, Act 265, Imd. Eff. June 28, 2018 ;– Am. 2019, Act 58, Imd. Eff. Sept. 30, 2019 ;– Am. 2020, Act 146, Imd. Eff. July 31, 2020 ;– Am. 2020, Act 165, Eff. Oct. 1, 2020 ;– Am. 2021, Act 48, Imd. Eff. July 13, 2021
Compiler’s Notes: Enacting section 3 of Act 521 of 2002 provides:“Enacting section 3. This amendatory act does not take effect unless the tax on cigarettes under the tobacco products tax act, 1993 PA 327, MCL 205.421 to 205.436, is increased by 50 cents or more per pack of cigarettes (25 mills per cigarette) effective on or before September 30, 2002 and the revenue from not less than 20 cents per pack of cigarettes (10 mills per cigarette) of that increase is dedicated by law for deposit into the state school aid fund established by section 11 of article IX of the state constitution of 1963.”For legislation increasing tax on cigarettes and dedicating a portion of increased revenue to state school aid fund, see 2002 PA 503, Imd. Eff. July 18, 2002.Enacting section 1 of Act 351 of 2004 provides:“Enacting section 1. In accordance with section 30 of article IX of the state constitution of 1963, total state spending in this amendatory act from state sources for fiscal year 2004-2005 is estimated at $11,173,900,000.00 and state appropriations to be paid to local units of government for fiscal year 2004-2005 are estimated at $11,113,650,400.00.”Enacting section 1 of 2005 PA 98 provides:”Enacting section 1. In accordance with section 30 of article I of the state constitution of 1963, total state spending from state sources for fiscal year 2004-2005 in this amendatory act, 2004 PA 518, 2004 PA 351, and 2004 PA 185 is estimated at $11,113,522, 200.00 and state appropriations to be paid to local units of government for fiscal year 2004-2005 are estimated at $11,050,922,200.00.”Enacting section 1 of 2005 PA 155 provides:”Enacting section 1. In accordance with section 30 of article I of the state constitution of 1963, total state spending in this amendatory act and in House Bill No. 4831 of the 93rd Legislature from state sources for fiscal year 2005-2006 is estimated at $11,364,814,000.00 and state appropriations to be paid to local units of government for fiscal year 2005-2006 are estimated at $11,341,913,100.00.”Enacting section 1 of Act 342 of 2006 provides:”Enacting section 1. (1) In accordance with section 30 of article I of the state constitution of 1963, total state spending in this amendatory act from state sources for fiscal year 2006-2007 is estimated at $11,682,508,200.00 and state appropriations to be paid to local units of government for fiscal year 2006-2007 are estimated at $11,536,597,200.00.(2) In accordance with section 30 of article I of the state constitution of 1963, total state spending from state sources for fiscal year 2005-2006 in this amendatory act and 2005 PA 155 is estimated at $11,308,027,200.00 and state appropriations to be paid to local units of government for fiscal year 2004-2005 are estimated at $11,285,376,300.00.”Enacting section 1 of Act 137 of 2007 provides:”Enacting section 1. In accordance with section 30 of article I of the state constitution of 1963, total state spending in this amendatory act from state sources for fiscal year 2007-2008 is estimated at $11,527,973,800.00 and state appropriations to be paid to local units of government for fiscal year 2007-2008 are estimated at $11,458,493,300.00.”Enacting section 1 of Act 112 of 2008 provides:”Enacting section 1. In accordance with section 30 of article IX of the state constitution of 1963, total state spending in this amendatory act and in 2007 PA 137 from state sources for fiscal year 2007-2008 is estimated at $11,421,776,200.00 and state appropriations to be paid to local units of government for fiscal year 2007-2008 are estimated at $11,346,293,300.00.”Enacting section 1 of Act 268 of 2008 provides:”Enacting section 1. In accordance with section 30 of article I of the state constitution of 1963, total state spending in this amendatory act from state sources for fiscal year 2008-2009 is estimated at $11,816,898,200.00 and state appropriations to be paid to local units of government for fiscal year 2008-2009 are estimated at $11,602,465,900.00.”Enacting section 1 of Act 73 of 2009 provides:”Enacting section 1. In accordance with section 30 of article IX of the state constitution of 1963, total state spending in this amendatory act and in 2008 PA 268 from state sources for fiscal year 2008-2009 is estimated at $11,097,798,200.00 and state appropriations to be paid to local units of government for fiscal year 2008-2009 are estimated at $10,890,765,900.00.”Enacting section 1 of Act 121 of 2009 provides:”Enacting section 1. In accordance with section 30 of article I of the state constitution of 1963, total state spending in this amendatory act from state sources for fiscal year 2009-2010 is estimated at $10,825,754,100.00 and state appropriations to be paid to local units of government for fiscal year 2009-2010 are estimated at $10,718,801,700.00.”Enacting section 1 of Act 217 of 2010 provides:”Enacting section 1. (1) In accordance with section 30 of article IX of the state constitution of 1963, total state spending in this amendatory act, in 2010 PA 204, and in 2010 PA 110 from state sources for fiscal year 2010-2011 is estimated at $10,955,902,900.00 and state appropriations to be paid to local units of government for fiscal year 2010-2011 are estimated at $10,824,041,900.00.(2) In accordance with section 30 of article IX of the state constitution of 1963, total state spending in this amendatory act, in 2010 PA 110, and in 2009 PA 121 from state sources for fiscal year 2009-2010 is estimated at $10,645,097,700.00 and state appropriations to be paid to local units of government for fiscal year 2009-2010 are estimated at $10,562,169,000.00.”Enacting section 1 of Act 299 of 2011 provides:”Enacting section 1. In accordance with section 30 of article IX of the state constitution of 1963, total state spending on school aid under article I of the state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772, in this amendatory act, in 2010 PA 110, in 2010 PA 204, in 2010 PA 205, in 2010 PA 217, and in 2011 PA 62 from state sources for fiscal year 2010-2011 is estimated at $10,803,402,900.00 and state appropriations to be paid to local units of government for fiscal year 2010-2011 are estimated at $10,701,332.600.00.”



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