HB-4227,As Passed House,May 13, 2003

SUBSTITUTE FOR

HOUSE BILL NO. 4227

                                                                             A bill to amend 1979 PA 94, entitled                                              

"The state school aid act of 1979,"                                         

by amending section 11 (MCL 388.1611), as amended by 2002 PA                

521.                                                                        

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 11.  (1) For the fiscal year ending September 30, 2002,                

2   there is appropriated for the public schools of this state and              

3   certain other state purposes relating to education the sum of               

4   $10,990,148,200.00 from the state school aid fund established by            

5   section 11 of article IX of the state constitution of 1963 and              

6   the sum of $198,413,500.00 from the general fund.  For the fiscal           

7   year ending September 30, 2003, there is appropriated for the               

8   public schools of this state and certain other state purposes               

9   relating to education the sum of $11,259,441,400.00 from the                

10  state school aid fund established by section 11 of article IX of            

1   the state constitution of 1963, the sum of $198,413,500.00 from             

2   the general fund, and the sum of $700,000.00 from local                     

3   revenues.   However, if legislation authorizing the transfer of             

4   $79,500,000.00 from the Michigan employment security act                    

5   contingent fund, penalties and interest subaccount, is not                  

6   enacted and in effect on or before October 1, 2002, there is                

7   instead appropriated from the general fund for 2002-2003 the sum            

8   of $122,656,500.00.  For the fiscal year ending September 30,               

9   2004, there is appropriated for the public schools of this state            

10  and certain other state purposes relating to education the sum of           

11  $11,246,667,400.00 from the state school aid fund established by            

12  section 11 of article IX of the state constitution of 1963 and              

13  the sum of $198,413,500.00 from the general fund.  In addition,             

14  available federal funds are appropriated for each of those fiscal           

15  years.                                                                      

16      (2) The appropriations under this section shall be allocated                

17  as provided in this act.  Money appropriated under this section             

18  from the general fund and from available federal funds shall be             

19  expended to fund the purposes of this act before the expenditure            

20  of money appropriated under this section from the state school              

21  aid fund.  If the maximum amount appropriated under this section            

22  from the state school aid fund for a fiscal year exceeds the                

23  amount necessary to fully fund allocations under this act from              

24  the state school aid fund, that excess amount shall not be                  

25  expended in that state fiscal year and shall not lapse to the               

26  general fund, but instead shall remain in the state school aid              

27  fund.                                                                       

1       (3) If the maximum amount appropriated under this section and               

2   section 11f from the state school aid fund for a fiscal year                

3   exceeds the amount available for expenditure from the state                 

4   school aid fund for that fiscal year, payments under sections               

5   11f, 11g, 22a, 31d, 51a(2), and 51c shall be made in full.  In              

6   addition, for districts beginning operations after 1994-95 that             

7   qualify for payments under section 22b, payments under section              

8   22b shall be made so that the qualifying districts receive the              

9   lesser of an amount equal to the 1994-95 foundation allowance of            

10  the district in which the district beginning operations after               

11  1994-95 is located or $5,500.00.  The amount of the payment to be           

12  made under section 22b for these qualifying districts shall be as           

13  calculated under section 22a, with the balance of the payment               

14  under section 22b being subject to the proration otherwise                  

15  provided under this subsection and subsection (4).   State For             

16  proration before May 1, 2003, state payments under each of the              

17  other sections of this act from all state funding sources shall             

18  be prorated on an equal percentage basis as necessary to reflect            

19  the amount available for expenditure from the state school aid              

20  fund for  that the affected fiscal year.  If additional                    

21  proration is necessary in 2002-2003 because of the outcome of any           

22  revenue estimating conference occurring after May 1, 2003, and              

23  for any proration necessary after 2002-2003, state payments under           

24  each of the other sections of this act from all state funding               

25  sources shall be prorated in the manner prescribed in subsection            

26  (4) as necessary to reflect the amount available for expenditure            

27  from the state school aid fund for the affected fiscal year.

1   However, if the department of treasury determines that proration            

2   will be required under this subsection, the department of                   

3   treasury shall notify the state budget director, and the state              

4   budget director shall notify the legislature at least 30 calendar           

5   days or 6 legislative session days, whichever is more, before the           

6   department reduces any payments under this act because of the               

7   proration.  During the 30 calendar day or 6 legislative session             

8   day period after that notification by the state budget director,            

9   the department shall not reduce any payments under this act                 

10  because of proration under this subsection.  The legislature may            

11  prevent proration from occurring by, within the 30 calendar day             

12  or 6 legislative session day period after that notification by              

13  the state budget director, enacting legislation appropriating               

14  additional funds from the general fund, countercyclical budget              

15  and economic stabilization fund, state school aid fund balance,             

16  or another source to fund the amount of the projected shortfall.            

17  (4) If additional proration is necessary in 2002-2003 because               

18  of the outcome of any revenue estimating conference occurring               

19  after May 1, 2003 and for any proration necessary after                     

20  2002-2003, the department shall calculate the proration in                  

21  district and intermediate district payments that is required                

22  under subsection (3) as follows:                                            

23      (a) The department shall recover 95% of the proration amount                

24  required under subsection (3) by reducing payments to districts.            

25  This reduction shall be made by calculating an equal dollar                 

26  amount per pupil as necessary to recover this percentage of the             

27  proration amount and reducing each district's total state school            

1   aid from state sources, other than payments under sections 11f,             

2   11g, 22a, 31d, 51a(2), 51a(12), 51c, 53a, and 56, by that                   

3   amount.                                                                     

4   (b) The department shall recover the remaining 5% of the                    

5   proration amount required under subsection (3) by reducing                  

6   payments to intermediate districts.  This reduction shall be made           

7   by reducing the payments to each intermediate district, other               

8   than payments under sections 11f, 11g, 22a, 31d, 51a(2), 51a(12),           

9   51c, 53a, and 56, on an equal percentage basis.

10  (5)  (4)  Except for the allocation under section 26a, any                  

11  general fund allocations under this act that are not expended by            

12  the end of the state fiscal year are transferred to the state               

13  school aid fund.