SB-0252, As Passed Senate, October 1, 2009

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 252

(As amended, October 1, 2009)

     A bill to amend 1979 PA 94, entitled

"The state school aid act of 1979,"

by amending sections 11, 11j, 17b, and 147 (MCL 388.1611,

388.1611j, 388.1617b, and 388.1747), sections 11 and 11j as amended

by 2009 PA 73, section 17b as amended by 2007 PA 137, and section

147 as amended by 2008 PA 268.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 11. (1) For the fiscal year ending September 30, 2009,

there is appropriated for the public schools of this state and

certain other state purposes relating to education the sum of

$11,019,798,200.00 from the state school aid fund established by

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

sum of $78,000,000.00 from the general fund. For the fiscal year

Senate Bill No. 252 as amended October 1, 2009

                     as amended October 1, 2009

ending September 30, 2009, there is also appropriated the sum of

$600,000,000.00 from the federal funding awarded to this state

under title XIV of the American recovery and reinvestment act of

2009, Public Law 111-5, to be used solely for the purpose of

funding the primary funding formula calculated under section 20, in

accordance with federal law. For the fiscal period beginning

October 1, 2009 and ending October 31, 2009, there is appropriated

for the public schools of this state and certain other state

purposes relating to education the sum of <<[$1,087,000,100.00]>> from

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

of the state constitution of 1963 and the sum of $2,900,000.00 from

the general fund. In addition, other available federal funds are

appropriated for the fiscal year ending September 30, 2009 2010.

Funds appropriated under this section are allocated as follows:

<<(A) EXCEPT FOR FUNDS ALLOCATED UNDER SECTION 11J, ALL STATE

FUNDS ARE ALLOCATED FOR THE SAME PURPOSES, FROM THE SAME FUNDING

SOURCES, AND UNDER THE SAME CONDITIONS AS STATE FUNDS WERE ALLOCATED

UNDER THIS ACT FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2009, AND

ARE ALLOCATED IN AN AMOUNT EQUAL TO 9.09% OF THE AMOUNT ALLOCATED

FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2009 FOR EACH OF THE

PURPOSES PROVIDED UNDER EACH FUNDING SECTION OF THIS ACT. HOWEVER,

THE DEPARTMENT SHALL DEDUCT THE FOLLOWING AMOUNTS FROM THE TOTAL

STATE SCHOOL AID OTHERWISE ALLOCATED TO DISTRICTS AND INTERMEDIATE

DISTRICTS RECEIVING FUNDING UNDER THIS SUBDIVISION:

     (i) FOR DISTRICTS, THE DEPARTMENT SHALL DEDUCT FROM THE TOTAL

STATE SCHOOL AID OTHERWISE ALLOCATED UNDER THIS SUBDIVISION TO EACH

DISTRICT AN AMOUNT EQUAL TO [$0.00] PER MEMBERSHIP PUPIL.

     (ii) FOR INTERMEDIATE DISTRICTS, THE DEPARTMENT SHALL DEDUCT

FROM THE TOTAL STATE SCHOOL AID OTHERWISE ALLOCATED UNDER THIS

SUBDIVISION TO EACH INTERMEDIATE DISTRICT AN AMOUNT EQUAL TO [0.0%]

OF THE AMOUNT OTHERWISE ALLOCATED TO THE INTERMEDIATE DISTRICT UNDER

THIS SUBDIVISION.>>

     (b) Except for federal funding awarded under title XIV of the

American recovery and reinvestment act of 2009, Public Law 111-5,

all federal funds are allocated for the same purposes, from the

same funding sources, under the same conditions, and in the same

amounts as those federal funds were allocated under this act for

the fiscal year ending September 30, 2009.

     (2) The appropriations under this section shall be allocated

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

the general fund shall be expended to fund the purposes of this act

before the expenditure of money appropriated under this section

from the state school aid fund. If the maximum amount appropriated

under this section from the state school aid fund for a fiscal year

exceeds the amount necessary to fully fund allocations under this

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

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

general fund, but instead shall be deposited into the school aid

stabilization fund created in section 11a.

     (3) If the maximum amount appropriated under this section from

the state school aid fund and the school aid stabilization fund for

a fiscal year exceeds the amount available for expenditure from the

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

11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f, 51a(2), 51a(12), 51c, 53a,

and 56 shall be made in full. In addition, for districts beginning

operations after 1994-95 that qualify for payments under section

22b, payments under section 22b shall be made so that the

qualifying districts receive the lesser of an amount equal to the

1994-95 foundation allowance of the district in which the district

beginning operations after 1994-95 is located or $5,500.00. The

amount of the payment to be made under section 22b for these

qualifying districts shall be as calculated under section 22a, with

the balance of the payment under section 22b being subject to the

proration otherwise provided under this subsection and subsection

(4). If proration is necessary, state payments under each of the

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

prorated in the manner prescribed in subsection (4) as necessary to

reflect the amount available for expenditure from the state school

aid fund for the affected fiscal year. However, if the department

of treasury determines that proration will be required under this

subsection, or if the department of treasury determines that

further proration is required under this subsection after an

initial proration has already been made for a fiscal year, the

department of treasury shall notify the state budget director, and

the state budget director shall notify the legislature at least 30

calendar days or 6 legislative session days, whichever is more,

before the department reduces any payments under this act because

of the proration. During the 30 calendar day or 6 legislative

session day period after that notification by the state budget

director, the department shall not reduce any payments under this

act because of proration under this subsection. The legislature may

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

6 legislative session day period after that notification by the

state budget director, enacting legislation appropriating

additional funds from the general fund, countercyclical budget and

economic stabilization fund, state school aid fund balance, or

another source to fund the amount of the projected shortfall.

     (4) If proration is necessary under subsection (3), the

department shall calculate the proration in district and

intermediate district payments that is required under subsection

(3) as follows:

     (a) The department shall calculate the percentage of total

state school aid allocated under this act for the affected fiscal

year for each of the following:

     (i) Districts.

     (ii) Intermediate districts.

     (iii) Entities other than districts or intermediate districts.

     (b) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(i) for districts by

reducing payments to districts. This reduction shall be made by

calculating an equal dollar amount per pupil as necessary to

recover this percentage of the proration amount and reducing each

district's total state school aid from state sources, other than

payments under sections 11f, 11g, 11j, 22a, 26a, 26b, 31d, 31f,

51a(2), 51a(12), 51c, and 53a, by that amount.

     (c) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(ii) for intermediate

districts by reducing payments to intermediate districts. This

reduction shall be made by reducing the payments to each

intermediate district, other than payments under sections 11f, 11g,

26a, 26b, 51a(2), 51a(12), 53a, and 56, on an equal percentage

basis.

     (d) The department shall recover a percentage of the proration

amount required under subsection (3) that is equal to the

percentage calculated under subdivision (a)(iii) for entities other

than districts and intermediate districts by reducing payments to

these entities. This reduction shall be made by reducing the

payments to each of these entities, other than payments under

sections 11j, 26a, and 26b, on an equal percentage basis.

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

fund allocations under this act that are not expended by the end of

the state fiscal year are transferred to the school aid

stabilization fund created under section 11a.

     Sec. 11j. From the appropriation in section 11, there is

allocated For the fiscal year ending September 30, 2010, there is

appropriated from the state school aid fund an amount not to exceed

$40,000,000.00 for 2008-2009 2009-2010 for payments to the school

loan bond redemption fund in the department of treasury on behalf

of districts and intermediate districts. Notwithstanding section 11

or any other provision of this act, funds allocated under this

section are not subject to proration and shall be paid in full.

     Sec. 17b. (1) Not later than October 20, November 20, December

20, January 20, February 20, March 20, April 20, May 20, June 20,

July 20, and August 20, the department shall prepare electronic

files of the amount to be distributed under this act in the

installment to the districts and intermediate districts and deliver

the electronic files to the state treasurer, and the state

treasurer shall pay the installments on each of those dates or, if

the date is not a business day, on the next business day following

that date. Except as otherwise provided in this act, the portion of

the district's or intermediate district's state fiscal year

entitlement to be included in each installment shall be 1/11. For

the fiscal period beginning October 1, 2009 and ending October 31,

2009 only, the portion of the district's or intermediate district's

entitlement for that fiscal period to be included in each

installment shall be the entire portion. A district or intermediate

district shall accrue the payments received in July and August to

the school fiscal year ending the immediately preceding June 30.

     (2) The state treasurer shall make payment under this section

by drawing a warrant in favor of the treasurer of each district or

intermediate district for the amount payable to the district or

intermediate district according to the electronic files and

delivering the warrant to the treasurer of each district or

intermediate district, or if the state treasurer receives a written

request by the treasurer of the district or intermediate district

specifying an account, by electronic funds transfer to that account

of the amount payable to the district or intermediate district

according to the electronic files. The department may make

adjustments in payments made under this section through additional

payments when changes in law or errors in computation cause the

regularly scheduled payment to be less than the amount to which the

district or intermediate district is entitled pursuant to this act.

     (3) Except as otherwise provided in this act, grant payments

to districts and intermediate districts under this act shall be

paid according to the installment schedule under subsection (1).

For the fiscal period beginning October 1, 2009 and ending October

31, 2009 only, for all grant payments that are to be made pursuant

to an agreement with the department, the department shall ensure

that the grant payments made during this fiscal period reflect the

reduced appropriation amount for this fiscal period in a way that

is appropriate for the program funded by the grant.

     (4) Upon the written request of a district or intermediate

district and the submission of proof satisfactory to the department

of a need of a temporary and nonrecurring nature, the

superintendent, with the written concurrence of the state treasurer

and the state budget director, may authorize an advance release of

funds due a district or intermediate district under this act. An

advance authorized under this subsection shall not cause funds to

be paid to a district or intermediate district more than 30 days

earlier than the established payment date for those funds.

     Sec. 147. The allocation for 2008-2009 2009-2010 for the

public school employees' retirement system pursuant to the public

school employees retirement act of 1979, 1980 PA 300, MCL 38.1301

to 38.1408, shall be made using the entry age normal cost actuarial

method and risk assumptions adopted by the public school employees

retirement board and the department of management and budget. The

annual level percentage of payroll contribution rate is estimated

at 16.54% 16.94% for the 2008-2009 2009-2010 state fiscal year. The

portion of the contribution rate assigned to districts and

intermediate districts for each fiscal year is all of the total

percentage points. This contribution rate reflects an amortization

period of 29 28 years for 2008-2009 2009-2010. The public school

employees' retirement system board shall notify each district and

intermediate district by February 28 of each fiscal year of the

estimated contribution rate for the next fiscal year.

     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 the fiscal period beginning

Senate Bill No. 252 as amended October 1, 2009

                     as amended October 1, 2009

October 1, 2009 and ending October 31, 2009 is estimated at

<<[$1,089,900,100.00]>> and state appropriations to be paid to local

units of government for the fiscal period beginning October 1, 2009

and ending October 31, 2009 are estimated at <<[$1,047,000,100.00]>>.

     Enacting section 2. This amendatory act takes effect October

9, 2009.

     Enacting section 3. This amendatory act does not take effect

if House Bill No. 4447 of the 95th Legislature is enacted into law

not later than October 8, 2009.