Bill Summary – FastDemocracy

HOUSE BILL NO. 6277
     December 05, 2024, Introduced by Rep. Andrews.
          A bill to amend 1979 PA 94, entitled
    "The state school aid act of 1979,"
    by amending sections 20 and 22a (MCL 388.1620 and 388.1622a), as
    amended by 2024 PA 120.
                     THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 20. (1) For 2024-2025, the target foundation allowance is
 $9,608.00.
       (2) The department shall calculate the amount of each
 district's foundation allowance as provided in this section, using
 a target foundation allowance in the amount specified in subsection
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 (1).
        (3) Except as otherwise provided in this section, the
 department shall calculate the amount of a district's foundation
 allowance 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 fiscal year that was equal to the target
 foundation allowance for the immediately preceding fiscal year, the
 district receives a foundation allowance in an amount equal to the
 target foundation allowance described in subsection (1) for the
 current fiscal year.
        (b) For a district that had a foundation allowance for the
 immediately preceding fiscal year that was greater than the target
 foundation allowance for the immediately preceding fiscal year, the
 district's foundation allowance is an amount equal to the lesser of
 (the sum of the district's foundation allowance for the immediately
 preceding fiscal year plus any per pupil amount calculated under
 section 20m(2) in the immediately preceding fiscal year plus the
 increase in the target foundation allowance for the current fiscal
 year, as compared to the immediately preceding fiscal year) or (the
 product of the district's foundation allowance for the immediately
 preceding 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).
        (c) For a district that had a foundation allowance in the
 immediately preceding fiscal year that was less than the target
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 foundation allowance in effect for that fiscal year, the district's
 foundation allowance is an amount equal to the lesser of (the sum
 of district's foundation allowance for the immediately preceding
 fiscal year plus any per pupil amount calculated under section
 20m(2) in the immediately preceding fiscal year plus the increase
 in the target foundation allowance for the current fiscal year, as
 compared to the immediately preceding fiscal year) or (the product
 of the district's foundation allowance for the immediately
 preceding 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).
       (d) For a district that has a foundation allowance that is not
 a whole dollar amount, the department shall round the district's
 foundation allowance up to the nearest whole dollar.
       (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 target foundation
 allowance for the current fiscal year, whichever is less, minus the
 local portion of the district's foundation allowance. Except as
 otherwise provided in this subsection, for a district described in
 subsection (3)(b) and (c), the state portion of the district's
 foundation allowance is an amount equal to the target foundation
 allowance minus the district's foundation allowance supplemental
 payment per pupil calculated under section 20m and minus the local
 portion of the district's foundation allowance. For a district that
 has a millage reduction required under section 31 of article IX of
 the state constitution of 1963, the department shall calculate the
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 state portion of the district's foundation allowance 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 that has been attached in whole or in part to the
 receiving district to satisfy debt obligations of the dissolved
 district under section 12 of the revised school code, MCL 380.12,
 the taxable value per membership pupil of property in the receiving
 district used for the purposes of this subsection does not include
 the taxable value of property within the geographic area of the
 dissolved district. For a community district, if school operating
 taxes continue to be levied by a qualifying school district under
 section 12b of the revised school code, MCL 380.12b, with the same
 geographic area as the community district, the taxable value per
 membership pupil of property in the community district to be used
 for the purposes of this subsection does not include the taxable
 value of property within the geographic area of the community
 district.
       (5) The allocation calculated under this section for a pupil
 is based on the foundation allowance of the pupil's district of
 residence. For a pupil enrolled under section 105 or 105c in a
 district other than the pupil's district of residence, the
 allocation calculated under this section is 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 is based on
 the foundation allowance of the educating district if the educating
 district's foundation allowance is greater than the foundation
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 allowance of the pupil's district of residence. The calculation
 under this subsection must take into account a district's per-pupil
 allocation under section 20m.
       (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 target foundation
 allowance specified in subsection (1), or, for a public school
 academy that was issued a contract under section 552 of the revised
 school code, MCL 380.552, to operate as a school of excellence that
 is a cyber school, $9,150.00. 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 must 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 must not exceed the amount per
 membership pupil otherwise calculated under this subsection.
       (7) For pupils in membership, other than special education
 pupils, in a community district, the allocation calculated under
 this section is an amount per membership pupil other than special
 education pupils in the community district equal to the foundation
 allowance of the qualifying school district, as described in
 section 12b of the revised school code, MCL 380.12b, that is
 located within the same geographic area as the community district.
       (8) Subject to subsection (4), for a district that is formed
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 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 is the lesser of the sum of 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 plus $100.00 or the highest
 foundation allowance among the original or affected districts. This
 subsection does not apply to a receiving district unless there is a
 subsequent consolidation or annexation that affects the district.
 The calculation under this subsection must take into account a
 district's per-pupil allocation under section 20m.
       (9) The department shall round each fraction used in making
 calculations under this section to the fourth decimal place and
 shall round the dollar amount of an increase in the target
 foundation allowance 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 51e.
       (11) To assist the legislature in determining the target
 foundation allowance for the subsequent fiscal year, each revenue
 estimating conference conducted under section 367b of the
 management and budget act, 1984 PA 431, MCL 18.1367b, must
 calculate a pupil membership factor, a revenue adjustment factor,
 and an index as follows:
       (a) The pupil membership factor is computed by dividing the
 estimated membership in the school year ending in the current
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 fiscal year, excluding intermediate district membership, by the
 estimated membership for the school year ending in the subsequent
 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 is computed by dividing the
 sum of the estimated total state school aid fund revenue for the
 subsequent fiscal year plus the estimated total state school aid
 fund revenue for the current 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 fiscal year plus the estimated total state school aid fund
 revenue for the immediately preceding 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 is calculated by multiplying the pupil
 membership factor by the revenue adjustment factor. If a consensus
 index is not determined at the revenue estimating conference, the
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 principals of the revenue estimating conference shall report their
 estimates to the house and senate subcommittees responsible for
 state school aid appropriations not later than 7 days after the
 conclusion of the revenue conference.
       (12) Payments to districts and public school academies are not
 made under this section. Rather, the calculations under this
 section are used to determine the amount of state payments under
 section 22b.
       (13) 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.
       (14) 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.as permitted under section 1211 of the revised school code,
 MCL 380.1211.
       (b) "Current fiscal year" means the fiscal year for which a
 particular calculation is made.
       (c) "Dissolved district" means a district that loses its
 organization, has its territory attached to 1 or more other
 districts, and is dissolved as provided under section 12 of the
 revised school code, MCL 380.12.
       (d) "Immediately preceding fiscal year" means the fiscal year
 immediately preceding the current fiscal year.
       (e) "Local portion of the district's foundation allowance"
 means an amount that is equal to the difference between (the sum of
 the product of the taxable value per membership pupil of all
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 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
 product of the captured assessed valuation under tax increment
 financing acts times the district's certified mills divided by the
 district's membership excluding special education pupils).
       (f) "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.
       (g) "Nonexempt property" means property that is not a
 principal residence, qualified agricultural property, qualified
 forest property, supportive housing property, industrial personal
 property, commercial personal property, or property occupied by a
 public school academy.
       (h) "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.
       (i) "Receiving district" means a district to which all or part
 of the territory of a dissolved district is attached under section
 12 of the revised school code, MCL 380.12.
       (j) "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.
       (k) "School operating taxes" means local ad valorem property
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 taxes levied under section 1211 of the revised school code, MCL
 380.1211, and retained for school operating purposes.
       (l) "Tax increment financing acts" means parts 2, 3, 4, and 6
 of the recodified tax increment financing act, 2018 PA 57, MCL
 125.4201 to 125.4420 and 125.4602 to 125.4629, or the brownfield
 redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670.
       (m) "Taxable value per membership pupil" means taxable value,
 as certified by the county treasurer and reported to the
 department, 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 state school aid fund money
 appropriated in section 11, there is allocated an amount not to
 exceed $4,144,000,000.00 for 2023-2024 and there is allocated an
 amount not to exceed $3,993,000,000.00 for 2024-2025 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 purp