Mich. Comp. Laws § 388.1651a — MI Code / Chapter 388 / Act Act-94-of-1979 / Section 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; shortfall; adjustments; total approved costs; 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.
Status: in_force

Sec. 51a.

(1) From the state school aid fund money in section 11, there is allocated an amount not to exceed $2,028,696,100.00 for 2024-2025 and there is allocated an amount not to exceed $2,219,596,100.00 for 2025-2026 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 $450,000,000.00 for 2024-2025 and $500,000,000.00 for 2025-2026, 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 $441,400,000.00 for 2024-2025 and $492,400,000.00 for 2025-2026, 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.

(3) If the department determines that the amount allocated for a fiscal year to a district or intermediate district under subsection (2) is insufficient to fulfill the specified percentages in subsection (2), the department shall pay the shortfall to the district or intermediate district during the fiscal year beginning on the October 1 following the determination. If the department determines that the amount allocated for a fiscal year to a district or intermediate district under subsection (2) exceeds the sum of the amount necessary to fulfill the specified percentages in subsection (2), 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.

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

(5) From the amount allocated in subsection (1), there is allocated an amount not to exceed $3,200,000.00 for 2024-2025 and 2025-2026 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.

(6) 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) 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.

(c) 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.

(7) 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.

(8) 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 individual would otherwise be entitled had that individual been employed by the receiving district originally.

(9) 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.

(10) From the funds allocated in subsection (1), there is allocated the amount necessary, estimated at $1,600,000.00 for 2024-2025 and estimated at $1,600,000.00 for 2025-2026, 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.

(11) If it is determined that funds allocated under subsection (2) or (10) 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 (10) or under section 51c to fully fund those allocations. After payments under subsections (2) and (10) and section 51c, the department shall expend the remaining funds from the allocation in subsection (1) in the following order:

(a) One hundred percent of the reimbursement required under section 53a.

(b) One hundred percent of the reimbursement required under subsection (5).

(c) One hundred percent of the payment required under section 54.

(d) One hundred percent of the payments under section 56.

(12) The allocations under subsections (2) and (10) 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.

(13) 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.

(14) 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. Beginning July 1, 2021, this subsection is subject to section 8c. It is the intent of the legislature that the immediately preceding sentence apply retroactively and is effective July 1, 2021.

(15) 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. Beginning July 1, 2021, this subsection is subject to section 8c. It is the intent of the legislature that the immediately preceding sentence apply retroactively and is effective July 1, 2021.

(16) 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; Am. 2022, Act 144, Imd. Eff. July 14, 2022; Am. 2022, Act 212, Imd. Eff. Oct. 12, 2022; Am. 2023, Act 3, Imd. Eff. Feb. 14, 2023; Am. 2023, Act 103, Imd. Eff. July 21, 2023; Am. 2023, Act 320, Eff. Feb. 13, 2024; Am. 2024, Act 120, Imd. Eff. July 23, 2024; Am. 2025, Act 15, Imd. Eff. Oct. 7, 2025