Appropriations: school aid omnibus; fiscal year 2026-2027 appropriations for K-12 school aid, higher education, and community colleges; provide for, the official text

Act No. 25

Public Acts of 2026

Approved by the Governor

July 21, 2026

Filed with the Secretary of State

July 21, 2026

EFFECTIVE
DATE: July 21, 2026

state of michigan

103rd Legislature

Regular session of 2026

Introduced by Reps. Bollin and Kelly

ENROLLED HOUSE BILL No. 5630

AN ACT to amend 1979 PA 94,
entitled “An act to make appropriations to aid in the support of the public
schools, the intermediate school districts, community colleges, and public
universities of the state; to make appropriations for certain other purposes
relating to education; to provide for the disbursement of the appropriations;
to authorize the issuance of certain bonds and provide for the security of
those bonds; to prescribe the powers and duties of certain state departments,
the state board of education, and certain other boards and officials; to create
certain funds and provide for their expenditure; to prescribe penalties; and to
repeal acts and parts of acts,” by amending sections 3, 6, 11, 11a, 11j, 11k,
11m, 11s, 11x, 12d, 12e, 15, 18, 18a, 19, 20, 20d, 21b, 21f, 21h, 22a, 22b,
22d, 22l, 22m, 22s, 24, 24a, 25f, 26a, 26b, 26c, 26d, 27a, 27b, 27c, 27d, 27j,
27l, 27m, 28, 30d, 31a, 31c, 31d, 31f, 31n, 31p, 31aa, 32d, 32e, 32n, 32v, 35a,
35m, 39, 39a, 51a, 51c, 51d, 51e, 51g, 53a, 54, 54d, 56, 61a, 61b, 62, 65, 67,
67f, 74, 81, 94, 94a, 94e, 97n, 98, 99h, 101, 104, 104h, 107, 147, 147a, 147b,
147c, 147e, 152a, 152b, 163, 164k, 164l, 201, 201f, 201i, 202a, 203, 205, 206,
207c, 210b, 212, 217a, 217b, 217c, 222, 223, 229a, 230, 236, 236c, 236d, 236j,
236s, 237b, 238, 241, 241a, 241b, 241c, 247, 248, 248a, 249, 256, 263, 263b,
264, 268, 269, 270, 270c, 275k, 276, 277, 278, 279, 280, 281, and 282 (MCL
388.1603, 388.1606, 388.1611, 388.1611a, 388.1611j, 388.1611k, 388.1611m,
388.1611s, 388.1611x, 388.1612d, 388.1612e, 388.1615, 388.1618, 388.1618a,
388.1619, 388.1620, 388.1620d, 388.1621b, 388.1621f, 388.1621h, 388.1622a,
388.1622b, 388.1622d, 388.1622l, 388.1622m, 388.1622s, 388.1624, 388.1624a,
388.1625f, 388.1626a, 388.1626b, 388.1626c, 388.1626d, 388.1627a, 388.1627b,
388.1627c, 388.1627d, 388.1627j, 388.1627l, 388.1627m, 388.1628, 388.1630d,
388.1631a, 388.1631c, 388.1631d, 388.1631f, 388.1631n, 388.1631p, 388.1631aa,
388.1632d, 388.1632e, 388.1632n, 388.1632v, 388.1635a, 388.1635m, 388.1639,
388.1639a, 388.1651a, 388.1651c, 388.1651d, 388.1651e, 388.1651g, 388.1653a,
388.1654, 388.1654d, 388.1656, 388.1661a, 388.1661b, 388.1662, 388.1665,
388.1667, 388.1667f, 388.1674, 388.1681, 388.1694, 388.1694a, 388.1694e,
388.1697n, 388.1698, 388.1699h, 388.1701, 388.1704, 388.1704h, 388.1707,
388.1747, 388.1747a, 388.1747b, 388.1747c, 388.1747e, 388.1752a, 388.1752b,
388.1763, 388.1764k, 388.1764l, 388.1801, 388.1801f, 388.1801i, 388.1802a,
388.1803, 388.1805, 388.1806, 388.1807c, 388.1810b, 388.1812, 388.1817a,
388.1817b, 388.1817c, 388.1822, 388.1823, 388.1829a, 388.1830, 388.1836,
388.1836c, 388.1836d, 388.1836j, 388.1836s, 388.1837b, 388.1838, 388.1841,
388.1841a, 388.1841b, 388.1841c, 388.1847, 388.1848, 388.1848a, 388.1849,
388.1856, 388.1863, 388.1863b, 388.1864, 388.1868, 388.1869, 388.1870,
388.1870c, 388.1875k, 388.1876, 388.1877, 388.1878, 388.1879, 388.1880,
388.1881, and 388.1882), sections 3, 6, 11, 11a, 11j, 11k, 11m, 11s, 11x, 12d,
15, 18, 19, 20, 20d, 21f, 21h, 22a, 22b, 22d, 22l, 22m, 24, 24a, 25f, 26a, 26b,
26c, 26d, 27a, 27b, 27c, 27l, 28, 30d, 31a, 31d, 31f, 31n, 31aa, 32d, 32n, 35a,
35m, 39, 39a, 51a, 51c, 51d, 51e, 51g, 53a, 54, 54d, 56, 61a, 61b, 62, 65, 67, 67f,
74, 81, 94, 94a, 94e, 98, 99h, 104, 104h, 107, 147, 147a, 147c, 147e, 152a,
152b, 201, 201f, 206, 207c, 210b, 212, 217a, 217b, 217c, 222, 229a, 230, 236,
236c, 236d, 236j, 241, 241a, 241b, 241c, 247, 248, 256, 263, 263b, 264, 268,
269, 270, 270c, 275k, 276, 277, 278, 279, 280, 281, and 282 as amended and
sections 12e, 22s, 31c, 97n, 164k, 164l, 201i, and 236s as added by 2025 PA 15,
sections 18a, 203, and 238 as amended by 2020 PA 165, sections 21b and
237b as amended by 2022 PA 144, sections 27d, 27j, 163, 205, 223, and 248a as
amended by 2024 PA 120, sections 27m, 32e, and 32v as added and sections 31p,
147b, and 202a as amended by 2023 PA 103, section 101 as amended by
2026 PA 15, and section 249 as added by 2017 PA 108, and by adding sections 16,
27o, 27t, 31j, 32p, 35d, 35o, 35p, 35q, 36, 36a, 51i, 54b, 61w, 67d, 94f, 95b,
98d, 99s, 99nn, 152c, 164m, 164n, 164o, 201h, 213, 236k, 236l, 237c, 239a,
247a, 295, and 295a; and to repeal acts and parts of acts.

The People of the State of
Michigan enact:

Sec.
3. (1) “Average daily attendance”, for the purposes of complying with federal
law, means 92% of the pupils counted in membership on the pupil membership
count day, as defined in section 6(7).

(2) “Board” means the governing body of a district or public
school academy.

(3) “Center” means the center for educational performance and
information created in section 94a.

(4) “Community district” means a school district organized
under part 5b of the revised school code, MCL 380.381 to 380.396.

(5) “Cooperative education program” means a written voluntary
agreement between and among districts to provide certain educational programs
for pupils in certain groups of districts. The written agreement must be
approved by all affected districts at least annually and must specify the educational
programs to be provided and the estimated number of pupils from each district
who will participate in the educational programs.

(6) “Department”, except as otherwise provided in this
article, means the department of education.

(7) “District” means, except as otherwise specifically
provided in this act, a local school district established under the revised
school code or, except in sections 6(4), 6(6), 11x, 12c, 13, 20, 22a, 22p, 31a,
51a(14), 105, 105c, and 166b, a public school academy. Except in section 20,
district also includes a community district.

(8) “District of residence”, except as otherwise provided in
this subsection, means the district in which a pupil’s custodial parent or
parents or legal guardian resides. For a pupil described in section 24b, the
pupil’s district of residence is the district in which the pupil enrolls under
that section. For a pupil described in section 6(4)(d), the pupil’s district of
residence is considered to be the district or intermediate district in which
the pupil is counted in membership under that section. For a pupil under court
jurisdiction who is placed outside the district in which the pupil’s custodial
parent or parents or legal guardian resides, the pupil’s district of residence
is considered to be the educating district or educating intermediate district.

(9) “District superintendent” means the superintendent of a
district or the chief administrator of a public school academy.

Sec.
6. (1) “Center program” means a program operated by a district or by an
intermediate district for special education pupils from several districts in
programs for pupils with autism spectrum disorder, pupils with severe cognitive
impairment, pupils with moderate cognitive impairment, pupils with severe
multiple impairments, pupils with hearing impairment, pupils with visual
impairment, and pupils with physical impairment or other health impairment.
Programs for pupils with emotional impairment housed in buildings that do not serve
regular education pupils also qualify. Unless otherwise approved by the
department, a center program either serves all constituent districts within an
intermediate district or serves several districts with less than 50% of the
pupils residing in the operating district. In addition, special education
center program pupils placed part-time in noncenter programs to comply with the
least restrictive environment provisions of section 1412 of the individuals
with disabilities education act, 20 USC 1412, may be considered center program
pupils for pupil accounting purposes for the time scheduled in either a center
program or a noncenter program.

(2) “District and high school graduation rate” means the
annual completion and pupil dropout rate that is calculated by the center
pursuant to nationally recognized standards.

(3) “District and high school graduation report” means a
report of the number of pupils, excluding adult education participants, in the
district for the immediately preceding school year, adjusted for those pupils
who have transferred into or out of the district or high school, who leave high
school with a diploma or other credential of equal status.

(4) “Membership”, except as otherwise provided in this
article, means for a district, a public school academy, or an intermediate
district the sum of the product of .90 times the number of full-time equated
pupils in grades K to 12 actually enrolled and in regular daily attendance
in the district, public school academy, or intermediate district on the pupil
membership count day for the current school year, plus the product of .10 times
the final audited count from the supplemental count day of full-time equated
pupils in grades K to 12 actually enrolled and in regular daily attendance in
the district, public school academy, or intermediate district for the
immediately preceding school year. A district’s, public school academy’s, or
intermediate district’s membership is adjusted as provided under section 25e
for pupils who enroll after the pupil membership count day in a strict
discipline academy operating under sections 1311b to 1311m of the revised
school code, MCL 380.1311b to 380.1311m. All pupil counts used in this
subsection are as determined by the department and calculated by adding the
number of pupils registered for attendance plus pupils received by transfer and
minus pupils lost as defined by rules promulgated by the superintendent, and as
corrected by a subsequent department audit. The amount of the foundation
allowance for a pupil in membership is determined under section 20. In making
the calculation of membership, all of the following, as applicable, apply to
determining the membership of a district, a public school academy, or an
intermediate district:

(a) Except as otherwise provided in this subsection, and
pursuant to subsection (6), a pupil is counted in membership in the pupil’s
educating district or districts. Except as otherwise provided in this
subsection, an individual pupil must not be counted for more than a total of
1.0 full-time equated membership.

(b) If a pupil is educated in a district other than the pupil’s
district of residence, if the pupil is not being educated as part of a
cooperative education program, if the pupil’s district of residence does not
give the educating district its approval to count the pupil in membership in
the educating district, and if the pupil is not covered by an exception
specified in subsection (6) to the requirement that the educating district must
have the approval of the pupil’s district of residence to count the pupil in
membership, the pupil is not counted in membership in any district.

(c) A special education pupil educated by the intermediate
district is counted in membership in the intermediate district.

(d) A pupil placed by a court or state agency in an
on-grounds program of a juvenile detention facility, a child caring
institution, or a mental health institution, or a pupil funded under section
53a, is counted in membership in the district or intermediate district approved
by the department to operate the program.

(e) A pupil enrolled in the Michigan Schools for the Deaf and
Blind is counted in membership in the pupil’s intermediate district of
residence.

(f) A pupil enrolled in a career and technical education
program supported by a millage levied over an area larger than a single
district or in an area vocational-technical education program established under
section 690 of the revised school code, MCL 380.690, is counted in membership
only in the pupil’s district of residence.

(g) A pupil enrolled in a public school academy is counted in
membership in the public school academy.

(h) For the purposes of this section and section 6a, for a
cyber school, as that term is defined in section 551 of the revised school
code, MCL 380.551, that is in compliance with section 553a of the revised
school code, MCL 380.553a, a pupil’s participation in the cyber school’s
educational program is considered regular daily attendance, and for a district
or public school academy, a pupil’s participation in a virtual course as that
term is defined in section 21f is considered regular daily attendance.
Beginning July 1, 2021, this subdivision 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. For the purposes of this
subdivision, for a pupil enrolled in a cyber school, all of the following apply
with regard to the participation requirement as described in this subdivision:

(i) Except as otherwise provided in this
subdivision, the pupil shall participate in each scheduled course on pupil
membership count day or supplemental count day, as applicable. If the pupil is
absent on pupil membership count day or supplemental count day, as applicable,
the pupil must attend and participate in class during the next 10 consecutive
school days if the absence was unexcused, or during the next 30 calendar days
if the absence was excused.

(ii) For a pupil who is not learning
sequentially, 1 or more of the following must be met on pupil membership count
day or supplemental count day, as applicable, for each scheduled course to
satisfy the participation requirement under this subdivision:

(A) The pupil attended a live lesson from the teacher.

(B) The pupil logged into a lesson or lesson activity and the
login can be documented.

(C) The pupil and teacher engaged in a subject-oriented
telephone conversation.

(D) There is documentation of an email dialogue between the
pupil and teacher.

(E) There is documentation of activity or work between the
learning coach and pupil.

(F) An alternate form of attendance as determined and agreed
upon by the cyber school and the pupil membership auditor was met.

(iii) For a pupil using sequential learning,
the participation requirement under this subdivision is satisfied if either of
the following occurs:

(A) Except as otherwise provided in this sub-subparagraph,
the pupil and the teacher of record or mentor complete a 2-way interaction for
1 course during the week on which pupil membership count day or supplemental
count day, as applicable, occurs, and the 3 consecutive weeks following that
week. However, if a school break is scheduled during any of the weeks described
in this sub-subparagraph that is 4 or more days in length or instruction has
been canceled districtwide during any of the weeks described in this
sub-subparagraph for 3 or more school days, the district is not required to
ensure that the pupil and the teacher of record or mentor completed a 2-way
interaction for that week. As used in this sub-subparagraph:

(I) “2-way interaction” means the communication that occurs
between the teacher of record or mentor and pupil, where 1 party initiates
communication and a response from the other party follows that communication.
Responses as described in this sub-sub-subparagraph must be to the
communication initiated by the teacher of record or mentor, and not some other
action taken. This interaction may occur through, but is not limited to, means
such as email, telephone, instant messaging, or face-to-face conversation. A
parent- or legal-guardian-facilitated 2-way interaction is considered a 2-way
interaction if the pupil is in any of grades K to 5 and does not yet possess
the skills necessary to participate in 2-way interactions unassisted. The
interactions described in this sub-sub-subparagraph must relate to a virtual
course on the pupil’s schedule and pertain to course content or progress.

(II) “Mentor” means a professional employee of the district
who monitors the pupil’s progress, ensures the pupil has access to needed
technology, is available for assistance, and ensures access to the teacher of
record. A mentor may also be the teacher of record if the mentor meets the
definition of a teacher of record under this sub-subparagraph and the district
is the provider for the course.

(III) “Teacher of record” means a teacher to whom all of the
following apply:

(1) The teacher is responsible for providing instruction,
determining instructional methods for each pupil, diagnosing learning needs,
assessing pupil learning, prescribing intervention strategies and modifying
lessons, reporting outcomes, and evaluating the effects of instruction and
support strategies. The teacher of record may coordinate the distribution and
assignment of the responsibilities described in this sub-sub-sub-subparagraph
with other teachers participating in the instructional process for a course.

(2) The teacher is certified for the grade level or is
working under a valid substitute permit, authorization, or approval issued by
the department.

(3) The teacher has a personnel identification code provided
by the center.

(IV) “Week” means a period that starts on Wednesday and ends
the following Tuesday.

(B) The pupil completes a combination of 1 or more of the
following activities for each scheduled course on pupil membership count day or
supplemental count day, as applicable:

(I) Documented attendance in a virtual course where
synchronous, live instruction occurred with the teacher.

(II) Documented completion of a course assignment.

(III) Documented completion of a course lesson or lesson
activity.

(IV) Documented pupil access to an ongoing lesson, which does
not include a login.

(V) Documented physical attendance on pupil membership count
day or supplemental count day, as applicable, in each scheduled course, if the
pupil will attend at least 50% of the instructional time for each scheduled
course on-site, face-to-face with the teacher of record. As used in this
sub-sub-subparagraph, “teacher of record” means that term as defined in
subparagraph (iii)(A).

(iv) For purposes of subparagraph (iii), each scheduled course currently being attempted by the
pupil, rather than every course on the pupil’s schedule for the entire term, is
considered a part of each scheduled course for the pupil.

(i) For a new district or public school academy beginning its
operation after December 31, 1994, membership for the first 2 full or partial
fiscal years of operation is determined as follows:

(i) If operations begin before the pupil
membership count day for the fiscal year, membership is the average number of
full-time equated pupils in grades K to 12 actually enrolled and in regular
daily attendance on the pupil membership count day for the current school year
and on the supplemental count day for the current school year, as determined by
the department and calculated by adding the number of pupils registered for
attendance on the pupil membership count day plus pupils received by transfer
and minus pupils lost as defined by rules promulgated by the superintendent,
and as corrected by a subsequent department audit, plus the final audited count
from the supplemental count day for the current school year, and dividing that
sum by 2.

(ii) If operations begin after the pupil
membership count day for the fiscal year and not later than the supplemental
count day for the fiscal year, membership is the final audited count of the
number of full-time equated pupils in grades K to 12 actually enrolled and in
regular daily attendance on the supplemental count day for the current school
year.

(j) If a district is the authorizing body for a public school
academy, then, in the first school year in which pupils are counted in
membership on the pupil membership count day in the public school academy, the
determination of the district’s membership excludes from the district’s pupil
count for the immediately preceding supplemental count day any pupils who are
counted in the public school academy on that first pupil membership count day
who were also counted in the district on the immediately preceding supplemental
count day.

(k) For an extended school year program approved by the
superintendent, a pupil enrolled, but not scheduled to be in regular daily
attendance, on a pupil membership count day, is counted in membership.

(l) To be counted in membership, a pupil
must meet the minimum age requirement to be eligible to attend school under
section 1147 of the revised school code, MCL 380.1147, and must be less than 20
years of age on September 1 of the school year except as follows:

(i) A special education pupil who is
enrolled and receiving instruction in a special education program or service
approved by the department, who does not have a high school diploma, and who is
less than 26 years of age as of September 1 of the current school year is
counted in membership.

(ii) A pupil who is determined by the
department to meet all of the following may be counted in membership:

(A) Is enrolled in a public school academy or an alternative
education high school diploma program, that is primarily focused on educating
pupils with extreme barriers to education, such as being homeless as that term
is defined under 42 USC 11302.

(B) Had dropped out of school.

(C) Is less than 22 years of age as of September 1 of the
current school year.

(iii) If a child does not meet the minimum age
requirement to be eligible to attend school for that school year under section
1147 of the revised school code, MCL 380.1147, but will be 5 years of age not
later than December 1 of that school year, the district may count the
child in membership for that school year if the parent or legal guardian has
notified the district in writing that the parent or legal guardian intends to
enroll the child in kindergarten for that school year.

(m) An individual who has achieved a high school diploma is
not counted in membership unless the individual is enrolled in a state-approved
early middle college and at least 1 college course is transcribed for high
school credit each membership count during the individual’s fifth year. An
individual who has achieved a high school equivalency certificate is not
counted in membership unless the individual is a student with a disability as
that term is defined in R 340.1702 of the Michigan Administrative Code. An
individual participating in a job training program funded under former section
107a, as repealed by 2004 PA 351, or a jobs program funded under former section
107b, administered by the department of labor and economic opportunity, or
participating in any successor of either of those 2 programs, is not counted in
membership.

(n) If a pupil counted in membership in a public school
academy is also educated by a district or intermediate district as part of a
cooperative education program, the pupil is counted in membership only in the
public school academy unless a written agreement signed by all parties
designates the party or parties in which the pupil is counted in membership,
and the instructional time scheduled for the pupil in the district or
intermediate district is included in the full-time equated membership determination
under subdivision (q) and section 101. However, for pupils receiving
instruction in both a public school academy and in a district or intermediate
district but not as a part of a cooperative education program, the following
apply:

(i) If the public school academy provides
instruction for at least 1/2 of the class hours required under section 101,
the public school academy receives as its prorated share of the full-time
equated membership for each of those pupils an amount equal to 1 times the
product of the hours of instruction the public school academy provides divided
by the number of hours required under section 101 for full-time equivalency,
and the remainder of the full-time membership for each of those pupils is
allocated to the district or intermediate district providing the remainder of
the hours of instruction.

(ii) If the public school academy provides
instruction for less than 1/2 of the class hours required under section 101,
the district or intermediate district providing the remainder of the hours of
instruction receives as its prorated share of the full-time equated membership
for each of those pupils an amount equal to 1 times the product of the hours of
instruction the district or intermediate district provides divided by the
number of hours required under section 101 for full-time equivalency, and the
remainder of the full-time membership for each of those pupils is allocated to
the public school academy.

(o) An individual less than 16 years of age as of September 1
of the current school year who is being educated in an alternative education
program is not counted in membership if there are also adult education
participants being educated in the same program or classroom.

(p) The department shall give a uniform interpretation of
full-time and part-time memberships.

(q) The number of class hours used to calculate full-time
equated memberships must be consistent with section 101. In determining
full-time equated memberships for pupils who are enrolled in a postsecondary
institution or for pupils engaged in an internship or work experience under
section 1279h of the revised school code, MCL 380.1279h, a pupil is not
considered to be less than a full-time equated pupil solely because of the
effect of the pupil’s postsecondary enrollment or engagement in the internship
or work experience, including necessary travel time, on the number of class
hours provided by the district to the pupil.

(r) Full-time equated memberships for pupils in kindergarten
are determined by dividing the number of instructional hours scheduled and
provided per year per kindergarten pupil by the same number used for
determining full-time equated memberships for pupils in grades 1 to 12.
However, to the extent allowable under federal law, for a district or public
school academy that provides evidence satisfactory to the department that it
used federal title I money in the 2 immediately preceding school fiscal years
to fund full-time kindergarten, full-time equated memberships for pupils in
kindergarten are determined by dividing the number of class hours scheduled and
provided per year per kindergarten pupil by a number equal to 1/2 the number
used for determining full-time equated memberships for pupils in grades 1 to
12. The change in the counting of full-time equated memberships for pupils in
kindergarten that took effect for 2012-2013 is not a mandate.

(s) For a district or a public school academy that has pupils
enrolled in a grade level that was not offered by the district or public school
academy in the immediately preceding school year, the number of pupils enrolled
in that grade level to be counted in membership is the average of the number of
those pupils enrolled and in regular daily attendance on the pupil membership
count day and the supplemental count day of the current school year. Membership
is calculated by adding the number of pupils registered for attendance in that
grade level on the pupil membership count day plus pupils received by transfer
and minus pupils lost as defined by rules promulgated by the superintendent,
and as corrected by subsequent department audit, plus the final audited count
from the supplemental count day for the current school year, and dividing that
sum by 2.

(t) A pupil enrolled in a cooperative education program may
be counted in membership in the pupil’s district of residence with the written
approval of all parties to the cooperative agreement.

(u) If, as a result of a disciplinary action, a district
determines through the district’s alternative or disciplinary education program
that the best instructional placement for a pupil is in the pupil’s home or
otherwise apart from the general school population, if that placement is
authorized in writing by the district superintendent and district alternative
or disciplinary education supervisor, and if the district provides appropriate
instruction as described in this subdivision to the pupil at the pupil’s home
or otherwise apart from the general school population, the district may count
the pupil in membership on a pro rata basis, with the proration based on the
number of hours of instruction the district actually provides to the pupil
divided by the number of hours required under section 101 for full-time
equivalency. For the purposes of this subdivision, a district is considered to
be providing appropriate instruction if all of the following are met:

(i) The district provides at least 2
nonconsecutive hours of instruction per week to the pupil at the pupil’s home
or otherwise apart from the general school population under the supervision of
a certificated teacher.

(ii) The district provides instructional
materials, resources, and supplies that are comparable to those otherwise
provided in the district’s alternative education program.

(iii) Course content is comparable to that in
the district’s alternative education program.

(iv) Credit earned is awarded to the pupil
and placed on the pupil’s transcript.

(v) If a pupil was enrolled in a public school academy on the
pupil membership count day, if the public school academy’s contract with its
authorizing body is revoked or the public school academy otherwise ceases to
operate, and if the pupil enrolls in a district within 45 days after the pupil
membership count day, the department shall adjust the district’s pupil count
for the pupil membership count day to include the pupil in the count.

(w) For a public school academy that has been in operation
for at least 2 years and that suspended operations for at least 1 semester and
is resuming operations, membership is the sum of the product of .90 times the
number of full-time equated pupils in grades K to 12 actually enrolled and in
regular daily attendance on the first pupil membership count day or
supplemental count day, whichever is first, occurring after operations resume,
plus the product of .10 times the final audited count from the most recent
pupil membership count day or supplemental count day that occurred before
suspending operations, as determined by the superintendent.

(x) Except for 2026-2027, if a district’s membership for a
particular fiscal year, as otherwise calculated under this subsection, would be
less than 1,550 pupils, the district has 4.5 or fewer pupils per square mile,
as determined by the department, and the district does not receive funding under
section 22d(2), the district’s membership is considered to be the membership
figure calculated under this subdivision. If a district educates and counts in
its membership pupils in grades 9 to 12 who reside in a contiguous district
that does not operate grades 9 to 12 and if 1 or both of the affected districts
request the department to use the determination allowed under this sentence,
the department shall include the square mileage of both districts in
determining the number of pupils per square mile for each of the districts for the
purposes of this subdivision. If a district has established a community
engagement advisory committee in partnership with the department of treasury,
is required to submit a deficit elimination plan or an enhanced deficit
elimination plan under section 1220 of the revised school code, MCL 380.1220,
and is located in a city with a population between 9,000 and 11,000, as
determined by the department, that is in a county with a population between
150,000 and 160,000, as determined by the department, the district’s membership
is considered to be the membership figure calculated under this subdivision. For
2026-2027 only, every district’s membership is considered to be the membership
figure calculated under this subdivision. The membership figure calculated
under this subdivision is the greater of the following:

(i) The average of the district’s membership
for the 3-fiscal-year period ending with that fiscal year, calculated by adding
the district’s actual membership for each of those 3 fiscal years, as otherwise
calculated under this subsection, and dividing the sum of those 3 membership
figures by 3.

(ii) The district’s actual membership for
that fiscal year as otherwise calculated under this subsection.

(y) Full-time equated memberships for special education
pupils who are not enrolled in kindergarten but are enrolled in a classroom
program under R 340.1754 of the Michigan Administrative Code are determined by
dividing the number of class hours scheduled and provided per year by 450.
Full-time equated memberships for special education pupils who are not enrolled
in kindergarten but are receiving early childhood special education services
under R 340.1755 or R 340.1862 of the Michigan Administrative Code are
determined by dividing the number of hours of service scheduled and provided
per year per pupil by 180.

(z) A pupil of a district that begins its school year after
Labor Day who is enrolled in an intermediate district program that begins
before Labor Day is not considered to be less than a full-time pupil solely due
to instructional time scheduled but not attended by the pupil before Labor Day.

(aa) For the first year in which a pupil is counted in
membership on the pupil membership count day in a middle college program, the
membership is the average of the full-time equated membership on the pupil
membership count day and on the supplemental count day for the current school
year, as determined by the department. If a pupil described in this subdivision
was counted in membership by the operating district on the immediately
preceding supplemental count day, the pupil is excluded from the district’s
immediately preceding supplemental count for the purposes of determining the
district’s membership.

(bb) A district or public school academy that educates a
pupil who attends a United States Olympic Education Center may count the pupil
in membership regardless of whether or not the pupil is a resident of this
state.

(cc) A pupil enrolled in a district other than the pupil’s
district of residence under section 1148(2) of the revised school code, MCL
380.1148, is counted in the educating district.

(dd) For a pupil enrolled in a dropout recovery program that
meets the requirements of section 23a, the pupil must be counted as 1/12 of a
full-time equated membership for each month that the district operating the
program reports that the pupil was enrolled in the program and was in full
attendance or based on the number of successfully completed courses by the
pupil, with each successfully completed course equivalent to 1/12 of a
full-time equated membership. A district may claim more than 1/12 of a full-time
equated membership within a month for an enrolled pupil who was in full
attendance and successfully completed more than 1 required course. If the
special membership counting provisions under this subdivision result in a pupil
being counted as more than 1.0 FTE in a fiscal year, the entire FTE
amount, including any amount in excess of 1.0 FTE, must be funded under
sections 22a and 22b. A district may generate more than 1.0 FTE for a pupil
enrolled in a program under section 23a. The district operating the
program shall report to the center the number of pupils who were enrolled in
the program and were in full attendance for a month not later than 30 days
after the end of that month. A district shall not report a pupil as being in
full attendance for a month unless both of the following are met:

(i) A personalized learning plan is in place
on or before the first school day of the month for the first month the pupil
participates in the program.

(ii) Either of the following is met:

(A) The pupil meets the district’s definition under section
23a of satisfactory monthly progress for that month or, if the pupil does not
meet that definition of satisfactory monthly progress for that month, the pupil
did meet that definition of satisfactory monthly progress in the immediately
preceding month and appropriate interventions, as defined by the district, are
implemented within 10 school days after it is determined that the pupil does
not meet that definition of satisfactory monthly progress.

(B) For the first 2 months that the pupil participates in the
program, the pupil earns 0.25 credit by the end of the second month. A pupil
described in this sub-subparagraph may be retroactively reported as being in
full attendance for the first month that the pupil participated in the program.

(ee) A pupil participating in a virtual course under section
21f is counted in membership in the district enrolling the pupil.

(ff) If a public school academy that is not in its first or
second year of operation closes at the end of a school year and does not reopen
for the next school year, the department shall adjust the membership count of
the district or other public school academy in which a former pupil of the
closed public school academy enrolls and is in regular daily attendance for the
next school year to ensure that the district or other public school academy
receives the same amount of membership aid for the pupil as if the pupil were
counted in the district or other public school academy on the supplemental
count day of the preceding school year.

(gg) If a special education pupil is expelled under section
1311 or 1311a of the revised school code, MCL 380.1311 and 380.1311a, and
is not in attendance on the pupil membership count day because of the
expulsion, and if the pupil remains enrolled in the district and resumes
regular daily attendance during that school year, the district’s membership is
adjusted to count the pupil in membership as if the pupil had been in
attendance on the pupil membership count day.

(hh) A pupil enrolled in a community district is counted in
membership in the community district.

(ii) A part-time pupil enrolled in a nonpublic school in
grades K to 12 in accordance with section 166b must not be counted as more than
0.75 of a full-time equated membership.

(jj) A district that borders another state or a public school
academy that operates at least grades 9 to 12 and is located within 20 miles of
a border with another state may count in membership a pupil who is enrolled in
a course at a college or university that is located in the bordering state and
within 20 miles of the border with this state if all of the following are met:

(i) The pupil would meet the definition of
an eligible student under the postsecondary enrollment options act, 1996 PA
160, MCL 388.511 to 388.524, if the course were an eligible course under that
act.

(ii) The course in which the pupil is
enrolled would meet the definition of an eligible course under the
postsecondary enrollment options act, 1996 PA 160, MCL 388.511 to 388.524, if
the course were provided by an eligible postsecondary institution under that
act.

(iii) The department determines that the
college or university is an institution that, in the other state, fulfills a
function comparable to a state university or community college, as those terms
are defined in section 3 of the postsecondary enrollment options act, 1996 PA
160, MCL 388.513, or is an independent nonprofit degree-granting college or
university.

(iv) The district or public school academy
pays for a portion of the pupil’s tuition at the college or university in an
amount equal to the eligible charges that the district or public school academy
would pay to an eligible postsecondary institution under the postsecondary
enrollment options act, 1996 PA 160, MCL 388.511 to 388.524, as if the course
were an eligible course under that act.

(v) The district or public school academy
awards high school credit to a pupil who successfully completes a course as
described in this subdivision.

(kk) A pupil enrolled in a middle college program may be
counted for more than a total of 1.0 full-time equated membership for any of
the school years in which the pupil is enrolled in the middle college program,
but the total full-time equated membership for that pupil for all of the school
years in which the pupil is enrolled in high school must not be greater than
5.00 full-time equated membership if the pupil is enrolled in more than the
minimum number of instructional days and hours required under section 101 and
the pupil is expected to complete the 5‑year program with both a high
school diploma and at least 60 transferable college credits or is expected to
earn an associate’s degree in fewer than 5 years. A pupil who graduates with
both a high school diploma and at least 60 transferable college credits or an
associate degree at least 1 semester early is considered to have completed the
middle college program in fewer than 5 years.

(ll) If a district’s or public school academy’s
membership for a particular fiscal year, as otherwise calculated under this
subsection, includes pupils counted in membership who are enrolled under
section 166b, all of the following apply for the purposes of this subdivision:

(i) If the district’s or public school
academy’s membership for pupils counted under section 166b equals or exceeds 5%
of the district’s or public school academy’s membership for pupils not counted
in membership under section 166b in the immediately preceding fiscal year, then
the growth in the district’s or public school academy’s membership for pupils
counted under section 166b must not exceed 10%.

(ii) If the district’s or public school
academy’s membership for pupils counted under section 166b is less than 5% of
the district’s or public school academy’s membership for pupils not counted in
membership under section 166b in the immediately preceding fiscal year,
then the district’s or public school academy’s membership for pupils counted
under section 166b must not exceed the greater of the following:

(A) Five percent of the district’s or public school academy’s
membership for pupils not counted in membership under section 166b.

(B) Ten percent more than the district’s or public school
academy’s membership for pupils counted under section 166b in the immediately
preceding fiscal year.

(iii) If 1 or more districts consolidate or
are parties to an annexation, then the calculations under subparagraphs (i) and (ii) must be applied to the combined total
membership for pupils counted in those districts for the fiscal year
immediately preceding the consolidation or annexation.

(5) “Public school academy” means that term as defined in
section 5 of the revised school code, MCL 380.5.

(6) “Pupil” means an individual in membership in a public
school. A district must have the approval of the pupil’s district of residence
to count the pupil in membership, except approval by the pupil’s district of
residence is not required for any of the following:

(a) A nonpublic part-time pupil enrolled in grades K to 12 in
accordance with section 166b.

(b) A pupil receiving 1/2 or less of the pupil’s instruction
in a district other than the pupil’s district of residence.

(c) A pupil enrolled in a public school academy.

(d) A pupil enrolled in a district other than the pupil’s
district of residence if the pupil is enrolled in accordance with section 105
or 105c.

(e) A pupil who has made an official written complaint or
whose parent or legal guardian has made an official written complaint to law
enforcement officials and to school officials of the pupil’s district of
residence that the pupil has been the victim of a criminal sexual assault or
other serious assault, if the official complaint either indicates that the
assault occurred at school or that the assault was committed by 1 or more other
pupils enrolled in the school the pupil would otherwise attend in the district
of residence or by an employee of the district of residence. A person who
intentionally makes a false report of a crime to law enforcement officials for
the purposes of this subdivision is subject to section 411a of the Michigan
penal code, 1931 PA 328, MCL 750.411a, which provides criminal penalties for
that conduct. As used in this subdivision:

(i) “At school” means in a classroom,
elsewhere on school premises, on a school bus or other school-related vehicle,
or at a school-sponsored activity or event whether or not it is held on school
premises.

(ii) “Serious assault” means an act that
constitutes a felony violation of chapter XI of the Michigan penal code, 1931
PA 328, MCL 750.81 to 750.90g, or that constitutes an assault and infliction of
serious or aggravated injury under section 81a of the Michigan penal code, 1931
PA 328, MCL 750.81a.

(f) A pupil whose district of residence changed after the
pupil membership count day and before the supplemental count day and who
continues to be enrolled on the supplemental count day as a nonresident in the
district in which the pupil was enrolled as a resident on the pupil membership
count day of the same school year.

(g) A pupil enrolled in an alternative education program
operated by a district other than the pupil’s district of residence who meets 1
or more of the following:

(i) The pupil has been suspended or expelled
from the pupil’s district of residence for any reason, including, but not
limited to, a suspension or expulsion under section 1310, 1311, or 1311a of the
revised school code, MCL 380.1310, 380.1311, and 380.1311a.

(ii) The pupil had previously dropped out of
school.

(iii) The pupil is pregnant or is a parent.

(iv) The pupil has been referred to the
program by a court.

(h) A pupil enrolled in the Michigan Virtual School, for the
pupil’s enrollment in the Michigan Virtual School.

(i) A pupil who is the child of a person who works at the
district or who is the child of a person who worked at the district as of the
time the pupil first enrolled in the district but who no longer works at the
district due to a workforce reduction. As used in this subdivision, “child”
includes an adopted child, stepchild, or legal ward.

(j) An expelled pupil who has been denied reinstatement by
the expelling district and is reinstated by another school board under section
1311 or 1311a of the revised school code, MCL 380.1311 and 380.1311a.

(k) A pupil enrolled in a district other than the pupil’s
district of residence in a middle college program if the pupil’s district of
residence and the enrolling district are both constituent districts of the same
intermediate district.

(l) A pupil enrolled in a district other
than the pupil’s district of residence who attends a United States Olympic
Education Center.

(m) A pupil enrolled in a district other than the pupil’s
district of residence under section 1148(2) of the revised school code, MCL
380.1148.

(n) A pupil who enrolls in a district other than the pupil’s
district of residence as a result of the pupil’s school not making adequate
yearly progress under the no child left behind act of 2001, Public Law 107-110,
or the every student succeeds act, Public Law 114-95. However, if a district
educates pupils who reside in another district and if the primary instructional
site for those pupils is established by the educating district after 2009-2010
and is located within the boundaries of that other district, the educating
district must have the approval of that other district to count those pupils in
membership.

(7) “Pupil membership count day” of a district or
intermediate district means:

(a) Except as provided in subdivision (b) or (c), either of
the following:

(i) The first Wednesday in October each
school year.

(ii) For a district or building in which
school is not in session on the Wednesday described in subparagraph (i) due to conditions not within the control of school
authorities, with the approval of the superintendent, the immediately following
day on which school is in session in the district or building.

(b) Except as otherwise provided in subdivision (c), for a
district or intermediate district maintaining school during the entire school
year, the following days:

(i) Fourth Wednesday in July.

(ii) First Wednesday in October.

(iii) Second Wednesday in February.

(iv) Fourth Wednesday in April.

(c) If a date listed in subdivision (a) or (b) is on a day of
religious or cultural significance, as determined by the district or
intermediate district, the immediately following day on which school is in
session in the district or building.

(8) “Pupils in grades K to 12 actually enrolled and in
regular daily attendance” means, except as otherwise provided in this section,
pupils in grades K to 12 in attendance and receiving instruction in all classes
for which they are enrolled on the pupil membership count day or the
supplemental count day, as applicable. Except as otherwise provided in this
section and subsection, a pupil who is absent from any of the classes in which
the pupil is enrolled on the pupil membership count day or supplemental count
day and who does not attend each of those classes during the 10 consecutive school
days immediately following the pupil membership count day or supplemental count
day, except for a pupil who has been excused by the district, is not counted as
1.0 full-time equated membership. Except as otherwise provided in this section,
a pupil who is excused from attendance on the pupil membership count day or
supplemental count day and who fails to attend each of the classes in which the
pupil is enrolled within 30 calendar days after the pupil membership count day
or supplemental count day is not counted as 1.0 full-time equated membership.
Except as otherwise provided in this section, in addition, a pupil who was
enrolled and in attendance in a district, intermediate district, or public
school academy before the pupil membership count day or supplemental count day
of a particular year but was expelled or suspended on the pupil membership
count day or supplemental count day is only counted as 1.0 full-time equated
membership if the pupil resumed attendance in the district, intermediate district,
or public school academy within 45 days after the pupil membership count day or
supplemental count day of that particular year. Except as otherwise provided in
this section, a pupil not counted as 1.0 full-time equated membership due to an
absence from a class is counted as a prorated membership for the classes the
pupil attended. For purposes of this subsection:

(a) “Appropriately placed” means holding a valid Michigan
educator credential with the required grade range for the assignment, as
defined by the superintendent of public instruction.

(b) “Class” means a period of time in 1 day when pupils and an
individual who is appropriately placed or an individual working under a valid
substitute permit, authorization, or approval issued by the department are
together and instruction is taking place. If a pupil is assigned to a class or
instructional setting for which the individual providing instruction is not
appropriately placed, the misplacement is subject to the penalties and remedies
provided under section 163.

(9) “Rule” means a rule promulgated pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(10) “The revised school code” means the revised school code,
1976 PA 451, MCL 380.1 to 380.1852.

(11) “School district of the first class”, “first class
school district”, and “district of the first class” mean, for the purposes of
this article only, a district that had at least 40,000 pupils in membership for
the immediately preceding fiscal year.

(12) “School fiscal year” means a fiscal year that commences
July 1 and continues through June 30.

(13) “State board” means the state board of education.

(14) “Superintendent”, unless the context clearly refers to a
district or intermediate district superintendent, means the superintendent of
public instruction described in section 3 of article VIII of the state
constitution of 1963.

(15) “Supplemental count day” means the day on which the
supplemental pupil count is conducted under section 6a.

(16) “Tuition pupil” means a pupil of school age attending
school in a district other than the pupil’s district of residence for whom
tuition may be charged to the district of residence. Tuition pupil does not
include a pupil who is a special education pupil, a pupil described in
subsection (6)(d) to (n), or a pupil whose parent or guardian voluntarily enrolls
the pupil in a district that is not the pupil’s district of residence. A pupil’s
district of residence shall not require a high school tuition pupil, as
provided under section 111, to attend another school district after the pupil
has been assigned to a school district.

(17) “State school aid fund” means the state school aid fund
established in section 11 of article IX of the state constitution of 1963.

(18) “Taxable value” means, except as otherwise provided in
this article, the taxable value of property as determined under section 27a of
the general property tax act, 1893 PA 206, MCL 211.27a.

(19) “Textbook” means a book, electronic book, or other
instructional print or electronic resource that is selected and approved by the
governing board of a district and that contains a presentation of principles of
a subject, or that is a literary work relevant to the study of a subject
required for the use of classroom pupils, or another type of course material
that forms the basis of classroom instruction.

(20) “Total state aid” or “total state school aid”, except as
otherwise provided in this article, means the total combined amount of all
funds due to a district, intermediate district, or other entity under this
article.

(21) “Weighted pupil membership” means that term as
calculated in this subsection. For the purposes of calculations under this
subsection, the base weighted pupil membership for a district is 0. All of the
following apply to the weighted pupil membership under this subsection:

(a) For each full-time English language learner counted in
membership in a district in the immediately preceding fiscal year, the weighted
pupil membership for that district must be increased as follows:

(i) For a full-time equivalent English
language learner who was assessed in the immediately preceding fiscal year
under the WIDA ACCESS for English language learners or the WIDA Alternate
ACCESS with a WIDA ACCESS or WIDA Alternate ACCESS composite score between 1.0
and 1.9, as applicable to each assessment, an increase of 0.1940. It is
intended that the additional weighted pupil membership under this subparagraph
be increased annually until it equals 0.75.

(ii) For a full-time equivalent English
language learner who was assessed in the immediately preceding fiscal year
under the WIDA ACCESS for English language learners or the WIDA Alternate
ACCESS with a WIDA ACCESS or WIDA Alternate ACCESS composite score between 2.0
and 2.9, as applicable to each assessment, an increase of 0.1339. It is
intended that the additional weighted pupil membership under this subparagraph
be increased annually until it equals 0.50.

(iii) For a full-time equivalent English
language learner who was assessed in the immediately preceding fiscal year
under the WIDA ACCESS for English language learners or the WIDA Alternate
ACCESS with a WIDA ACCESS or WIDA Alternate ACCESS composite score between 3.0
and 3.9, as applicable to each assessment, an increase of 0.0219. It is
intended that the additional weighted pupil membership under this subparagraph
be increased annually until it equals 0.35.

(b) For each economically disadvantaged pupil counted in
membership in a district, the weighted pupil membership for that district must
be increased as follows:

(i) For the purpose of this subparagraph,
the department shall determine the number of pupils in membership who are
economically disadvantaged as the greatest of the following:

(A) The number of membership pupils in the district who are
determined to be economically disadvantaged, as reported to the center in the
form and manner prescribed by the center not later than the fifth Wednesday
after the pupil membership count day of the immediately preceding fiscal year.

(B) If the district is in the community eligibility program,
the number of pupils determined to be eligible based on the product of the
identified student percentage multiplied by the total number of pupils in the
district, as reported to the center in the form and manner prescribed by the
center not later than the fifth Wednesday after the pupil membership count day
of the immediately preceding fiscal year. These calculations must be made at
the building level. This sub-subparagraph applies only to an eligible district
for the fiscal year immediately following the first fiscal year in which it is
in the community eligibility program. As used in this sub-subparagraph, “identified
student percentage” means the quotient of the number of pupils in an eligible
district who are determined to be economically disadvantaged, as reported to
the center in a form and manner prescribed by the center not later than the
fifth Wednesday after the pupil membership count day in the fiscal year
preceding the first fiscal year in which the eligible district is in the
community eligibility program, divided by the total number of pupils counted in
an eligible district on the pupil membership count day in the fiscal year preceding
the first fiscal year in which the eligible district is in the community
eligibility program.

(C) If the district began operations as a district after the
pupil membership count day of the current fiscal year, the number of membership
pupils in the district who are determined to be economically disadvantaged, as
reported to the center in the form and manner prescribed by the center not
later than the fifth Wednesday after the supplemental count day of the current
fiscal year.

(D) If, for a particular fiscal year, the number of
membership pupils in a district who are determined under sub-subparagraph (A)
to be economically disadvantaged or to be eligible based on the identified
student percentage varies by more than 20 percentage points from the number of
those pupils in the district as calculated under sub-subparagraph (A) for the
immediately preceding fiscal year caused by an egregious reporting error by the
district, the department may choose to have the calculations under sub-subparagraph
(A) instead be made using the number of membership pupils in the district who
are determined to be economically disadvantaged, as reported to the center in
the form and manner prescribed by the center not later than the fifth Wednesday
after the supplemental count day of the immediately preceding fiscal year.

(ii) Each district must be assigned an
opportunity index score each fiscal year, the value of which is the quotient of
the number of economically disadvantaged pupils as determined under this
subdivision for the district and the total number of pupils in the district in
the immediately preceding fiscal year, multiplied by 100 and rounded up to the
nearest whole number. Each district must be assigned an opportunity index band
as follows:

(A) A district with an opportunity index score greater than
or equal to 0 but less than 20 must be assigned to band 1 and must receive an
additional weighted pupil membership of at least 0.1913 and not more than
0.1965 for each economically disadvantaged pupil. The additional weighted
pupil membership under this sub-subparagraph must be an amount equal to the
district’s opportunity index score minus 1, multiplied by the band adjustment
factor applicable to this subdivision, plus 0.1913 multiplied by the number of
pupils identified as economically disadvantaged under this sub-subparagraph. It
is intended that the additional weighted pupil membership under this
sub-subparagraph be increased annually until it reaches between 0.35 and 0.36
per economically disadvantaged pupil.

(B) A district with an opportunity index score greater than
or equal to 20 but less than 44 must be assigned to band 2 and must receive an
additional weighted pupil membership of at least 0.1968 and not more than
0.2046 for each economically disadvantaged pupil. The additional weighted
pupil membership under this sub-subparagraph must be an amount equal to the
district’s opportunity index score minus 20, multiplied by the band adjustment
factor applicable to this subdivision, plus 0.1968 multiplied by the number of
pupils identified as economically disadvantaged under this sub-subparagraph. It
is intended that the additional weighted pupil membership under this
sub-subparagraph be increased annually until it reaches between 0.36 and 0.375
per economically disadvantaged pupil.

(C) A district with an opportunity index score greater than
or equal to 44 but less than 59 must be assigned to band 3 and must receive an
additional weighted pupil membership of at least 0.2050 and not more than
0.2126 for each economically disadvantaged pupil. The additional weighted pupil
membership under this sub-subparagraph must be an amount equal to the district’s
opportunity index score minus 44, multiplied by the band adjustment factor
applicable to this subdivision, plus 0.2050 multiplied by the number of pupils
identified as economically disadvantaged under this sub-subparagraph. It is
intended that the additional weighted pupil membership under this
sub-subparagraph be increased annually until it reaches between 0.375 and 0.39
per economically disadvantaged pupil.

(D) A district with an opportunity index score greater than
or equal to 59 but less than 73 must be assigned to band 4 and must receive an
additional weighted pupil membership of at least 0.2132 and not more than
0.2284 for each economically disadvantaged pupil. The additional weighted
pupil membership under this sub-subparagraph must be an amount equal to the
district’s opportunity index score minus 59, multiplied by the band adjustment
factor applicable to this sub-subparagraph, plus 0.2132 multiplied by the
number of pupils identified as economically disadvantaged under this
sub-subparagraph. It is intended that the additional weighted pupil membership
under this sub-subparagraph be increased annually until it reaches between 0.39
and 0.42 per economically disadvantaged pupil.

(E) A district with an opportunity index score greater than
or equal to 73 but less than 85 must be assigned to band 5 and must receive an
additional weighted pupil membership of at least 0.2296 and not more than
0.2546 for each economically disadvantaged pupil. The additional weighted
pupil membership under this sub-subparagraph must be an amount equal to the
district’s opportunity index score minus 73, multiplied by the band adjustment
factor applicable to this sub-subparagraph, plus 0.2296 multiplied by the
number of pupils identified as economically disadvantaged under this
sub-subparagraph. It is intended that the additional weighted pupil membership
under this sub-subparagraph be increased annually until it reaches between 0.42
and 0.47 per economically disadvantaged pupil.

(F) A district with an opportunity index score greater than
or equal to 85 must be assigned to band 6 and must receive an additional
weighted pupil membership at a rate of 0.2569 for each economically
disadvantaged pupil. It is intended that the additional weighted pupil
membership under this sub-subparagraph will be increased annually until it
reaches 0.47 per economically disadvantaged pupil.

(G) As used in this subparagraph, “band adjustment factor”
means an amount equal to the difference between the lowest and highest
reimbursement bounds for each band, divided by the number of possible
opportunity index scores in that band.

(c) To assist the legislature in determining necessary
funding levels to support foundation allowance payments for weighted pupil
membership calculated in this subsection, each revenue estimating conference
conducted under section 367b of the management and budget act, 1984 PA 431, MCL
18.1367b, must include estimated pupil counts necessary to determine a weighted
pupil membership under this subsection for the current and subsequent 2 fiscal
years.

(d) As used in this subsection:

(i) “Economically disadvantaged” means a
pupil who has been determined eligible for free or reduced-price meals as
determined under the Richard B. Russell national school lunch act, 42 USC 1751
to 1769j; who is in a household receiving supplemental nutrition assistance
program or temporary assistance for needy families assistance; or who is
homeless, migrant, or in foster care, as reported to the center.

(ii) “English language learner” means limited
English proficient pupils who speak a language other than English as their
primary language and have difficulty speaking, reading, writing, or
understanding English as reported to the center.

Sec.
11. (1) For the fiscal year ending September 30, 2026, there is appropriated
for the public schools of this state and certain other state purposes relating
to education the sum of $18,179,025,300.00 from the state school aid fund, the
sum of $73,151,100.00 from the general fund, an amount not to exceed $100,000,000.00
from the school consolidation and infrastructure fund created under section
11x, an amount not to exceed $125,000,000.00 from the school transportation
fund created under section 22k, an amount not to exceed $71,000,000.00 from the
enrollment stabilization fund created under section 29, an amount not to exceed
$18,000,000.00 from the great start readiness program reserve fund created
under section 32e, an amount not to exceed $30,000,000.00 from the educator
fellowship public provider fund created under section 27d, an amount not to
exceed $97,037,400.00 from the state school aid pupil support reserve fund
created under section 22r, and an amount not to exceed $600,000.00 from the
general pupil support reserve fund created under section 22s. For the fiscal
year ending September 30, 2027, there is appropriated for the public schools of
this state and certain other state purposes relating to education the sum of
$18,856,252,300.00 from the state school aid fund, the sum of $57,984,900.00
from the general fund, an amount not to exceed $125,000,000.00 from the school
transportation fund created under section 22k, an amount not to exceed
$130,000,000.00 from the enrollment stabilization fund created under section
29, an amount not to exceed $26,300,000.00 from the great start readiness
program reserve fund created under section 32e, an amount not to exceed $80,000,000.00
from the educator fellowship public provider fund created under section 27d, an
amount not to exceed $7,000,000.00 from the educator fellowship private
provider fund created under section 27e, an amount not to exceed
$107,037,400.00 from the state school aid pupil support reserve fund created
under section 22r, and an amount not to exceed $600,000.00 from the general
pupil support reserve fund created under section 22s. In addition, all
available federal funds are appropriated as allocated in this article for the
fiscal years ending September 30, 2026 and September 30, 2027.

(2) The appropriations under this section are allocated as
provided in this article. Money appropriated under this section from the
general fund must be expended to fund the purposes of this article before the
expenditure of money appropriated under this section from the state school aid
fund.

(3) Any general fund allocations under this article that are
not expended by the end of the fiscal year are transferred to the school aid
stabilization fund created under section 11a.

Sec.
11a. (1) The school aid stabilization fund is created as a separate account
within the state school aid fund.

(2) The state treasurer may receive money or other assets
from any source for deposit into the school aid stabilization fund. The state
treasurer shall deposit into the school aid stabilization fund all of the
following:

(a) Unexpended and unencumbered state school aid fund revenue
for a fiscal year that remains in the state school aid fund as of the
bookclosing for that fiscal year.

(b) Money statutorily dedicated to the school aid
stabilization fund.

(c) Money appropriated to the school aid stabilization fund.

(3) Money available in the school aid stabilization fund may
not be expended without a specific appropriation from the school aid
stabilization fund. Money in the school aid stabilization fund must be expended
only for purposes for which state school aid fund money may be expended.

(4) The state treasurer shall direct the investment of the
school aid stabilization fund. The state treasurer shall credit to the school
aid stabilization fund interest and earnings from fund investments.

(5) Money in the school aid stabilization fund at the close
of a fiscal year remains in the school aid stabilization fund and does not
lapse to the unreserved school aid fund balance or the general fund.

(6) If the maximum amount appropriated under section 11 from
the state school aid fund for a fiscal year exceeds the amount available for
expenditure from the state school aid fund for that fiscal year, there is
appropriated from the school aid stabilization fund to the state school aid
fund an amount equal to the projected shortfall as determined by the department
of treasury, but not to exceed available money in the school aid stabilization
fund. If the money in the school aid stabilization fund is insufficient to
fully fund an amount equal to the projected shortfall, the state budget
director shall notify the legislature as required under section 296(2) and
state payments in an amount equal to the remainder of the projected shortfall
must be prorated in the manner provided under section 296(3).

(7) For 2026-2027, in addition to the appropriations in
section 11, there is appropriated from the school aid stabilization fund to the
state school aid fund the amount necessary to fully fund the allocations under
this article.

Sec.
11j. From the state school aid fund money appropriated in section 11, there is
allocated an amount not to exceed $23,000,000.00 for 2026-2027 for payments to
the school loan bond redemption fund in the department of treasury on behalf of
districts and intermediate districts. Notwithstanding section 296 or any other
provision of this act, funds allocated under this section are not subject to
proration and must be paid in full.

Sec.
11k. For 2026-2027, there is appropriated from the general fund to the school
loan revolving fund an amount equal to the amount of school bond loans assigned
to the Michigan finance authority, not to exceed the total amount of school
bond loans held in reserve as long-term assets. As used in this section, “school
loan revolving fund” means that fund created in section 16c of the shared
credit rating act, 1985 PA 227, MCL 141.1066c.

Sec.
11m. From the state school aid fund money appropriated in section 11, there is
allocated for 2026-2027 an amount not to exceed $10,000,000.00 for fiscal year
cash-flow borrowing costs solely related to the state school aid fund
established under section 11 of article IX of the state constitution of 1963.

Sec.
11s. (1) From the state school aid fund money appropriated in section 11, there
is allocated $3,000,000.00 for 2026-2027 only for the purpose of providing
services and programs to children who reside within the boundaries of a
district with the majority of its territory located within the boundaries of a
city for which an executive proclamation of emergency concerning drinking water
is issued in the current or immediately preceding 11 fiscal years under the
emergency management act, 1976 PA 390, MCL 30.401 to 30.421, and that has at
least 4,500 pupils in membership for the 2016-2017 fiscal year or has at least
2,400 pupils in membership for a fiscal year after 2016-2017.

(2) For 2026-2027 only, from the state school aid fund money
allocated in subsection (1), there is allocated an amount not to exceed $3,000,000.00
to an intermediate district that has a constituent district described in
subsection (1) for interventions and supports for students in grades K to 12
who were impacted by an executive proclamation of emergency described in
subsection (1) concerning drinking water. Funds under this subsection must be
used for behavioral supports, social workers, counselors, psychologists,
nursing services, including, but not limited to, vision and hearing services,
transportation services, parental engagement, community coordination, and other
support services.

(3) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
11x. (1) The school consolidation and infrastructure fund is created as a
separate account within the state school aid fund for the purpose of improving
student academic outcomes, increasing the efficiency of the state’s public
education system, and creating a healthy and safe space for students in this
state.

(2) The state treasurer may receive money or other assets
from any source for deposit into the school consolidation and infrastructure
fund. The state treasurer shall direct the investment of the school
consolidation and infrastructure fund. The state treasurer shall credit to the
school consolidation and infrastructure fund interest and earnings from school
consolidation and infrastructure fund investments.

(3) Money in the school consolidation and infrastructure fund
at the close of the fiscal year remains in the school consolidation and
infrastructure fund and does not lapse to the state school aid fund or the
general fund.

(4) The department of treasury is the administrator of the
school consolidation and infrastructure fund for auditing purposes.

(5) Money available in the school consolidation and
infrastructure fund must not be expended without a specific appropriation.

(6) From the state school aid fund money appropriated under
section 11, there is allocated for 2022-2023 only an amount not to exceed
$5,000,000.00 for grants to districts and intermediate districts to support the
cost of a feasibility study or analysis of consolidation or the consolidation
of services among 1 or more buildings within a district, among 1 or more
districts, or among 1 or more intermediate districts. Districts and
intermediate districts may apply for a grant under this subsection to the department
on a first-come, first-serve basis. The maximum amount of a grant to be
distributed under this subsection may not exceed $250,000.00. Notwithstanding
section 17b, the department shall make payments under this subsection on a
schedule determined by the department.

(7) To be eligible for a grant under subsection (6), a
district or intermediate district must demonstrate to the department, in the
manner prescribed by the department, that it will conduct a feasibility study
or analysis and that all of the following will be met:

(a) Within 30 days after completion of the study or analysis,
the district or intermediate district will make the results of the study or
analysis available to all districts and intermediate districts included in the
study or analysis. Within 60 days after the completion of the study or
analysis, the district or intermediate district will make the results available
on a publicly available website.

(b) The study or analysis may include, but is not limited to,
consolidation opportunities in the following areas:

(i) Financial services, which may include,
but is not limited to, the following:

(A) Budgeting and staffing.

(B) Payroll.

(C) Employee benefits.

(D) State reporting.

(E) Software consolidation to achieve common software
throughout the intermediate district.

(ii) Human resources, which may include, but
is not limited to, the following:

(A) Onboarding.

(B) Title IX administration.

(C) Hiring.

(D) Software consolidation to achieve common software
throughout the intermediate district.

(iii) Information technology, which may
include, but is not limited to, the following:

(A) Software consolidation to achieve common software
throughout the intermediate district.

(B) Fiber projects.

(C) Cybersecurity.

(D) One-to-one device management.

(iv) Grant management and reporting, which
may include, but is not limited to, the following:

(A) Management of all state grant sites and databases.

(B) Grant reporting.

(v) Cash management, which may include, but
is not limited to, the opportunities for intermediate districts and districts
to contract on cash flow management to maximize interest earnings.

(vi) Debt issuance and management, including
at least all of the following:

(A) Refunding opportunities.

(B) New bond issue analysis.

(vii) School facility consolidation.

(viii) Consolidation of transportation-related
activities.

(ix) The physical consolidation of districts.

(8) An intermediate district that receives a grant under this
section shall meet with its constituent districts located within the
intermediate district to discuss the results of the study or analysis and to
implement changes where feasible. The application for an intermediate district
must include a brief description of how the intermediate district will conduct
these meetings.

(9) To be eligible for the receipt of funding for
infrastructure-related projects appropriated from the school consolidation and
infrastructure fund created under this section, a district must allow for the
facility condition assessments described in former section 11y to be conducted
in the district. It is the intent of the legislature that money in the school
consolidation and infrastructure fund will not be appropriated for
infrastructure projects until the completion of the facility condition assessments
described in former section 11y.

(10) For 2026-2027, $50,000,000.00 from the state school aid
fund must be deposited into the school consolidation and infrastructure fund.

Sec.
12d. (1) From the school consolidation and infrastructure fund created under
section 11x, there is allocated for 2023-2024 only an amount not to exceed
$110,000,000.00 for the purposes of this section.

(2) From the amount allocated in subsection (1), there is
allocated an amount not to exceed $75,000,000.00 for grants to districts and
intermediate districts to support costs related to internal consolidation
within the district or intermediate district. All of the following apply to
grants under this subsection:

(a) The department shall allow grants for applicants that
have already taken actions for internal consolidation within the previous 2
years and grants for applicants that have not yet begun internal consolidation
activities.

(b) The department shall prioritize applications from
districts and intermediate districts that meet any of the following criteria:

(i) Are in an opportunity index band, as
determined under section 6(21), of 3 or higher.

(ii) Are an intermediate district for which
the percentage of pupils in membership who were determined to be economically
disadvantaged in the immediately preceding fiscal year is equal to or greater
than the minimum percentage for a district or public school academy to be in an
opportunity index band, as determined under section 6(21), of 3 or higher.

(iii) Are experiencing declining enrollment.

(iv) Have no ability to issue bonds for
infrastructure needs, or have made a good-faith effort, as determined by the
department, to issue bonds for infrastructure needs.

(c) Grants may be used for operational expenses related to
internal consolidation and for infrastructure needs. Infrastructure needs may
include, but are not limited to, the removal of buildings.

(3) From the amount allocated in subsection (1),
$35,000,000.00 is allocated as follows:

(a) $15,000,000.00 to Detroit Public Schools Community
District to support the construction of the Cooley High School athletic
complex.

(b) $10,000,000.00 to Wayne RESA to support the construction
of an academic and professional building in the city of Wayne.

(c) $5,000,000.00 to Beecher Community School District to
support the construction of a high school in the district.

(d) $4,000,000.00 to Taylor School District for costs related
to a new high school in the district.

(e) $1,000,000.00 to the School District of the City of
Hamtramck to support the costs of building infrastructure upgrades and
maintenance.

(4) Subject to the provisions of this subsection, in addition
to the money appropriated in section 11, from the state school aid fund, there
is appropriated and allocated for 2025-2026 an amount not to exceed
$4,000,000.00 to Taylor School District for costs related to a new high school
in the district or for other infrastructure purposes. The appropriation and
allocation under this subsection is contingent on the effective issuance of a
directive by the budget director, pursuant to section 451a of the management
and budget act, 1984 PA 431, MCL 18.1451a, to lapse $4,000,000.00 of remaining
funding from a work project that was established under this section in
2023-2024. The amount allocated under this subsection may not exceed the amount
lapsed from the work project referenced in the immediately preceding sentence.

(5) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
12e. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 only an amount estimated at $50,000,000.00 for
grants to districts and intermediate districts for infrastructure needs,
including, but not limited to, demolition of vacant buildings as described in
this section.

(2) Districts and intermediate districts must apply on a
competitive basis for funding in a form and manner determined by the
department.

(3) If the amount allocated under subsection (1) is
insufficient to fully fund awards under this section, there is appropriated
from the school consolidation and infrastructure fund described in section 11x
the amount necessary, but not to exceed $50,000,000.00, to fully fund these
awards, or the maximum available in the fund, whichever is less. The state
budget director shall provide notification to the house and senate
appropriations subcommittees on school aid and the house and senate fiscal
agencies regarding any additional appropriation described in this subsection.

(4) The department shall prioritize applications from
districts and intermediate districts that meet any of the following criteria:

(a) Are in an opportunity index band, as determined under
section 6(21), of 4 or higher.

(b) Are an intermediate district for which the percentage of
pupils in membership who were determined to be economically disadvantaged in
the immediately preceding fiscal year is equal to or greater than the minimum
percentage for a district or public school academy to be in an opportunity
index band, as determined under section 6(21), of 4 or higher.

(c) Have infrastructure needs identified by the statewide
school facilities study under the former section 11y as being critical needs. A
district or intermediate district must demonstrate that the needs described in
this subdivision affect the health, safety, or well-being of students.

(d) Have no ability to issue bonds for infrastructure needs,
or have made a good-faith effort, as determined by the department, to issue
bonds for infrastructure needs.

(5) Funds awarded in subsection (4) may be used only to
address infrastructure needs that were identified as critical needs in the
statewide school facilities study issued pursuant to the former section 11y.

(6)
From the state school aid fund money allocated
in subsection (1), there is allocated for 2026-2027 an amount not to exceed
$8,800,000.00 for grants to districts to cover costs associated with the
demolition of vacant buildings on property owned by the district. All of the
following apply to grants awarded under this subsection:

(a) A district shall apply for funding under this section in
a form and manner determined by the department.

(b) The department shall prioritize applicants that have lost
more than 80% of their pupil membership since 2002-2003 with the greatest
number of vacant properties.

(c) Notwithstanding section 18a, funds allocated for programs
described in this subsection may be available for expenditure until September
30, 2029. A recipient of funding for a program described in this subsection
must return any unexpended funds to the department in a manner prescribed by
the department by not later than October 30, 2029.

(7) A recipient of funds under subsection (6) must not be
awarded more than $10,000,000.00 in additional grants under this section.

(8) The funds allocated under this section for 2026-2027 are
a work project appropriation, and any unexpended funds for 2026-2027 are
carried forward into 2027-2028. The purpose of the work project is to fund
district and intermediate district infrastructure needs. The estimated
completion date of the work project is September 30, 2029.

(9) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
15. (1) If a district or intermediate district fails to receive its proper
apportionment, the department, upon satisfactory proof that the district or
intermediate district was entitled justly, shall apportion the deficiency in
the next apportionment. Subject to subsections (2) and (3), if a district or
intermediate district has received more than its proper apportionment, the
department, upon satisfactory proof, shall deduct the excess in the next
apportionment. Notwithstanding any other provision in this article, state aid
overpayments to a district, other than overpayments in payments for special
education or special education transportation, may be recovered from any
payment made under this article other than a special education or special
education transportation payment, from the proceeds of a loan to the district
under the emergency municipal loan act, 1980 PA 243, MCL 141.931 to 141.942, or
from the proceeds of millage levied or pledged under section 1211 of the
revised school code, MCL 380.1211. State aid overpayments made in special
education or special education transportation payments may be recovered from
subsequent special education or special education transportation payments, from
the proceeds of a loan to the district under the emergency municipal loan act,
1980 PA 243, MCL 141.931 to 141.942, or from the proceeds of millage levied or
pledged under section 1211 of the revised school code, MCL 380.1211.

(2) If the result of an audit conducted by or for the
department affects the current fiscal year membership, the department shall
adjust affected payments in the current fiscal year. A deduction due to an
adjustment made as a result of an audit conducted by or for the department, or
as a result of information obtained by the department from the district, an
intermediate district, the department of treasury, or the office of auditor
general, must be deducted from the district’s apportionments when the
adjustment is finalized. At the request of the district and upon the district
presenting evidence satisfactory to the department of the hardship, the
department may grant up to an additional 4 years for the adjustment and may advance
payments to the district otherwise authorized under this article if the
district would otherwise experience a significant hardship in satisfying its
financial obligations. However, a district that presented satisfactory evidence
of hardship and was undergoing an extended adjustment during 2018-2019 may
continue to use the period of extended adjustment as originally granted by the
department.

(3) If, based on an audit by the department or the department’s
designee or because of new or updated information received by the department,
the department determines that the amount paid to a district or intermediate
district under this article for the current fiscal year or a prior fiscal year
was incorrect, the department shall make the appropriate deduction or payment
in the district’s or intermediate district’s allocation in the next
apportionment after the adjustment is finalized. The department shall calculate
the deduction or payment according to the law in effect in the fiscal year in
which the incorrect amount was paid. If the district does not receive an
allocation for the fiscal year or if the allocation is insufficient to pay the
amount of any deduction, the amount of any deduction otherwise applicable must
be satisfied from the proceeds of a loan to the district under the emergency
municipal loan act, 1980 PA 243, MCL 141.931 to 141.942, or from the proceeds
of millage levied or pledged under section 1211 of the revised school code, MCL
380.1211, as determined by the department.

(4) A membership adjustment must not be made under this
section based on an educator misplacement, as that term is defined in section
163, that is subject to a state aid adjustment under section 163. For an
educator misplacement described in section 163, the penalties and remedies
provided under section 163 are the exclusive state aid adjustment for that
misplacement.

(5) The department may conduct audits, or may direct audits
by designee of the department, for the current fiscal year and the immediately
preceding fiscal year of all records related to a program for which a district
or intermediate district has received funds under this article.

(6) Expenditures made by departments under this article that
are caused by the write-off of prior year accruals may be funded by revenue
from the write-off of prior year accruals.

(7) In addition to funds appropriated in section 11 for all
programs and services, there is appropriated for 2026-2027 for obligations in
excess of applicable appropriations an amount equal to the collection of
overpayments, but not to exceed amounts available from overpayments.

Sec.
16. The
department may not enter into a state contract with an individual if an
employee of the department may financially benefit from the contract.

Sec.
18. (1) Except as provided in another section of this article, each district or
other entity shall apply the money received by the district or entity under
this article to salaries and other compensation of teachers and other
employees, tuition, transportation, lighting, heating, ventilation, water
service, the purchase of textbooks, other supplies, and any other school
operating expenditures defined in section 7. However, not more than 20% of the
total amount received by a district under sections 22a and 22b or received by
an intermediate district under section 81 may be transferred by the board to
either the capital projects fund or to the debt retirement fund for debt
service. A district or other entity shall not apply or take the money for a
purpose other than as provided in this section. The department shall determine
the reasonableness of expenditures and may withhold from a recipient of funds
under this article the apportionment otherwise due upon a violation by the
recipient. A district must not be prohibited or limited from using funds
appropriated or allocated under this article that are permitted for use for
noninstructional services to contract or subcontract with an intermediate
district, third party, or vendor for the noninstructional services.

(2) Subject to subsection (17), a district or intermediate
district shall adopt an annual budget in a manner that complies with the
uniform budgeting and accounting act, 1968 PA 2, MCL 141.421 to 141.440a.
Within 15 days after a district board adopts its annual operating budget for
the following school fiscal year, or after a district board adopts a subsequent
revision to that budget, the district shall make all of the following available
through a link on its website homepage, or may make the information available
through a link on its intermediate district’s website homepage, in a form and
manner prescribed by the department:

(a) The annual operating budget and subsequent budget
revisions.

(b) Using data that have already been collected and submitted
to the department, a summary of district expenditures for the most recent
fiscal year for which they are available, expressed in the following 2 visual
displays:

(i) A chart of personnel expenditures,
broken into the following subcategories:

(A) Salaries and wages.

(B) Employee benefit costs, including, but not limited to,
medical, dental, vision, life, disability, and long-term care benefits.

(C) Retirement benefit costs.

(D) All other personnel costs.

(ii) A chart of all district expenditures,
broken into the following subcategories:

(A) Instruction.

(B) Support services.

(C) Business and administration.

(D) Operations and maintenance.

(c) Links to all of the following:

(i) The current collective bargaining
agreement for each bargaining unit.

(ii) Each health care benefits plan,
including, but not limited to, medical, dental, vision, disability, long-term
care, or any other type of benefits that would constitute health care services,
offered to any bargaining unit or employee in the district.

(iii) The audit report of the financial audit
conducted under subsection (4) for the most recent fiscal year for which it is
available.

(iv) The bids required under section 5 of the
public employees health benefit act, 2007 PA 106, MCL 124.75.

(v) The district’s written policy governing
procurement of supplies, materials, and equipment.

(vi) The district’s written policy
establishing specific categories of reimbursable expenses, as described in
section 1254(2) of the revised school code, MCL 380.1254.

(vii) Either the district’s accounts payable
check register for the most recent school fiscal year or a statement of the
total amount of expenses incurred by board members or employees of the district
that were reimbursed by the district for the most recent school fiscal year.

(d) The total salary and a description and cost of each
fringe benefit included in the compensation package for the superintendent of
the district and for each employee of the district whose salary exceeds
$100,000.00.

(e) The annual amount spent on dues paid to associations.

(f) The annual amount spent on lobbying or lobbying services.
As used in this subdivision, “lobbying” means that term as defined in section 5
of 1978 PA 472, MCL 4.415.

(g) Any deficit elimination plan or enhanced deficit
elimination plan the district was required to submit under the revised school
code.

(h) Identification of all credit cards maintained by the
district as district credit cards, the identity of all individuals authorized
to use each of those credit cards, the credit limit on each credit card, and
the dollar limit, if any, for each individual’s authorized use of the credit
card.

(i) Costs incurred for each instance of out-of-state travel
by the school administrator of the district that is fully or partially paid for
by the district and the details of each of those instances of out-of-state
travel, including at least identification of each individual on the trip,
destination, and purpose.

(3) For the information required under subsection (2)(a),
(2)(b)(i), and (2)(c), an intermediate district
shall provide the same information in the same manner as required for a
district under subsection (2).

(4) For the purposes of determining the reasonableness of
expenditures, whether a district or intermediate district has received the
proper amount of funds under this article, and whether a violation of this
article has occurred, all of the following apply:

(a) The department shall require that each district and
intermediate district have an audit of the district’s or intermediate district’s
financial and pupil accounting records conducted at least annually, and at such
other times as determined by the department, at the expense of the district or
intermediate district, as applicable. The audits must be performed by a
certified public accountant or by the intermediate district superintendent, as
may be required by the department, or in the case of a district of the first
class by a certified public accountant, the intermediate superintendent, or the
auditor general of the city. A district or intermediate district shall retain
these records for the current fiscal year and from at least the 3 immediately
preceding fiscal years.

(b) If a district operates in a single building with fewer
than 700 full-time equated pupils, if the district has stable membership, and
if the error rate of the immediately preceding 2 pupil accounting field audits
of the district is less than 2%, the district may have a pupil accounting field
audit conducted biennially but must continue to have desk audits for each pupil
count. The auditor must document compliance with the audit cycle in the pupil
auditing manual. As used in this subdivision, “stable membership” means that
the district’s membership for the current fiscal year varies from the district’s
membership for the immediately preceding fiscal year by less than 5%.

(c) A district’s or intermediate district’s annual financial
audit must include an analysis of the financial and pupil accounting data used
as the basis for distribution of state school aid.

(d) The pupil and financial accounting records and reports,
audits, and management letters are subject to requirements established in the
auditing and accounting manuals approved and published by the department.

(e) All of the following must be done not later than November
1 each year for reporting the prior fiscal year data:

(i) A district shall file the annual
financial audit reports with the intermediate district and the department. If
the issuance of single audits is delayed for the 2024-25 school year due to a
late issuance of a Compliance Supplement, the single audit portion of that
audit must be filed within 30 days of the issuance of the Compliance Supplement
by OMB.

(ii) The intermediate district shall file the
annual financial audit reports for the intermediate district with the
department. If the issuance of single audits is delayed for the 2024-25 school
year due to a late issuance of a Compliance Supplement, the single audit
portion of that audit must be filed within 30 days of the issuance of the
Compliance Supplement by OMB.

(iii) The intermediate district shall enter
the pupil membership audit reports, known as the audit narrative, for its
constituent districts and for the intermediate district, for the pupil
membership count day and supplemental count day, in the Michigan student data
system.

(f) The annual financial audit reports and pupil accounting
procedures reports must be available to the public in compliance with the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

(g) Not later than January 31 of each year, the department
shall notify the state budget director and the legislative appropriations
subcommittees responsible for review of the school aid budget of districts and
intermediate districts that have not filed an annual financial audit and pupil
accounting procedures report required under this section for the school year
ending in the immediately preceding fiscal year.

(5) By the first business day in November of each fiscal
year, each district and intermediate district shall submit to the center, in a
manner prescribed by the center, annual comprehensive financial data consistent
with the district’s or intermediate district’s audited financial statements and
consistent with accounting manuals and charts of accounts approved and
published by the department. For an intermediate district, the report must also
contain the website address where the department can access the report required
under section 620 of the revised school code, MCL 380.620. The department shall
ensure that the prescribed Michigan public school accounting manual chart of
accounts includes standard conventions to distinguish expenditures by allowable
fund function and object. The functions must include at minimum categories for
instruction, pupil support, instructional staff support, general
administration, school administration, business administration, transportation,
facilities operation and maintenance, facilities acquisition, and debt service;
and must include object classifications of salary, benefits, including
categories for active employee health expenditures, purchased services,
supplies, capital outlay, and other. A district shall report the required level
of detail consistent with the manual as part of the comprehensive annual
financial report.

(6) By the last business day in September of each year, each
district and intermediate district shall file with the center the special
education actual cost report, known as “SE-4096”, on a form and in the manner
prescribed by the center. An intermediate district shall certify the audit of a
district’s report.

(7) By not later than 1 week after the last business day in
September of each year, each district and intermediate district shall file with
the center the audited transportation expenditure report, known as “SE-4094”,
on a form and in the manner prescribed by the center. An intermediate district
shall certify the audit of a district’s report.

(8) The department shall review its pupil accounting and
pupil auditing manuals at least annually and shall periodically update those
manuals to reflect changes in this article. Any changes to the pupil accounting
manual that are applicable for the school year that begins after March 31 of a
fiscal year must be published by not later than March 31 of that fiscal year.
However, if legislation is enacted that necessitates adjustments to the pupil
accounting manual after March 31 of a fiscal year, and a district incurs a
violation of the amended pupil accounting manual in the subsequent fiscal year,
the department must notify the district of that violation and allow the
district 30 days to correct the violation before the department is allowed to
impose financial penalties under this act related to the violation.

(9) If a district that is a public school academy purchases
property using money received under this article, the public school academy
shall retain ownership of the property unless the public school academy sells
the property at fair market value.

(10) If a district or intermediate district does not comply
with subsections (4), (5), (6), (7), and (12), or if the department determines
that the financial data required under subsection (5) are not consistent with
audited financial statements, the department shall withhold all state school
aid due to the district or intermediate district under this article, beginning
with the next payment due to the district or intermediate district, until the
district or intermediate district complies with subsections (4), (5), (6), (7),
and (12). If the district or intermediate district does not comply with
subsections (4), (5), (6), (7), and (12) by the end of the fiscal year, the
district or intermediate district forfeits the amount withheld.

(11) Subject to subsection (17), if a district or
intermediate district does not comply with subsection (2), the department may
withhold up to 10% of the total state school aid due to the district or
intermediate district under this article, beginning with the next payment due
to the district or intermediate district, until the district or intermediate
district complies with subsection (2). If the district or intermediate district
does not comply with subsection (2) by the end of the fiscal year, the district
or intermediate district forfeits the amount withheld.

(12) By November 1 of each year, if a district or
intermediate district offers virtual learning under section 21f, or for a
school of excellence that is a cyber school, as defined in section 551 of the
revised school code, MCL 380.551, the district or intermediate district shall
submit to the department a report that details the per-pupil costs of operating
the virtual learning by vendor type and virtual learning model. The report must
include information concerning the operation of virtual learning for the
immediately preceding school fiscal year, including information concerning
summer programming. Information must be collected in a form and manner
determined by the department and must be collected in the most efficient manner
possible to reduce the administrative burden on reporting entities.

(13) By March 31 of each year, the department shall submit to
the house and senate appropriations subcommittees on state school aid, the
state budget director, and the house and senate fiscal agencies a report
summarizing the per-pupil costs by vendor type of virtual courses available
under section 21f and virtual courses provided by a school of excellence that
is a cyber school, as defined in section 551 of the revised school code, MCL 380.551.

(14) As used in subsections (12) and (13), “vendor type”
means the following:

(a) Virtual courses provided by the Michigan Virtual
University.

(b) Virtual courses provided by a school of excellence that
is a cyber school, as defined in section 551 of the revised school code, MCL
380.551.

(c) Virtual courses provided by third party vendors not
affiliated with a public school in this state.

(d) Virtual courses created and offered by a district or
intermediate district.

(15) An allocation to a district or another entity under this
article is contingent upon the district’s or entity’s compliance with this
section.

(16) The department shall annually submit to the senate and
house subcommittees on school aid and to the senate and house standing
committees on education an itemized list of allocations under this article to
any association or consortium consisting of associations in the immediately
preceding fiscal year. The report must detail the recipient or recipients, the
amount allocated, and the purpose for which the funds were distributed.

(17) If the legislature has not enacted and the governor has
not approved the general appropriations act for state school aid for the
upcoming fiscal year on or before July 1, the department shall not withhold
funds or impose any penalty under subsection (11) against a district or
intermediate district for failure to comply with subsection (2) until 30
days after the enactment of the general appropriations act for state school aid
for that fiscal year.

Sec.
18a. (1) This subsection applies only to grant funds awarded and allotted from
appropriations in this article that have not been designated as a work project
appropriation under section 451a of the management and budget act, 1984 PA 431,
MCL 1451a. Except as otherwise provided in this article, grant funds described
in this subsection that are awarded and allotted to a district, intermediate
district, or other entity, unless otherwise specified in this article, must be
expended by the grant recipient before the end of the fiscal year immediately
following the fiscal year in which the funds are received. Except as otherwise
provided in this article, if a grant recipient does not expend the funds
received under this article before the end of the fiscal year in which the
funds are received, the grant recipient shall submit a report to the department
not later than November 1 after the fiscal year in which the funds are received
indicating whether it expects to expend those funds during the fiscal year in
which the report is submitted. Except as otherwise provided in this article, a
recipient of a grant shall return any unexpended grant funds to the department
in the manner prescribed by the department not later than September 30 after
the fiscal year in which the funds are received.

(2)
This subsection applies only to grant funds awarded and allotted from
appropriations in this article that have been designated as a work project
appropriation under section 451a of the management and budget act, 1984 PA
431, MCL 18.1451a. Except as otherwise provided in this article, grant funds
described in this subsection that are awarded and allotted to a district,
intermediate district, or other entity, unless otherwise specified in this
article, must be expended by the grant recipient before the end of the fiscal
year immediately following the fiscal year in which the work project is closed
under section 451a of the management and budget act, 1984 PA 431, MCL 18.1451a.
Except as otherwise provided in this article, a recipient of a grant shall
return any unexpended grant funds to the department in the manner prescribed by
the department not later than September 30 after the fiscal year in which the
work project is closed.

Sec.
19. (1) A district or intermediate district shall comply with all applicable
reporting requirements specified in state and federal law. Data provided to the
center, in a form and manner prescribed by the center, must be aggregated and
disaggregated as required by state and federal law. In addition, a district or
intermediate district shall cooperate with all measures taken by the center to
establish and maintain a statewide P-20 longitudinal data system.

(2) Each district shall furnish to the center not later than
5 weeks after the pupil membership count day and by the last business day in
June of the school fiscal year ending in the fiscal year, in a manner
prescribed by the center, the information necessary for the preparation of the
district and high school graduation report, information regarding completion of
early middle college credentials obtained and postsecondary credits obtained in
any college acceleration program, and information necessary for the preparation
of the state and federal accountability reports. This information must meet
requirements established in the pupil auditing manual approved and published by
the department. The center shall calculate an annual graduation and pupil
dropout rate for each high school, each district, and this state, in compliance
with nationally recognized standards for these calculations. The center shall
report all graduation and dropout rates to the senate and house education
committees and appropriations committees, the state budget director, and the
department not later than 30 days after the publication of the list described
in subsection (5). Before reporting these graduation and dropout rates, the
department shall allow a school or district to appeal the calculations. The
department shall consider and act upon the appeal within 30 days after it is
submitted and shall not report these graduation and dropout rates until after
all appeals have been considered and decided.

(3) By the first business day in December and by the last
business day in June of each year, and within 30 days of any change in
employment or assignment status, a district shall furnish to the center, in a manner
prescribed by the center, information related to educational personnel and
personnel vacancies as necessary for reporting required by state and federal
law. For the purposes of this subsection, the center shall only require
districts and intermediate districts to report information that is not already
available from the office of retirement services in the department of
technology, management, and budget, including, but not limited to, vacancy
start and end dates, reasons for the vacancy, and reasons for the vacancy
termination.

(4) If a district or intermediate district fails to meet the
requirements of this section, the department shall withhold 5% of the total
funds for which the district or intermediate district qualifies under this
article until the district or intermediate district complies with this section.
If the district or intermediate district does not comply with this section by
the end of the fiscal year, the department shall place the amount withheld in
an escrow account until the district or intermediate district complies with
this section.

(5) Before publishing a list of school or district
accountability designations as required by the no child left behind act of
2001, Public Law 107-110, or the every student succeeds act, Public Law 114-95,
and utilizing data that were certified as accurate and complete after districts
and intermediate districts adhered to deadlines, data quality reviews, and
correction processes leading to local certification of final student data in
subsection (2), the department shall allow a school or district to appeal any
calculation errors used in the preparation of accountability metrics. The
department shall consider and act upon the appeal within 30 days after it is
submitted and shall not publish the list until after all appeals have been
considered and decided.

(6) The department shall implement statewide standard
reporting requirements for education data approved by the department in
conjunction with the center. The department shall work with the center,
intermediate districts, districts, and other interested stakeholders to
implement this policy change. A district or intermediate district shall
implement the statewide standard reporting requirements not later than
2017-2018 or when a district or intermediate district updates its education
data reporting system, whichever is later.

(7) A district or intermediate district shall collect and
submit to the center tribal affiliation data for all students and staff and the
identification of student participation in federal programs funded under 20 USC
7401 to 7546 and participation in federal programs funded under the Johnson-O’Malley
supplemental Indian education program modernization act, Public Law 115-404.
The data must be reported in a form and manner prescribed by the center in
consultation with the federally recognized Indian tribes in this state and the
department in adherence to the department’s tribal consultation policy. A
district or intermediate district shall begin completion of the reporting
requirement under this subsection by not later than the 2024-2025 fiscal year.

Sec.
20. (1) For 2026-2027, the target foundation allowance is $10,300.00.

(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 (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 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 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. Before the fiscal year ending September 30, 2027, 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. Beginning with the fiscal
year ending September 30, 2027, it is the intent of the legislature that the
previous sentence no longer applies and the taxable value per membership pupil
of property in the community district used for the purposes of this subsection
includes the taxable value of property within the geographic area of the
community district on or after July 1, 2026 and thereafter.

(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 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, $10,300.00. 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
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 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 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.

(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 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
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.
20d. In making the final determination required under former section 20a of a
district’s combined state and local revenue per membership pupil in 1993-94 and
in making calculations under section 20 for 2026-2027, the department and the
department of treasury shall comply with all of the following:

(a) For a district that had combined state and local revenue
per membership pupil in the 1994-95 fiscal year of $6,500.00 or more and served
as a fiscal agent for a state board designated area vocational education center
in the 1993-94 school year, total state school aid received by or paid on
behalf of the district under this act in 1993‑94 excludes payments made
under former section 146 and under section 147 on behalf of the district’s
employees who provided direct services to the area vocational education center.
Not later than June 30, 1996, the department shall make an adjustment under
this subdivision to the district’s combined state and local revenue per
membership pupil in the 1994-95 fiscal year and the department of treasury
shall make a final certification of the number of mills that may be levied by
the district under section 1211 of the revised school code, MCL 380.1211, as a
result of the adjustment under this subdivision.

(b) If a district had an adjustment made to its 1993-94 total
state school aid that excluded payments made under former section 146 and under
section 147 on behalf of the district’s employees who provided direct services
for intermediate district center programs operated by the district under former
section 51 and sections 51a to 56, if nonresident pupils attending the center
programs were included in the district’s membership for purposes of calculating
the combined state and local revenue per membership pupil for 1993-94, and if
there is a signed agreement by all constituent districts of the intermediate
district agreeing to an adjustment under this subdivision, the department shall
calculate the foundation allowances for 1995-96 and 1996-97 of all districts
that had pupils attending the intermediate district center program operated by
the district that had the adjustment as if their combined state and local revenue
per membership pupil for 1993-94 included resident pupils attending the center
program and excluded nonresident pupils attending the center program.

Sec.
21b. (1) Subject to subsections (2) and (3), a district shall use funds
received under this section, section 22a, or section 22b to support the
attendance of a district pupil who is an eligible student at an eligible
postsecondary institution under the postsecondary enrollment options act, 1996
PA 160, MCL 388.511 to 388.524, or under the career and technical preparation
act, 2000 PA 258, MCL 388.1901 to 388.1913, by paying eligible charges on
behalf of the district pupil as required under those acts.

(2) A district is not required to pay transportation costs,
parking costs, or activity fees on behalf of an eligible student for attendance
at an eligible postsecondary institution as described in subsection (1).

(3) A district may pay more money to an eligible
postsecondary institution on behalf of an eligible student than required under
the postsecondary enrollment options act, 1996 PA 160, MCL 388.511 to 388.524,
or the career and technical preparation act, 2000 PA 258, MCL 388.1901 to
388.1913, and may use local school operating revenue for that purpose. An
eligible student is responsible for payment of the remainder of the costs
associated with the eligible student’s postsecondary enrollment that exceed the
amount the district is required to pay under the postsecondary enrollment
options act, 1996 PA 160, MCL 388.511 to 388.524, or the career and technical
preparation act, 2000 PA 258, MCL 388.1901 to 388.1913, and that are not paid
by the district. As used in this subsection, “local school operating revenue”
means that term as defined in section 22b.

(4) From the state school aid fund money appropriated in
section 11, there is allocated for 2026-2027 only an amount not to exceed
$40,000,000.00 for reimbursements to eligible districts supporting eligible
charges on behalf of eligible students as described in subsection (1). All of
the following apply to payments made under this subsection:

(a) To be considered an eligible district under this section,
a district must be assigned to an opportunity index band, as described in
section 6(21), of 4 or higher.

(b) Payments must not exceed the amount the eligible district
is required to pay under the postsecondary enrollment options act, 1996 PA 160,
MCL 388.511 to 388.524, and the career and technical preparation act, 2000 PA
258, MCL 388.1901 to 388.1913.

(c) If the amount allocated in this subsection is not
sufficient to fully reimburse all eligible districts, payments to eligible
districts must be adjusted as follows:

(i) Payments to any individual district that
exceed 25% of the allocation under this subsection must be reduced to an amount
equal to 25% of the allocation under this subsection.

(ii) If, after the operation of subparagraph
(i), the amount allocated under this
subsection is still insufficient to fully reimburse all eligible districts, the
payment to each eligible district must be prorated on an equal percentage
basis.

(d) If the amount allocated in this subsection exceeds the
amount necessary to fully reimburse all eligible districts, the department
shall provide payments to districts assigned to an opportunity index band, as
described in section 6(21), of 3. If the remaining funds are insufficient to
fully fund all eligible districts described in this subdivision, the payment to
each eligible district described in this subdivision must be prorated on an
equal percentage basis.

(e) If, after the operation of subdivision (d), the amount
allocated in this subsection exceeds the amount necessary to fully reimburse
all eligible districts, the department shall provide payments to districts
assigned to an opportunity index band, as described in section 6(21), of 2. If
the remaining funds are insufficient to fully fund all eligible districts
described in this subdivision, the payment to each eligible district described
in this subdivision must be prorated on an equal percentage basis.

(f) If, after the operation of subdivision (e), the amount
allocated in this subsection exceeds the amount necessary to fully reimburse
all eligible districts, the department shall provide payments to districts
assigned to an opportunity index band, as described in section 6(21), of 1. If
the remaining funds are insufficient to fully fund all eligible districts
described in this subdivision, the payment to each eligible district described
in this subdivision must be prorated on an equal percentage basis.

(g) Funds under this section may be used to support CTE dual
enrollment programs authorized under section 61b.

(h) Notwithstanding section 17b, the department shall make
payments under this subsection on a schedule determined by the department.

(5) As used in this section, “eligible charges”, “eligible
student”, and “eligible postsecondary institution” mean those terms as defined
in section 3 of the postsecondary enrollment options act, 1996 PA 160, MCL
388.511 to 388.524, or in section 3 of the career and technical preparation
act, 2000 PA 258, MCL 388.1903, as applicable.

Sec.
21f. (1) A primary district shall enroll an eligible pupil in virtual courses
in accordance with the provisions of this section. A primary district shall not
offer a virtual course to an eligible pupil unless the virtual course is
published in the primary district’s catalog of board-approved courses or in the
statewide catalog of virtual courses maintained by the Michigan Virtual
University pursuant to section 98. The primary district shall also provide on
its publicly accessible website a link to the statewide catalog of virtual
courses maintained by the Michigan Virtual University. Unless the pupil is at
least age 18 or is an emancipated minor, a pupil must not be enrolled in a
course that meets virtually for more than 6 days in a school year without the
consent of the pupil’s parent or legal guardian.

(2) Subject to subsection (3), a primary district shall
enroll an eligible pupil in up to 2 virtual courses as requested by the pupil
during an academic term, semester, or trimester.

(3) A pupil may be enrolled in more than 2 virtual courses in
a specific academic term, semester, or trimester if both of the following
conditions are met:

(a) The primary district has determined that it is in the
best interest of the pupil.

(b) The pupil agrees with the recommendation of the primary
district.

(4) If the number of applicants eligible for acceptance in a
virtual course does not exceed the capacity of the provider to provide the
virtual course, the provider shall accept for enrollment all of the applicants
eligible for acceptance. If the number of applicants exceeds the provider’s
capacity to provide the virtual course, the provider shall use a random draw
system, subject to the need to abide by state and federal antidiscrimination
laws and court orders. A primary district that is also a provider shall
determine whether or not it has the capacity to accept applications for
enrollment from nonresident applicants in virtual courses and may use that
limit as the reason for refusal to enroll a nonresident applicant.

(5) A primary district may not establish additional
requirements beyond those specified in this subsection that would prohibit a
pupil from taking a virtual course. A pupil’s primary district may deny the
pupil enrollment in a virtual course if any of the following apply, as
determined by the district:

(a) The pupil is enrolled in any of grades K to 5.

(b) The pupil has previously gained the credits that would be
provided from the completion of the virtual course.

(c) The virtual course is not capable of generating academic
credit.

(d) The virtual course is inconsistent with the remaining
graduation requirements or career interests of the pupil.

(e) The pupil has not completed the prerequisite coursework
for the requested virtual course or has not demonstrated proficiency in the
prerequisite course content.

(f) The pupil has failed a previous virtual course in the
same subject during the 2 most recent academic years.

(g) The virtual course is of insufficient quality or rigor. A
primary district that denies a pupil enrollment request for this reason shall
enroll the pupil in a virtual course in the same or a similar subject that the
primary district determines is of acceptable rigor and quality.

(h) The cost of the virtual course exceeds the amount
identified in subsection (10), unless the pupil or the pupil’s parent or legal
guardian agrees to pay the cost that exceeds this amount.

(i) The request for a virtual course enrollment did not occur
within the same timelines established by the primary district for enrollment
and schedule changes for regular courses.

(j) The request for a virtual course enrollment was not made
in the academic term, semester, trimester, or summer preceding the enrollment.
This subdivision does not apply to a request made by a pupil who is newly
enrolled in the primary district.

(6) If a pupil is denied enrollment in a virtual course by
the pupil’s primary district, the primary district shall provide written
notification to the pupil of the denial, the reason or reasons for the denial
under subsection (5), and a description of the appeal process. The pupil may
appeal the denial by submitting a letter to the superintendent of the
intermediate district in which the pupil’s primary district is located. The
letter of appeal must include the reason provided by the primary district for
not enrolling the pupil and the reason why the pupil is claiming that the
enrollment should be approved. The intermediate district superintendent or
designee shall respond to the appeal within 5 days after it is received. If the
intermediate district superintendent or designee determines that the denial of
enrollment does not meet 1 or more of the reasons specified in subsection (5),
the primary district shall enroll the pupil in the virtual course.

(7) To provide a virtual course to an eligible pupil under
this section, a provider must do all of the following:

(a) Ensure that the virtual course has been published in the
pupil’s primary district’s catalog of board-approved courses or published in
the statewide catalog of virtual courses maintained by the Michigan Virtual
University.

(b) Assign to each pupil a teacher of record and provide the
primary district with the personnel identification code assigned by the center
for the teacher of record. If the provider is a community college, the virtual
course must be taught by an instructor employed by or contracted through the
providing community college.

(c) Offer the virtual course on an open entry and exit
method, or aligned to a semester, trimester, or accelerated academic term
format.

(d) If the virtual course is offered to eligible pupils in
more than 1 district, the following additional requirements must also be met:

(i) Provide the Michigan Virtual University
with a course syllabus that meets the definition under subsection (14)(g) in a
form and manner prescribed by the Michigan Virtual University for inclusion in
a statewide catalog of virtual courses.

(ii) Not later than October 1 of each fiscal
year, provide the Michigan Virtual University with an aggregated count of
enrollments for each virtual course the provider delivered to pupils under this
section during the immediately preceding school year, and the number of
enrollments in which the pupil earned 60% or more of the total course points
for each virtual course.

(8) To provide a virtual course under this section, a
community college shall ensure that each virtual course it provides under this
section generates postsecondary credit.

(9) For any virtual course a pupil enrolls in under this
section, the pupil’s primary district must assign to the pupil a mentor and
shall supply the provider with the mentor’s contact information.

(10) For a pupil enrolled in 1 or more virtual courses, the
primary district shall use foundation allowance or per-pupil funds calculated
under section 20 to pay for the expenses associated with the virtual course or
courses. A primary district is not required to pay toward the cost of a virtual
course an amount that exceeds 6.67% of the target foundation allowance for the
current fiscal year as calculated under section 20.

(11) A virtual learning pupil has the same rights and access
to technology in the pupil’s primary district’s school facilities as all other
pupils enrolled in the pupil’s primary district. The department shall establish
standards for hardware, software, and internet access for pupils who are
enrolled in more than 2 virtual courses under this section in an academic term,
semester, or trimester taken at a location other than a school facility.

(12) If a pupil successfully completes a virtual course, as
determined by the pupil’s primary district, the pupil’s primary district shall
grant appropriate academic credit for completion of the course and shall count
that credit toward completion of graduation and subject area requirements. A
pupil’s school record and transcript must identify the virtual course title as
it appears in the virtual course syllabus.

(13) The enrollment of a pupil in 1 or more virtual courses
must not result in a pupil being counted as more than 1.0 full-time equivalent
pupils under this article. The minimum requirements to count the pupil in
membership are those established by the pupil accounting manual as it was in
effect for the 2015-2016 school year or as subsequently amended by the
department if the department notifies the legislature about the proposed
amendment at least 60 days before the amendment becomes effective.

(14) Subject to the requirements of this subsection, a
district may provide virtual instruction under this subsection for not more
than 6 days in a school year. If a district plans to provide instruction under
this subsection, the district’s plan must be approved by the board of the
district, and the district must provide notice of the plan to impacted pupils
and their parents or legal guardians before enactment of the plan. Instruction
may be provided synchronously or asynchronously, as determined by the
department. Days of instruction under this subsection may be used only for the
following purposes, as defined by the department:

(a) A maximum of 3 days may be designated as testing days,
during which students are released from regular classroom instruction to
participate in state or federally mandated assessments. Days of virtual
instruction provided under this subdivision are limited to buildings and grade
levels impacted by assessments.

(b) A maximum of 3 days of virtual instruction may be
provided due to conditions not within control of the district, including, but
not limited to, closures due to snow, ice, or other extreme weather events or
unforeseen emergencies. Days of virtual instruction under this subdivision may
be used only after a district has exhausted all emergency closure days
permitted under section 101.

(15) As used in this section:

(a) “Instructor” means an individual who is employed by or
contracted through a community college.

(b) “Mentor” means a professional employee of the primary
district who monitors the pupil’s progress, ensures the pupil has access to
needed technology, is available for assistance, and ensures access to the
teacher of record. A mentor may also serve as the teacher of record if the
primary district is the provider for the virtual course and the mentor meets
the requirements under subdivision (e).

(c) “Primary district” means the district that enrolls the
pupil and reports the pupil for pupil membership purposes.

(d) “Provider” means the district, intermediate district,
community college, or other third-party vendor that the primary district pays
to provide the virtual course or the Michigan Virtual University if it is
providing the virtual course.

(e) “Teacher of record” means a teacher who meets all of the
following:

(i) Is appropriately placed under a valid
Michigan teaching certificate or a teaching permit, authorization, or approval
issued by the department. As used in this subparagraph, “appropriately placed”
means holding a valid Michigan educator credential with the required grade
range and discipline or subject area for the assignment, as defined by the
superintendent of public instruction.

(ii) Is responsible for providing
instruction, determining instructional methods for each pupil, diagnosing
learning needs, assessing pupil learning, prescribing intervention strategies
and modifying lessons, reporting outcomes, and evaluating the effects of
instruction and support strategies.

(iii) Has a personnel identification code
provided by the center.

(iv) If the provider is a community college,
is an instructor employed by or contracted through the providing community
college.

(f) “Virtual course” means a course of study that is capable
of generating a credit or a grade and that is provided in an interactive
learning environment where any portion of the curriculum is delivered using the
internet and in which pupils may be separated from their instructor or teacher
of record by time or location, or both.

(g) “Virtual course syllabus” means a document that includes
all of the following:

(i) An alignment document detailing how the
course meets applicable state standards or, if the state does not have state
standards, nationally recognized standards.

(ii) The virtual course content outline.

(iii) The virtual course required assessments.

(iv) The virtual course prerequisites.

(v) Expectations for actual instructor or
teacher of record contact time with the virtual learning pupil and other
communications between a pupil and the instructor or teacher of record.

(vi) Academic support available to the
virtual learning pupil.

(vii) The virtual course learning outcomes and
objectives.

(viii) The name of the institution or
organization providing the virtual content.

(ix) The name of the institution or
organization providing the instructor or teacher of record.

(x) The course titles assigned by the
provider and the course titles and course codes from the National Center for
Education Statistics (NCES) school codes for the exchange of data (SCED).

(xi) The number of eligible pupils that will
be accepted by the provider in the virtual course. A primary district that is
also the provider may limit the enrollment to those pupils enrolled in the
primary district.

(xii) The results of the virtual course
quality review using the guidelines and model review process published by the
Michigan Virtual University.

(h) “Virtual learning pupil” means a pupil enrolled in 1 or
more virtual courses.

Sec.
21h. (1) From the state school aid pupil support reserve fund money
appropriated in section 11, there is allocated $6,137,400.00 for 2026-2027 for
assisting districts assigned by the superintendent to participate in a
partnership district agreement to improve student achievement and district
financial stability. It is the intent of the legislature that the appropriation
in this section will be funded with state school aid pupil support reserve fund
money through 2027-2028. The superintendent shall identify any conditions that
may be contributing to low academic performance within a district being
considered for assignment to a partnership district agreement. The purpose of
the partnership district agreement is to identify district needs, develop intervention
plans, and partner with public, private, and nonprofit organizations to
coordinate resources and improve student achievement. Assignment of a district
to a partnership district agreement is made by the superintendent.

(2) A district described in subsection (1) is eligible for
funding under this section if the district includes at least 1 school that has
been identified as low performing under the approved federal accountability
system. A district described in this subsection must do all of the following to
be eligible for funding under this section:

(a) Within 90 days of assignment to the partnership district
agreement described in this section, complete a comprehensive needs assessment
or evaluation in collaboration with an intermediate district, community
members, education organizations, and postsecondary institutions, as
applicable, that is approved by the superintendent. The comprehensive needs
assessment or evaluation must include at least all of the following:

(i) A review of the district’s
implementation and utilization of a multi-tiered system of supports to ensure
that it is used to appropriately inform instruction.

(ii) A review of the district and school
building leadership and educator capacity to substantially improve student
outcomes.

(iii) A review of classroom, instructional,
and operational practices and curriculum to ensure alignment with
research-based instructional practices and state curriculum standards.

(b) Develop a district continuous improvement plan that has
been approved by the superintendent and that addresses the needs identified in
the comprehensive needs assessment or evaluation completed under subdivision (a).
The district continuous improvement plan must include at least all of the
following:

(i) Specific actions that will be taken by
the district and each of its partners to improve student achievement.

(ii) Specific measurable benchmarks that will
be met within 18 months to improve student achievement and identification of
expected student achievement outcomes to be attained within 3 years after
assignment to the partnership.

(iii) Measurable benchmarks that put pupils on
track to meet or exceed grade level proficiency, increase high school
graduation rates, reduce class sizes in grades K to 3, and improve attendance
rates.

(c) Provide access to training for district leadership,
including, but not limited to, the superintendent or chief administrator and
school board or board of directors members, on areas of education fiscal and
policy matters. The department may require training for district leadership and
all board members under this subdivision at a rate and frequency needed to
support measurable academic outcomes for the district.

(3) Upon approval of the district continuous improvement plan
developed under subsection (2), the department shall assign a team of
individuals with expertise in comprehensive school and district reform to
partner with the district, the intermediate district, community organizations,
education organizations, and postsecondary institutions identified in the
district continuous improvement plan to review the district’s use of existing
financial resources to ensure that those resources are being used as
efficiently and effectively as possible to improve student academic achievement
and to ensure district financial stability. The superintendent of public
instruction may waive burdensome administrative rules for a partnership
district for the duration of the partnership district agreement.

(4) Funds allocated under this section, excluding funds
allocated under subsection (5), may be used to pay for district expenditures
approved by the superintendent to improve student achievement. Funds may be
used for professional development for teachers or district or school
leadership, increased instructional time, teacher mentors, literacy, numeracy,
reducing K-3 class sizes, reducing chronic absenteeism, or other expenditures
that directly impact student achievement and cannot be paid from existing district
financial resources. Notwithstanding section 17b, the department shall make
payments to districts under this section on a schedule determined by the
department.

(5) From the funds allocated under subsection (1), there is
allocated for 2026-2027 an amount not to exceed $137,400.00 for the purchase of
a data analytics tool to be used by districts described in subsection (1). The
superintendent of public instruction shall require districts described in
subsection (1) to purchase a data analytics tool funded under this subsection
as part of the agreements described in this section.

(6) The department shall annually report to the legislature
on the activities funded under this section and how those activities impacted
student achievement in districts that received funds under this section. To the
extent possible, participating districts receiving funding under this section
shall participate in the report.

Sec.
22a. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $3,726,000,000.00 for 2025-2026 and there
is allocated an amount not to exceed $3,562,000,000.00 for 2026-2027 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 purposes under
section 11 of article IX of the state constitution of 1963. Pursuant to section
11 of article IX of the state constitution of 1963, this guarantee does
not apply to a district in a year in which the district levies a millage rate
for school district operating purposes less than it levied in 1994. However,
subsection (2) applies to calculating the payments under this section. Funds
allocated under this section that are not expended in the fiscal year for which
they were allocated, as determined by the department, may be used to supplement
the allocations under sections 22b and 51c to fully fund those allocations for
the same fiscal year.

(2) To ensure that a district receives an amount equal to the
district’s 1994-95 total state and local per-pupil revenue for school operating
purposes, there is allocated to each district a state portion of the district’s
1994-95 foundation allowance in an amount calculated as follows:

(a) Except as otherwise provided in this subsection, the
state portion of a district’s 1994-95 foundation allowance is an amount equal
to the district’s 1994-95 foundation allowance or $6,500.00, whichever is less,
minus the difference between the sum of the product of the taxable value per
membership pupil of all 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 ad valorem property tax revenue of the
district captured under tax increment financing acts divided by the district’s
membership. 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 state portion of the district’s foundation allowance as if that
reduction did not occur. For a receiving district, if school operating taxes
are 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,
taxable value per membership pupil of all property in the receiving district
that is nonexempt property and taxable value per membership pupil of property
in the receiving district that is commercial personal property do not include
property within the geographic area of the dissolved district; ad valorem
property tax revenue of the receiving district captured under tax increment
financing acts does not include ad valorem property tax revenue captured within
the geographic boundaries of the dissolved district under tax increment
financing acts; and certified mills do not include the certified mills of the
dissolved district. Except as otherwise provided in this subdivision, for a
community district, the department shall reduce the allocation as otherwise
calculated under this section by an amount equal to the amount of local school
operating tax revenue that would otherwise be due to the community district if
not for the operation of section 386 of the revised school code, MCL 380.386,
and the amount of this reduction is offset by the increase in funding under
section 22b(2). Beginning
with the fiscal year ending September 30, 2027, it is the intent of the
legislature that the previous sentence no longer applies and the allocation for
a community district under this section shall not be reduced by the amount of
local school operating tax revenue that would otherwise be due to the community
district if not for the operation of section 386 of the revised school code,
MCL 380.386, and no offset is provided by increased funding under section
22b(2). Beginning with the fiscal year
ending September 30, 2027, for a qualifying school district that has entered
into a qualified debt agreement, all of the following apply:

(i) The qualifying school district is
presumed to have paid the unpaid obligations of the qualifying school district
under the qualified debt agreement and repaid all outstanding operating
obligations of the qualifying school district.

(ii) Section 386 of the revised school code,
MCL 380.386, is presumed to no longer apply to the community district.

(iii) The qualifying school district is
presumed, after payment under subdivision (a), to have remitted to the
community district any remaining money in any revenue fund established under
the qualified debt agreement.

(b) For a district that had a 1994-95 foundation allowance
greater than $6,500.00, the state payment under this subsection is the sum of
the amount calculated under subdivision (a) plus the amount calculated under
this subdivision. The amount calculated under this subdivision must be equal to
the difference between the district’s 1994-95 foundation allowance minus
$6,500.00 and the current year hold harmless school operating taxes per pupil.
If the result of the calculation under subdivision (a) is negative, the
negative amount is an offset against any state payment calculated under this
subdivision. If the result of a calculation under this subdivision is negative,
there is not a state payment or a deduction under this subdivision. The taxable
values per membership pupil used in the calculations under this subdivision are
as adjusted by ad valorem property tax revenue captured under tax increment
financing acts divided by the district’s membership. For a receiving district,
if school operating taxes are 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, ad valorem property tax revenue captured under tax
increment financing acts do not include ad valorem property tax revenue
captured within the geographic boundaries of the dissolved district under tax
increment financing acts.

(3) For pupils in membership in a qualifying public school
academy, there is allocated under this section to the authorizing body that is
the fiscal agent for the qualifying public school academy for forwarding to the
qualifying public school academy an amount equal to the 1994-95 per-pupil
payment to the qualifying public school academy under section 20.

(4) A district or qualifying public school academy may use
funds allocated under this section in conjunction with any federal funds for
which the district or qualifying public school academy otherwise would be
eligible.

(5) Except as otherwise provided in this subsection, for a
district that is formed or reconfigured after June 1, 2000 by consolidation of
2 or more districts or by annexation, the resulting district’s 1994-95
foundation allowance under this section beginning after the effective date of
the consolidation or annexation is the average of the 1994‑95 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 in the fiscal year in which the
consolidation takes place who reside in the geographic area of each of the
original districts. If an affected district’s 1994-95 foundation allowance is
less than the 1994-95 basic foundation allowance, the amount of that district’s
1994-95 foundation allowance is considered for the purpose of calculations
under this subsection to be equal to the amount of the 1994-95 basic foundation
allowance. This subsection does not apply to a receiving district unless there
is a subsequent consolidation or annexation that affects the district.

(6) As used in this section:

(a) “1994-95 foundation allowance” means a district’s 1994-95
foundation allowance calculated and certified by the department of treasury or
the superintendent under former section 20a as enacted in 1993 PA 336 and as
amended by 1994 PA 283.

(b) “Certified mills” means the lesser of 18 mills or the
number of mills of school operating taxes levied by the district in 1993-94.

(c) “Current fiscal year” means the fiscal year for which a
particular calculation is made.

(d) “Current year hold harmless school operating taxes per
pupil” means the per-pupil revenue generated by multiplying a district’s
1994-95 hold harmless millage by the district’s current year taxable value per
membership pupil. For a receiving district, if school operating taxes are 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, taxable value
per membership pupil does not include the taxable value of property within the
geographic area of the dissolved district.

(e) “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.

(f) “Hold harmless millage” means, for a district with a
1994-95 foundation allowance greater than $6,500.00, the number of mills by
which the exemption from the levy of school operating taxes on a principal
residence, qualified agricultural property, qualified forest property, supportive
housing property, industrial personal property, commercial personal property,
and property occupied by a public school academy could be reduced as provided
in section 1211 of the revised school code, MCL 380.1211, and the number of
mills of school operating taxes that could be levied on all property as
provided in section 1211(2) of the revised school code, MCL 380.1211, as
certified by the department of treasury for the 1994 tax year. For a receiving
district, if school operating taxes are 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, school operating taxes do not include school
operating taxes levied within the geographic area of the dissolved district.

(g) “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.

(h) “Michigan finance authority” means the public body
corporate and politic created within the department of treasury by Executive
Reorganization Order No. 2010-2, MCL 12.194.

(i) “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.

(j) “Obligations” means that term as defined in a qualified
debt agreement.

(k) “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.

(l) “Qualified debt agreement” means a
master debt indenture settlement agreement between a qualifying school district
and 1 or more other parties, including without limitation, the state treasurer
and the Michigan finance authority.

(m) “Qualifying public school academy” means a public school
academy that was in operation in the 1994-95 school year and is in operation in
the current fiscal year.

(n) “Qualifying school district” means a school district
described in section 12b of the revised school code, MCL 380.12b.

(o) “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.

(p) “School operating taxes” means local ad valorem property
taxes levied under section 1211 of the revised school code, MCL 380.1211, and
retained for school operating purposes as defined in section 20.

(q) “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.

(r) “Taxable value per membership pupil” means each of the
following divided by the district’s membership:

(i) For the number of mills by which the
exemption from the levy of school operating taxes on a principal residence,
qualified agricultural property, qualified forest property, supportive housing
property, industrial personal property, commercial personal property, and
property occupied by a public school academy may be reduced as provided in
section 1211 of the revised school code, MCL 380.1211, the taxable value of
principal residence, qualified agricultural property, qualified forest
property, supportive housing property, industrial personal property, commercial
personal property, and property occupied by a public school academy for the
calendar year ending in the current fiscal year. For a receiving district, if
school operating taxes are 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, mills do not include mills within the geographic area of the
dissolved district.

(ii) For the number of mills of school
operating taxes that may be levied on all property as provided in section 1211(2)
of the revised school code, MCL 380.1211, the taxable value of all property for
the calendar year ending in the current fiscal year. For a receiving district,
if school operating taxes are 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, school operating taxes do not include school operating
taxes levied within the geographic area of the dissolved district.

Sec.
22b. (1) Except as otherwise provided in this section, for discretionary
nonmandated payments to districts under this section, there is allocated for
2025-2026 an amount not to exceed $6,783,000,000.00 from the state school aid
fund and general fund appropriations in section 11, there is allocated for
2026-2027 an amount not to exceed $6,914,450,000.00 from the state school aid
fund and general fund appropriations in section 11, and there is additionally
allocated for 2026-2027 only an amount not to exceed $56,100,000.00 from the
state school aid fund appropriation in section 11. In addition, there is
allocated for 2025-2026 only an amount not to exceed $124,000,000.00 from the
state school aid fund appropriation in section 11, and there is allocated for
2026-2027 only an amount not to exceed $130,000,000.00 from the enrollment
stabilization fund appropriation in section 11. Funds allocated under this
section that are not expended in the fiscal year for which they were allocated,
as determined by the department, may be used to supplement the allocations
under sections 22a and 51c to fully fund those allocations for the same fiscal
year.

(2) Subject to subsection (4) and section 296, the allocation
to a district under subsection (1) is an amount equal to the sum of the amounts
calculated under sections 20, 20m, 51a(2), 51a(3), 51a(11), and 51e, minus the
sum of the allocations to the district under sections 22a and 51c. Except as
otherwise provided in this subsection, for a community district, the allocation
as otherwise calculated under this section is increased by an amount equal to
the amount of local school operating tax revenue that would otherwise be due to
the community district if not for the operation of section 386 of the revised
school code, MCL 380.386, to offset the absence of local school operating
revenue in a community district in the funding of the state portion of the foundation
allowance under section 20(4). Beginning with the fiscal year ending September
30, 2027, it is the intent of the legislature that the previous sentence no
longer applies. Beginning
with the fiscal year ending September 30, 2027, for a qualifying school
district that has entered into a qualifying debt agreement, all of the
following apply:

(a) The qualifying school district is presumed to have paid
the unpaid obligations of the qualifying school district under the qualified
debt agreement and repaid all outstanding operating obligations of the
qualifying school district.

(b) Section 386 of the revised school code, MCL 380.386, is
presumed to no longer apply to the community district.

(c) The qualifying school district is presumed, after payment
under subdivision (a), to have remitted to the community district any remaining
money in any revenue fund established under the qualified debt agreement.

(3) To receive an allocation under this section, each
district must do all of the following:

(a) Comply with section 1280b of the revised school code, MCL
380.1280b.

(b) Comply with sections 1278a and 1278b of the revised
school code, MCL 380.1278a and 380.1278b.

(c) Furnish data and other information required by state and
federal law to the center and the department in the form and manner specified
by the center or the department, as applicable.

(d) Comply with section 1230g of the revised school code, MCL
380.1230g.

(e) Comply with section 21f.

(f) For a district that has entered into a partnership
district agreement with the department, comply with section 22p.

(g) Comply with 1 of the following, as applicable:

(i) If Senate Bill No. 903 of the 103rd
Legislature is enacted into law, section 1280h of the revised school code, MCL
380.1280h.

(ii) If subparagraph (i) does not apply, section 164m.

(h) Comply with section 1280f of the revised school code, MCL
380.1280f. Beginning with the fiscal year ending September 30, 2026, if a
district is not using a curriculum from the department’s evidence-based
curriculum list required under section 1280f of the revised school code, MCL
380.1280f, the district must provide a notification to all parents or legal
guardians of students in grades K to 5 receiving instruction with that
curriculum that includes all of the following:

(i) A statement informing parents or legal
guardians that the curriculum used by the district is not evidence-based or not
aligned to state standards, which could negatively impact student academic
outcomes.

(ii) A statement explaining why the district
is not using a curriculum that is evidence-based or aligned to state standards.

(iii) A plan, including a projected timeline,
for when a new curriculum will be adopted that is evidence-based and aligned to
state standards.

(4) In addition to the allocation under subsection (1), and
subject to subsection (3) and section 296, from the state school aid fund money
appropriated in section 11 there is allocated for 2026-2027 an amount not to
exceed $1,627,665,100.00 for a weighted foundation payment to districts in an
amount equal to the target foundation allowance multiplied by the weighted
pupil membership for the district.

(5) Districts are encouraged to use funds allocated under
this section for the purchase and support of payroll, human resources, and
other business function software that is compatible with that of the
intermediate district in which the district is located and with other districts
located within that intermediate district.

(6) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this state
related to commercial or industrial property tax appeals, including, but not
limited to, appeals of classification, that impact revenues dedicated to the
state school aid fund.

(7) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this state
associated with lawsuits filed by 1 or more districts or intermediate districts
against this state. If the allocation under this section is insufficient to
fully fund all payments required under this section, the payments under this
subsection must be made in full before any proration of remaining payments
under this section.

(8) It is the intent of the legislature that all
constitutional obligations of this state have been fully funded under sections
22a, 31d, 51a, 51c, 51e, and 152a. If a claim is made by an entity receiving
funds under this article that challenges the legislative determination of the
adequacy of this funding or alleges that there exists an unfunded
constitutional requirement, the state budget director may escrow or allocate
from the discretionary funds for nonmandated payments under this section the
amount as may be necessary to satisfy the claim before making any payments to
districts under subsection (2). If funds are escrowed, the escrowed funds are a
work project appropriation and the funds are carried forward into the following
fiscal year. The purpose of the work project is to provide for any payments
that may be awarded to districts as a result of litigation. The work project is
completed upon resolution of the litigation.

(9) If the local claims review board or a court of competent
jurisdiction makes a final determination that this state is in violation of
section 29 of article IX of the state constitution of 1963 regarding state
payments to districts, the state budget director shall use work project funds
under subsection (8) or allocate from the discretionary funds for nonmandated
payments under this section the amount as may be necessary to satisfy the
amount owed to districts before making any payments to districts under
subsection (2).

(10) If a claim is made in court that challenges the
legislative determination of the adequacy of funding for this state’s
constitutional obligations or alleges that there exists an unfunded
constitutional requirement, any interested party may seek an expedited review
of the claim by the local claims review board. If the claim exceeds
$10,000,000.00, this state may remove the action to the court of appeals, and
the court of appeals has and shall exercise jurisdiction over the claim.

(11) If payments resulting from a final determination by the
local claims review board or a court of competent jurisdiction that there has
been a violation of section 29 of article IX of the state constitution of 1963
exceed the amount allocated for discretionary nonmandated payments under this
section, the legislature shall provide for adequate funding for this state’s
constitutional obligations at its next legislative session.

(12) If a lawsuit challenging payments made to districts
related to costs reimbursed by federal title XIX Medicaid funds is filed
against this state, then, for the purpose of addressing potential liability
under such a lawsuit, the state budget director may place funds allocated under
this section in escrow or allocate money from the funds otherwise allocated
under this section, up to a maximum of 50% of the amount allocated in
subsection (1). If funds are placed in escrow under this subsection, those
funds are a work project appropriation and the funds are carried forward into
the following fiscal year. The purpose of the work project is to provide for
any payments that may be awarded to districts as a result of the litigation.
The work project is completed upon resolution of the litigation. In addition,
this state reserves the right to terminate future federal title XIX Medicaid
reimbursement payments to districts if the amount or allocation of reimbursed
funds is challenged in the lawsuit. As used in this subsection, “title XIX”
means title XIX of the social security act, 42 USC 1396 to 1396w-6.

(13) As used in this section:

(a) “Dissolved district” means that term as defined in
section 20.

(b) “Local school operating revenue” means school operating
taxes levied under section 1211 of the revised school code, MCL 380.1211. For a
receiving district, if school operating taxes are 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, local school operating revenue does not
include school operating taxes levied within the geographic area of the
dissolved district.

(c) “Michigan finance authority” means the public body
corporate and politic created within the department of treasury by Executive
Reorganization Order No. 2010-2, MCL 12.194.

(d) “Obligations” means that term as defined in a qualified
debt agreement.

(e) “Qualified debt agreement” means a master debt indenture
settlement agreement between a qualifying school district and 1 or more other
parties, including without limitation, the state treasurer and the Michigan
finance authority.

(f) “Qualifying school district” means a school district
described in section 12b of the revised school code, MCL 380.12b.

(g) “Receiving district” and “school operating taxes” mean
those terms as defined in section 20.

Sec.
22d. (1) From the state school aid fund money appropriated under section 11, an
amount not to exceed $14,184,400.00 is allocated for 2026-2027 for supplemental
payments to rural districts under this section.

(2) From the allocation under subsection (1), there is
allocated for 2026-2027 an amount not to exceed $4,304,100.00 for payments
under this subsection to eligible districts. A district that meets all of the
following is an eligible district under this subsection:

(a) Operates grades K to 12.

(b) Has fewer than 250 pupils in membership.

(c) Each school building operated by the district meets at
least 1 of the following:

(i) Is located in the Upper Peninsula at
least 30 miles from any other public school building.

(ii) Is located on an island that is not
accessible by bridge.

(3) The amount of the additional funding to each eligible
district under subsection (2) is determined under a spending plan developed as
provided in this subsection and approved by the superintendent of public
instruction. The spending plan must be developed cooperatively by the
intermediate superintendents of each intermediate district in which an eligible
district is located. The intermediate superintendents shall review the
financial situation of each eligible district, determine the minimum essential
financial needs of each eligible district, and develop and agree on a spending
plan that distributes the available funding under subsection (2) to the
eligible districts based on those financial needs. The intermediate
superintendents shall submit the spending plan to the superintendent of public
instruction for approval. Upon approval by the superintendent of public
instruction, the amounts specified for each eligible district under the
spending plan are allocated under subsection (2) and must be paid to the
eligible districts in the same manner as payments under section 22b.

(4) Subject to subsection (7), from the allocation in
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$9,269,000.00 for payments under this subsection to districts that have fewer
than 10.0 pupils per square mile, as determined by the department, or that have
greater than 250 square miles.

(5) The funds allocated under subsection (4) are allocated as
follows:

(a) An amount equal to $7,022,900.00 is allocated to
districts with fewer than 8.0 pupils per square mile, as determined by the
department, on an equal per-pupil basis.

(b) The balance of the funding under subsection (4) is
allocated as follows:

(i) For districts with at least 8.0 but
fewer than 9.0 pupils per square mile, as determined by the department, the
allocation is an amount per pupil equal to 75% of the per-pupil amount
allocated to districts under subdivision (a).

(ii) For districts with at least 9.0 but
fewer than 10.0 pupils per square mile, as determined by the department, the
allocation is an amount per pupil equal to 50% of the per-pupil amount
allocated to districts under subdivision (a).

(iii) For districts that have greater than 250
square miles, have at least 10.0 pupils per square mile, and do not receive
funding under subsection (2), as determined by the department, the allocation
is an amount per pupil equal to 100% of the per-pupil amount allocated to
districts under subdivision (a).

(c) If the total funding allocated under subdivision (b) is
insufficient to fully fund payments as calculated under that subdivision, the
department shall prorate payments to districts under subdivision (b) on an
equal per-pupil basis. If funding allocated under subdivision (b) remains
unallocated after making calculations under that subdivision, the department
may provide the remaining unallocated funding on an equal per-pupil basis to
districts receiving funding under subdivision (b)(i) and (ii).

(6) Subject to subsection (7), from the allocation under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$611,300.00 for payments under this subsection to districts where each school
building operated by the district is located on an island that is accessible by
bridge.

(7) A district receiving funds allocated under subsection (2)
is not eligible for funding allocated under subsection (4) or (6). A district
receiving funds allocated under subsection (6) is not eligible for funding
under subsection (2) or (4).

Sec.
22l. (1) From the school transportation fund
money appropriated under section 11, there is allocated for 2026-2027 only an
amount not to exceed $125,000,000.00 to districts and intermediate districts
for transportation costs. Funding for each district or intermediate district is
as follows:

(a) The department must assign each district and intermediate
district to an octile based on the number of riders per square mile and
calculate the median cost per rider for each octile.

(b) Funds must be distributed to each district and
intermediate district as follows:

(i) An initial amount at the lesser of the
octile’s median cost per rider or the actual transportation cost per general
education rider at the district or intermediate district.

(ii) An additional amount for districts and
intermediate districts that have outlier costs per rider that are deemed
reasonable, as determined by the department.

(c) If funds are insufficient to fully fund payments under
this section, payments may be prorated on an equal percentage basis.

(2) To remain eligible for funding under subsection (1), by
not later than December 1 of the current fiscal year, a school district must
submit, in a form and manner determined by the department, to their
intermediate district, and a public school academy must submit, in a form and
manner determined by the department, to the intermediate district in which the
public school academy is located, the number of nonpublic school students the
district expects to transport as required under section 1321 of the revised
school code, MCL 380.1321. Intermediate districts shall submit this information
to the department by not later than February 1.

(3) The department shall compile the reports provided by
intermediate districts under subsection (2) into 1 legislative report. The
department shall provide this report not later than March 1 of each fiscal year
for which funding is allocated under this section to the house and senate
subcommittees responsible for school aid, the house and senate fiscal agencies,
and the state budget director.

(4) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
22m. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 an amount not to exceed $3,500,000.00 for supporting
the integration of local data systems into the Michigan data hub network based
on common standards and applications that are in compliance with section 19(6).

(2) An entity that is the fiscal agent for no more than 5
consortia of intermediate districts that previously received funding from the
technology readiness infrastructure grant under former section 22i for the
purpose of establishing regional data hubs that are part of the Michigan data
hub network is eligible for funding under this section.

(3) The center shall work with an advisory committee composed
of representatives from intermediate districts within each of the data hub
regions to coordinate the activities of the Michigan data hub network.

(4) The center, in collaboration with the Michigan data hub
network, shall determine the amount of funds distributed under this section to
each participating regional data hub within the network, based upon a
competitive grant process. The center shall ensure that the entities receiving
funding under this section represent geographically diverse areas in this
state.

(5) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the center.

(6) To receive funding under this section, a regional data
hub must have a governance model that ensures local control of data, data
security, and student privacy issues. The integration of data within each of
the regional data hubs must provide for the actionable use of data by districts
and intermediate districts through common reports and dashboards and for
efficiently providing information to meet state and federal reporting purposes.

(7) Participation in a data hub region in the Michigan data
hub network under this section is voluntary and is not required.

(8) Entities receiving funding under this section shall use
the funds for all of the following:

(a) Creating an infrastructure that effectively manages the
movement of data between data systems used by intermediate districts,
districts, and other educational organizations in Michigan based on common data
standards to improve student achievement.

(b) Utilizing the infrastructure to put in place commonly
needed integrations, reducing cost and effort to do that work while increasing
data accuracy and usability.

(c) Promoting the use of a more common set of applications by
promoting systems that integrate with the Michigan data hub network.

(d) Promoting 100% district adoption of the Michigan data hub
network.

(e) Ensuring local control of data, data security, and
student data privacy.

(f) Utilizing the infrastructure to promote the actionable
use of data through common reports and dashboards that are consistent
statewide.

(g) Creating a governance model to facilitate sustainable
operations of the infrastructure in the future, including administration, legal
agreements, documentation, staffing, hosting, and funding.

(h) Evaluating future data initiatives at all levels to
determine whether the initiatives can be enhanced by using the standardized
environment in the Michigan data hub network.

(9) By not later than January 1 of each fiscal year, the
center shall prepare a summary report of information provided by each entity
that received funds under this section that includes measurable outcomes based
on the objectives described under this section and a summary of compiled data
from each entity to provide a means to evaluate the effectiveness of the
project. The center shall submit the report to the house and senate
appropriations subcommittees on school aid and to the house and senate fiscal
agencies.

Sec.
22s. (1) The general pupil support reserve fund is created as a separate
account within the state school aid fund to fund programs described in sections
30d, 31aa, and 99h. It is the intent of the legislature that money in the
general pupil support reserve fund will be used to support the above programs
for 2025-2026, 2026-2027, and 2027-2028.

(2) The state treasurer may receive money or other assets
from any source for deposit into the general pupil support reserve fund. The
state treasurer shall direct the investment of the general pupil support
reserve fund. The state treasurer shall credit to the general pupil support
reserve fund interest and earnings from general pupil support reserve fund
investments.

(3) Money in the general pupil support reserve fund at the
close of the fiscal year remains in the general pupil support reserve fund and
does not lapse to the state school aid fund.

(4) The department of treasury is the administrator of the
general pupil support reserve fund for auditing purposes.

(5) Money available in the general pupil support reserve fund
must not be expended without a specific appropriation.

(6) For the fiscal year ending September 30, 2027 only,
$12,000,000.00 from the educator fellowship private provider fund under section
27e is deposited into the general pupil support reserve fund.

Sec.
24. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 an amount not to exceed $7,650,000.00 for payments
to the educating district or intermediate district for educating pupils
assigned by a court or the department of health and human services to reside in
or to attend a juvenile detention facility or child caring institution licensed
by the department of health and human services and approved by the department
to provide an on-grounds education program. The amount of the payment under
this section to a district or intermediate district is calculated as prescribed
under subsection (2).

(2) The department shall allocate the total amount allocated
under this section by paying to the educating district or intermediate district
an amount equal to the lesser of the district’s or intermediate district’s
added cost or the department’s approved per-pupil allocation for the district
or intermediate district. For the purposes of this subsection:

(a) “Added cost” means 100% of the added cost each fiscal
year for educating all pupils assigned by a court or the department of health
and human services to reside in or to attend a juvenile detention facility or
child caring institution licensed by the department of health and human
services or the department of licensing and regulatory affairs and approved by
the department to provide an on-grounds education program. Added cost is
computed by deducting all other revenue received under this article for pupils
described in this section from total costs, as approved by the department, in
whole or in part, for educating those pupils in the on-grounds education
program or in a program approved by the department that is located on property
adjacent to a juvenile detention facility or child caring institution. Costs
reimbursed by federal funds are not included.

(b) “Department’s approved per-pupil allocation” for a
district or intermediate district is determined by dividing the total amount
allocated under this section for a fiscal year by the full-time equated
membership total for all pupils approved by the department to be funded under
this section for that fiscal year for the district or intermediate district.

(3) A district or intermediate district educating pupils
described in this section at a residential child caring institution may
operate, and receive funding under this section for, a department-approved
on-grounds educational program for those pupils that is longer than 181 days,
but not longer than 233 days, if the child caring institution was licensed as a
child caring institution and offered in 1991-92 an on-grounds educational
program that was longer than 181 days but not longer than 233 days and that was
operated by a district or intermediate district.

(4) Special education pupils funded under section 53a are not
funded under this section.

Sec.
24a. From the state school aid fund money appropriated in section 11, there is
allocated an amount not to exceed $1,355,700.00 for 2026-2027 for payments to
intermediate districts for pupils who are placed in juvenile justice service
facilities operated by the department of health and human services. The amount
of the payment to each intermediate district is an amount equal to the state
share of those costs that are clearly and directly attributable to the
educational programs for pupils placed in facilities described in this section
that are located within the intermediate district’s boundaries. The
intermediate districts receiving payments under this section shall cooperate
with the department of health and human services to ensure that all funding
allocated under this section is utilized by the intermediate district and
department of health and human services for educational programs for pupils
described in this section. Pupils described in this section are not eligible to
be funded under section 24. However, a program responsibility or other fiscal
responsibility associated with these pupils must not be transferred from the
department of health and human services to a district or intermediate district
unless the district or intermediate district consents to the transfer.

Sec.
25f. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $1,600,000.00 for 2026-2027 for payments
to strict discipline academies and qualified districts, as provided under this
section.

(2) To receive funding under this section, a strict
discipline academy or qualified district must first comply with section 25e and
use the pupil transfer process described in that section for changes in
enrollment as prescribed under that section and apply annually for funding
under section 24.

(3) The total amount allocated to a strict discipline academy
or qualified district under this section is equal to the strict discipline
academy’s or qualified district’s pupil membership in the immediately preceding
year multiplied by an amount calculated by dividing the total allocation under
this section by the total pupil membership for eligible strict discipline
academies and qualified districts in the immediately preceding year. However,
the sum of the amounts received by a strict discipline academy or qualified
district under this section and under section 24 must not exceed the product of
the strict discipline academy’s or qualified district’s per-pupil allocation
calculated under section 20 multiplied by the strict discipline academy’s or
qualified district’s full-time equated membership. The department shall
allocate funds to strict discipline academies and qualified districts under
this section on a monthly basis.

(4) Special education pupils funded under section 53a are not
funded under this section.

(5) The department shall make payments to strict discipline
academies and qualified districts under this section according to the payment
schedule under section 17b.

(6) For purposes of this section, the pupil membership for
the current fiscal year for a qualified district is the actual number of pupils
that are in the custody of a county juvenile agency as described in subsection
(7)(a).

(7) As used in this section:

(a) “Qualified district” means a public school academy that
is not a strict discipline academy that enrolls individuals who are in the
custody of a county juvenile agency to which both of the following are
applicable:

(i) The agency had custody of individuals
who were enrolled in a strict discipline academy in the 2020-2021 school year.

(ii) The strict discipline academy that the
individuals described in subparagraph (i) were
enrolled in subsequently closed.

(b) “Strict discipline academy” means a public school academy
established under sections 1311b to 1311m of the revised school code, MCL
380.1311b to 380.1311m.

Sec.
26a. From the state school aid fund money appropriated in section 11, there is
allocated an amount not to exceed $14,000,000.00 for 2025-2026 to reimburse
districts and intermediate districts under section 12 of the Michigan
renaissance zone act, 1996 PA 376, MCL 125.2692, for taxes levied in 2025. From
the state school aid fund money appropriated in section 11, there is allocated
an amount not to exceed $14,000,000.00 for 2026-2027 to reimburse districts and
intermediate districts under section 12 of the Michigan renaissance zone act,
1996 PA 376, MCL 125.2692, for taxes levied in 2026. The department
shall pay the allocations by not later than 60 days after the department
of treasury certifies to the department and to the state budget director that
the department of treasury has received all necessary information to properly
determine the amounts due to each eligible recipient.

Sec.
26b. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $5,549,000.00 for 2026-2027 for payments
to districts, intermediate districts, and community college districts for the
portion of the payment in lieu of taxes obligation that is attributable to
districts, intermediate districts, and community college districts under
section 2154 of the natural resources and environmental protection act, 1994 PA
451, MCL 324.2154.

(2) If the amount appropriated under this section is
insufficient to fully pay obligations under this section, payments are prorated
on an equal basis among all eligible districts, intermediate districts, and
community college districts.

Sec.
26c. (1) From the state school aid fund money appropriated under section 11,
there is allocated an amount not to exceed $48,300,000.00 for 2026-2027 to the
promise zone fund created in subsection (3). The funds allocated under this
section reflect the amount of revenue from the collection of the state
education tax captured under section 17 of the Michigan promise zone authority
act, 2008 PA 549, MCL 390.1677.

(2) Funds allocated to the promise zone fund under this
section must be used solely for payments to eligible districts and intermediate
districts, in accordance with section 17 of the Michigan promise zone authority
act, 2008 PA 549, MCL 390.1677, that have a promise zone development plan
approved by the department of treasury under section 7 of the Michigan promise
zone authority act, 2008 PA 549, MCL 390.1667. Eligible districts and
intermediate districts shall use payments made under this section for reimbursement
for qualified educational expenses as that term is defined in section 3 of the
Michigan promise zone authority act, 2008 PA 549, MCL 390.1663.

(3) The promise zone fund is created as a separate account
within the state school aid fund to be used solely for the purposes of the
Michigan promise zone authority act, 2008 PA 549, MCL 390.1661 to 390.1679. All
of the following apply to the promise zone fund:

(a) The state treasurer shall direct the investment of the
promise zone fund. The state treasurer shall credit to the promise zone fund
interest and earnings from fund investments.

(b) Money in the promise zone fund at the close of a fiscal
year remains in the promise zone fund and does not lapse to the general fund.

(4) Subject to subsection (2), the state treasurer may make
payments from the promise zone fund to eligible districts and intermediate
districts under the Michigan promise zone authority act, 2008 PA 549, MCL
390.1661 to 390.1679, to be used for the purposes of a promise zone authority
created under that act.

(5) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
26d. (1) From the state school aid fund money appropriated under section 11,
there is allocated an amount not to exceed $19,000,000.00 for 2025-2026 and an
amount not to exceed $21,800,000.00 for 2026-2027 for reimbursements to
intermediate districts as required under section 15b of the brownfield
redevelopment financing act, 1996 PA 381, MCL 125.2665b.

(2) The amounts reimbursed under subsection (1) must be used
by the intermediate district only for the purposes for which the property taxes
were originally levied.

(3) The Michigan strategic fund and the Michigan economic
development corporation shall work with the department of treasury in
identifying the amount of tax revenues that are to be reimbursed under
subsection (1).

(4) Notwithstanding section 17b, the department of treasury
shall make payments under this section on a schedule determined by the
department of treasury.

Sec.
27a. (1) From the educator fellowship public provider fund money appropriated
in section 11, there is allocated for 2026-2027 an amount not to exceed
$10,000,000.00, from the state school aid fund money appropriated in section
11, there is allocated for 2026-2027 an amount not to exceed $10,000,000.00,
and from the general fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $5,000,000.00 for the MI future
educator fellowship program. The funds allocated under this section must be
used to offset tuition costs for individuals who are working toward earning
their initial teacher certification. At the close of the fiscal year, money
allocated under this section that is unspent must be deposited as follows:

(a) For state school aid fund money, into the educator
fellowship public provider fund in section 27d.

(b) For general fund money, into the educator fellowship
private provider fund in section 27e.

(2) To establish initial eligibility for an award from
funding under this section, an individual must meet all of the following
conditions by the date of enrollment described in subdivision (a):

(a) Be admitted to an eligible educator preparation program;
be working toward a teacher certification; be enrolled in enough coursework to
be considered enrolled full-time during the academic year, as determined by the
student’s educator preparation program, or the equivalent of full-time
participation for individuals enrolled in an alternative certification program,
as defined by the department; and, for students at institutions of higher
education, be considered at least a junior-level student, as determined by the
institution of higher education.

(b) Not have previously earned a teacher certification.

(c) Timely complete a grant application in a form and manner
prescribed by the department of lifelong education, advancement, and potential.

(d) Timely file the Free Application for Federal Student Aid
for the enrollment period described in subdivision (a).

(e) Timely apply for all available gift aid for the
enrollment period described in subdivision (a).

(f) Agree to repay any funds received from funding under this
section if the individual does not maintain enrollment in their educator
preparation program, the individual does not successfully complete their
educator program, or the individual does not complete the work requirement
described in subsection (7).

(g) Have a high school or college grade point average of at
least 3.0.

(h) Be a resident of this state, as determined for purposes
of the Free Application for Federal Student Aid.

(3) To establish continuing eligibility for an award under
this section at an eligible educator preparation program, an individual must
meet all of the following conditions:

(a) Maintain full-time continuous enrollment in an eligible
educator preparation program, as determined by the educator preparation
program, or the equivalent of full-time participation for individuals enrolled
in an alternative certification program, as defined by the department,
excluding any period of time missed due to a medical or other emergency, as
determined by the department of lifelong education, advancement, and potential.

(b) Maintain satisfactory academic progress, including a
grade point average of at least 3.0, in courses provided by the eligible
educator preparation program and meet requirements established by the eligible
educator preparation program.

(c) Participate in relevant academic and career advising
programs offered by the eligible educator preparation program.

(d) Timely file the Free Application for Federal Student Aid
for each academic year in which the individual receives an award from funding
under this section.

(e) Timely apply for all available gift aid for each academic
year in which the individual applies for funding under this section.

(f) Maintain residency in this state, as determined for
purposes of the Free Application for Federal Student Aid.

(4) An award under this section must not exceed $10,000.00
per academic year or the cost of tuition at the eligible educator preparation
program attended, whichever is less. As used in this subsection, the cost of
tuition at an educator preparation program that is an institution of higher
education is the in-district resident rate plus other required fees, as
determined by the department of lifelong education, advancement, and potential;
and the cost of tuition at an educator preparation program that is an alternative
certification provider is the cost of tuition plus other required fees, as
determined by the department of lifelong education, advancement, and potential.

(5) Awards under this section must be distributed to eligible
educator preparation programs on behalf of an eligible recipient on a timeline
determined by the department of lifelong education, advancement, and potential.

(6) Pending available funds, applicants may renew their award
for up to 3 years, or until program completion, whichever comes first.

(7) To be an eligible recipient of fellowship funding under
this section, an individual must pledge to work as a certified teacher in a
public school, a nonpublic school, a qualifying public preschool program, or a
qualifying nonpublic preschool program in this state and must meet 1 of the
following work requirements:

(a) For a recipient of funding under this section who
received an award for 1 academic year, 3 years of work as a certified teacher
in a public school, a nonpublic school, a qualifying public preschool program,
or a qualifying nonpublic preschool program in this state.

(b) For a recipient of funding under this section who
received an award for 2 academic years, 4 years of work as a certified teacher
in a public school, a nonpublic school, a qualifying public preschool program,
or a qualifying nonpublic preschool program in this state.

(c) For a recipient of funding under this section who
received an award for 3 academic years, 5 years of work as a certified teacher
in a public school, a nonpublic school, a qualifying public preschool program,
or a qualifying nonpublic preschool program in this state.

(d) For a recipient working in a critical needs district, 3
years of work as a certified teacher. As used in this subdivision, “critical
needs district” means a district with a median household income in the lowest
quartile in each prosperity region, as determined by the department.

(8) If an award recipient does not maintain enrollment in
their educator preparation program as required under subsection (3)(a), does
not successfully complete their educator preparation program, or does not meet
the work requirement described in subsection (7), any amount received from
funds under this section converts to a 0% interest loan that must be repaid to
this state within 10 years, plus any deferment period as determined and
approved by the department of lifelong education, advancement, and potential.
The amount of repayment must be reduced proportionate to the number of years
worked in public schools, nonpublic schools, qualifying public preschool
programs, or qualifying nonpublic preschool programs in this state as a
certificated teacher out of 5 years. The department of lifelong education,
advancement, and potential shall develop guidance to enforce this subsection.

(9) An individual may not concurrently receive funding
through programs funded under this section and programs funded under section
27b.

(10) If the amount allocated in subsection (1) is
insufficient to fully fund awards under this section, there is appropriated
from the educator fellowship public provider fund in section 27d or the
educator fellowship private provider fund in section 27e, as applicable, the
amount necessary to fully fund these programs. The state budget director shall
provide notification to the house and senate appropriations subcommittees on K
to 12 school aid and the house and senate fiscal agencies for any additional appropriation
described under this subsection.

(11) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section on
a schedule determined by the department of lifelong education, advancement, and
potential.

(12) The department of lifelong education, advancement, and
potential shall report to the chairpersons of the house appropriations
subcommittee on school aid and education and the senate appropriations
subcommittee on pre-K to 12 by February 15 of the current fiscal year. The
report must include the following:

(a) The number and amount of awards granted in the previous
fiscal year.

(b) The number of recipients in the previous fiscal year that
had their awards converted to loans under subsection (8).

(13) As used in this section, “eligible educator preparation
program” means a public or nonpublic institution of higher education or an
alternative route provider that meets all of the following, as applicable:

(a) Is approved by the department to offer teacher
preparation programming.

(b) Enrolls 1 or more future educator fellowship recipients.

(c) Has not been deemed as ineligible to receive Michigan
achievement scholarship funding under section 248 as a result of exceeding
tuition restraint requirements described in section 248.

(d)
Includes, as part of its required educator preparation coursework, pedagogical
methods grounded in the science of reading. If an educator preparation program
does not include pedagogical methods grounded in the science of reading, the
program may maintain eligibility by providing to the department of lifelong
education, advancement, and potential a detailed public plan, in a form and
manner determined by the department of lifelong education, advancement, and
potential, to comply with section 1531e of the revised school code, MCL
380.1531e, by not later than September 30, 2027.

Sec.
27b. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2025-2026 only an amount not to exceed $70,000,000.00 to
districts, intermediate districts, and consortia of intermediate districts for
grow your own programs and educator development programs as described in this
section and subject to subsection (5), and there is allocated for 2026-2027
only an amount not to exceed $25,000,000.00 to districts, intermediate
districts, and consortia of intermediate districts for grow your own programs,
educator workforce innovation programs, and educator development and retention
programs as described in this section.

(2) The department shall establish a competitive grant
process to distribute funds under this section. A district, intermediate
district, or consortium of intermediate districts must apply for funds in a
form and manner prescribed by the department. As part of the application
described in this subsection, a district, intermediate district, or consortium
of intermediate districts must submit the following information and assurances:

(a) Demonstrated need for funding in the district,
intermediate district, or consortium of intermediate districts or the broader
community, including projected workforce needs, and a proposed spending plan on
how the funds will be used that includes, but is not limited to, administrative
costs, expected tuition, fees, and books for the program. Funds used for
administrative costs must not exceed 10% of funds received through an award
under this section. As used in this
subdivision, “administrative costs” includes only costs associated with teacher
recruitment, retention, development, innovation, and evaluation.

(b) Number of support staff projected to participate in a
program described in this section.

(c) The planned activities for programs described in this
section.

(d) Projected outcomes of programs described in this section,
which must include, but are not limited to, the following:

(i) Teacher and school leader retention and
satisfaction.

(ii) Teacher and school leader efficacy.

(iii) Anticipated school or district partners,
evidenced by signed partnership agreements.

(iv) Beginning in 2026-2027, demonstration of
addressing projected workforce needs.

(e) Assurances that the programs described in this section
will be no cost for participants and that participants will be compensated as
an employee for the duration of their training, including a paid residency,
fellowship, or student teaching.

(f) Beginning in 2026-2027, assurances that any educator
preparation program partnering with the district, intermediate district, or
consortium of intermediate districts to support a grow your own program under
this section satisfies at least 1 of the following:

(i) Is approved by the department for the
preparation of teachers in this state.

(ii) Satisfies both of the following:

(A) Holds national accreditation from the Council for the
Accreditation of Education Preparation or the Association for Advancing Quality
in Educator Preparation.

(B) Leads to licensure in this state.

(3) Recipients of grants under this section must submit
performance reports to the department not less than twice per year. Each report
must include the following information:

(a) The number of program participants served and retention
in the program or district.

(b) Qualitative and quantitative participant feedback.

(c) Evidence of efficacy and progress toward projected
outcomes.

(4) The department shall ensure that all performance reports
required under subsection (3) are made publicly available on the department’s website.

(5) For 2025-2026 only, grant awards under this section must
be structured into 3 tiers, as described in subsections (6), (8), and (11). Beginning
in 2026-2027, grant awards under this section must be structured into 4 tiers,
as described in subsections (6), (8), (11), and (14), or be used for the
purposes described in subsection (17). All programs funded under this section
must address a measurable and critical problem related to the health and
efficacy of this state’s education talent working in Michigan schools and be
data- and research-driven, demonstrating effectiveness against intended and
measurable outcomes.

(6) For 2025-2026 only, funding for tier 1 grant awards must
not exceed $50,000,000.00, unless otherwise directed by the legislature. In
2025-2026, the department shall allocate at least 1 tier 1 grant of not less
than $40,000,000.00. For 2026-2027 only, funding for tier 1 grant awards must
not exceed $8,000,000.00. Tier 1 grants must sustain or further scale programs
that meet all of the following criteria, as applicable:

(a) For 2025-2026 only, have been in operation in this state
for at least 5 years, and evaluated for at least 2 years by a rigorous,
independent Michigan-based evaluator, and results of the program have been made
publicly available.

(b) For 2025-2026 only, have at least 2 consecutive years of
public financial audits of the program with no material findings.

(c) For 2025-2026 only, demonstrate broad geographic reach
and investment into teachers and school leaders at every experience level, in
partnerships established with not fewer than 15 local education agencies across
both urban and rural regions, that extend back to the start of the 2023-2024
school year, bound by written agreements that include data sharing with an
independent evaluator for evaluation purposes.

(d) For 2025-2026 only, generate private matching funds.

(e) For 2026-2027, have been in operation at least 3 years.

(f) For 2026-2027, demonstrate a proven track record of
success, as evidenced by internal data showing both of the following:

(i) High rates of educator retention within
the program, the profession, or participating districts after program
completion.

(ii) Active and ongoing engagement and formal
partnership with school districts in each of the state’s intermediate
districts.

(g) For 2026-2027, operate as a statewide program,
demonstrating the ability to serve a geographically diverse population,
including both urban and rural areas.

(h) For 2026-2027, have a demonstrated track record of
receiving private philanthropic or corporate funding.

(7) Notwithstanding section 18a, funds allocated in 2025-2026
for programs described in subsection (6) may be available for expenditure until
September 30, 2029. A recipient of funding for a program described in
subsection (6) must return any unexpended funds to the department in a manner
prescribed by the department by not later than October 30, 2029.

(8) Tier 2 grants must scale or sustain programs that meet
all of the following criteria, as applicable:

(a) For 2025-2026 only, have been in operation for at least
3 years.

(b) For 2025-2026 only, demonstrate promising internal
results, but are not yet supported by an independent evaluation.

(c) For 2025-2026 only, serve a geographically diverse
population, including both urban and rural areas.

(d) Have a demonstrated track record of receiving private
philanthropic or corporate funding.

(e) For 2026-2027, have been in operation for at least 4
years.

(f) For 2026-2027, be a Michigan-based nonprofit organization
organized under section 501(c)(3) of the internal revenue code, 26 USC 501.

(g) For 2026-2027, serve both K to 12 and the early childhood
educator pipelines in a geographically diverse population, including both urban
and rural areas.

(h) For 2026-2027, demonstrate promising internal results and
have contracted with a third-party research agency.

(i) For 2026-2027, have a demonstrated track record of
launching grow your own programs with more than 100 participants in
geographically diverse areas of the state.

(j) For 2026-2027, have partnered with at least 9 districts
and a national nonprofit strategic staffing organization to adopt innovative
staffing models, including strategic staffing.

(k) For 2026-2027, have led at least 1 program that develops
school district talent leaders with national best practices and is
degree-granting.

(l) For 2026-2027, have partnered with at
least 5 of this state’s educator preparation programs to improve teacher
preparation, teacher candidate experience, and outcomes.

(9) For 2025-2026 only, grant awards for programs described
in subsection (8) must not exceed $12,500,000.00 per year. For
2026-2027 only, funding for tier 2 grant awards must not exceed $8,000,000.00.

(10) Notwithstanding section 18a, funds allocated in
2025-2026 for programs described in subsection (8) may be available for
expenditure until September 30, 2027. A recipient of funding in 2025-2026 for a
program described in subsection (8) must return any unexpended funds to the
department in a manner prescribed by the department by not later than October
30, 2027.

(11) Tier 3 grants must scale or sustain programs that meet
all of the following criteria, as applicable:

(a) For 2025-2026 only, have been in operation for fewer
than 2 years.

(b) For 2025-2026 only, do not yet have independent
evaluation data available.

(c) For 2025-2026 only, are limited in scope or geography.

(d) For 2025-2026 only, include a documented path to scale or
expand the program to serve more educators or additional districts.

(e) For 2026-2027, have been in operation for at least 3
years.

(f) For 2026-2027, have an independent evaluation partnership
with promising results.

(g) For 2026-2027, are a regional consortium model led by an
intermediate district serving between 97,000 and 103,000 students, partnering
with not fewer than 35 districts and a regional educator preparation program
approved by the department for the preparation of teachers in this state.

(h) For 2026-2027, include a documented path to deepen
regional impact or support replication of the program model in additional
regions of the state.

(12) For 2025-2026 only, grant awards for programs described
in subsection (11) must not exceed $5,000,000.00 per year. For
2026-2027 only, funding for tier 3 grant awards must not exceed $3,000,000.00.

(13) Notwithstanding section 18a, funds allocated in
2025-2026 for programs described in subsection (11) may be available for
expenditure until September 30, 2027. A recipient of funding for a program
described in subsection (11) must return any unexpended funds to the
department in a manner prescribed by the department by not later than October
30, 2027.

(14) Beginning in 2026-2027, tier 4 grants must fund
pilot-stage, early-stage, or small programs that meet both of the following
criteria:

(a) Do not yet have independent evaluation data available.

(b) Are limited in scope or geography.

(15) An individual may not concurrently receive funding for
programs under this section and programs funded under sections 27a and 27c.

(16) From the state school aid fund money allocated in
subsection (1) for 2026-2027, an amount not to exceed $3,000,000.00 may be
awarded by the department for school librarian specialist certification grants.
These grants may be awarded to eligible programs that provide a pathway for
individuals to receive a school librarian specialist (NQ) endorsement from the
department. In awarding grants under this subsection, the department shall
prioritize awards for applicants serving in schools that have libraries but do
not have staff with a school librarian or equivalent endorsement.

(17) Notwithstanding section 17b, the department shall make
payments under this section by not later than December 15, 2026.

Sec.
27c. (1) From the state school aid fund money appropriated in section 11, there
is allocated $30,000,000.00 for 2026-2027, from the educator fellowship public
provider fund money appropriated in section 11, there is allocated
$20,000,000.00 for 2026-2027, and from the educator fellowship private provider
fund money appropriated in section 11, there is allocated $7,000,000.00 for
2026-2027 for the MI future educator student teacher stipend program. Except as
otherwise provided in this section, the funds allocated under this section must
be paid to eligible educator preparation programs for payments to eligible
student teachers working in a district. At the close of the fiscal year, state
school aid fund money allocated under this section that is unspent must be
deposited into the educator fellowship public provider fund in section 27d.

(2) An eligible student teacher under this subsection must
meet all of the following:

(a) The individual must be admitted to an eligible educator
preparation program, be working toward a teacher certification, and be
participating in required student teaching coursework. As used in this
subdivision, “required student teaching coursework” means credit hours, or the
program equivalent, required by an eligible educator preparation program for
successful completion of the program. This coursework must include regular
placement in a district or nonpublic school where the student gains real-world,
first-hand experience working in a classroom, teaching students, engaging in
the day-to-day activities of a certified teacher, and working daily under the
guidance of a certified teacher.

(b) The individual must timely complete an application in a
form and manner prescribed by the department of lifelong education,
advancement, and potential. The application must include the district or
nonpublic school in which the individual is working as a student teacher and
must include a certification by the district or nonpublic school and the
individual’s eligible educator preparation program that the student is working
as a student teacher. If the individual’s eligible educator preparation program
is not provided by a public institution of higher education, the district or
nonpublic school in which the individual is working must also provide an
assurance that they will forward any amount received under this section from
the department of lifelong education, advancement, and potential for purposes
of the program described in this section to the individual’s eligible educator
preparation program.

(c) The individual must not have received a payment from
funds under this subsection previously, unless the individual is enrolled in an
eligible educator preparation program that requires multiple semesters of
student teaching. An individual may receive not more than 2 awards under this
section.

(d) If an individual is employed by their district or
nonpublic school as a teacher of record, they are not eligible for payment
under this section.

(e) An individual that is a current City Year corps member
enrolled in an eligible educator preparation program is eligible for payment
under this section.

(3) The department of lifelong education, advancement, and
potential shall pay each eligible educator preparation program an amount not to
exceed $9,600.00 per academic semester for each eligible student teacher
working in a district or nonpublic school. If the individual’s eligible
educator preparation program is not provided by a public institution of higher
education, the department of lifelong education, advancement, and potential
shall pay an amount not to exceed $9,600.00 per academic semester to the
district or nonpublic school in which the individual is working as a student
teacher, and that district or nonpublic school must forward the amount received
to the individual’s eligible educator preparation program. It is intended that
payments under this subsection are made at the beginning of the semester in 1
lump sum for eligible student teachers.

(4) Eligible educator preparation programs shall pay funds
received under this section, in entirety, to the eligible student teacher.

(5) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section on
a schedule determined by the department of lifelong education, advancement, and
potential.

(6) If the amount allocated in subsection (1) is insufficient
to fully fund awards under this section, there is appropriated from the
educator fellowship public provider fund in section 27d and from the educator
fellowship private provider fund in section 27e the amount necessary to fully
fund the programs described in this section. The state budget director shall
notify the house and senate appropriations subcommittees on K to 12 school aid
and the house and senate fiscal agencies of any additional appropriation
described in this subsection.

(7) Any funds provided to or on behalf of an individual who
is completing the required placement under subsection (2) at a nonpublic school
must be paid from the educator fellowship private provider fund created under
section 27e.

(8) As used in this section, “eligible educator preparation
program” means an institution of higher education that meets all of the
following:

(a) Is a public or private institution of higher education in
this state.

(b) Has an established school of education with an educator
preparation program approved by the department.

(c) Has not been deemed as ineligible to receive Michigan
achievement scholarship funding under section 248 as a result of exceeding
tuition restraint requirements described in section 248.

(d)
Includes, as part of its required educator preparation coursework, pedagogical
methods grounded in the science of reading. If an educator preparation program
does not meet this standard, the program may maintain eligibility by providing
to the department of lifelong education, advancement, and potential a detailed
public plan, in a form and manner determined by the department of lifelong
education, advancement, and potential, to comply with section 1531e of the
revised school code, MCL 380.1531e, by not later than September 30, 2027.

Sec.
27d. (1) The educator fellowship public provider fund is created as a separate
account within the state school aid fund for the purpose of improving the
educator workforce through recruitment efforts for students attending public
educator preparation programs and through the provision of professional learning as
described under section 35a(10).

(2) The state treasurer may receive money or other assets
from any source for deposit into the educator fellowship public provider fund.
The state treasurer shall direct the investment of the educator fellowship
public provider fund. The state treasurer shall credit to the educator
fellowship public provider fund interest and earnings from educator fellowship
public provider fund investments.

(3) Money in the educator fellowship public provider fund at
the close of the fiscal year remains in the educator fellowship public provider
fund and does not lapse to the state school aid fund.

(4) The department of treasury is the administrator of the
educator fellowship public provider fund for auditing purposes.

(5) The department of treasury shall expend money from the
educator fellowship public provider fund, upon appropriation, for the purposes
described in section 27a for students admitted to public educator preparation
programs, for the purposes described in section 27c, and for the purposes
described in section 35a(4).

Sec.
27j. (1) The student loan repayment assistance reserve fund is created as a
separate account within the state school aid fund.

(2) The state treasurer may receive money or other assets
from any source for deposit into the student loan repayment assistance reserve
fund. The state treasurer shall direct the investment of the student loan
repayment assistance reserve fund. The state treasurer shall credit to the
student loan repayment assistance reserve fund interest and earnings from
student loan repayment assistance reserve fund investments.

(3) Money in the student loan repayment assistance reserve
fund at the close of the fiscal year lapses to the state school aid fund.

(4) The department of treasury is the administrator of the
student loan repayment assistance reserve fund for auditing purposes.

(5) Money available in the student loan repayment assistance
reserve fund must not be expended without a specific appropriation.

Sec.
27l. (1) From the state school aid fund money
appropriated in section 11, there is allocated $150,000,000.00 for 2026-2027
only to districts and intermediate districts in an equal amount per pupil.
Subject to subsection (2), a district or intermediate district shall use all of
the funding allocated under this subsection to increase compensation for
educators in the district or intermediate district.

(2) If there are 1 or multiple labor unions representing
educators in the district or intermediate district, the district or
intermediate district shall bargain any increases in compensation under
subsection (1) with those unions. All payments to educators made by districts
or intermediate districts with funds allocated under subsection (1) shall be in
addition to any existing compensation negotiated in a collective bargaining
agreement.

(3) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

(4) The funds appropriated under this section for payments to
educators are 1-time bonus payments. Pursuant to section 3a(3) of the public
school employees retirement act of 1979, 1980 PA 300, MCL 38.1303a, payments
under this section are not considered compensation for retirement purposes and
are not subject to member or employer contribution requirements under the
Michigan public school employees’ retirement system (MPSERS).

(5) As used in this section, “Educator” includes, but is not
limited to, teachers, librarians, speech therapists, language therapists,
physical therapists, occupational therapists, school counselors, school social
workers, school psychologists, school nurses, paraprofessionals aids, food service
workers, custodians, bus drivers, and literacy coaches. Educator also includes
any other school employee covered under a collective bargaining agreement.

Sec.
27m. (1) Subject to the provisions in this subsection, and in addition to the
funds appropriated in section 11, from the state school aid fund, there is
appropriated and allocated an amount not to exceed $2,500,000.00 to districts
and intermediate districts to fund financial awards to eligible teachers who
hold National Board Certification. The appropriation and allocation under
this subsection is contingent on the effective issuance of a directive by the
budget director, pursuant to section 451a of the management and budget act,
1984 PA 431, MCL 18.1451a, to lapse the remaining funding from a work
project that was established under this section in 2023-2024. The amount
allocated under this subsection may not exceed the amount lapsed from the work
project referenced in the immediately preceding sentence.

(2) A district or intermediate district must apply in a form
and manner determined by the department. Awards must be granted as $4,000.00 to
all eligible teachers who hold National Board Certification, and an additional
$6,000.00 for eligible teachers who hold National Board Certification and serve
in Title I schools.

(3) The department shall grant awards under this section on a
first-come, first-served basis. An eligible teacher shall not receive more than
1 award in a single fiscal year.

(4) The funds allocated under this section for 2026-2027 are
a work project appropriation, and any unexpended funds for 2026-2027 are
carried forward into 2027-2028. The purpose of the work project is to enable
and encourage teachers to get National Board Certification. The estimated
completion date of the work project is September 30, 2029.

(5) The funds appropriated under this section are 1-time
bonus payments. Pursuant to section 3a(3) of the public school employees
retirement act of 1979, 1980 PA 300, MCL 38.1303a, these payments are not
considered compensation for retirement purposes and are not subject to member
or employer contribution requirements under the Michigan public school
employees’ retirement system (MPSERS).

(6) As used in this section, “eligible teacher” includes
individuals who hold a valid or expired Michigan teaching certificate and are
employed by the district or intermediate district as teachers, including those
in teacher leadership roles as a peer assistance and review coach, mentor, or
other teacher support provider if the position does not require a school
administrator certificate.

Sec.
27o. (1) From
the state school aid fund money appropriated in section 11, there is allocated
$3,000,000.00 for 2026-2027 only to an intermediate district to support a
statewide digital credentialing initiative for students in CTE programs and
educators. The digital credentialing initiative must provide students and
instructional staff with access to a verifiable, portable, and accessible
digital record of skills, competencies, and achievements that may be securely
shared with employers, postsecondary institutions, and workforce partners
across this state, supporting Michigan’s economic workforce competitiveness by
improving skills transparency and portability statewide.

(2) Funds received under this section must be awarded to an
intermediate district to partner with a nonprofit organization with
demonstrated experience in digital credentialing and workforce-aligned talent
record systems.

(3) The digital credentialing initiative must enable CTE
students statewide, including program completers and individuals demonstrating
proficiency in Perkins V-aligned competencies, to earn verified, portable
digital credentials documenting career pathway achievements, workforce
readiness, and postsecondary readiness. Credentials must be aligned to
department-approved CTE programs and statewide competency frameworks to ensure
consistency and portability across regions.

(4) The digital credentialing initiative must include, at a
minimum, both of the following:

(a) Development of digital credentials for CTE program
completion, work-based learning, youth apprenticeship, and soft skills. All
credentials must be stored, including industry-recognized credits. Credentials
must be maintained within a statewide credential library to support consistent
issuance, validation, and recognition across this state. These achievements
must be showcased in a digital, portable portfolio that organizes and displays
verified credentials, skills, competencies, and achievements and can be
securely shared.

(b) Digital credentials for educators that track literacy
professional development for educators, including the completion of LETRS
training or other science of reading-based training. Credentials issued for the
completion of LETRS training must be competency based, verifiable, and
electronically shareable by the educator. Each credential must document the
specific level or unit completed and the date of completion.

(5) The development of digital credentials for CTE program
completion described in subsection (4)(a) must align with state and regional
workforce and education systems to support Michigan’s economic workforce
competitiveness and regional talent pipeline needs, while ensuring statewide
consistency and portability of credentials. The administering nonprofit
organization shall provide statewide implementation support and submit an
annual report to the department detailing adoption, credential issuance by type
and region, and progress toward improving statewide CTE-to-workforce outcomes.

(6) The administering nonprofit organization shall provide
participant-level data in a form and manner prescribed by the department to
support credential issuance, registry reporting, and integration with statewide
education data systems. Data submitted under this section must align with
statewide education data infrastructure standards, including coordination with
MiDataHub and MiGreatDataLake.

(7) The digital credentialing initiative must annually report
to the department, to the extent not otherwise collected through existing
reporting systems, the name, personnel identification code, employing district
or entity, level or unit completed, date of completion, and credential status
for each educator participating in LETRS training funded under section 35a. The
department may incorporate this information into a statewide educator workforce
profile system.

(8) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

(9) As used in this section:

(a) “CTE program” means a career and technical education
program.

(b) “CTE student” means a pupil enrolled in a career and
technical education program.

Sec.
27t. From the
state school aid fund money appropriated in section 11, there is allocated for
2026-2027 only an amount not to exceed $500,000.00 to 1 or more districts or
intermediate districts participating in the educator-on-loan program
established by the department. Permissible uses of funds under this section
include, but are not limited to, paying additional costs associated with hiring
an employee in the Michigan public school employees’ retirement system and
other employment-related costs, such as employee benefits. Notwithstanding
section 17b, the department shall make payments under this section on a
schedule determined by the department.

Sec.
28. (1) To recognize differentiated instructional costs for different types of
pupils as well as additional costs to provide essential services in 2026-2027,
the following sections provide a weighted foundation allocation or an
additional payment of some type in the following amounts, as allocated under
those sections:

(a) Section 22b, weighted foundation payment,
$1,627,655,100.00.

(b) Section 22d, isolated and rural districts,
$14,184,400.00.

(c) Section 22l, transportation
reimbursement, $125,000,000.00.

(d) Section 32d, great start readiness program,
$730,356,100.00.

(e) Section 51c, special education, mandated percentages,
$1,141,700,000.00.

(f) Section 54d, early on, $26,081,900.00.

(g) Section 61a, career and technical education, standard
reimbursement, $45,985,000.00.

(h) Section 61b, career and technical education, early middle
college and career and technical education, $9,220,400.00.

(2) The funding described in subsection (1) is not a separate
allocation of any funding but is instead a listing of funding allocated in the
sections listed in subsection (1).

Sec.
30d. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $200,000,000.00 for 2026-2027, and from
the general fund money appropriated in section 11, there is allocated an amount
not to exceed $2,000,000.00 for 2026-2027 for the purpose of making payments to
participating entities to provide free school lunch and breakfast to public
school and nonpublic school pupils in grades pre-K to 12.

(2) To receive funding under this section, a participating
entity must participate in the National School Lunch Program and School
Breakfast Program and must do all of the following:

(a) Provide reimbursable breakfasts and reimbursable lunches
at no cost to all students for any school breakfast program or school lunch
program operated by the participating entity.

(b) Submit information regarding the number of reimbursable
breakfasts and reimbursable lunches served in a manner prescribed by the
department.

(c) Maximize federal reimbursement for reimbursable
breakfasts and reimbursable lunches by operating under the CEP if the
participating entity has an identified student percentage greater than or equal
to the minimum requirement to be eligible to participate in the CEP. For
purposes of this subdivision, all eligible participating entities must elect
CEP on behalf of a single school, a group or groups of schools, or all schools
in the participating entity, as applicable, in a manner that maximizes federal
reimbursement.

(d) Meet all applicable state and federal standards in its
school breakfast and lunch programs, as determined by the department.

(e) Take all efforts to maximize and implement policies that
require parents or guardians to fill out relevant family income information, in
a manner prescribed by the department, for the purposes of determining student
eligibility for federal free or reduced cost meal reimbursement rates and CEP
eligibility determinations.

(f) Forgive all school meal debt related to federally
reimbursable meals, as determined by the department.

(3) Participating entities are encouraged to offer meals that
meet students’ dietary restrictions, including the provision of gluten-free
meals, vegetarian meals, vegan meals, and, upon request, kosher meals, halal
meals, and meals meeting any allergy restrictions as confirmed by a doctor’s
note. Participating entities are encouraged to purchase food from Michigan
growers when possible and practical.

(4) For each eligible participating entity, the department
shall pay an amount equal to the following:

(a) The amount equal to the federal rate per student paid per
pupil per free breakfast and lunch under the child nutrition act of 1966, 42
USC 21 1771 to 1793, and the Richard B. Russell national school lunch act, 42 USC 1751
to 1769j, multiplied by the number of breakfasts and lunches provided by the
participating entity to students, less the federal revenue received by the
participating entity under the school breakfast program and the school lunch
program under the child nutrition act of 1966, 42 USC 21 1771 to 1793, and the
Richard B. Russell national school lunch act, 42 USC 1751 to 1769j,
and other state lunch payments received under section 31d.

(b) The amount equal to the federal rate per student paid per
pupil per free breakfast and lunch under the child nutrition act of 1966, 42
USC 21 1771 to 1793, and the Richard B. Russell national school lunch act, 42 USC 1751
to 1769j, multiplied by the number of breakfasts and lunches provided by the
participating entity, as applicable, to children participating in the Great
Start Readiness Program under section 32d at the participating entity, less all
other federal and state lunch payments made for those children. For purposes of
this subdivision, compliance with 7 CFR 226.9 is required. The department shall
assign rates of reimbursement pursuant to 7 CFR 226.9, at least annually, on
the basis of family size and income information reported by each eligible
participating entity. Assigned rates of reimbursement must be adjusted annually
to reflect changes in the national average payment rates.

(5) Notwithstanding section 17b, the department may make
payments under this section on a schedule determined by the department.

(6) In addition to the appropriations in section 11, if the
amount allocated in subsection (1) is insufficient to fully reimburse districts
for meals as required in this section, there is appropriated from the school
meals reserve fund created in section 30e the amount necessary to fully fund
these reimbursements.

(7) In addition to the appropriations in section 11, if the
amount allocated in subsection (1) is insufficient to fully reimburse nonpublic
schools for meals as required in this section, there is appropriated from the
general pupil support reserve fund created in section 22s the amount necessary,
not to exceed $1,000,000.00, to fund these reimbursements.

(8) As used in this section:

(a) “CEP” means the Community Eligibility Provision under the
Richard B. Russell national school lunch act, 42 USC 1751 to 1769j.

(b) “Participating entity” means a district, intermediate
district, nonpublic school, or the Michigan Schools for the Deaf and Blind.

Sec.
31a. (1) From the state school aid fund money appropriated in section
11, there is allocated for 2026-2027 an amount not to exceed $33,000,000.00, to
support primary health care services provided to children and adolescents up to
age 21. These funds must be expended in a form and manner determined jointly by
the department and the department of health and human services. When making
funding decisions for new adolescent health centers under this subsection, the
department and department of health and human services shall prioritize support
for primary health care services in unserved and underserved counties as
determined by the department of health and human services. An amount equal to
4% of the funds allocated under this subsection must be made available for technical
support and coordination services from a nonprofit organization exclusively
dedicated to serving adolescent health centers in this state and that has a
membership that includes federally qualified health centers, local public
health departments, hospital systems, and public school districts. As a
requirement of being awarded the funds under this subsection as prescribed
under this subsection, a nonprofit organization described in this subsection
shall make readily available technical support and coordination services to all
child and adolescent health centers in this state.

(2) From the state school aid fund money appropriated in
section 11, there is allocated for 2026-2027 an amount not to exceed
$10,150,000.00 for the state portion of the hearing and vision screenings as
described in part 93 of the public health code, 1978 PA 368, MCL 333.9301 to
333.9329, and, from the general fund money appropriated in section 11, there is
allocated for 2026-2027 an amount not to exceed $1,500,000.00 for the state
portion of the dental screenings as described in part 93 of the public health
code, 1978 PA 368, MCL 333.9301 to 333.9329. A local public health department
shall pay at least 50% of the total cost of the screenings. The frequency of
the vision screenings must be as required under R 325.13091 to R 325.13096 of
the Michigan Administrative Code and the frequency of the hearing screenings must
be as required under R 325.3271 to R 325.3276 of the Michigan Administrative
Code. Funds must be awarded in a form and manner approved jointly by the
department and the department of health and human services.

(3) Notwithstanding section 17b, the department shall make
payments to eligible entities under this section on a schedule determined by
the department.

Sec.
31c. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2025-2026 only an amount not to exceed $65,000,000.00 for
grants to eligible districts for pilot programs to maintain or establish small
classes in grades K to 3 in eligible school buildings in the district.

(2) To be eligible for a grant under subsection (1), a
district must have at least 1 eligible school building and must apply to the
department in the form and manner prescribed by the department. A district
shall include in its application a projected budget for maintaining or
establishing small classes in grades K to 3 and shall demonstrate in the
projected budget that at least 10% of the funds received by the district under
section 31a will be used to support small classes under this section.

(3) For a school building to be considered an eligible school
building under subsection (2), the school building must meet all of the
following requirements:

(a) Operate at least 1 of grades K to 3.

(b) Be operated by a district that operates all of grades K
to 12 and that receives funds under section 31a.

(c) Be located in a district that is in an opportunity index
band, as described in section 31a, of 4 or higher.

(4) Not more than 25% of the total allocation under this
section may be paid to any single district. The department shall make
allocations under this section to districts that are geographically diverse,
including urban, suburban, and rural districts. Grants issued under this
section must be awarded to at least the following districts:

(a) Muskegon Heights Public School Academy System.

(b) Benton Harbor Area Schools.

(c) Flint School District.

(d) Wayne-Westland Community School District.

(5) A district that receives funds under this section shall
use the funds to maintain or establish small classes in grades K to 3 in school
buildings of the district for which funds are received under this section. The
average class size must be not more than 17 pupils per class, with not more
than 19 pupils in any particular class. A district that receives funds under
this section shall use at least 10% of the funds the district receives for 2025-2026
under section 31a for the purposes of this section.

(6) Funding to districts under this section for 2025-2026 is
intended to be for the first of 2 years of funding.

(7) The funds allocated in this section are a work project
appropriation, and any unexpended funds for 2025-2026 are carried forward into 2026-2027.
The purpose of the work project is to lower class sizes in grades K to 3. The
estimated completion date of the work project is September 30, 2030.

(8) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
31d. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $29,553,400.00 for 2026-2027 for the
purpose of making payments to districts and other eligible entities under this
section.

(2) The amounts allocated from state sources under this
section are used to pay the amount necessary to reimburse districts for 6.0127%
of the necessary costs of the state mandated portion of lunch programs provided
by those districts. The department shall calculate the amount due to each
district under this section using the methods of calculation adopted by the
Michigan supreme court in the consolidated cases known as Durant v State of Michigan, 456 Mich 175 (1997).

(3) The payments made under this section include all state
payments made to districts so that each district receives at least 6.0127% of
the necessary costs of operating the state mandated portion of the lunch
program in a fiscal year.

(4) The payments made under this section to districts and
other eligible entities that are not required under section 1272a of the
revised school code, MCL 380.1272a, to provide a lunch program must be in an
amount not to exceed $10.00 per eligible pupil plus 5 cents for each free lunch
and 2 cents for each reduced price lunch provided, as determined by the
department.

(5) From the federal funds appropriated in section 11, there
is allocated for 2026-2027 all available federal funding, estimated at
$418,267,600.00 for child nutrition programs and, for 2026-2027, all available
federal funding, estimated at $100.00, for food distribution programs.

(6) Notwithstanding section 17b, the department shall make
payments to eligible entities other than districts under this section on a
schedule determined by the department.

(7) In purchasing food for a lunch program funded under this
section, a district or other eligible entity shall give preference to food that
is grown or produced by Michigan businesses if it is competitively priced and
of comparable quality.

(8) In addition to the appropriations in section 11, if the
amount allocated in subsection (1) is insufficient to fully reimburse districts
for meals as required under this section, there is appropriated from the school
meals reserve fund created under section 30e the amount necessary to fully fund
these reimbursements.

Sec.
31f. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $16,900,000.00 for 2026-2027 for the
purpose of making payments to districts to reimburse for the cost of providing
breakfast.

(2) The funds allocated under this section for school
breakfast programs are made available to all eligible applicant districts that
meet all of the following criteria:

(a) The district participates in the federal school breakfast
program and meets all standards as prescribed by 7 CFR parts 210, 220, 225,
226, and 245.

(b) Each breakfast eligible for payment meets the federal
standards described in subdivision (a).

(3) The payment for a district under this section is at a per
meal rate equal to the lesser of the district’s actual cost or 100% of the
statewide average cost of a meal served, as determined and approved by the
department, less federal reimbursement, participant payments, and state
breakfast reimbursements received under section 30d. The department shall determine
the statewide average cost using costs as reported in a manner approved by the
department for the preceding school year.

(4) Notwithstanding section 17b, the department may make
payments under this section pursuant to an agreement with the department.

(5) In purchasing food for a school breakfast program funded
under this section, a district shall give preference to food that is grown or
produced by Michigan businesses if it is competitively priced and of comparable
quality.

(6) In addition to the appropriations in section 11, if the
amount allocated in subsection (1) is insufficient to fully reimburse districts
for meals as required under this section, there is appropriated from the school
meals reserve fund created under section 30e the amount necessary to fully fund
these reimbursements.

Sec.
31j. (1) From
the state school aid fund money appropriated in section 11, there is allocated
an amount not to exceed $4,000,000.00 for 2026-2027 for a program to support
districts in the purchase of locally grown fruits, vegetables, and legumes as
described in this section.

(2) Funding under this section retained by the department for
administration must not exceed 5%. Funding under this section retained by
project partners for data collection, outreach, and training must not exceed 2%
for each partner.

(3) The department shall develop and implement a competitive
grant program for districts to assist in paying for the costs incurred by the
district to purchase or increase purchases of whole or minimally processed
fruits, vegetables, and legumes grown in this state. The maximum amount that
may be drawn down on a grant to a district is based on the number of meals
served by the district during the previous school year under the Richard B.
Russell national school lunch act, 42 USC 1751 to 1769j. The department shall
collaborate with the Michigan department of agriculture and rural development
to provide training to newly participating schools and electronic information
on Michigan agriculture.

(4) The goals of the program under this section include
improving daily nutrition and eating habits for children through the school and
child care settings while investing in Michigan’s agricultural and related food
business economy.

(5) A district that receives a grant under this section shall
use those funds for the costs incurred by the district to do both of the
following:

(a) Purchase whole or minimally processed fruits, vegetables,
and legumes that meet both of the following:

(i) For each fiscal year, were purchased for
use in meals and supportive activities as part of the United States Department
of Agriculture child nutrition programs provided between October 1 through
September 30 of that fiscal year.

(ii) Are grown in this state and, if
minimally processed, are also processed in this state.

(b) Pay for labor and food transportation of locally grown
fruits, vegetables, and legumes that directly support the activities and goals
of the program described in this section. The amount paid under this
subdivision must not exceed 25% of the grant award.

(6) For Michigan-grown fruits, vegetables, and legumes that
satisfy the requirements of subsection (5), the department shall make matching
reimbursements in an amount not to exceed 10 cents for every school meal that
is served as part of the United States Department of Agriculture’s child
nutrition programs.

(7) In awarding grants under this section, the department
shall work in consultation with Michigan-based farm-to-school resource
organizations to develop scoring criteria that assess an applicant’s ability to
procure Michigan-grown products, prepare and menu Michigan-grown products,
promote and market Michigan-grown products, and submit letters of intent from
districts on plans for educational activities that promote the goals of the
program.

(8) The department shall give preference to districts that
propose educational activities that meet 1 or more of the following: promote
healthy food activities; have clear educational objectives; involve parents or
the community; connect to a school’s or child care center’s farm-to-school or
farm-to-early-child-care procurement activities; and market and promote the
program, leading to increased pupil knowledge and consumption of Michigan-grown
products. The department shall give stronger weighting and consideration to applications
with robust marketing and promotional activities.

(9) In awarding grants, the department shall also consider
all of the following:

(a) The percentage of children who qualify for free or
reduced-price school meals under the Richard B. Russell national school lunch
act, 42 USC 1751 to 1769j.

(b) The variety of school sizes and geographic locations
within the identified prosperity regions.

(c) Existing or planned collaboration between districts, or
with agricultural businesses and essential local food infrastructure, such as
farms, farm cooperatives, processors, distributors, and local food hubs.

(10) As a condition of receiving a grant under this section,
a district shall provide or direct its vendors to provide to the department
copies of monthly receipts that show the quantity of different Michigan-grown
fruits, vegetables, and legumes purchased, the amount of money spent on each of
these products, the name and Michigan location of the farm that grew the
products, and the methods or plans to market and promote the program. The
district also shall provide to the department monthly United States Department
of Agriculture child nutrition reimbursable meal numbers and must retain
monthly menus noting when and how Michigan-grown products were used in meals.
The district and school food service director or directors also shall agree to
respond to brief online surveys and to provide a report that shows the
percentage relationship of Michigan spending compared to total food spending.
By not later than 60 days after the end of the period in which funds under this
section were received, and in which federal child nutrition programs require
submission of claims, each district shall submit a report to the department on
outcomes and related measurements for economic development and children’s
nutrition and readiness to learn. The report must include at least both of the
following:

(a) The extent to which farmers and related businesses,
including distributors and processors, saw an increase in market opportunities
and income generation through sales of Michigan or local products to districts.
All of the following apply for purposes of this subdivision:

(i) The data used to determine the amount of
this increase are the total dollar amount of Michigan or local fruits,
vegetables, and legumes purchased by schools, along with the number of
different types of products purchased; school food purchasing trends identified
along with products that are of new and growing interest among food service
directors; the number of businesses impacted; and the percentage of total food
budget spent on Michigan-grown fruits, vegetables, and legumes.

(ii) The district shall use purchasing data
collected for the program and surveys of school food service directors on the
impact and success of the program as the source for the data described in
subparagraph (i).

(b) The ability to which pupils can access a variety of
healthy Michigan-grown foods through schools and increase their consumption of
those foods. All of the following apply for purposes of this subdivision:

(i) The data used to determine whether this
subdivision is met are the number of pupils exposed to Michigan-grown fruits,
vegetables, and legumes at schools; the variety of products served; new items
taste-tested or placed on menus; and the increase in pupil willingness to try
new local healthy foods.

(ii) The district shall use purchasing data
collected for the project, meal count and enrollment numbers, school menu
calendars, and surveys of school food service directors as the source for the
data described in subparagraph (i).

(11) The department shall compile the reports provided by
districts under subsection (10) into 1 legislative report. The department shall
provide this report not later than April 1 of each fiscal year following the
fiscal year for which funding is allocated under this section to the house and
senate subcommittees responsible for school aid, the house and senate fiscal
agencies, and the state budget director.

(12) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
31n. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 for the purposes of this section an amount not to
exceed $106,545,000.00 and from the general fund money appropriated in section
11, there is allocated for 2026-2027 for the purposes of this section an amount
not to exceed $1,300,000.00. The department and the department of health and
human services shall continue a program to distribute this funding to add
licensed behavioral health providers for general education pupils, and
recipients of the funds under subsection (6) shall continue to seek federal
Medicaid match funding for all eligible mental health and support services.

(2) The department and the department of health and human
services shall maintain an advisory council for programs funded under this
section and any other funding under this act to improve or maintain the mental
health of pupils, except for programs funded under section 31a(1) and (2). The
advisory council shall define goals for implementation of programs, and shall
provide feedback on that implementation. At a minimum, the advisory council
shall consist of representatives of state associations representing school
health, school mental health, school counseling, education, health care, and
other organizations, representatives from the department and the department of
health and human services, and a representative from the school safety and
mental health commission. The department and department of health and human
services, working with the advisory council, shall determine an approach to
increase capacity for mental health and support services in schools for general
education pupils, and shall determine where that increase in capacity qualifies
for federal Medicaid match funding.

(3) The advisory council shall develop a fiduciary agent
checklist for intermediate districts to facilitate development of a plan to
submit to the department and to the department of health and human services.
The department and department of health and human services shall determine the
requirements and format for intermediate districts to submit a plan for
possible funding under subsection (6). The department shall make applications
for funding for this program available to districts and intermediate districts
by not later than December 1 of each fiscal year for which funds are allocated
under this section and shall award the funding by not later than February 1 of
each fiscal year for which funds are allocated under this section.

(4) The department of health and human services shall ensure
that the state Medicaid plan continues to be written in a way sufficient to
obtain appropriate Medicaid waivers to generate additional Medicaid match
funding for school mental health and support services for general education
pupils through the Caring for Students (C4S) expansion.

(5) From the state school aid fund money allocated under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$14,300,000.00 to be distributed to the network of child and adolescent health
centers to place a licensed master’s level behavioral health provider in
schools that do not currently have services available to general education
pupils. Child and adolescent health centers that are part of the network
described in this subsection shall provide a commitment to maintain services
and implement all available federal Medicaid match methodologies. The
department of health and human services shall use all existing or additional
federal Medicaid match opportunities to maximize funding allocated under this
subsection. The department shall provide funds under this subsection to child
and adolescent health centers that are part of the network described in this
subsection in the same proportion that funding under section 31a(1) is provided
to child and adolescent health centers that are part of the network described
in this subsection and that are located and operating in those districts. A
payment from funding allocated under this subsection must not be paid to an
entity that is not part of the network described in this subsection.

(6) From the state school aid fund money allocated under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$87,245,000.00 to be distributed to intermediate districts for the provision of
mental health and support services to general education pupils. Recipients of
funds under this subsection shall continue to seek federal Medicaid match
funding for all eligible mental health and support services. If a district or
intermediate district is not able to procure the services of a licensed master’s
level behavioral health provider, the district or intermediate district shall
notify the department and the department of health and human services and, if
the department and department of health and human services verify that the
district or intermediate district attempted to procure services from a master’s
level behavioral health provider and was not able to do so, then the district
or intermediate district may instead procure services from a provider with less
than a master’s degree in behavioral health. To be able to use the exemption in
the immediately preceding sentence, the district or intermediate district must
submit evidence satisfactory to the department and department of health and
human services demonstrating that the district or intermediate district took
measures to procure the services of a licensed master’s level behavioral health
provider but was unable to do so, and the department and department of health
and human services must be able to verify this evidence. From the first
$56,173,600.00 of the funds allocated under this subsection, the department shall
distribute up to $1,003,100.00 for 2026-2027 to each intermediate district that
submits a plan approved by the department and the department of health and
human services by February 1 of each fiscal year for which funds are allocated
under this section. The department shall distribute the remaining
$31,071,400.00 of the funds allocated under this subsection for 2026-2027 to
intermediate districts that submit a plan approved by the department and the
department of health and human services by February 1 of each fiscal year for
which funds are allocated under this section on an equal per-pupil basis based
on the combined total number of pupils in membership in the intermediate
district and its constituent districts, including public school academies that
are considered to be constituent districts under section 705(7) of the revised
school code, MCL 380.705. The department and department of health and human
services shall work cooperatively in providing oversight and assistance to
intermediate districts and shall monitor the program upon implementation. An
intermediate district shall use funds awarded under this subsection to provide
funding to its constituent districts, including public school academies that
are considered to be constituent districts under section 705(7) of the revised
school code, MCL 380.705, for the provision of mental health and support
services to general education pupils. In addition to the criteria identified
under subsection (9), an intermediate district shall consider geography, cost,
or other challenges when awarding funding to its constituent districts.
Districts receiving funding under this subsection are encouraged to provide
suicide prevention and awareness education and counseling.

(7) If funding awarded to an intermediate district remains
after funds are provided by the intermediate district to its constituent
districts, the intermediate district shall notify the department and department
of health and human services and submit evidence satisfactory to the department
and department of health and human services demonstrating how it would like to
use funds for purposes other than hiring licensed behavioral health providers
for general education pupils. With permission from the department and
department of health and human services, the intermediate district may hire or
contract for experts to provide mental health and support services to general
education pupils residing within the boundaries of the intermediate district,
including, but not limited to, expanding, hiring, or contracting for staff and
experts to provide those services directly or to increase access to those
services through coordination with outside mental health agencies; the
intermediate district may also contract with 1 or more other intermediate
districts for coordination and the facilitation of activities related to
providing mental health and support services to general education pupils
residing within the boundaries of the intermediate district; the intermediate
district may also use the funds under this section to create or strengthen
school-based behavioral health assessment teams that focus on providing
age-appropriate interventions, identifying behaviors that suggest a pupil may
be struggling with mental health challenges, providing treatment and support of
the pupil, and using disciplinary interventions and the criminal justice system
as methods of last resort; and the intermediate district may also use the funds
under this section to provide evidence-based trainings that support pupil
mental health.

(8) If funding awarded to an intermediate district under this
section remains unspent, or if the intermediate district submits an application
requesting a lower allocation than the maximum amount permitted, the
department, in conjunction with the intermediate district, may reallocate the
funds to another intermediate district or other intermediate districts capable
of expending the funds before the funding deadline in accordance with this
section as if those funds were originally allocated to the intermediate
district or intermediate districts to which the funds are being reallocated.

(9) A district requesting funds under this section from the
intermediate district in which it is located shall submit an application for
funding for the provision of mental health and support services to general
education pupils. A district receiving funding from the application process
described in this subsection shall provide services to nonpublic pupils upon
request. An intermediate district shall not discriminate against an application
submitted by a public school academy simply on the basis of the applicant being
a public school academy. The department shall approve grant applications based
on the following criteria:

(a) The district’s commitment to maintain mental health and
support services delivered by licensed providers into future fiscal years.

(b) The district’s commitment to work with its intermediate
district to use funding it receives under this section that is spent by the
district for general education pupils toward participation in federal Medicaid
match methodologies. A district must provide a local match of at least 20% of
the funding allocated to the district under section 31n.

(c) The district’s commitment to adhere to any local funding
requirements determined by the department and the department of health and
human services.

(d) The extent of the district’s existing partnerships with
community health care providers or the ability of the district to establish
such partnerships.

(e) The district’s documentation of need, including gaps in
current mental health and support services for the general education
population.

(f) The district’s submission of a formal plan of action
identifying the number of schools and pupils to be served.

(g) Whether the district will participate in ongoing
trainings.

(h) Whether the district will submit an annual report to the
state.

(i) Whether the district demonstrates a willingness to work
with the state to establish program and service delivery benchmarks.

(j) Whether the district has developed a school safety plan
or is in the process of developing a school safety plan.

(k) Any other requirements determined by the department or
the department of health and human services.

(10) Funding under this section, including any federal
Medicaid funds that are generated, must not be used to supplant existing
services.

(11) Both of the following are allocated to the department of
health and human services from the general fund money allocated under
subsection (1):

(a) For 2026-2027, an amount not to exceed $1,000,000.00 for
the purpose of upgrading technology and systems infrastructure and other
administrative requirements to support the programs funded under this section.

(b) For 2026-2027, an amount not to exceed $300,000.00 for
the purpose of administering the programs under this section and working on
generating additional Medicaid funds as a result of programs funded under this
section.

(12) From the state school aid fund money allocated under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$5,000,000.00 to intermediate districts on an equal per intermediate district
basis for the purpose of administering programs funded under this section.
Recipients of the funds under this subsection shall continue to seek federal
Medicaid match funding for all eligible mental health and support services and
participate in all learning collaboratives about C4S required by the department
and department of health and human services.

(13) The department and the department of health and human
services shall work with the advisory council to develop proposed measurements
of outcomes and performance. Those measurements must include, at a minimum, the
number of pupils served, the number of schools served, and where those pupils
and schools were located. The department and the department of health and human
services shall compile data necessary to measure outcomes and performance, and
districts and intermediate districts receiving funding under this section shall
provide data requested by the department and department of health and human
services for the measurement of outcomes and performance. The department and
department of health and human services shall provide an annual report by not later
than December 1 of each year to the house and senate appropriations
subcommittees on school aid and health and human services, to the house and
senate fiscal agencies, and to the state budget director. At a minimum, the
report must include measurements of outcomes and performance, proposals to
increase efficacy and usefulness, proposals to increase performance, and
proposals to expand coverage.

(14) A district or intermediate district that receives
funding directly or indirectly under this section may carry over any unexpended
funds received under this section for up to 2 fiscal years beyond the fiscal
year in which the funds were received.

(15) As used in this section, “general education pupil”
includes children served under sections 32d and 32t.

Sec.
31p. (1) From the state school aid fund money appropriated under section 11,
there is allocated for 2026-2027 only an amount not to exceed $3,000,000.00 for
grants to intermediate districts to implement a program as described in
subsection (2).

(2) The program described in this subsection must improve
youth access to evidence-based mental health services by training school mental
health professionals in effective practices, such as cognitive behavioral
therapy and mindfulness.

(3) The department shall establish a grant process to
distribute funds under this section.

(4) The department shall award, in an equal amount, grants
under this section to each intermediate district that has an approved grant
application for funding under this section. Intermediate districts must forward
to the program described in subsection (2) an amount equal to the amount
awarded to the intermediate district under this subsection to contract with the
program. The program must use funding received from intermediate districts to
satisfy the terms of the contracts with the intermediate districts on a
statewide basis.

(5) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec. 31aa. (1) From the state school aid fund money appropriated in
section 11, there is allocated $300,000,000.00 for 2026-2027 only, and from the
general fund money appropriated in section 11, there is allocated
$10,000,000.00 for 2026-2027 only, to support school safety and mental health.

(2) From the state school aid fund money allocated in
subsection (1), an amount not to exceed $100,000,000.00, and from the general
fund money allocated in subsection (1), the amount necessary to provide
payments to nonpublic schools as calculated under this subsection may be used
to provide payments to districts, intermediate districts, nonpublic schools,
and the Michigan Schools for the Deaf and Blind, as applicable, for activities
to improve student mental health. The department shall make payments under this
subsection to districts, intermediate districts, nonpublic schools, and the
Michigan Schools for the Deaf and Blind in an amount not to exceed $73.53 per
pupil. The total amount allocated for nonpublic schools under this subsection
must not exceed $7,000,000.00. The allowable expenditures of funds under this
subsection are as follows:

(a) Hiring or contracting for support staff for student
mental health needs, including, but not limited to, school psychologists,
social workers, counselors, and school nurses.

(b) Purchasing and implementing mental health screening
tools.

(c) Purchasing a statewide, integrated technology platform
that streamlines behavioral health documentation and care coordination.

(d) Providing school-based mental health personnel access to
consultation with behavioral health clinicians to respond to complex student
mental health needs.

(e) Purchasing and implementing an online behavioral health
tool moderated and led by licensed behavioral health professionals.

(f) Hiring or contracting a behavioral health coordinator.

(g) Evidence-based trainings to support mental health.

(h) Costs associated with collaboration between school
employees, families, and community partners to address the academic,
behavioral, and social needs of all students through collaborative
partnerships, resource coordination, data collection, and data sharing.

(i) Costs associated with conducting a systematic school
mental health needs assessment and resource mapping that identifies
programmatic and systemic needs and helps staff determine priorities and create
action plans.

(j) Implementing cell-phone-free school policies. As used in
this subdivision, “cell-phone-free school policy” means a policy that prohibits
students from accessing or using a personal communication device capable of
telecommunication or digital communication during instructional time, as
determined by the school.

(k) Purchasing and implementing an evidence-based character-
and relationship-building education program that includes family engagement,
service learning, and project-based character development, and that fosters
positive student-educator relationships and whole-school culture.

(3) From the state school aid fund money allocated in
subsection (1), an amount not to exceed $200,000,000.00 and from the general
fund money allocated in subsection (1), the amount necessary to provide
payments to nonpublic schools as calculated under this subsection may be used
to provide payments to districts, intermediate districts, nonpublic schools,
and the Michigan Schools for the Deaf and Blind, as applicable, for activities
to improve student safety. Subject to eligibility requirements in subsection
(6), the department shall make payments to eligible districts, intermediate
districts, nonpublic schools, and the Michigan Schools for the Deaf and Blind
in an amount not to exceed $147.06 per pupil. The total amount allocated for
nonpublic schools under this subsection must not exceed $14,000,000.00. The
allowable expenditures of funds under this subsection are as follows:

(a) Coordination with local law enforcement.

(b) Training for school staff on threat assessment.

(c) Training for school staff and students on threat
response.

(d) Training for school staff on crisis communication.

(e) Safety infrastructure, including, but not limited to,
cameras, door blocks, hardened vestibules, window screening, and technology
necessary to operate buzzer systems. This may also include firearm detection
software that integrates to existing security cameras to detect and alert
school personnel and first responders to visible firearms on school property.

(f) Age-appropriate training for students and families on
responsible firearm ownership, including safe handling and safe storage of
firearms.

(g) School resource officers and safety dogs. School resource
officers hired under this subsection must be properly licensed and in good
standing with the Michigan commission on law enforcement standards, and must be
in compliance with all applicable laws.

(h) Student Safety Management System, the information
technology platform and related services to improve student safety by
mitigating cyberbullying, school violence, human trafficking, and self-harm
that supports students from grades K to 12.

(i) A secure platform, administered by the department of
state police, for school officials, emergency responders, and emergency
management coordinators to house all school safety-related items, including,
but not limited to, EOP templates, EOP guidance, reference documents, and
security assessments. The platform should use existing password-protected
access control methods schools currently utilize and, to the extent possible,
be capable of integrating with existing platforms or technologies used by
districts for school safety. Through permissions-based access control, the
platform should be able to relay information clearly and in real time to each
person or entity necessary to provide a unified response to a safety incident,
or to take appropriate action in response to an anticipated disruption to the
normal functions of the surrounding community.

(j) Emergency infrastructure needs to respond to an immediate
threat to the health or safety of students and staff in the district,
intermediate district, nonpublic school, or the Michigan Schools for the Deaf
and Blind. A district, intermediate district, nonpublic school, or the Michigan
Schools for the Deaf and Blind shall not expend funds for this purpose without
first obtaining approval from the department. In making a determination of
approval, the department shall, at a minimum, assess whether the district,
intermediate district, nonpublic school, or the Michigan Schools for the Deaf
and Blind is responding to an immediate threat to the health or safety of
students and staff, and whether the district, intermediate district, nonpublic
school, or the Michigan Schools for the Deaf and Blind has other sources of
funding that should be utilized first.

(k) A contract with a vendor for a comprehensive safety and
security assessment or a comprehensive safety and security event assessment in
schools operated by the district, intermediate district, nonpublic school, or
the Michigan Schools for the Deaf and Blind.

(l) An emergency response system.

(4) Recipients of funding under this section must provide a
final expense report to the department by July 1 of each fiscal year. If the
department determines that the eligible recipient has misused the funds
allocated under this section, the eligible recipient shall reimburse the
department for the amount of state funding misused.

(5) Districts receiving funds under this section must
coordinate with intermediate districts to avoid duplication of services and to
streamline delivery of services to students.

(6) To receive funding under subsection (3), a district, an
intermediate district, a nonpublic school, or the Michigan Schools for the Deaf
and Blind must agree to be subject to a comprehensive investigation after a
mass casualty event, must agree to comply with a comprehensive investigation
into the mass casualty event and, for the purpose of that investigation, must
affirmatively agree to waive any privilege held by the district, intermediate
district, nonpublic school, or Michigan School for the Deaf and Blind that may
otherwise protect information from disclosure in the event of a mass casualty
event, and must agree to comply with a comprehensive investigation. All of the
following apply to a comprehensive investigation described in this subsection:

(a) The comprehensive investigation will assess the
circumstances surrounding the mass casualty event, including, but not limited
to:

(i) Emergency response effectiveness.

(ii) Compliance with safety protocols.

(iii) Communication procedures.

(iv) Any factors contributing to the
incident.

(b) The governor shall designate an appropriate person or
investigative entity to conduct the comprehensive investigation. This person or
investigative entity may include, but is not limited to, state law enforcement
agencies, independent review boards, or specially appointed task forces. The
person or designated investigative entity has the authority to do all of the
following:

(i) Access relevant records and data from
the district.

(ii) Interview witnesses and district
personnel involved.

(iii) Issue findings and recommendations based
on the investigation.

(c) The person or investigative entity designated in
subdivision (b) shall prepare a detailed report of its findings and submit the
report to the governor and relevant legislative committees within 90 days
following the conclusion of the investigation. The report must include
recommendations for preventing future incidents and improving school safety
protocols.

(7) In addition to the appropriations in section 11, if the
general fund money allocated in subsection (1) is insufficient to fully fund
awards to nonpublic schools under subsections (2) and (3), there is
appropriated from the general pupil support reserve fund created in section 22s
the amount necessary, not to exceed $11,000,000.00, to fund these
reimbursements.

(8) As used in this section:

(a) “Mass casualty event” means any of the following that
occur on school grounds or at a school-sponsored event:

(i) An incident resulting in significant
physical injuries to not fewer than 3 individuals. As used in this
subparagraph, “significant physical injury” means an injury that involves a
risk of death, significant physical pain, protracted and obvious disfigurement,
or a protracted loss or impairment of the function of a bodily member, organ,
or mental or sensory faculty.

(ii) An incident resulting in 2 or more
fatalities.

(iii) An incident of such scope that the
emergency response resources in the jurisdiction where the incident takes place
are not sufficient and resources from surrounding jurisdictions are required.

(iv) An incident that results in a sudden
surge of injured individuals necessitating emergency services.

(b) “Safety dog” means a dog that is contracted by a law
enforcement agency of this state, a local unit of government of this state, or
a district or an intermediate district and that is trained for detection of
firearms, explosives, narcotics, or vape substances.

(c) “School grounds” means all properties owned or operated
by the district, including transportation vehicles owned or operated by the
district.

(d) “School-sponsored event” means any activity organized or
sanctioned by the district.

(9) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
32d. (1) From the state school aid fund money appropriated in section 11, there
is allocated to eligible intermediate districts and consortia of intermediate
districts for great start readiness programs and other purposes described in
this section an amount not to exceed $712,356,100.00 for 2026-2027, and from
the great start readiness reserve fund money appropriated in section 11, there
is allocated $18,000,000.00 for 2026-2027 for the purposes of this section. An
intermediate district or consortium shall use funds allocated under this
section for eligible great start readiness program options. For a child to be
eligible to participate in a program under this section, the child must be at
least 4, but less than 5, years of age as of September 1 of the school year in
which the program is offered and must meet those eligibility and prioritization
guidelines. After eligible children who will be 4 years of age as of September
1 are enrolled, a child who is not 4 years of age as of September 1, but who will
be 4 years of age by not later than December 1, is eligible to participate if
both of the following are met:

(a) The child’s parent or legal guardian seeks a waiver from
the September 1 eligibility date by submitting a request for enrollment in a
program to the responsible intermediate district.

(b) The child meets eligibility and prioritization
guidelines.

(2) From the state school aid fund money allocated under
subsection (1), an amount not to exceed $700,356,100.00 for 2026-2027 is
allocated to intermediate districts or consortia of intermediate districts
based on the formula in section 39. An intermediate district or consortium of
intermediate districts receiving funding under this section shall act as the
fiduciary for the great start readiness programs. An intermediate district or
consortium of intermediate districts receiving funding under this section may
collaborate with local governments to identify children eligible for programs
funded under this section and may contract with local governments to provide
services. To be eligible to receive funds allocated under this subsection from
an intermediate district or consortium of intermediate districts, a district, a
consortium of districts, a local government, or a public or private for-profit
or nonprofit legal entity or agency must comply with this section and section
39. If the amount allocated in this subsection is insufficient to fully fund
allocations calculated under section 39, there is appropriated from the great
start readiness program reserve fund the amount necessary and available to
fully fund those allocations.

(3) From the state school aid fund money allocated under
subsection (2), the department of lifelong education, advancement, and
potential shall award a competitive grant to a state public university to
continue a longitudinal evaluation of children who have participated in great
start readiness programs.

(4) Except as otherwise provided in subsection (5), to be
eligible for funding under this section, a program must prepare children for
success in school through comprehensive part-day programs, school-day programs,
GSRP extended programs, GSRP/Head Start school-day blended programs, GSRP/Head
Start extended blended programs, or other eligible great start readiness
program options that contain all of the following program components, as
determined by the department of lifelong education, advancement, and potential:

(a) Participation in a collaborative recruitment and
enrollment process to ensure that each child is enrolled in the program most
appropriate to the child’s needs and to maximize the use of federal, state, and
local funds. Programs receiving funding under this section must provide current
enrollment data, including slots open for enrollment and slots filled, to the
intermediate district or consortium of intermediate districts from which
funding is received for that program. The enrollment process must ensure that
children in families with lower income and children with other risk factors, as
determined by the department of lifelong education, advancement, and potential,
are enrolled before children with lesser needs.

(b) An age-appropriate educational curriculum that is in
compliance with the early childhood standards of quality for birth to
kindergarten children adopted by the state board, including, at least, the
Connect4Learning curriculum.

(c) Nutritional services for all program participants
supported by federal, state, and local resources as applicable.

(d) Physical and dental health and developmental screening
services for all program participants.

(e) Referral services for families of program participants to
community social service agencies, including mental health services, as
appropriate.

(f) Active and continuous involvement of the parents or
guardians of the program participants.

(g) A plan to conduct and report annual great start readiness
program evaluations and continuous improvement plans using criteria approved by
the department of lifelong education, advancement, and potential.

(h) Participation in a school readiness advisory committee
convened as a workgroup of the great start collaborative that provides for the
involvement of classroom teachers, parents or guardians of program
participants, and community, volunteer, and social service agencies and
organizations, as appropriate. The advisory committee shall annually review and
make recommendations regarding the program components listed in this
subsection. The advisory committee also shall make recommendations to the great
start collaborative regarding other community services designed to improve all
children’s school readiness.

(i) The ongoing articulation of the kindergarten and first
grade programs offered by the program provider.

(j) Participation in this state’s great start to quality
process with a level of at least enhancing quality level.

(5) To help expand access to great start readiness programs,
the department of lifelong education, advancement, and potential may waive the
requirements under subsection (4) and a program may be eligible for funding
under this section for new or expanding programs if the program demonstrates to
the satisfaction of the department of lifelong education, advancement, and
potential that the program meets all of the following:

(a) Is a licensed group or child care center or is a licensed
program.

(b) Provides the minimum instructional time as required by
the department of lifelong education, advancement, and potential.

(c) Participates in this state’s quality improvement system
at a level determined by the department of lifelong education, advancement, and
potential.

(d) Implements a professional educator preparation plan, as
defined by the department of lifelong education, advancement, and potential,
for educators not meeting teacher credentialing standards described in
subsection (8).

(e) Uses a developmentally appropriate curriculum, as
determined by the department of lifelong education, advancement, and potential.

(f) Conducts a developmental screening and referral process,
as determined by the department of lifelong education, advancement, and
potential.

(g) Commits to participating in program financial review and
monitoring, as determined by the department of lifelong education, advancement,
and potential.

(h) Provides a plan to implement an approved great start
readiness program curriculum and meet additional great start readiness program
standards, as determined by the department of lifelong education, advancement,
and potential.

(6) A waiver under subsection (5) may be granted for up to 3
years for requirements related to program credentialing and may be granted for
up to 2 years for all other requirements, as determined by the department of
lifelong education, advancement, and potential.

(7) The department of lifelong education, advancement, and
potential shall provide a report to the house and senate appropriations
subcommittees on school aid, the state budget director, and the house and
senate fiscal agencies that summarizes the number and types of exemptions
granted under subsection (5) and progress made by programs granted waivers
under subsection (5) by September 30 of each fiscal year. It is the intent of
the legislature to review the waiver allowability under subsection (5) before
the fiscal year ending September 30, 2027.

(8) Applications for funding under this section must be
submitted to the department of lifelong education, advancement, and potential
in a form and manner determined by the department of lifelong education,
advancement, and potential. The application must demonstrate, at a minimum,
compliance with program requirements described in subsection (4) or (5) and
must ensure that recipients will only utilize qualified personnel, as
determined by the department of lifelong education, advancement, and potential,
for eligible great start readiness program options.

(9) For a grant recipient that enrolls pupils in an eligible
great start readiness program option that blends GSRP and Head Start
programming, the grant recipient shall ensure that all Head Start and GSRP
policies and regulations are applied to the blended slots, with adherence to
the highest standard from either program, to the extent allowable under federal
law. A grant recipient may request a waiver from the department of lifelong
education, advancement, and potential to align GSRP policies and regulations
with Head Start national standards for quality, including ratios, and the
department of lifelong education, advancement, and potential may approve the
waiver. Not later than March 1 of each year, the department of lifelong
education, advancement, and potential will report to the legislature and post
on a publicly available website a list by intermediate district or consortium
with the number and type of each waiver requested and approved.

(10) To help expand access to great start readiness programs,
the department of lifelong education, advancement, and potential may allow
great start readiness programs to implement Head Start national performance
standards for quality as an alternative to great start readiness program
policies and regulations if the great start readiness program demonstrates to
the satisfaction of the department of lifelong education, advancement, and
potential that the great start readiness program is meeting the requirements of
the Head Start national performance standards.

(11) An intermediate district or consortia of intermediate
districts receiving funding under this section must publish, on an easily
accessible website, a data dashboard containing the number of allocations
requested from the state, a list of programs offering great start readiness
programs in their boundaries, and current enrollment data for each
subrecipient, including total slots open for enrollment, slots filled, and
waitlist information, if applicable. A link to this website must be provided to
families on waitlists for any great start readiness program in their
boundaries.

(12) An intermediate district or consortium of intermediate
districts receiving a grant under this section shall designate an early
childhood coordinator, and may provide services directly or may contract with 1
or more districts or public or private for-profit or nonprofit providers that
meet all requirements of subsection (4) or (8), as applicable.

(13) An intermediate district or consortium of intermediate
districts may retain for administrative services provided by the intermediate
district or consortium of intermediate districts an amount not to exceed 4% of
the grant amount. Expenses incurred by subrecipients engaged by the
intermediate district or consortium of intermediate districts for directly
running portions of the program are considered program costs or a contracted
program fee for service. Subrecipients operating early childhood programs may
include indirect costs, not to exceed the federal de minimis.

(14) An intermediate district or consortium of intermediate
districts may expend not more than 2% of the total grant amount for outreach,
recruiting, and public awareness of the program, if the intermediate district
or consortium of intermediate districts also participates in related statewide
marketing and outreach efforts.

(15) An intermediate district or consortium of intermediate
districts receiving a grant under this section shall allow parents of eligible
children who are residents of the intermediate district or within the
consortium to choose a program operated by or contracted with another
intermediate district or consortium of intermediate districts and shall enter
into a written agreement regarding payment, in a manner prescribed by the
department of lifelong education, advancement, and potential.

(16) An intermediate district or consortium of intermediate
districts receiving a grant under this section shall conduct a local process to
contract with interested and eligible public and private for-profit and
nonprofit community-based providers that meet all requirements of subsection
(4) for at least 30% of its total allocation. Children served in a program
funded through only Head Start are not counted toward this 30% allocation. The
department of lifelong education, advancement, and potential shall provide
guidance to intermediate districts and consortia of intermediate districts on
counting children served by Head Start programming for the purposes of this 30%
allocation. An intermediate district or consortium shall report to the
department of lifelong education, advancement, and potential, in a manner
prescribed by the department of lifelong education, advancement, and potential,
information necessary for the department of lifelong education, advancement,
and potential to determine the intermediate district’s or consortium of
intermediate districts’ compliance with this subsection. If the intermediate
district or consortium is not able to contract for at least 30% of its total
allocation, the intermediate district or consortium shall notify the department
of lifelong education, advancement, and potential and, if the department of
lifelong education, advancement, and potential verifies that the intermediate
district or consortium attempted to contract for at least 30% of its total
allocation and was not able to do so, the intermediate district or consortium
may retain and use all of its allocation as provided under this section. To be
able to use this exemption, the intermediate district or consortium shall
demonstrate to the department of lifelong education, advancement, and potential
that the intermediate district or consortium increased the percentage of its
total allocation for which it contracts with a community-based provider and the
intermediate district or consortium shall submit evidence satisfactory to the
department of lifelong education, advancement, and potential, and the
department of lifelong education, advancement, and potential must be able to
verify this evidence, demonstrating that the intermediate district or
consortium took measures to contract for at least 30% of its total allocation
as required under this subsection, including, but not limited to, at least all
of the following measures:

(a) The intermediate district or consortium notified each
nonparticipating licensed child care center located in the service area of the
intermediate district or consortium regarding the center’s eligibility to
participate, in a manner prescribed by the department of lifelong education,
advancement, and potential.

(b) The intermediate district or consortium provided to each
nonparticipating licensed child care center located in the service area of the
intermediate district or consortium information regarding great start readiness
program requirements and a description of the application and selection process
for community-based providers.

(c) The intermediate district or consortium provided to the
public and to participating families a list of community-based great start
readiness program subrecipients with a great start to quality level of at least
enhancing quality level.

(17) If an intermediate district or consortium of
intermediate districts receiving a grant under this section fails to submit
satisfactory evidence to demonstrate its effort to contract for at least 30% of
its total allocation, as required under subsection (16), the department of
lifelong education, advancement, and potential may reduce the allocation to the
intermediate district or consortium by a percentage equal to the difference
between the percentage of an intermediate district’s or consortium’s total
allocation awarded to community-based providers and 30% of its total
allocation. By not later than September 30,
the department of lifelong
education, advancement, and potential shall submit a report on any intermediate
districts impacted by this subsection to the senate and house appropriations
subcommittees on school aid, the senate and house appropriations committees,
the senate and house fiscal agencies, the senate and house policy offices, and
the state budget office.

(18) To assist intermediate districts and consortia in
complying with the requirement to contract with community-based providers, for
at least 30% of their total allocation, the department of lifelong education,
advancement, and potential shall do all of the following:

(a) Ensure that a great start resource center or the
department of lifelong education, advancement, and potential provides each
intermediate district or consortium receiving a grant under this section with
the contact information for each licensed child care center located in the
service area of the intermediate district or consortium by March 1 of each
year.

(b) Ensure that all intermediate district, district,
community college or university, Head Start grantee or delegate, private
for-profit, and private nonprofit providers are subject to a single great start
to quality continuous quality improvement system. The continuous quality
improvement system must ensure that regulators process all prospective
providers at the same pace on a first-come, first-served basis and must not
allow 1 type of provider to receive a great start to quality level ahead of any
other type of provider.

(c) By not later than March 1 of each year, compile the
results of the information reported by each intermediate district or consortium
under subsection (16) and report to the legislature and post on a publicly
available website a list by intermediate district or consortium with the number
and percentage of each intermediate district’s or consortium’s total allocation
allocated to community-based providers by provider type, including private
for-profit, private nonprofit, community college or university, Head Start
grantee or delegate, and district or intermediate district.

(d) Allow intermediate districts and consortia and eligible
community-based providers to utilize materials and supplies purchased for great
start readiness programs within their facilities for other early care and
education activities, in the following order of priority:

(i) Early care and education activities
under a federal award.

(ii) Early care and education activities
under other state awards.

(iii) Early care and education activities
under local or regional awards.

(19) A recipient of funds under this section shall report to
the center in a form and manner prescribed by the center the information
necessary to derive the number of children participating in the program, the
number of eligible children not participating in the program and on a waitlist,
and the total number of children participating in the program by various
demographic groups and eligibility factors necessary to analyze equitable and
priority access to services for the purposes of subsection (3).

(20) As used in this section:

(a) “Child care center” means that term as defined in section
1 of 1973 PA 116, MCL 722.111.

(b) “Eligible great start readiness program options” means a
program option that operates on a school-day, part-day, or extended schedule
length, as determined by the department of lifelong education, advancement, and
potential. The department of lifelong education, advancement, and potential
must maintain and publish on its website requirements for each eligible
schedule length, including the minimum day length, the minimum number of days
per week, and the minimum number of weeks per year. These programs may be
blended with Head Start programs, if allowable by federal rules and
regulations.

(c) “Federal poverty guidelines” means the guidelines
published annually in the Federal Register by the United States Department
of Health and Human Services under its authority to revise the poverty line
under 42 USC 9902.

(d) “GSRP extended program” means a program that operates for
at least the same length of day as a district’s first grade program for a
minimum of 5 days per week, 36 weeks per year.

(e) “GSRP/Head Start extended blended program” means a
program funded under this section and a Head Start program that are combined
for an extended program.

(f) “GSRP/Head Start school-day blended program” means a
part-day program funded under this section and a Head Start program, which are
combined for a school-day program.

(g) “Licensed child care center” means a child care center
that has been issued a license under 1973 PA 116, MCL 722.111 to 722.128, to
operate a child care center.

(h) “Part-day program” means a program that operates at least
4 days per week, 30 weeks per year, for at least 3 hours of teacher-child
contact time per day but for fewer hours of teacher-child contact time per day
than a school-day program.

(i) “School-day program” means a program that operates for at
least the same length of day as a district’s first grade program for a minimum
of 4 days per week, 30 weeks per year. A classroom that offers a school-day
program must enroll all children for the school day to be considered a
school-day program.

(21) From the state school aid fund money allocated in
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$10,000,000.00 and, from the great start readiness program reserve fund money
allocated in subsection (1), there is allocated for 2026-2027 an amount not to
exceed $18,000,000.00 for reimbursement of transportation costs for children
attending great start readiness programs funded under this section. To receive
reimbursement under this subsection, by not later than November 1 of each year,
a program funded under this section that provides transportation shall submit
to the intermediate district that is the fiscal agent for the program a
projected transportation budget. The amount of the reimbursement for
transportation under this subsection is no more than the projected
transportation budget or $500.00 multiplied by the number of children funded
for the program under this section. If the amount allocated under this
subsection is insufficient to fully reimburse the transportation costs for all
programs that provide transportation and submit the required information, the
department of lifelong education, advancement, and potential shall prorate the
reimbursement in an equal amount per child funded. The department of lifelong
education, advancement, and potential shall make payments to the intermediate
district that is the fiscal agent for each program, and the intermediate
district shall then reimburse the program provider for transportation costs as
prescribed under this subsection.

(22) Subject to, and from the funds allocated under,
subsection (21), the department of lifelong education, advancement, and
potential shall allow programs to utilize those funds for costs related to
parent- or guardian-provided transportation and for costs related to parent- or
guardian-accompanied transportation provided by transportation service
companies, buses, or other public transportation services. For payments related
to parent- or guardian-provided transportation, the department of lifelong education,
advancement, and potential shall develop parameters to ensure dollars are
utilized in a way that improves access to eligible great start readiness
program options for low-income and geographically isolated families. To be
eligible to utilize funding under this subsection, a program must submit to the
intermediate district or consortia of intermediate districts all of the
following:

(a) The names of families provided with transportation
support along with a documented reason for the need for transportation support
and the type of transportation provided.

(b) Financial documentation of actual transportation costs
incurred by the program, including, but not limited to, receipts and mileage
reports, as determined by the department of lifelong education, advancement,
and potential.

(c) Any other documentation or information determined
necessary by the department of lifelong education, advancement, and potential.

(23) The department of lifelong education, advancement, and
potential shall implement a process to review and approve age-appropriate
comprehensive classroom level quality assessments for GSRP grantees that
support the early childhood standards of quality for birth to kindergarten
children adopted by the state board. The department of lifelong education,
advancement, and potential shall make available to intermediate districts at
least 2 classroom level quality assessments that have been approved by the department
of lifelong education, advancement, and potential.

(24) An intermediate district that is a GSRP grantee may
approve the use of a supplemental curriculum that aligns with and enhances the
age-appropriate educational curriculum in the classroom. If the department of
lifelong education, advancement, and potential objects to the use of a
supplemental curriculum approved by an intermediate district, the director of
the department of lifelong education, advancement, and potential shall
establish a review committee independent of the department of lifelong education,
advancement, and potential. The review committee shall meet within 60 days of
the department of lifelong education, advancement, and potential registering
its objection in writing and provide a final determination on the validity of
the objection within 60 days of the review committee’s first meeting.

(25) The department of lifelong education, advancement, and
potential shall implement a process to evaluate and approve age-appropriate
educational curricula that are in compliance with the early childhood standards
of quality for birth to kindergarten children adopted by the state board.

(26) From the state school aid fund money allocated under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$2,000,000.00 for payments to intermediate districts or consortia of
intermediate districts for professional development and training materials for
educators in programs implementing new curricula or child assessment tools
approved for use in the great start readiness program. Curricula
and child assessment tools purchased with funds received under this subsection
must be in compliance with early childhood standards of quality for birth to
kindergarten children, including the science of reading, as that
term is defined in section 1280f of the revised school code, MCL
380.1280f.

(27) A great start readiness program, a GSRP extended
program, a GSRP/Head Start school-day blended program, a GSRP/Head Start
extended blended program, or other eligible great start readiness programs
funded under this section are permitted to utilize AmeriCorps Pre-K Reading
Corps members in classrooms implementing research-based literacy intervention
strategies.

(28) In addition to the allocation under subsection (1), from
the state school aid fund money appropriated under section 11, there is
allocated an amount not to exceed $3,600,000.00 for 2026-2027 only for
classroom start up grants to intermediate districts and consortia of
intermediate districts for new or expanding great start readiness classrooms.
All of the following apply to funding allocated under this subsection:

(a) To receive funding under this subsection, intermediate
districts and consortia of intermediate districts must apply for the funding in
a form and manner prescribed by the department of lifelong education,
advancement, and potential.

(b) The department of lifelong education, advancement, and
potential shall pay an amount not to exceed $50,000.00 for each new or expanded
classroom. If funding is insufficient to fully fund all eligible applicants,
the department of lifelong education, advancement, and potential must prorate
the per-classroom amount on an equal basis.

(c) Funds received under this subsection by intermediate
districts and consortia of intermediate districts must be paid in full to the
entity operating the classroom and may be used for 1 or more of the following
purposes:

(i) Costs associated with attracting,
recruiting, retaining, and licensing required classroom education personnel to
staff new or expanded classrooms.

(ii) Supporting facility improvements or
purchasing facility space or modular classroom units necessary to provide a
safe, high-quality learning environment for children in each new or expanded
classroom, and for costs to become a licensed facility such as architectural
drawings, permits, and other prelicensure inspection fees.

(iii) Outreach material necessary for public
awareness that the great start readiness program has openings in the area and
for costs associated with enrolling eligible children in new or expanded
classrooms.

(iv) Supporting costs in each new or expanded
classroom associated with improving a provider’s great start to quality level.

(d) Recipients of funds under this subsection must
demonstrate that instructional staff have completed, or are in the process of
completing, professional learning in the science of reading. Grant funds may be
used to support this professional learning and are intended to ensure new
classrooms are well equipped to implement evidence-based literacy strategies.

(e) The funds allocated under this subsection for 2025-2026
are a work project appropriation, and any unexpended funds for 2025-2026 do not
lapse to the state school aid fund and are carried forward into 2026-2027. The
purpose of the work project is to continue support for new or expanded great
start readiness classrooms. The estimated completion date of the work project
is September 30, 2027.

(f) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this subsection
on a schedule determined by the department of lifelong education, advancement,
and potential.

(29) In addition to the funds allocated in subsection (1),
there is allocated from the general fund money appropriated under section 11
for 2024-2025 only an amount not to exceed $1,950,000.00 for an intermediate
district or a consortium of intermediate districts to partner with the
department of lifelong education, advancement, and potential and
community-based organizations to continue implementing statewide outreach and
enrollment campaign activities to raise awareness about the availability of
services through the great start readiness program, and to promote enrollment.

(30) The funds allocated under subsection (29) for 2024-2025
are a work project appropriation, and any unexpended funds for 2024-2025 are
carried forward into 2025-2026. The purpose of the work project is to raise
awareness of and participation in great start readiness programming. The
estimated completion date of the work project is September 30, 2027.

(31) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under subsection (29)
on a schedule determined by the department of lifelong education, advancement,
and potential.

Sec.
32e. (1) The great start readiness program reserve fund is created as a
separate account in the state school aid fund for the purpose of supporting the
great start readiness program and for the purposes described in section 32v.

(2) The state treasurer may receive money or other assets
from any source for deposit into the great start readiness program reserve
fund. The state treasurer shall direct the investment of the great start
readiness program reserve fund. The state treasurer shall credit to the great
start readiness program reserve fund interest and earnings from great start
readiness program reserve fund investments.

(3) Money in the great start readiness program reserve fund
at the close of the fiscal year remains in the great start readiness program
reserve fund and does not lapse to the state school aid fund or the general
fund.

(4) The department of treasury is the administrator of the
great start readiness program reserve fund for auditing purposes.

(5) Money available in the great start readiness program
reserve fund must not be expended without a specific appropriation.

(6) For the fiscal year ending September 30, 2023 only,
$200,000,000.00 from the state school aid fund is deposited into the great
start readiness program reserve fund.

Sec.
32n. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 only an amount not to exceed $50,000,000.00, and
from the state school aid pupil support reserve fund money appropriated in
section 11, there is allocated for 2026-2027 only an amount not to exceed
$85,000,000.00 to Clinton County RESA to collaborate with the department
of lifelong education, advancement, and potential, for the purposes of this
section. It is the intent of the legislature that, for 2027-2028, the
allocation from the state school aid pupil support reserve fund money
appropriated in section 11 for the purposes described in this section will be
$100,000,000.00.

(2) The funds allocated in subsection (1) must be used for a
grant program for eligible applicants to expand access to quality, affordable
programming before and after the school day or during the summer for young
people. Not more than 40% of the total allocation under subsection (1) may be
allocated to statewide or regional grant applications. The department of
lifelong education, advancement, and potential shall establish competitive
grant criteria for the program described in this subsection. To be eligible for
a grant under this subsection, the applicant must meet, at a minimum, all of
the following criteria:

(a) Serve children in any of grades K to 12.

(b) Be a community-based organization that is exempt from
federal income tax under section 501(c)(3) of the internal revenue code, 26 USC
501, an institution of higher education, a public library, a city or
municipality, or an intermediate district.

(c) Provide before-school, after-school,
before-and-after-school, or summer school programming to children described in
subdivision (a). These programs must be used to support expanded learning
opportunities, including, but not limited to, mentoring, leadership, community
engagement, agriculture, visual and performing arts, literacy, science,
technology, engineering, mathematics, health and wellness, recreation,
financial literacy, physical fitness, career and college exploration, youth
voice, 21st century skills, conflict resolution, and social engagement
programming.

(d) Address academic outcomes and not fewer than 2 additional
measurable goals, including, but not limited to, improved school attendance,
improved attitudes toward school, improved positive behaviors, skill
development and retention, higher education aspirations, and improved family
engagement and include activities linked to research or quality practices.

(e) Be 1 of the following:

(i) A licensed child care organization.

(ii) An entity that has an active application
to be a licensed child care organization.

(iii) An exempt entity.

(f) For entities meeting eligibility requirements under
subdivision (e)(ii) and (iii),
demonstrate in a form and manner determined by the department that all of the
following are in place for staff working with youth:

(i) Background checks through the Central
Registry Clearance and the Internet Criminal History Access Tool.

(ii) First aid and cardiopulmonary
resuscitation (CPR) training.

(iii) Health and Safety Training Courses for
Child Care Providers, Modules A, B, and C.

(3) The department of lifelong education, advancement, and
potential shall establish a competitive grant process for awarding funding
under subsection (2). The department of lifelong education, advancement, and
potential shall develop the form and manner for applying for the grants. The
application must include a request for information on the applicant’s outreach
to children, youth, and families who are eligible for free or reduced-price
meals under the Richard B. Russell national school lunch act, 42 USC 1751 to
1769j. The application must be open for not less than 30 calendar days. At
least 30 days before the application is opened, the department of lifelong
education, advancement, and potential must publish on its public website the
criteria that will be used in evaluating the application that must include, but
are not limited to, priorities under subsection (5).

(4) Subject to subsection (8), in determining award amounts
under subsection (2), the department of lifelong education, advancement, and
potential shall, to the extent practicable, ensure that eligible entities in
all geographic regions of this state are represented in the distribution of
grant funding under subsection (2).

(5) Subject to subsection (8), the department of lifelong
education, advancement, and potential shall prioritize the distribution of
grant funding under subsection (2) based on, at a minimum, the following:

(a) An applicant’s demonstrated need.

(b) The percentage of low-income families in the geographic
area being served. Prioritization must be determined by the average percentage
of pupils in the district who are eligible for free and reduced-priced meals as
determined under the Richard B. Russell national school lunch act, 42 USC 1751
to 1769j, where eligible entities will provide before-and-after-school or
summer school programs.

(c) Whether the application provides services for the full
school year.

(d) The applicant’s track record for providing quality,
affordable before-and-after-school or summer school services.

(e) Whether an applicant serving children in any of grades K
to 8 is a licensed child care organization, is an entity that has an active
application to be a licensed child care organization, or has implemented the
Michigan Out-of-School Time Standards of Quality if the applicant is an exempt
entity and, beginning in 2025-2026, serves at least 15 school-age youth at a
single location in grades K to 12.

(6) An eligible entity that receives grant funding under
subsection (2) shall use the funding only to provide before-school,
after-school, before-and-after-school, or summer school programming to children
described in subsection (2)(a). The programming offered under subsection (2)
must meet all of the following:

(a) For programming that is offered by a licensed child care
organization, be provided to children and youth in a manner in which the
children are physically present at the building or location for which the
licensed child care organization received its license under 1973 PA 116, MCL
722.111 to 722.128, or, for programming that is offered by an exempt entity
serving grades K to 12, be provided to children and youth in a manner in which
the children and youth are physically present at a building or location designated
by the exempt entity.

(b) Provide educational programming in core subject areas,
including, but not limited to, mathematics, reading, and science.

(c) Provide data to evaluate the program in a form and manner
as prescribed by the department of lifelong education, advancement, and
potential.

(7) All of the following apply to funding allocated under
subsection (2):

(a) An amount not to exceed 0.25% of the funding allocated
under subsection (2) or $250,000.00, whichever is greater, may be retained by
Clinton County RESA for administrative costs.

(b) An amount not to exceed $500,000.00 of the funding
allocated under subsection (2) must be allocated by Clinton County RESA, as
directed by the department of lifelong education, advancement, and potential,
and in collaboration with the center and the Michigan afterschool partnership
as needed, to provide statewide evaluation activities of eligible youth served,
their families, and programs funded under this section. This evaluation must
allow for a comparative analysis between program youth and their peers in
grades K to 12.

(c) An amount not to exceed 1.5% of the funding allocated
under subsection (2) must be allocated by Clinton County RESA, as directed by
the department of lifelong education, advancement, and potential, and in
collaboration with the Michigan afterschool partnership, to provide statewide
out-of-school time activities and supports including, but not limited to,
capacity building initiatives, professional development, and technical
assistance to increase the likelihood for implementation of high quality, evidence-based,
out-of-school time learning opportunities by eligible entities under
subsections (4) and (5).

(8) The department of lifelong education, advancement, and
potential shall award not less than 60% of the funding under subsection (2) to
community-based organizations.

(9) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section in
an amount equal to 1/2 of the grant total upon award of the grant, and the
remaining 1/2 of the grant total on a schedule determined by the department of
lifelong education, advancement, and potential. The department of lifelong
education, advancement, and potential may make payments in full to grantees
demonstrating resource needs, as determined by the department of lifelong
education, advancement, and potential. Grantees that do not comply with
reporting requirements, fail to provide the services proposed in their grant
application, or close during the grant period may be required to repay the
funding they received under this section to the department of lifelong
education, advancement, and potential.

(10) The department of lifelong education, advancement, and
potential, in collaboration with the Michigan Afterschool Partnership, shall
convene an advisory committee to review the program components listed within
this section and make recommendations to the department of lifelong education,
advancement, and potential for changes on the program described in this
section. The advisory committee shall meet at a schedule set by the department
of lifelong education, advancement, and potential, or at least quarterly. The
advisory committee shall provide for the involvement of, but not limited to,
community-based organizations, regional intermediaries, district
administrators, youth, parents, and representatives from the business and
philanthropic communities, as appropriate.

(11) Subject to subsection (2), the department of lifelong
education, advancement, and potential shall establish and implement a
multi-tiered grant funding structure within its competitive grant process to
account for statewide or regional grant applications, as well as midsize grants
serving 6 to 14 program sites and smaller grants serving 1 to 5 program sites.

(12) As used in this section:

(a) “An entity that has an active application to be a
licensed child care organization” means an entity that has an active
application to be a licensed child care organization under 1973 PA 116, MCL
722.111 to 722.128, and will be a licensed child care organization before the
entity provides services for which a child care organization is required to be
licensed under 1973 PA 116, MCL 722.111 to 722.128.

(b) “Child care organization” means that term as defined in
section 1 of 1973 PA 116, MCL 722.111.

(c) “Exempt entity” means an entity described in section
1(1)(i)(i) to (v) of
1973 PA 116, MCL 722.111.

(d) “Licensed child care organization” means a child care
organization that has been issued a license under 1973 PA 116, MCL 722.111 to
722.128, to operate a child care organization.

(e) “School-age” means a child who is eligible to attend a
grade of kindergarten or higher, but is less than 13 years of age. A child
is considered to be school age on the first day of the school year in which the
child is eligible under section 1 of 1973 PA 116, MCL 722.111.

(f) “Statewide or regional grant” means a grant to 2 or more
entities, community-based organizations, statewide network affiliations, or any
combination of those entities working together with the objective of serving
more than 2,000 children across at least 15 program sites statewide, or to
serve more than 2,000 children across at least 15 program sites within a
publicly defined boundary region, and that have a demonstrated track record of
success in providing or organizing a statewide or regional system of
out-of-school time programs. If an applicant applies for a statewide or
regional grant, the applicant and the program sites included on their
application may not appear on any other grant application submitted for funding
under subsection (2).

Sec.
32p. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 an amount not to exceed $30,000,000.00 to create and implement
statewide early learning partnerships. It is the intent of the legislature that
these early learning partnerships will provide centralized access points to
families for trusted entry into the early childhood system, family and
community outreach to build awareness, trust, and referral networks, outreach
through child health providers to engage pediatric professionals for early
detection of developmental delays or other health needs, and data collection
and analysis to provide real-time insights necessary to improve services and
systems.

(2) From the funds allocated in subsection (1), the
department of lifelong education, advancement, and potential shall award at
least $16,900,000.00 to eligible intermediate districts for the purposes of
this subsection. All of the following apply to funds awarded under this
subsection:

(a) Intermediate districts must apply for funding in a form
and manner determined by the department of lifelong education, advancement, and
potential.

(b) The department of lifelong education, advancement, and
potential shall award funding to eligible intermediate districts in a way that
ensures that families statewide have equitable access to services provided by
an early learning partnership. The amount awarded to an eligible intermediate
district must not be less than the amount received by the intermediate district
in 2024-2025 for local great start collaboratives. At least $1,000,000.00 must
be awarded to eligible intermediate districts in a manner determined by the
department of lifelong education, advancement, and potential to support MiFamily
engagement regional centers. To be eligible for funds awarded under this
subdivision, intermediate districts must partner with an entity with expertise
in family leadership, as determined by the department of lifelong education,
advancement, and potential.

(c) Intermediate districts must use funding received under
this subsection for the following purposes:

(i) Convening early learning partnerships on
a regular basis to ensure early childhood system building and the development
of implementation strategies through active partnerships with families and
multiple community organizations.

(ii) Improving family access, leadership, and
engagement in early childhood education.

(iii) Enhancing child development, learning,
and well-being.

(iv) Creating strong, efficient community
systems.

(v) Providing universal developmental
screening and follow-up support through care coordinators.

(vi) Participating in a coordinated,
statewide enrollment system that increases child participation in early care
and education programs as described in subsection (5).

(vii) Supporting the following staffing costs
in each early learning partnership:

(A) At least 0.8 FTE for a lead position to provide
system-building capacity by facilitating the implementation of program
components and activities, ensuring initiatives are data-driven, completing
annual program assessments, connecting families to developmental screening, and
ensuring intermediate districts have dedicated care coordinators.

(B) At least 0.5 FTE for a care coordinator within each
intermediate district. Care coordinators are responsible for answering
questions from families, providing follow-up services related to developmental
screenings and referrals, tracking data, and providing cross-sector
coordination to ensure families are seamlessly connected to the full scope of
services within the intermediate district region.

(3) From the funds allocated in subsection (1), there is
allocated for 2026-2027 an amount not to exceed $3,900,000.00 for
evidence-based, family-centered, data-driven family support services,
including, but not limited to, home visiting programs that comply with the
requirements of 2012 PA 291, MCL 400.791 to 400.798. Funds allocated under this
subsection must be expended in a form and manner determined jointly by the
department of lifelong education, advancement, and potential and the department
of health and human services. The department of lifelong education,
advancement, and potential shall make payments under this subsection to an
intermediate district serving as a fiscal agent for these funds on a schedule
determined by the department of lifelong education, advancement, and potential.

(4) From the funds allocated in subsection (1), the
department of lifelong education, advancement, and potential shall award at
least $4,000,000.00 to eligible intermediate districts for the purpose of
improving access to books and other literacy materials for children from birth
to age 5. An intermediate district must apply for these funds in a form and
manner determined by the department of lifelong education, advancement, and
potential and may use the funding to support programs, including, but not limited
to, the Dolly Parton Imagination Library, Reach Out and Read Michigan, or any
other program that provides books and literacy materials to children from birth
to age 5 and educates families on the importance of frequently reading aloud
with children. If funding available under this subsection is insufficient to
fully fund all interested intermediate districts and families, funding to each
intermediate district must prioritize enrollment to those families with the
highest levels of economic need.

(5) From the funds allocated in subsection (1), there is
allocated for 2026-2027 an amount not to exceed $4,000,000.00 for an
intermediate district to partner with the department of lifelong education,
advancement, and potential and community-based organizations to raise awareness
about the availability of services through early learning partnerships and to
develop systems to identify and reach out to families. All of the following
apply to funding under this subsection:

(a) Funding under this subsection must be used for the
following purposes:

(i) Organizing community events and outreach
activities to inform parents about early learning partnerships, the positive
impacts of early childhood education, and additional early childhood programs
available to families.

(ii) Developing and implementing a
coordinated statewide enrollment system that allows providers to advertise
available services and allows families to enroll in early education programs.
The system described in this subparagraph must include information about
additional early childhood programs for families to increase participation in
early care and education.

(b) Families are not required to participate in early
learning partnerships.

(6) From the funds allocated in subsection (1), the
department of lifelong education, advancement, and potential may award up to
$1,200,000.00 to intermediate districts to administer or provide services,
programs, or resources required by this section that would otherwise be
administered or provided by the department of lifelong education, advancement,
and potential. Funds awarded under this subsection may be distributed as
follows:

(a) Up to $50,000.00 to Oakland Schools to provide strategic
leadership in collaboration with the department of lifelong education,
advancement, and potential to ensure accountability, efficacy, and consistent
implementation of programs under this section to a national fidelity standard,
as determined by the department of lifelong education, advancement, and
potential.

(b) Up to $1,150,000.00 to Clinton County RESA to collaborate
with the department of lifelong education, advancement, and potential to
provide statewide leadership, technical assistance, a central access point,
community outreach, and administrative support.

(7) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section on
a schedule determined by the department of lifelong education, advancement, and
potential.

Sec.
32v. (1) From the state school aid fund money appropriated under section 11,
there is allocated for 2026-2027 only an amount not to exceed $21,700,000.00,
and from the great start readiness reserve fund money appropriated in section
11, there is allocated for 2026-2027 only an amount not to exceed $8,300,000.00
to implement early childhood workforce development initiatives.

(2) The department must award funding under this section to
an intermediate district or a consortium of intermediate districts to serve as
a fiscal agent.

In collaboration with the department of lifelong education,
advancement, and potential, the department shall direct funds allocated to an
intermediate district or consortium of intermediate districts for initiatives
that will support any of the following objectives:

(a) Increasing the number of early childhood workers in the
great start readiness program, child care, and Head Start.

(b) Enhancing professional development and career advancement
opportunities for early childhood workers.

(c) Implementing early childhood worker recruitment and
retention strategies, including, but not limited to, the following:

(i) Stipends, grants, or reimbursements for
eligible postsecondary costs, travel, or housing expenses, as determined by the
department.

(ii) Bonus or incentive payments, or
implementation of compensation structures intended to recruit, retain, or
reward eligible early childhood workers.

(iii) Payment of costs associated with the
provision of health care, retirement, or paid leave benefits to early childhood
workers.

(iv) Matching costs for any other funds
allocated to enhance or supplement the implementation of initiatives eligible
under this section.

(d) Administering the funds under this section and data
collection efforts in partnership with at least 1 public university located in
this state. At a minimum, data collection efforts must evaluate the
effectiveness of early childhood workforce initiatives funded. Total
administration and data collection costs must not exceed 5% of the funds
allocated under this section.

(3) Funds allocated under this section for 2026-2027 are a
work project appropriation, and any unexpended funds for 2026-2027 are carried
forward into 2027-2028. The purpose of the work project is to support the
implementation of early childhood workforce development initiatives. The
estimated completion date of the work project is September 30, 2029.

(4) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
35a. (1) From the appropriations in section 11, there is allocated for
2026-2027 an amount not to exceed $77,500,000.00 from the state school aid fund
and an amount not to exceed $50,000,000.00 from the educator fellowship public
provider fund for the purposes of this section. It is the intent of the
legislature that, for 2027-2028, the allocation from the state school aid fund
money appropriated in section 11 for the purposes described in this section
will be $52,500,000.00. The superintendent shall designate staff or contracted
employees funded under this section as critical shortage. For each fiscal year
in which funding is allocated under this section, the superintendent of public
instruction shall do both of the following:

(a) Report in person to the house and senate appropriations
subcommittees on school aid regarding progress on literacy and be available for
questioning as prescribed through a process developed by the chairs of the
house and senate appropriations subcommittees on school aid.

(b) Submit a written report to the house and senate
appropriations subcommittees on school aid regarding progress on literacy. The
report described in this subdivision must include the number of literacy
coaches supported by funding provided under subsection (2), including the
number of coaches supported in each intermediate district, and the percentage
of supported coaches that have received, or are in the process of receiving,
professional learning by the approved provider described in subsection (5).

(2) From the state school aid fund money allocated under
subsection (1), there is allocated an amount not to exceed $52,500,000.00 for
2026-2027 for the purpose of providing literacy coaches at intermediate
districts to assist teachers in developing and implementing instructional
strategies for pupils in grades pre-K to 5 so that pupils are reading at grade
level by the end of grade 3. All of the following apply to funding under this
subsection:

(a) The department shall develop an application process
consistent with the provisions of this subsection. An application must provide
assurances that literacy coaches funded under this subsection are knowledgeable
about at least the following:

(i) Current state literacy standards for
pupils in grades pre-K to 3.

(ii) Implementing an instructional delivery
model based on frequent use of formative, screening, and diagnostic tools,
known as a multi-tiered system of supports, to determine individual progress
for pupils in grades pre-K to 5 so that pupils are reading at grade level
by the end of grade 3.

(iii) The use of data from diagnostic tools to
determine the necessary additional supports and interventions needed by
individual pupils in grades pre-K to 5 to read at grade level.

(b) From the allocation under this subsection, the department
shall award grants to intermediate districts for the support of literacy
coaches. The department shall provide this funding in the following manner:

(i) The department shall award each
intermediate district grant funding to support the cost of 4 literacy coaches
in an equal amount per literacy coach, not to exceed $125,000.00.

(ii) After distribution of the grant funding
under subparagraph (i), the department shall distribute grant
funding for additional literacy coaches in an amount not to exceed $125,000.00
per literacy coach. The department shall ensure that each intermediate district
receives funding for at least 1 additional literacy coach compared to the
number of coaches funded under this section in 2025-2026.

(iii) If funding under this subsection remains
available after the distributions in subparagraphs (i) and (ii), the department shall distribute the
remaining funds based on the percentage of the total statewide number of pupils
in grades K to 3 who meet the income eligibility standards for the federal free
and reduced-price lunch programs who are enrolled in districts in the
intermediate district. Funds may be distributed under this section only after
the department ensures that no intermediate district receives funding for fewer
literacy coaches in 2026-2027 compared to the number of coaches for which the
intermediate district received funding in 2025-2026.

(c) If an intermediate district that receives funding under
this subsection uses an assessment tool that screens for characteristics of
dyslexia, the intermediate district shall use the assessment results from that
assessment tool to identify pupils who demonstrate characteristics of dyslexia.

(d) All literacy coaches funded under this subsection must
have already received, or be making progress toward receiving, professional
learning by the approved provider described in subsection (5).

(e) To be eligible to receive funding under this subsection,
an intermediate district must provide the department with a list by September 1
of the immediately preceding fiscal year containing contact information for all
literacy coaches funded under this subsection, in a form and manner determined
by the department. An intermediate district shall communicate any personnel
changes and changes to contact information for literacy coaches funded under
this subsection to the department within 30 days of the personnel change or
change in contact information.

(f) The department shall develop a coaching evaluation
framework to be implemented in alignment to the literacy coaching model
described in section 1280f of the revised school code, MCL 388.1280f.

(g) All literacy coaches funded under this subsection must
comply with the requirements described in section 35o.

(3) If a district or intermediate district expends any
funding received under subsection (2) for professional development in
research-based effective reading instruction, the district or intermediate
district shall select a professional development program from the list
described in subdivision (a). All of the following apply to the requirement
under this subsection:

(a) The department shall issue a request for proposals for
professional development programs in research-based effective reading
instruction to develop an initial approved list of professional development
programs in research-based effective reading instruction. The department shall
make the initial approved list public and shall determine if it will, on a
rolling basis, approve any new proposals submitted for addition to its initial
approved list.

(b) To be included as an approved professional development
program in research-based effective reading instruction under subdivision (a),
an applicant must demonstrate to the department in writing the program’s
competency in all of the following topics:

(i) Understanding of phonemic awareness,
phonics, fluency, vocabulary, and comprehension.

(ii) Appropriate use of assessments and
differentiated instruction.

(iii) Selection of appropriate instructional
materials.

(iv) Application of research-based
instructional practices.

(c) As used in this subsection, “effective reading
instruction” means reading instruction scientifically proven to result in
improvement in pupil reading skills.

(4) From the state school aid fund money allocated under
subsection (1), there is allocated an amount not to exceed $25,000,000.00, and
from the educator fellowship public provider fund money allocated under
subsection (1), there is allocated an amount not to exceed $50,000,000.00
for 2026-2027 only to an intermediate district identified by the department for
the provision of professional learning by the approved provider described in
subsection (5). All of the following apply to funding under this subsection:

(a) Funds must first be used to provide the professional
learning described in subsection (5) to all of the following:

(i) Pre-K to grade 5 educators that provide,
support, or oversee pre-K to grade 5 reading instruction.

(ii) Special education educators.

(iii) Administrators overseeing individuals
described in subparagraphs (i) and (ii).

(iv) Literacy coaches.

(v) Faculty and staff at educator
preparation programs that teach reading fundamental courses.

(vi) Partners that lead regional and
statewide literacy professional development, as determined by the department.

(b) If funds remain after the allocation of funds under
subdivision (a), districts that establish a public goal to train all qualifying
staff may receive the following:

(i) Access to personalized training and
support for district-wide implementation at no additional cost to the district.

(ii) If funding is available, grants to
support district-wide completion of the professional learning described in
subsection (5). Eligible costs under this subparagraph include hiring
substitute teachers and compensating participants for additional time.

(c) For purposes of this subsection, the approved provider
described in subsection (5) must establish and manage professional learning
opportunities that are open to all school personnel described in this
subsection.

(5) For the provision of professional learning to the school
personnel described in subsection (4), LETRS is the approved provider of
professional learning as long as LETRS continues to meet all of the following:

(a) Be offered through a system of training that provides
educators with the knowledge base to effectively implement any class-wide,
supplemental, or intervention reading approach and to determine why some
students struggle with reading, writing, spelling, and language.

(b) Provide training activities that direct educators to
implement effective reading and spelling instruction supported by
scientifically based research and foster a direct explicit instructional
sequence that uses techniques to support teachers’ independence in using their
newly-learned skills with students in the classroom.

(c) Include integrated components for educators and
administrators in pre-K to grade 3 with embedded evaluation or assessment of
knowledge. Evaluation or assessment of knowledge under this subdivision must
incorporate evaluations of learning throughout each unit and include a
summative assessment that must be completed to demonstrate successful course
completion.

(d) Build teacher content knowledge and pedagogical knowledge
of the critical components of literacy including how the brain learns to read,
phonological and phonemic awareness; letter knowledge; phonics; advanced
phonics; vocabulary and oral language; fluency; comprehension; spelling and
writing; and the organization of language.

(e) Support educators in understanding how to effectively use
screening, progress monitoring, and diagnostic assessment data to improve
literacy outcomes through prevention and intervention for reading difficulties
in a multi-tiered system of supports. The multi-tiered system of supports must
include at least all of the following essential components:

(i) Team-based leadership.

(ii) A tiered delivery system.

(iii) Selection and implementation of
instruction, interventions, and supports.

(iv) A comprehensive screening and assessment
system.

(v) Continuous data-based decision making.

(f) On a quarterly basis, report all of the following
information to the department, in a form and manner prescribed by the
department:

(i) The total number of individuals who have
completed the required professional learning, organized by role group.

(ii) The total number of individuals who are
enrolled in the professional learning, organized by role group.

(iii) The total number of individuals who
enrolled but withdrew from the professional learning prior to completion,
organized by role group.

(iv) The total number of individuals who
enrolled but transferred to a different cohort prior to completion, organized
by role group.

(v) The cost per individual to enroll in the
professional learning.

(vi) The total grant funds expended for all
individuals who completed or enrolled in the professional learning during the
quarter reported.

(vii) The total unused grant funds for the
quarter reported.

(viii) The strategies and technical assistance
provided to support participant completion.

(6) As used in this section:

(a) “Dyslexia” means both of the following:

(i) A specific learning disorder that is
neurobiological in origin and characterized by difficulties with accurate or
fluent word recognition and by poor spelling and decoding abilities that
typically result from a deficit in the phonological component of language that
is often unexpected in relation to other cognitive abilities and the provision
of effective classroom instruction.

(ii) A specific learning disorder that may
include secondary consequences, such as problems in reading comprehension and a
reduced reading experience that can impede the growth of vocabulary and
background knowledge and lead to social, emotional, and behavioral
difficulties.

(b) “Evidence-based” means an activity, program, process,
service, strategy, or intervention that demonstrates statistically significant
effects on improving pupil outcomes or other relevant outcomes and that meets
at least both of the following:

(i) At least 1 of the following:

(A) Is based on strong evidence from at least 1 well-designed
and well-implemented experimental study.

(B) Is based on moderate evidence from at least 1
well-designed and well-implemented quasi-experimental study.

(C) Is based on promising evidence from at least 1
well-designed and well-implemented correlational study with statistical
controls for selection bias.

(D) Demonstrates a rationale based on high-quality research
findings or positive evaluation that the activity, program, process, service,
strategy, or intervention is likely to improve pupil outcomes or other relevant
outcomes.

(ii) Includes ongoing efforts to examine the
effects of the activity, program, process, service, strategy, or intervention.

(c) “Explicit” means direct and deliberate instruction
through continuous pupil-teacher interaction that includes teacher modeling,
guided practice, and independent practice.

(d) “Fluency” means the ability to read with speed, accuracy,
and proper expression.

(e) “Multi-tiered system of supports” means a comprehensive
framework that includes 3 distinct tiers of instructional support and is
composed of a collection of evidence-based strategies designed to meet the
individual needs and assets of a whole pupil at all achievement levels.

(f) “Phonemic awareness” means the conscious awareness of all
of the following:

(i) Individual speech sounds, including, but
not limited to, consonants and vowels, in spoken syllables.

(ii) The ability to consciously manipulate
through, including, but not limited to, matching, blending, segmenting,
deleting, or substituting, individual speech sounds described in subparagraph (i).

(iii) All levels of the speech sound system,
including, but not limited to, word boundaries, rhyme recognition, stress
patterns, syllables, onset-rime units, and phonemes.

(g) “Phonological” means relating to the system of
contrastive relationships among the speech sounds that constitute the
fundamental components of a language.

(h) “Progress monitoring” means the assessing of students’
academic performance, quantifying students’ rates of improvement or progress
toward goals, and determining how students are responding to instruction.

(i) “Rapid automatized naming (RAN)” means a task that
measures how quickly individuals can name objects; pictures; colors; or
symbols, including letters and digits, aloud, which can predict later reading
abilities for preliterate children.

Sec.
35d. (1) From
the state school aid fund money appropriated under section 11, there is
allocated for 2026-2027 only an amount not to exceed $1,000,000.00 for the
department to provide grants to districts and intermediate districts for the
purchase of 1 or more components or trainings through an eligible teacher
training program for children with dyslexia from a provider of an eligible
teacher training program for children with dyslexia as described in this
section. It is intended that supports funded under this section assist with the
implementation of dyslexia requirements under section 1280f of the revised
school code, MCL 380.1280f.

(2) A provider that provides programming that meets all of
the following criteria is considered to be a provider of an eligible teacher
training program for purposes of this section:

(a) The programming allows teachers to incorporate the 5
components essential to an effective reading program into their daily lessons.
The 5 components described in this subdivision are phonemic awareness, phonics,
vocabulary, fluency, and comprehension.

(b) The programming trains educators to teach reading using a
proven, multisensory approach.

(c) The programming educates teachers on how to explicitly
and effectively teach reading to beginning readers.

(d) The programming breaks reading and spelling down into
smaller skills involving letters and sounds, and then builds on these skills
over time.

(e) The programming uses multisensory teaching strategies to
teach reading by using sight, hearing, touch, and movement to help students
connect and learn the concepts being taught.

(3) Districts and intermediate districts may apply to the
department for grants to purchase components or training through an eligible
teacher training program from a provider of an eligible teacher training
program, and, upon receiving an application and except as otherwise provided in
this subsection, the department shall make payments to districts and
intermediate districts for those purchases. The department shall make payments
under this section on a first-come, first-served basis until funds are depleted.

Sec.
35m. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 only an amount not to exceed $50,000,000.00 for the
purposes described in this section, including payments to improve educational
outcomes in literacy.

(2) The department shall continue the committee for literacy
achievement that includes representatives of higher education and early
childhood literacy educators who have expertise in literacy instruction and
research. The committee shall exist until at least September 2029. The
department shall appoint the members of the committee for literacy achievement.
The department shall develop a process to identify and assemble experts for the
committee. The primary focus of the committee is to recommend tools and strategies
with the goal of increasing student academic outcomes in the area of literacy.
The committee is encouraged to collaborate with the Michigan Education Research
Institute or other entities with similar expertise on the subject of literacy.
The department shall determine the size and benchmarks of the committee. The
committee shall do all of the following:

(a) Critically evaluate literacy series and materials. The
committee shall evaluate with research-based outcomes, using the committee’s
expertise in the field of literacy. The committee shall assign grade tiers to
the series based on the series’ likelihood to increase student literacy
outcomes. Priority must be given to series that already have a demonstrated
history of increasing student outcomes. The committee may perform an evaluation
under this subdivision based on submissions from a vendor, but must
independently verify the validity of information provided by the vendor. The
committee is also strongly encouraged to evaluate available materials not
submitted to the department by a vendor.

(b) Critically evaluate literacy professional development.
The committee shall evaluate with research-based outcomes, using the committee’s
expertise in the field of literacy. The committee shall assign grade tiers to
the professional development based on the professional development’s likelihood
to increase student literacy outcomes. Priority must be given to professional
development that already has a demonstrated history of increasing student
outcomes. The committee may perform an evaluation under this subdivision based
on submissions from a vendor, but must independently verify the validity of
information provided by the vendor. The committee is also strongly encouraged
to evaluate available materials not submitted to the department by a vendor.

(c) Critically evaluate other applicable literacy tools or
services the committee determines to have a high likelihood or demonstrated
history of increasing student literacy outcomes. The committee may perform an
evaluation under this subdivision based on submissions from a vendor, but must
independently verify the validity of information provided by the vendor. The
committee is also strongly encouraged to evaluate available materials not
submitted to the department by a vendor.

(d) Create, maintain, and post annually on a publicly
available website a rankings list of all literacy series and other items the
committee has evaluated. This includes items from each part of the rankings
list, items evaluated in the 2024-2025 school year, and any subsequent items
evaluated going forward. The committee shall denote on the list whether major
changes have been made to a literacy series or other item on the list since the
literacy series or other item was evaluated by the committee and if the
literacy series or other item has not been evaluated since the last ranking.
The rankings list created in this subdivision must align with the list of
evidence-based tier 1, classwide elementary reading curricula and
materials that are aligned with science of reading methods that research has
shown to improve literacy outcomes and help pupils achieve reading proficiency
as required under section 1280f of the revised school code, MCL 380.1280f. A
list described in this subdivision may include a maximum of 15 recommendations.
Additional items may be evaluated. However, only the top 15 may be recommended
for use.

(3) An individual on the committee shall recuse themselves
from evaluating literacy series and other items that the individual has helped
create, that the individual would benefit from financially, or for which the
individual has any other conflict of interest.

(4) From the funds allocated in subsection (1), the
department shall make payments to districts and intermediate districts in an
amount necessary, as determined by the department, for a district or
intermediate district to implement the chosen literacy item.

(5) From the funding allocated in subsection (1), the
department may pay an annual stipend of up to $8,000.00 for each member of the
committee for literacy achievement who is employed by or at a public
institution of higher education, a district, or an intermediate district. A
stipend must be commensurate with the committee member’s contribution to the
committee. Funding must be paid to the public institution of higher education,
the district, or the intermediate district where the committee member is
employed, and the public institution of higher education, the district, or the
intermediate district must then use funding received to award the stipend
directly to the individual committee member. A committee member who is not
employed by or at a public institution of higher education, a district, or an
intermediate district is not eligible to receive a stipend under this
subsection.

(6) To be eligible for funding under this section, a district
or intermediate district must apply in a form and manner determined by the
department. As a condition of receiving the funding, the district or
intermediate district must agree to provide to the department information twice
a year, on or before May 1 and October 1, on the literacy series and other
items used for the previous and current school years, and the literacy series
and other items to be used for the next school year. The literacy series and
other items used by districts and intermediate districts must be added to the
annual rankings required under subsection (2).

(7) Except as otherwise provided in this section and
notwithstanding section 17b, the department shall make payments under this
section on a schedule determined by the department.

Sec.
35o. (1) From
the state school aid fund money appropriated in section 11, there is allocated
an amount not to exceed $6,000,000.00 for 2026-2027 to an intermediate district
in which the combined total number of pupils in membership of all of its
constituent districts is the fewest among all intermediate districts in this
state to improve literacy instruction in alignment with the science of reading
and section 1280f of the revised school code, MCL 380.1280f.

(2) Funding under this subsection must be used by the
intermediate district described in subsection (1), in partnership with an
association that represents intermediate district administrators in this state,
to do all of the following:

(a) Maintain, and update as necessary based on research, the
state’s literacy essentials and disciplinary literacy essentials for grades
pre-K to 12, including teacher and principal training modules and materials.

(b) Lead face-to-face and online professional learning on the
state’s literacy essentials and disciplinary literacy essentials for grades
pre-K to 12 for literacy coaches, principals, and teachers.

(c) Lead face-to-face and online professional learning for
school and district administrators and leadership teams about leading systems
that support effective literacy instruction in all classrooms.

(d) Facilitate a statewide network of literacy coaches that
ensures consistent use of evidence-based literacy practices including monthly
communities of practice, regular coaching intensives, and an annual institute.
In addition to completing training from the approved provider of professional
learning described in section 35a(5), all literacy coaches funded under section
35a(2) must do all of the following, as applicable:

(i) Participate in the statewide coaching
network described in this subdivision.

(ii) Participate in at least 1 coaching
intensive.

(iii) Attend the annual institute.

(iv) Complete the literacy essentials and
coaching modules.

(v) For literacy coaches who are new to the
network, attend a new coach kickoff.

(e) Place regional lead literacy coaches to facilitate
professional learning for literacy coaches. Regional lead literacy coaches
described in this subdivision shall provide support for literacy coaches,
teachers, and administrators, and shall facilitate regional data collection to
evaluate the effectiveness of statewide literacy coaches funded under this
section.

(f) Meet monthly with the department and the department of
lifelong education, advancement, and potential to align efforts and achieve
statewide goals to train every educator in the science of reading.

(3) By not later than September 1 of each year, the
intermediate district described in subsection (1), in consultation with grant
recipients, shall submit a report to the chairs of the senate and house
appropriations subcommittees on school aid, the chairs of the senate and house
standing committees responsible for education legislation, the house and senate
fiscal agencies, the state budget director, and the directors of the
departments of education and lifelong education, advancement, and potential. The
report described in this subdivision must include coaching cycle data by
intermediate district, statewide student achievement results in English
language arts, and survey results with feedback from teachers and
administrators regarding the initiatives implemented under this section.

(4) Up to 2% of funds allocated under this section may be
used by the association representing intermediate district administrators that
is in partnership with the intermediate district as described in subsection (1)
to administer this section.

Sec.
35p. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $50,000,000.00 to implement
high-impact tutoring programs through eligible tutoring partners in eligible
districts.

(2) Eligible tutoring partners shall apply for funding in a
form and manner determined by the department. An application for funding
described in this subsection must include at least all of the following:

(a) An identification of a district or intermediate district
that will serve as a fiscal agent for awarded funds.

(b) A list of district partners that will be recipients of
high-impact tutoring from the eligible tutoring partner, including a letter of
support from each district that affirms their commitment to ensure alignment
with tier 1 instruction, implementation fidelity, including, but not limited
to, student usage and frequency, and participation in data sharing and training
necessary to maximize outcomes.

(c) Projections for the number of students who will be
served, broken down by partner district.

(d) A description of the efficacious nature of the eligible
tutoring partner’s program, including the ability of the eligible tutoring
partner to hit certain benchmarks and goals, based on evidence.

(e) A plan for how the eligible tutoring partner will target
high-impact tutoring for the highest need student populations based on some or
all of the following criteria:

(i) Statewide assessment data.

(ii) Screeners or formative assessment
scores.

(iii) Economically disadvantaged status.

(iv) Special education status.

(v) English language learner status.

(f) A planned budget for the high-impact tutoring program
provided, including the total dollars necessary to serve the identified student
population and an estimate of the percentage of awarded dollars that would be
directly deployed for high-impact tutoring.

(g) A commitment to provide periodic reporting to each
district served and to the department, in a form and manner determined by the
department, to ensure funds are being spent in accordance with this section.

(h) A commitment to return any or all funds awarded if the
department determines dollars are used in a way that violates this section.

(i) Any additional information required by the department to
make informed decisions on awarding competitive grants under this section and
to ensure financial stewardship of awarded dollars.

(3) The department shall award grants to applicants on a
competitive basis, using at least all of the following in making award
determinations:

(a) The cost effectiveness of the application based on the
number of students projected to be served, the total requested budget, and the
demonstrated outcome capacity of the high-impact tutoring program.

(b) The reasonability that the eligible tutoring partner will
be able to meet the stated outcome benchmarks.

(c) Other criteria, as determined by the department, to
ensure grants are awarded to the most impactful applicants.

(4) If the amount allocated in subsection (1) is not
sufficient to fully fund all eligible tutoring partners that apply for funding,
the department must prioritize grant awards to districts with the lowest levels
of literacy proficiency, as determined by student scores on the Michigan
student test of educational progress (M-STEP).

(5) The department may approve applications from eligible
tutoring partners that offer innovative ways to reach students at a lower cost
by waiving elements of high-impact tutoring described in subsection (11). This
must include, but is not limited to, offering virtual programs. In such cases,
the eligible tutoring partner submitting the application must provide evidence
of program impact and implement an outcomes-based contract model.

(6) It is the intent of the legislature that the work
associated with the grant application, oversight, and administration of awards
under this section be performed primarily by the eligible tutoring partner and
not by districts that have agreed to receive high-impact tutoring.

(7) If a district or intermediate district agrees to receive
high-impact tutoring from an eligible tutoring partner, the district or
intermediate district must do all of the following:

(a) Work with the eligible tutoring partner to identify
students that would benefit from the program. The district or intermediate
district must communicate with parents or legal guardians of identified
students to describe the available program, outline possible student outcomes,
and encourage student participation.

(b) To the extent possible, integrate the high-impact
tutoring program with the district’s Michigan Integrated Continuous Improvement
Process (MICIP) plan.

(c) If the district or intermediate district is the fiscal
agent for the eligible tutoring partner, except as otherwise provided in this
subdivision, forward the amount awarded to the tutoring partner. The designated
fiscal agent may retain up to 0.5% of the funding awarded to the tutoring
partner for administrative purposes.

(8) All of the following apply to the funds allocated under
this section:

(a) The department shall make award determinations and
notifications by not later than January 15, 2027.

(b) The department shall make initial payments to identified
fiscal agents by no later than March 1, 2027. Identified fiscal agents shall
forward funding to eligible tutoring partners by not later than March 15, 2027.

(c) Eligible tutoring partners shall begin deploying services
in recipient districts and intermediate districts before the end of the
2026-2027 school year.

(9) From the allocation in subsection (1), there is allocated
$600,000.00 to the Clinton County Regional Educational Service Agency to work
with the Michigan Association of Intermediate School Administrators (MAISA), to
do all of the following:

(a) Provide a report on high-impact tutoring programs
implemented with the funding allocated under subsection (1).

(b) Develop and provide technical assistance to districts in
selecting high-impact tutoring strategies and integrating these strategies into
district Michigan Integrated Continuous Improvement Process (MICIP) plans.
Developing and providing technical assistance may include the design, review,
and integration of eligible tutoring programs within the MiStrategyBank.

(c) Collect, aggregate, and report data in collaboration with
the MAISA Michigan Collaborative Hub. An amount not to exceed $300,000.00 of
the funds allocated under this subsection may be used for this purpose.

(d) Provide an annual report of the impact of high-impact
tutoring programs to the office of the governor, the senate and house education
committees, the senate and house appropriations subcommittees on school aid,
and the state budget director.

(10) From the allocation in subsection (1), there is
allocated not more than $5,000,000.00 for a parent-driven tutoring pilot. All
of the following apply to the parent-driven tutoring pilot described in this
subsection:

(a) The department shall award grants to districts to
participate in a parent-driven tutoring pilot. The department shall do both of
the following when making award determinations under this subdivision:

(i) Prioritize applicants in an opportunity
index band, as determined under section 6(21), of 4 or higher.

(ii) Ensure recipients represent both urban
and rural districts and include all geographic regions of this state.

(b) A district that receives an award under this subsection
shall open an application process to parents and legal guardians of students.
The application must include the name of the chosen tutoring provider.
Districts shall prioritize applications from parents and legal guardians of
students that are economically disadvantaged and most academically at risk.

(c) Funds awarded through the application process described
in subdivision (b) may be used for tutoring services through an evidence-based
tutoring provider with whom the district is not currently partnered.

(d) A district receiving funds under this subsection shall
make payments directly to the tutoring provider chosen on the application by a
parent or legal guardian under subdivision (b).

(e) A district receiving funds under this section may retain
2.5% of funds for administration.

(f) A district shall provide a final report to the department
including how many students participated in tutoring by grade level, which
tutoring providers were used, and funds awarded by tutoring provider.

(11) As used in this
section:

(a)
“Eligible tutoring partner” means a tutoring provider, including, but not
limited to, a tutoring provider created by for-profit vendors, nonprofit
vendors, intermediate districts, districts, and the Michigan Schools for the
Deaf and Blind, that provides high-impact tutoring and meets at least 1 of the
following:

(i) Is included on the
ProvenTutoring list maintained by the Center for Research and Reform in
Education at Johns Hopkins University.

(ii) Has a Tutoring
Program Design Badge as awarded by the National Student Support Accelerator, a
program of the SCALE Initiative at Stanford University.

(iii) Is a vetted
high-impact tutoring program included in the MiStrategyBank. If necessary, the
Michigan Association of Intermediate School Administrators may convene a
committee to review tutoring programs for inclusion in the MiStrategyBank.

(b)
“High-impact tutoring” means, except as otherwise provided in this section,
in-person tutoring that meets all of the following:

(i) Occurs before,
during, or after the school day.

(ii) Is individualized,
with tutor ratios not higher than 1:4.

(iii) Provides
intensive support with a minimum of 2 sessions per week.

(iv) Uses a structured,
evidence-based curriculum designed for tutoring, with formative assessments to
track progress.

(v) Uses trained
tutors.

(vi) Includes ongoing
assessment and feedback.

Sec.
35q. (1) By not
later than March 1, 2027, the department, in collaboration with the department
of lifelong education, advancement, and potential, and the center, shall
publish to a publicly accessible location on its website and shall update
periodically thereafter, as new data becomes available, a literacy achievement
and opportunity transparency dashboard that includes at least the following:

(a) The percentage of children in this state with access to
free, full-day pre-K opportunities.

(b) The percentage of pre-K to grade 5 educators in this
state who are trained in the science of reading.

(c) The percentage of districts in this state using a
curriculum funded under section 35m.

(d) Literacy-related results, including multiyear trend data,
from the following state assessments:

(i) The grade 3 Michigan student test of
educational progress (M-STEP).

(ii) The grade 7 Michigan student test of
educational progress (M-STEP).

(iii) The SAT.

(iv) The National Assessment of Educational
Progress (NAEP).

(e) Additional metrics that help the public and policymakers
track statewide literacy progress.

(f) A summary of activities the state is taking to improve
literacy outcomes.

(2) The data published under subsection (1) must be
disaggregated by district and school demographics where possible.

Sec.
36. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $5,000,000.00 for the purposes
described in this section, including payments to improve educational outcomes
in mathematics.

(2) The department shall create the committee for mathematics
achievement, which must include representatives of higher education and
mathematics educators who have expertise in mathematics instruction and
research. The committee shall exist until at least September 2029. The
department shall appoint the members of the committee for mathematics
achievement. The department shall develop a process to identify and assemble
experts for the committee for mathematics achievement. The primary focus of the
committee for mathematics achievement is to recommend curricula and materials
with the goal of increasing student academic outcomes in the area of
mathematics. The committee for mathematics achievement is encouraged to
collaborate with entities with expertise on the subject of mathematics. The
department shall determine the size and benchmarks of the committee for
mathematics achievement. The committee for mathematics achievement shall do all
of the following:

(a) Critically evaluate K to 5 mathematics curricula and
materials. The committee for mathematics achievement shall evaluate with
research-based outcomes, using the committee for mathematics achievement’s expertise in the field
of mathematics. The committee for mathematics achievement shall assign grade
tiers to a curriculum based on the curriculum’s likelihood of increasing
student mathematics outcomes. Priority must be given to curricula that already
have a demonstrated history of increasing student outcomes. The committee for
mathematics achievement may perform an evaluation under this subdivision based
on submissions from a vendor, but must independently verify the validity of
information provided by the vendor. The committee for mathematics achievement
is also strongly encouraged to evaluate available materials not submitted to
the department by a vendor.

(b) Create, maintain, and annually post on a publicly
available website a rankings list of all K to 5 mathematics curricula the
committee for mathematics achievement has evaluated. This includes items from
each part of the rankings list, items evaluated in the 2026-2027 school year,
and any subsequent items evaluated going forward. The committee for mathematics
achievement shall denote on the list whether major changes have been made to a
mathematics curriculum on the list since the mathematics curriculum was
evaluated by the committee for mathematics achievement and if the mathematics
curriculum has not been evaluated since the last ranking.

(c) The committee for mathematics achievement must select not
more than 5 mathematics curricula to recommend for purchase by districts.

(3) An individual on the committee for mathematics
achievement shall recuse themselves from evaluating mathematics curricula or
other items that the individual has helped create, that the individual would
benefit from financially, or for which the individual has any other conflict of
interest.

(4) From the funds allocated in subsection (1), and subject
to subsection (6), the department shall make payments to districts and
intermediate districts in an amount determined by the department. The
department shall not make payments under this subsection until the committee
for mathematics achievement has critically evaluated as many mathematics
curricula and other items from subsection (2) as possible. Payments under this
subsection may be used only to purchase 1 of the 5 mathematics curricula described
in subsection (2)(c). If funding remains after all payments have been made to
districts and intermediate districts, the department may open a second round of
applications. The department shall award funding under this subsection as a
formula grant in an amount equal to the amount necessary for the district or
intermediate district to implement the chosen mathematics curriculum or other
item until funding is depleted. The department may place a cap on the total
award per district or intermediate district.

(5) From the funds allocated in subsection (1), the
department may pay an annual stipend of up to $8,000.00 for each member of the
committee for mathematics achievement who is employed by or at a public
institution of higher education, a district, or an intermediate district. A
stipend paid under this subsection must be commensurate with the committee
member’s contribution to the committee for mathematics achievement. Funding
must be paid to the public institution of higher education, the district, or
the intermediate district where the committee member is employed, and the
public institution of higher education, the district, or the intermediate
district must then use funding received to award the stipend directly to the
individual committee member. A committee member who is not employed by or at a
public institution of higher education, a district, or an intermediate district
is not eligible to receive a stipend under this subsection.

(6) To be eligible for funding under subsection (4), a
district or intermediate district must apply in a form and manner determined by
the department. As a condition of receiving the funding, the district or
intermediate district must agree to provide to the department information twice
per year, on or before May 1 and October 1, on the mathematics curriculum used
for the previous and current school years, and the mathematics curriculum and
other items to be used for the next school year. The mathematics curricula used
by districts and intermediate districts described in this subsection must be
added to the annual rankings required under subsection (2).

(7) Except as otherwise provided in this section and
notwithstanding section 17b, the department shall make payments under this
section on a schedule determined by the department.

(8) Funds allocated under subsection (1) for 2026-2027 are a
work project appropriation, and any unexpended funds for 2026-2027 are carried
forward into 2027-2028. The purpose of the work project is to improve
mathematics instructional practices. The estimated completion date of the work
project is September 30, 2029.

Sec.
36a. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $5,000,000.00 for the purposes
described in this section, including payments to improve educational outcomes
in STEM.

(2) The department shall create the committee for STEM
achievement, which must include representatives of higher education and STEM
educators who have expertise in STEM instruction and research. The committee
for STEM achievement shall exist until at least September 2029. The department
shall appoint the members of the committee for STEM achievement. The department
shall develop a process to identify and assemble experts for the committee for STEM achievement. The
primary focus of the committee for STEM achievement is to recommend tools and
strategies with the goal of increasing student academic outcomes in the areas
of STEM. The committee for STEM achievement is encouraged to collaborate with
entities with expertise on the subject of STEM. The department shall determine
the size and benchmarks of the committee for
STEM achievement. The committee for STEM achievement shall do both of the
following:

(a) Critically evaluate applicable STEM tools or services for
classroom instruction for pupils in grades 3 to 8 that the committee for STEM
achievement determines to have a high likelihood or demonstrated history of
increasing student STEM outcomes. The committee for STEM achievement may
perform an evaluation under this subdivision based on submissions from a
vendor, but must independently verify the validity of information provided by
the vendor. The committee for STEM achievement is also strongly encouraged to
evaluate available materials not submitted to the department by a vendor.

(b) Create, maintain, and post annually on a publicly
available website a rankings list of all STEM items that the committee for STEM
achievement has evaluated. This includes items from each part of the rankings
list, items evaluated in the 2026-2027 school year, and any subsequent items
evaluated going forward. The committee for STEM achievement shall denote on the
list whether major changes have been made to a STEM item on the list since the
STEM item was evaluated by the committee for STEM achievement and if the STEM
item has not been evaluated since the last ranking.

(3) An individual on the committee for STEM achievement shall
recuse themselves from evaluating STEM items that the individual has helped
create, that the individual would benefit from financially, or for which the
individual has any other conflict of interest.

(4) From the funds allocated in subsection (1), the
department shall make payments to districts and intermediate districts in an
amount determined by the department. The department shall not make payments
under this subsection until the committee for STEM achievement has critically
evaluated as many STEM items from subsection (2) as possible. If funding
remains after all payments have been made to districts and intermediate
districts, the department may open a second round of applications. The
department shall award funding under this subsection as a formula grant in an
amount equal to the amount necessary for the district or intermediate district
to implement the chosen STEM item until funding is depleted. The department may
place a cap on the total award per district or intermediate district. Funds
under this subsection may not be used to purchase curricula that may be
purchased using funds under section 36.

(5) From the funding allocated in subsection (1), the
department may pay an annual stipend of up to $8,000.00 for each member of the
committee for STEM achievement who is employed by or at a public institution of
higher education, a district, or an intermediate district. A stipend paid under
this subsection must be commensurate with the committee member’s contribution
to the committee for
STEM achievement. Funding must be paid to the public institution of higher
education, the district, or the intermediate district where the committee
member is employed, and the public institution of higher education, the
district, or the intermediate district must then use funding received to award
the stipend directly to the individual committee member. A committee member who
is not employed by or at a public institution of higher education, a district,
or an intermediate district is not eligible to receive a stipend under this
subsection.

(6) To be eligible for funding under this section, a district
or intermediate district must apply in a form and manner determined by the
department. As a condition of receiving the funding, the district or
intermediate district must agree to provide to the department information twice
per year, on or before May 1 and October 1, on the STEM items used for the
previous and current school years, and the STEM items to be used for the next
school year. The STEM items used by districts and intermediate districts must
be added to the annual rankings required under subsection (2).

(7) Except as otherwise provided in this section and
notwithstanding section 17b, the department shall make payments under this
section on a schedule determined by the department.

(8) Funds allocated under subsection (1) for 2026-2027 are a
work project appropriation, and any unexpended funds for 2026-2027 are carried
forward into 2027-2028. The purpose of the work project is to improve STEM
instructional practices. The estimated completion date of the work project is
September 30, 2029.

(9) As used in this section, “STEM” means science,
technology, engineering, and mathematics.

Sec.
39. (1) An eligible applicant receiving funds under section 32d shall submit an
application, in a form and manner prescribed by the department of lifelong
education, advancement, and potential, by a date specified by the department of
lifelong education, advancement, and potential in the immediately preceding
fiscal year. An eligible applicant is not required to amend the applicant’s
current accounting cycle or adopt this state’s fiscal year accounting cycle in
accounting for financial transactions under this section. The application must
include all of the following:

(a) The estimated total number of age-eligible children in
the community, as provided to the applicant by the department of lifelong
education, advancement, and potential utilizing the most recent population data
available from the American Community Survey conducted by the United States
Census Bureau. The department of lifelong education, advancement, and potential
shall ensure that it provides updated American Community Survey population data
at least once every 3 years.

(b) The estimated number of age-eligible children in the
community who are being served exclusively by Head Start programs operating in
the community.

(c) The number of children whom the applicant will have the
capacity to serve in each eligible great start readiness program option who
meet the age-eligible criteria of section 32d.

(2) The great start readiness target foundation amount for
2026-2027 is $11,736.00.

(3) After notification of funding allocations, an applicant
receiving funds under section 32d shall also submit an implementation plan for
approval, in a form and manner prescribed by the department of lifelong
education, advancement, and potential, by a date specified by the department of
lifelong education, advancement, and potential, that details how the applicant
complies with the program components established by the department of lifelong
education, advancement, and potential under section 32d.

(4) Subject to subsection (5), the initial allocation to each
eligible applicant under section 32d is equal to the sum of the following:

(a) The number of children in the current school year served
in a program determined by the department of lifelong education, advancement,
and potential to be a school-day program multiplied by the great start
readiness target foundation.

(b) The number of children in the current school year served
in a program determined by the department of lifelong education, advancement,
and potential to be a part-day program or a school-day blended with Head Start
multiplied by the great start readiness target foundation divided by 2.

(c) The total number of children in the current school year
served in a program determined by the department of lifelong education,
advancement, and potential to be an extended program multiplied by the great
start readiness target foundation multiplied by 1.2.

(d) The number of children in the current school year served
in a program determined by the department of lifelong education, advancement,
and potential to be an extended program blended with Head Start or a part-day
extended program multiplied by the great start readiness target foundation
multiplied by 0.6.

(5) Subject to subsection (6), if the calculations under
subsection (4) result in a total allocation exceeding the amount available as
allocated or appropriated under section 32d(2), initial allocations to each
eligible applicant under section 32d are calculated as the sum of the
following:

(a) An amount equal to the calculations described in
subsection (4) but using for those calculations the lesser of the number of
children served in the immediately preceding fiscal year or the number of
children the applicant has the capacity to serve in the current fiscal year
instead of the number of children served in the current fiscal year.

(b) An amount equal to the remaining available dollars after
calculations in subdivision (a) distributed proportionately to eligible
applicants where calculations under subdivision (a) are less than the amount
originally calculated under subsection (4).

(6) If the calculations under subsection (5) result in a
total allocation exceeding the amount available as allocated or appropriated
under section 32d(2), the initial allocation to each eligible applicant is the
amount calculated under subsection (4) prorated on an equal percentage basis.

(7) If, taking into account the total amount to be allocated
to the applicant as calculated under this section, an applicant determines that
it is able to include additional eligible children in the great start readiness
program without additional funds under section 32d, the applicant may include
additional eligible children but does not receive additional funding under
section 32d for those children.

(8) The department of lifelong education, advancement, and
potential shall review the program components under section 32d and under this
section at least biennially. The department of lifelong education, advancement,
and potential also shall convene a committee of internal and external
stakeholders at least once every 5 years to ensure that the funding structure
under this section reflects current system needs under section 32d.

(9) Each intermediate district or consortium of intermediate
districts that receives funds under section 32d shall report all of the
following to the department of lifelong education, advancement, and potential
by not later than September 15 of the immediately preceding fiscal year,
December 15, and March 15:

(a) The total number of children enrolled in all great start
readiness programs administered by the intermediate district or consortium of
intermediate districts, disaggregated by program type and by provider type.

(b) The total number of children on a waitlist for all great
start readiness programs administered by the intermediate district or
consortium of intermediate districts.

(c) The estimated total capacity of all great start readiness
programs administered by the intermediate district or consortium of
intermediate districts.

(10) By not later than October 1, January 1, and April 1 of
each fiscal year, the department of lifelong education, advancement, and
potential shall report to the house and senate fiscal agencies and the state
budget office on the data collected under subsection (9), disaggregated by
intermediate district or consortium of intermediate districts. The report must
include grant application information included under subsection (1) for each
intermediate district or consortium of intermediate districts. The department
of lifelong education, advancement, and potential shall submit the report
described in this subsection in a spreadsheet-compatible format.

(11) To assist the legislature in determining necessary
funding levels to support payments for the great start readiness program as
calculated under this section, each revenue estimating conference conducted
under section 367b of the management and budget act, 1984 PA 431, MCL
18.1367b, must include an estimated enrollment in great start readiness
programs for the current and two subsequent fiscal years.

Sec.
39a. (1) From the federal funds appropriated in section 11, there is allocated
for 2026-2027 to districts, intermediate districts, and other eligible entities
all available federal funding, estimated at $1,100.00 for the federal programs
under the no child left behind act of 2001, Public Law 107-110, or the every
student succeeds act, Public Law 114-95. These funds are allocated as follows:

(a) An amount estimated at $100.00 for 2026-2027 to provide
students with drug- and violence-prevention programs and to implement
strategies to improve school safety, funded from DED-OESE, drug-free schools
and communities funds.

(b) An amount estimated at $100.00 for 2026-2027 for the
purpose of preparing, training, and recruiting high-quality teachers and class
size reduction, funded from DED-OESE, improving teacher quality funds.

(c) An amount estimated at $100.00 for 2026-2027 for programs
to teach English to limited English proficient (LEP) children, funded from
DED-OESE, language acquisition state grant funds.

(d) An amount estimated at $100.00 for 2026-2027 for rural
and low-income schools, funded from DED-OESE, rural and low-income school
funds.

(e) An amount estimated at $100.00 for 2026-2027 to provide
supplemental programs to enable educationally disadvantaged children to meet
challenging academic standards, funded from DED-OESE, title I, disadvantaged
children funds.

(f) An amount estimated at $100.00 for 2026-2027 for the
purpose of identifying and serving migrant children, funded from DED-OESE,
title I, migrant education funds.

(g) An amount estimated at $100.00 for 2026-2027 for the
purpose of providing high-quality extended learning opportunities, after school
and during the summer, for children in low-performing schools, funded from
DED-OESE, twenty-first century community learning center funds.

(h) An amount estimated at $100.00 for 2026-2027 to help
support local school improvement efforts, funded from DED-OESE, title I, local
school improvement grants.

(i) An amount estimated at $100.00 for 2026-2027 to improve
the academic achievement of students, funded from DED-OESE, title IV, student
support and academic enrichment grants.

(j) An amount estimated at $100.00 for 2026-2027 for literacy
programs that advance literacy skills for students from birth through grade 12,
including, but not limited to, English-proficient students and students with
disabilities, funded from DED-OESE, striving readers comprehensive literacy
program.

(k) An amount estimated at $100.00 for 2026-2027 for grants
to support and demonstrate innovative partnerships to train school-based mental
health service providers, funded from DED-OESE, mental health service
professional demonstration grant program.

(2) From the federal funds appropriated in section 11, there
is allocated to districts, intermediate districts, and other eligible entities
all available federal funding, estimated at $500.00 for 2026-2027 for the
following programs that are funded by federal grants:

(a) An amount estimated at $100.00 for 2026-2027 to provide
services to homeless children and youth, funded from DED-OVAE, homeless
children and youth funds.

(b) An amount estimated at $100.00 for 2026-2027 for
providing career and technical education services to pupils, funded from
DED-OVAE, basic grants to states.

(c) An amount estimated at $100.00 for 2026-2027 for the
Michigan charter school subgrant program, funded from DED–OII, public charter
schools program funds.

(d) An amount estimated at $100.00 for 2026-2027 for the
purpose of promoting and expanding high-quality preschool services, funded from
HHS-OECD preschool development funds.

(e) An amount estimated at $100.00 for 2026-2027 for the
purpose of addressing priority substance abuse treatment, prevention, and
mental health needs, funded from HHS-SAMHSA.

(3) The department, or, for subsections (1)(g) and (2)(d),
the department of lifelong education, advancement, and potential, shall
distribute all federal funds allocated under this section in accordance with
federal law and with flexibility provisions outlined in Public Law 107-116, and
in the education flexibility partnership act of 1999, Public Law 106-25.
Notwithstanding section 17b, the department or the department of lifelong
education, advancement, and potential, as applicable, shall make payments of federal
funds to districts, intermediate districts, and other eligible entities under
this section on a schedule determined by the department.

(4) For the purposes of applying for federal grants
appropriated under this article, the department, or, for subsections (1)(g) and
(2)(d), the department of lifelong education, advancement, and potential, shall
allow an intermediate district to submit a consortium application on behalf of
2 or more districts with the agreement of those districts as appropriate
according to federal rules and guidelines.

(5) For the purposes of funding federal title I grants under
this article, in addition to any other federal grants for which the strict
discipline academy is eligible, the department, or, for subsections (1)(g) and
(2)(d), the department of lifelong education, advancement, and potential, shall
allocate to a strict discipline academy out of title I, part A an amount equal
to what the strict discipline academy would have received if included and
calculated under title I, part D, or what it would receive under the formula
allocation under title I, part A, whichever is greater.

(6) As used in this section:

(a) “DED” means the United States Department of Education.

(b) “DED-OESE” means the DED Office of Elementary and
Secondary Education.

(c) “DED-OII” means the DED Office of Innovation and
Improvement.

(d) “DED-OVAE” means the DED Office of Vocational and Adult
Education.

(e) “HHS” means the United States Department of Health and
Human Services.

(f)  “HHS-OECD” means the HHS Office of Early Childhood
Development.

(g) “HHS-SAMHSA” means the HHS Substance Abuse and Mental
Health Services Project.

Sec.
51a. (1) From the state school aid fund money in section 11, there is allocated
an amount not to exceed $2,125,396,100.00 for 2025-2026 and there is allocated
an amount not to exceed $2,264,337,500.00 for 2026-2027. 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, there is
allocated an amount estimated at $500,000,000.00 for 2025-2026 and $100.00 for
2026-2027, 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 $457,800,000.00 for 2025-2026 and
$495,200,000.00 for 2026-2027, 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 2025-2026 and 2026-2027 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 $1,800,000.00 for 2025-2026 and
estimated at $1,800,000.00 for 2026-2027, 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.

Sec.
51c. As required by the court in the consolidated cases known as Durant v State of Michigan, 456 Mich 175 (1997), from the allocation
under section 51a(1), there is allocated for 2025-2026 and for 2026-2027 the
amount necessary, estimated at $1,056,400,000.00 for 2025-2026 and
$1,141,700,000.00 for 2026-2027, for payments to reimburse 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. Funds allocated under this section that are not
expended in the fiscal year for which they were allocated, as determined by the
department, may be used to supplement the allocations under sections 22a and
22b to fully fund those allocations for the same fiscal year.

Sec.
51d. (1) From the federal funds appropriated in section 11, there is allocated
for 2026-2027 all available federal funding, estimated at $300.00, for special
education programs and services that are funded by federal grants. The
department shall distribute all federal funds allocated under this section in
accordance with federal law. 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 federal funds allocated under subsection (1),
the following amounts are allocated:

(a) For 2026-2027, an amount estimated at $100.00 for
handicapped infants and toddlers, funded from DED-OSERS, handicapped infants
and toddlers funds.

(b) For 2026-2027, an amount estimated at $100.00 for
preschool grants under Public Law 94-142, funded from DED-OSERS, handicapped
preschool incentive funds.

(c) For 2026-2027, an amount estimated at $100.00 for special
education programs funded by DED-OSERS, handicapped program, individuals with
disabilities act funds.

(3) As used in this section, “DED-OSERS” means the United
States Department of Education Office of Special Education and Rehabilitative
Services.

Sec.
51e. (1) From the allocation under section 51a(1), there is allocated for the
amount necessary, estimated at $519,800,000.00 for 2025-2026 and
$533,200,000.00 for 2026-2027, for payments to districts and intermediate
districts for 100% of foundation allowance costs associated with special
education pupils.

(2) The department shall calculate the amount allocated to a
district under this section by multiplying the district’s special education
pupil membership, excluding pupils described in section 51a(11), times 100% of
the foundation allowance under section 20 of the pupil’s district of residence,
plus 100% of the amount of the district’s per-pupil allocation under section
20m, not to exceed 100% of 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 100% of the amount per
membership pupil calculated under section 20(6). For an intermediate district,
the amount allocated under this subsection is an amount per special education
membership pupil, excluding pupils described in section 51a(11), and is
calculated in the same manner as for a district, using 100% of the foundation
allowance under section 20 of the pupil’s district of residence, not to exceed
100% of the target foundation allowance for the current fiscal year, and 100%
of that district’s per-pupil allocation under section 20m.

Sec.
51g. From the general fund money appropriated in section 11, $3,000,000.00 is
allocated for 2026-2027 to an association for administrators of special
education services to develop content for use by special education students,
teachers, and others. Any content that is developed as described in this
section must be accessible throughout this state. Funds received by an
association under this section may be used to support the development of
assessment tools to measure the needs of students with special education needs
in remote learning environments and the effectiveness of various educational
methods and tools, in collaboration with the department. Funds under this
section may also be utilized to identify any available federal funds for
research related to special education in remote learning.

Sec.
51i. (1) It is
the intent of the legislature that, beginning in the fiscal year ending
September 30, 2028, a weighted special education funding formula begins to be
implemented to recognize the higher costs associated with certain student
needs.

(2) It is the intent of the legislature that a weighted
special education funding formula described in subsection (1) be
implemented in a way to work toward the following target weights for payments
to districts and intermediate districts for identified special education
students:

(a) Speech and language impairment, 1.1.

(b) Specific learning disability, 1.1.

(c) Other health impairment multiplied, 1.8.

(d) Physical impairment multiplied, 3.1.

(e) Severe multiple impairments, 3.1.

(f) Cognitive impairment, 3.1.

(g) Deaf or hard of hearing multiplied, 3.1.

(h) Deaf-blindness, 3.1.

(i) Emotional impairment multiplied, 3.8.

(j) Visual impairment, 3.8.

(k) Early childhood developmental delays, 3.8.

(l) Autism spectrum disorder, 3.8.

(m) Traumatic brain injury, 3.8.

(3) It is the intent of the legislature that payments to
districts and intermediate districts under the formula described in this
section be adjusted to take into account available federal revenue and local
revenue generating capacity of recipient districts and intermediate districts.

Sec.
53a. (1) For districts, reimbursement for pupils described in subsection (2) is
100% of the total approved costs of operating special education programs and
services approved by the department and included in the intermediate district
plan adopted under article 3 of the revised school code, MCL 380.1701 to
380.1761, minus the district’s foundation allowance calculated under section 20
and minus the district’s per-pupil allocation under section 20m. For
intermediate districts, the department shall calculate reimbursement for pupils
described in subsection (2) 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 under section 20 for the current
fiscal year plus the amount of the district’s per-pupil allocation under
section 20m.

(2) Reimbursement under subsection (1) is for the following
special education pupils:

(a) Pupils assigned to a district or intermediate district
through the community placement program of the courts or a state agency, if the
pupil was a resident of another intermediate district at the time the pupil
came under the jurisdiction of the court or a state agency.

(b) Pupils who are residents of institutions operated by the
department of health and human services.

(c) Pupils who are former residents of department of
community health institutions for the developmentally disabled who are placed
in community settings other than the pupil’s home.

(d) Pupils enrolled in a department-approved on-grounds
educational program longer than 180 days, but not longer than 233 days, at a
residential child care institution, if the child care institution offered in
1991-92 an on-grounds educational program longer than 180 days but not longer
than 233 days.

(e) Pupils placed in a district by a parent for the purpose
of seeking a suitable home, if the parent does not reside in the same
intermediate district as the district in which the pupil is placed.

(3) Only those costs that are clearly and directly
attributable to educational programs for pupils described in subsection (2),
and that would not have been incurred if the pupils were not being educated in
a district or intermediate district, are reimbursable under this section.

(4) The costs of transportation are funded under this section
and are not reimbursed under section 58.

(5) The department shall not allocate more than
$10,500,000.00 of the allocation for 2026-2027 in section 51a(1) under
this section.

Sec.
54. (1) Each intermediate district receives an amount per pupil for each pupil
in attendance at the Michigan Schools for the Deaf and Blind. The amount is
proportionate to the total instructional cost at each school. The department
shall not allocate more than $1,688,000.00 of the allocation for 2026-2027 in
section 51a(1) under this subsection.

(2) From the state school aid fund money allocated in section
51a(1), there is allocated an amount not to exceed $2,841,400.00 for 2026-2027
for the Michigan Schools for the Deaf and Blind. Notwithstanding section 17b,
the department shall make payments under this subsection on a schedule
determined by the department.

Sec.
54b. From the
state school aid fund money appropriated in section 11, there is allocated an
amount not to exceed $1,600,000.00 for 2026-2027 to expand the implementation
of the literacy and social, emotional, and behavioral components of a
multi-tiered system of supports, including positive behavioral interventions
and supports, using the Michigan Multi-Tiered System of Supports Technical
Assistance Center. All of the following apply to funds allocated under this
section:

(a) The department shall use funds allocated under this
section, through an intermediate district, for the purpose of expanding the
statewide expertise, technical assistance, and implementation of the
multi-tiered system of supports, dyslexia expertise, and evidence-based
instructional practices grounded in the science of reading using the Michigan
Multi-Tiered System of Supports Technical Assistance Center. The department
shall identify an intermediate district to act as a fiscal agent for funds
allocated under this section.

(b) The department shall provide a report each year to the
state budget director, the house and senate appropriations subcommittees on
school aid, and the house and senate fiscal agencies that details the
following:

(i) The progress being made by districts in
implementing multi-tiered systems of supports.

(ii) The progress being made by districts in
providing reading intervention services described in section 1280f of the
revised school code, MCL 380.1280f, for pupils in grades K to 12.

(iii) Other information the department
determines would be useful to understand the status of districts’
implementation of effective multi-tiered systems of supports and reading
intervention programs.

(c) Up to 2% of funds allocated under this section may be
used by the intermediate district serving as the fiscal agent for these funds
to administer this section.

Sec.
54d. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $26,081,900.00 for 2026-2027 to
intermediate districts for the purpose of providing state early on services
programs for children from birth to 3 years of age with a developmental delay
or a disability, or both, and their families, as described in the early on
Michigan state plan, as approved by the department of lifelong education,
advancement, and potential.

(2) To be eligible to receive grant funding under this
section, each intermediate district must apply in a form and manner determined
by the department of lifelong education, advancement, and potential.

(3) The grant funding allocated under this section must be
used to increase early on services and resources available to children that
demonstrate developmental delays to help prepare them for success as they enter
school. State early on services include evaluating and providing early
intervention services for eligible infants and toddlers and their families to
address developmental delays, including those affecting physical, cognitive,
communication, adaptive, social, or emotional development. Grant funds must not
be used to supplant existing services that are currently being provided.

(4) The department of lifelong education, advancement, and
potential shall distribute the funds allocated under subsection (1) to
intermediate districts according to the department of lifelong education,
advancement, and potential’s early on funding formula utilized to distribute
the federal award to Michigan under part C of the individuals with disabilities
education act, Public Law 108-446. Funds received under this section must not
supplant existing funds or resources allocated for early on early intervention
services. An intermediate district receiving funds under this section shall
maximize the capture of Medicaid funds to support early on early intervention
services to the extent possible.

(5) Each intermediate district that receives funds under this
section shall report data and other information to the department of lifelong
education, advancement, and potential in a form, manner, and frequency
prescribed by the department of lifelong education, advancement, and potential
to allow for monitoring and evaluation of the program and to ensure that the
children described in subsection (1) received appropriate levels and types of
services delivered by qualified personnel, based on the individual needs of the
children and their families.

(6) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section on
a schedule determined by the department of lifelong education, advancement, and
potential.

(7) Grant funds awarded and allocated to an intermediate
district under this section must be expended by the grant recipient before June
30 of the fiscal year immediately following the fiscal year in which the funds
were received.

Sec.
56. (1) For the purposes of this section:

(a) “Membership” means for a particular fiscal year the total
membership of the intermediate district and the districts constituent to the
intermediate district, except that if a district has elected not to come under
part 30 of the revised school code, MCL 380.1711 to 380.1741, membership of the
district is not included in the membership of the intermediate district.

(b) “Millage levied” means the millage levied for special
education under part 30 of the revised school code, MCL 380.1711 to 380.1741,
including a levy for debt service obligations.

(c) “Taxable value” means the total taxable value of the
districts constituent to an intermediate district, except that if a district
has elected not to come under part 30 of the revised school code, MCL 380.1711
to 380.1741, taxable value of the district is not included in the taxable value
of the intermediate district.

(2) From the allocation under section 51a(1), there is
allocated an amount not to exceed $40,008,100.00 for 2025-2026 and
$40,008,100.00 for 2026-2027 to reimburse intermediate districts levying
millages for special education under part 30 of the revised school code, MCL
380.1711 to 380.1741. The purpose, use, and expenditure of the reimbursement
are limited as if the funds were generated by these millages and governed by
the intermediate district plan adopted under article 3 of the revised school
code, MCL 380.1701 to 380.1761. As a condition of receiving funds under this
section, an intermediate district distributing any portion of special education
millage funds to its constituent districts must submit for departmental
approval and implement a distribution plan.

(3) Except as otherwise provided in this subsection,
reimbursement for those millages levied in 2024-2025 is made in 2025-2026 at an
amount per 2024-2025 membership pupil computed by subtracting from $278,700.00
the 2024-2025 taxable value behind each membership pupil and multiplying the
resulting difference by the 2024-2025 millage levied, and then subtracting from
that amount the 2024-2025 local community stabilization share revenue for
special education purposes and 2024-2025 tax increment revenues captured by a
brownfield redevelopment authority created under the brownfield redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2670, behind each membership
pupil for reimbursement of personal property exemption loss under the local
community stabilization authority act, 2014 PA 86, MCL 123.1341 to 123.1362,
and reimbursements paid under section 26d for tax increment revenues captured
by a brownfield redevelopment authority under the brownfield redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2670. For the purposes of the
calculation described in the previous sentence only, for an intermediate
district receiving funds under this section and section 62, reimbursements paid
under section 26d must be multiplied by the ratio of special education millage
levied, as defined in this section, and the sum of special education millage
levied and vocational-technical education millage levied, as defined in section
62. Reimbursement in 2025-2026 for an intermediate district whose 2017-2018
allocation was affected by the operation of subsection (5) is an amount equal
to 102.5% of the 2017-2018 allocation to that intermediate district.

(4) Except as otherwise provided in this subsection,
reimbursement for those millages levied in 2025-2026 is made in 2026-2027 at an
amount per 2025-2026 membership pupil computed by subtracting from $294,000.00
the 2025-2026 taxable value behind each membership pupil and multiplying the
resulting difference by the 2025-2026 millage levied, and then subtracting from
that amount the 2025-2026 local community stabilization share revenue for
special education purposes and 2025-2026 tax increment revenues captured by a
brownfield redevelopment authority created under the brownfield redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2670, behind each membership
pupil for reimbursement of personal property exemption loss under the local
community stabilization authority act, 2014 PA 86, MCL 123.1341 to 123.1362,
and reimbursements paid under section 26d for tax increment revenues captured
by a brownfield redevelopment authority under the brownfield redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2670. For the purposes of the
calculation described in the previous sentence only, for an intermediate
district receiving funds under this section and section 62, reimbursements paid
under section 26d must be multiplied by the ratio of special education millage
levied, as defined in this section, and the sum of special education millage
levied and vocational-technical education millage levied, as defined in section
62. Reimbursement in 2026-2027 for an intermediate district whose 2017-2018
allocation was affected by the operation of subsection (5) is an amount equal
to 102.5% of the 2017-2018 allocation to that intermediate district.

(5) The department shall ensure that the amount paid to a
single intermediate district under subsection (2) does not exceed 62.9% of the
total amount allocated under subsection (2).

(6) The department shall ensure that the amount paid to a
single intermediate district under subsection (2) is not less than 75% of the
amount allocated to the intermediate district under subsection (2) for the
immediately preceding fiscal year.

(7) From the allocation under section 51a(1), there is
allocated an amount not to exceed $34,200,000.00 for 2025-2026 and 2026-2027 to
provide payments to intermediate districts levying millages for special
education under part 30 of the revised school code, MCL 380.1711 to 380.1741.
The purpose, use, and expenditure of the payments under this subsection are
limited as if the funds were generated by these millages and governed by the
intermediate district plan adopted under article 3 of the revised school code,
MCL 380.1701 to 380.1761. The department shall provide a payment under this
subsection to each intermediate district described in this subsection as
follows:

(a) For 2025-2026 and 2026-2027, except as otherwise provided
in this subsection, for an intermediate district with a 3-year average special
education millage revenue per pupil in the immediately preceding fiscal year
that is less than $251.00 and that is levying at least 46.2% but less than
60.0% of its maximum millage rate allowed under section 1724a of the revised
school code, MCL 380.1724a, an amount computed by subtracting from $251.00 the
3-year average special education millage revenue per pupil in the immediately
preceding fiscal year and, only if the millage levied by the intermediate
district is less than 1, multiplying that amount by the number of mills levied
divided by 1, and then multiplying that amount by the 3-year average membership
in the immediately preceding fiscal year, and then subtracting from that amount
the amount allocated under subsection (2) for the current fiscal year. If the
calculation under this subdivision results in an amount below zero, there is no
payment under this subdivision.

(b) For 2025-2026 and 2026-2027, except as otherwise provided
in this subsection, for an intermediate district with a 3-year average special
education millage revenue per pupil in the immediately preceding fiscal year
that is less than $296.00 and that is levying at least 60.0% of its maximum
millage rate allowed under section 1724a of the revised school code, MCL
380.1724a, an amount computed by subtracting from $296.00 the 3-year average
special education millage revenue per pupil in the immediately preceding fiscal
year, and, only if the millage levied by the intermediate district is less than
1, multiplying that amount by the number of mills levied divided by 1, and then
multiplying that amount by the 3-year average membership in the immediately
preceding fiscal year, and then subtracting from that amount the amount
allocated under subsection (2) for the current fiscal year. If the calculation
under this subdivision results in an amount below zero, there is no payment
under this subdivision.

(8) After making allocations to eligible intermediate
districts under subsections (3), (4), and (7), if funds remain unallocated from
the allocations under subsections (2) and (7), the department must allocate
remaining funds to intermediate districts proportional to the amounts allocated
to intermediate districts under subsections (3) and (4).

(9) As used in subsection (7):

(a) “3-year average membership” means the 3-year average
pupil membership for each of the 3 most recent fiscal years.

(b) “3-year average special education millage revenue per
pupil” means the 3-year average taxable value per mill levied behind each
membership pupil for each of the 3 most recent fiscal years multiplied by the
millage levied in the most recent fiscal year.

Sec.
61a. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $45,985,000.00 for 2026-2027 to reimburse
on an added cost basis districts, except for a district that served as the
fiscal agent for a vocational education consortium in the 1993-94 school year
and that has a foundation allowance as calculated under section 20 greater than
the target foundation allowance under that section, and secondary area
vocational-technical education centers for secondary-level career and technical
education programs according to rules approved by the superintendent.
Applications for participation in the programs must be submitted in the form
prescribed by the department. The department shall determine the added cost for
each career and technical education program area. The department shall
prioritize the allocation of added cost funds based on the capital and program
expenditures needed to operate the career and technical education programs
provided; the number of pupils enrolled; the advancement of pupils through the
instructional program; the existence of an articulation agreement with at least
1 postsecondary institution that provides pupils with opportunities to earn
postsecondary credit during the pupil’s participation in the career and
technical education program and transfers those credits to the postsecondary
institution upon completion of the career and technical education program; and
the program rank in student placement, job openings, and wages, and shall
ensure that the allocation does not exceed 75% of the added cost of any
program. Notwithstanding any rule or department determination to the contrary,
when determining a district’s allocation or the formula for making allocations
under this section, the department shall include the participation of pupils in
grade 9 in all of those determinations and in all portions of the formula. With
the approval of the department, the board of a district maintaining a secondary
career and technical education program may offer the program for the period
from the close of the school year until September 1. The program shall use
existing facilities and must be operated as prescribed by rules promulgated by
the superintendent.

(2) Except for a district that served as the fiscal agent for
a vocational education consortium in the 1993-94 school year, the department
shall reimburse districts and intermediate districts for local career and
technical education administration, shared time career and technical education
administration, and career education planning district career and technical
education administration. The superintendent shall adopt guidelines for the
definition of what constitutes administration and shall make reimbursement
pursuant to those guidelines. The department shall not distribute more than
$800,000.00 of the allocation in subsection (1) under this subsection.

(3) A career and technical education program funded under
this section may provide an opportunity for participants who are eligible to be
funded under section 107 to enroll in the career and technical education
program funded under this section if the participation does not occur during
regular school hours.

Sec.
61b. (1) From the state school aid fund money appropriated under section 11,
there is allocated for 2026-2027 an amount not to exceed $9,220,400.00 for CTE
early middle college and CTE dual enrollment programs authorized under this
section and for planning grants for the development or expansion of CTE early
middle college programs. The purpose of these programs is to increase the
number of Michigan residents with high-quality degrees or credentials, and to
increase the number of students who are college and career ready upon high
school graduation.

(2) From the funds allocated under subsection (1), the
department shall allocate an amount as determined under this subsection to each
intermediate district serving as a fiscal agent for state-approved CTE early
middle college and CTE dual enrollment programs in each of the career education
planning districts identified by the department. An intermediate district shall
not use more than 5% of the funds allocated under this subsection for
administrative costs for serving as the fiscal agent.

(3) To be an eligible fiscal agent, an intermediate district
must agree to do all of the following in a form and manner determined by the
department:

(a) Distribute funds to eligible CTE early middle college and
CTE dual enrollment programs in a career education planning district as
described in this section.

(b) Collaborate with the career and educational advisory
council in the workforce development board service delivery area to develop 1
regional strategic plan under subsection (4) that aligns CTE programs and
services into an efficient and effective delivery system for high school
students. The department will align career education planning districts,
workforce development board service delivery areas, and intermediate districts
for the purpose of creating 1 regional strategic plan for each workforce development
board service delivery area.

(c) Implement a regional process to rank career clusters in
the workforce development board service delivery area as described under
subsection (4). Regional processes must be approved by the department before
the ranking of career clusters.

(d) Report CTE early middle college and CTE dual enrollment
program and student data and information as prescribed by the department and
the center.

(e) The local education agency responsible for student
reporting in the Michigan student data system (MSDS) will report the total
number of college credits the student earned, at the time of high school
graduation, as determined by the department and the center.

(f) The local education agency will report each award outcome
in the Michigan student data system (MSDS) that the CTE early middle college
student attained. For purposes of this subsection, an on-track CTE early middle
college graduate is a graduate who obtained their high school diploma and at
least 1 of the following:

(i) An associate degree.

(ii) 60 transferable college credits.

(iii) Professional certification.

(iv) A Michigan Early Middle College
Association certificate.

(v) Participation in a registered
apprenticeship.

(4) A regional strategic plan must be approved by the career
and educational advisory council before submission to the department. A
regional strategic plan must include, but is not limited to, the following:

(a) An identification of regional employer need based on a
ranking of all career clusters in the workforce development board service
delivery area ranked by 10-year projections of annual job openings and median
wage for each standard occupational code in each career cluster as obtained
from the United States Bureau of Labor Statistics. Standard occupational codes
within high-ranking clusters also may be further ranked by median wage and
annual job openings. The career and educational advisory council located in the
workforce development board service delivery area shall review the rankings and
modify them if necessary to accurately reflect employer demand for talent in
the workforce development board service delivery area. A career and educational
advisory council shall document that it has conducted this review and certify
that it is accurate. These career cluster rankings must be determined and
updated once every 4 years.

(b) An identification of educational entities in the
workforce development board service delivery area that will provide eligible
CTE early middle college and CTE dual enrollment programs including districts,
intermediate districts, postsecondary institutions, and noncredit occupational
training programs leading to an industry-recognized credential.

(c) A strategy to inform parents and students of CTE early
middle college and CTE dual enrollment programs in the workforce development
board service delivery area.

(d) Any other requirements as defined by the department.

(5) An eligible CTE program is a program that meets all of
the following:

(a) Has been identified in the highest 5 career cluster
rankings in any of the 16 workforce development board service delivery area
strategic plans jointly approved by the department of labor and economic
opportunity and the department.

(b) Has a coherent sequence of courses in a specific career
cluster that will allow a student to earn a high school diploma and achieve at
least 1 of the following:

(i) For CTE early middle college, outcomes
as defined in subsection (3)(f).

(ii) For CTE dual enrollment, 1 of the
following:

(A) An associate degree.

(B) An industry-recognized technical certification approved
by the department of labor and economic opportunity.

(C) Up to 60 transferable college credits.

(D) Participation in a registered apprenticeship,
pre-apprenticeship, or apprentice readiness program.

(c) Is aligned with the Michigan merit curriculum.

(d) Has an articulation or a college credit agreement with at
least 1 postsecondary institution that provides students with opportunities to
receive postsecondary credits during the student’s participation in the CTE
early middle college or CTE dual enrollment program and transfers those credits
to the postsecondary institution upon completion of the CTE early middle
college or CTE dual enrollment program.

(e) Provides instruction that is supervised, directed, or
coordinated by an appropriately certificated CTE teacher or, for concurrent
enrollment courses, a postsecondary faculty member.

(f) Provides for highly integrated student support services
that include at least the following:

(i) Teachers as academic advisors.

(ii) Supervised course selection.

(iii) Monitoring of student progress and
completion.

(iv) Career planning services provided by a
local one-stop service center as described in the Michigan works one-stop
service center system act, 2006 PA 491, MCL 408.111 to 408.135, or by a high
school counselor or advisor.

(g) Has courses that are taught on a college campus, are
college courses offered at the high school and taught by college faculty, or
are courses taught in combination with online instruction.

(6) The department shall distribute funds to eligible CTE
early middle college and CTE dual enrollment programs as follows:

(a) The department shall determine statewide average CTE
costs per pupil for each CIP code program by calculating statewide average
costs for each CIP code program for the 3 most recent fiscal years.

(b) The distribution to each eligible CTE early middle
college or CTE dual enrollment program is the product of 50% of CTE costs per
pupil times the pupil enrollment of each eligible CTE early middle college or
CTE dual enrollment program in the immediately preceding school year.

(7) To receive funds under this section, a CTE early middle
college or CTE dual enrollment program shall furnish to the intermediate
district that is the fiscal agent identified in subsection (2), in a form and
manner determined by the department, all information needed to administer this
program and meet federal reporting requirements; shall allow the department or
the department’s designee to review all records related to the program for
which it receives funds; and shall reimburse the state for all disallowances
found in the review, as determined by the department.

(8) There is allocated for 2026-2027 from the funds under
subsection (1) an amount not to exceed $500,000.00 from the state school aid
fund allocation for grants to intermediate districts or consortia of
intermediate districts for the purpose of planning for new or expanded early
middle college programs. Applications for grants must be submitted in a form
and manner determined by the department. The amount of a grant under this
subsection must not exceed $50,000.00. To be eligible for a grant under this
subsection, an intermediate district or consortia of intermediate districts
must provide matching funds equal to the grant received under this subsection.
Notwithstanding section 17b, the department shall make payments under this
subsection in the manner determined by the department.

(9) Funds distributed under this section may be used to fund
program expenditures that would otherwise be paid from foundation allowances,
including, but not limited to, work-based learning programs. A program
receiving funding under section 61a may receive funding under this section for
allowable costs that exceed the reimbursement the program received under
section 61a. The combined payments received by a program under section 61a and
this section must not exceed the total allowable costs of the program. A
program provider shall not use more than 5% of the funds allocated under this
section to the program for administrative costs.

(10) If the allocation under subsection (1) is insufficient
to fully fund payments as otherwise calculated under this section, the
department shall prorate payments under this section on an equal percentage
basis, using for that proration calculation payments made for CTE dual
enrollment programs only.

(11) If pupils enrolled in a career cluster in an eligible
CTE early middle college or CTE dual enrollment program qualify to be
reimbursed under this section, those pupils continue to qualify for
reimbursement until graduation, even if the career cluster is no longer
identified as being in the highest 5 career cluster rankings.

(12) As used in this section:

(a) “Allowable costs” means those costs directly attributable
to the program as jointly determined by the department of labor and economic
opportunity and the department.

(b) “Career and educational advisory council” means an
advisory council to the local workforce development boards located in a
workforce development board service delivery area consisting of educational,
employer, labor, and parent representatives.

(c) “CIP” means classification of instructional programs.

(d) “CTE” means career and technical education programs.

(e) “CTE dual enrollment program” means a 4-year high school
program of postsecondary courses offered by eligible postsecondary educational
institutions that leads to an industry-recognized certification or degree.

(f) “Early middle college program” means a 5-year high school
program.

(g) “Eligible postsecondary educational institution” means
that term as defined in section 3 of the career and technical preparation act,
2000 PA 258, MCL 388.1903.

Sec.
61w. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $2,900,000.00 for competitive grants
to districts and intermediate districts to support digital career exploration
programs and virtual reality simulation programs that enhance and expand
existing career and technical education programs.

(2) Districts and intermediate districts shall apply for
funds under this section on a competitive basis in a form and manner determined
by the department.

(3) A virtual reality simulation program described in this
section must offer software, hardware, or both that provides immersive career
exploration and workforce development programming for students.

(4) Fifty percent of the funds allocated under this section
must be awarded to districts and intermediate districts to purchase software,
hardware, or related technology platforms. The remaining 50% of the funds must
be awarded to districts and intermediate districts to partner with businesses
or nonprofit organizations that provide mobile virtual reality career
exploration services, including providers capable of delivering software and
hardware with immersive career experiences directly to schools.

(5) Awards received under this section must be used to
support career and technical education programs aligned with high-skill,
high-wage, and high-demand occupations across career clusters aligned with
local and market needs. A recipient may use an award under this section to
support virtual reality simulation programs that reach multiple career clusters
or career exploration opportunities.

(6) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
62. (1) For the purposes of this section:

(a) “Membership” means for a particular fiscal year the total
membership of the intermediate district and the districts constituent to the
intermediate district or the total membership of the area vocational-technical
program, except that if a district has elected not to come under sections 681
to 690 of the revised school code, MCL 380.681 to 380.690, the membership of
that district are not included in the membership of the intermediate district.
However, the membership of a district that has elected not to come under sections
681 to 690 of the revised school code, MCL 380.681 to 380.690, is included in
the membership of the intermediate district if the district meets both of the
following:

(i) The district operates the area
vocational-technical education program pursuant to a contract with the
intermediate district.

(ii) The district contributes an annual
amount to the operation of the program that is commensurate with the revenue
that would have been raised for operation of the program if millage were levied
in the district for the program under sections 681 to 690 of the revised school
code, MCL 380.681 to 380.690.

(b) “Millage levied” means the millage levied for area
vocational-technical education under sections 681 to 690 of the revised school
code, MCL 380.681 to 380.690, including a levy for debt service obligations
incurred as the result of borrowing for capital outlay projects and in meeting
capital projects fund requirements of area vocational-technical education.

(c) “Taxable value” means the total taxable value of the
districts constituent to an intermediate district or area vocational-technical
education program, except that if a district has elected not to come under
sections 681 to 690 of the revised school code, MCL 380.681 to 380.690, the
taxable value of that district is not included in the taxable value of the
intermediate district. However, the taxable value of a district that has
elected not to come under sections 681 to 690 of the revised school code, MCL
380.681 to 380.690, is included in the taxable value of the intermediate
district if the district meets both of the following:

(i) The district operates the area
vocational-technical education program pursuant to a contract with the
intermediate district.

(ii) The district contributes an annual
amount to the operation of the program that is commensurate with the revenue
that would have been raised for operation of the program if millage were levied
in the district for the program under sections 681 to 690 of the revised school
code, MCL 380.681 to 380.690.

(2) From the state school aid fund money appropriated in
section 11, there is allocated an amount not to exceed $9,190,000.00 each
fiscal year for 2024-2025 and 2025-2026 to reimburse intermediate districts and
area vocational-technical education programs established under section 690(3)
of the revised school code, MCL 380.690, levying millages for area
vocational-technical education under sections 681 to 690 of the revised school
code, MCL 380.681 to 380.690. The purpose, use, and expenditure of the
reimbursement are limited as if the funds were generated by those millages.

(3) Reimbursement for those millages levied in 2024-2025 is
made in 2025-2026 at an amount per 2024-2025 membership pupil computed by
subtracting from $288,300.00 the 2024-2025 taxable value behind each membership
pupil and multiplying the resulting difference by the 2024-2025 millage levied,
and then subtracting from that amount the 2024-2025 local community
stabilization share revenue for area vocational technical education and
2024-2025 tax increment revenues captured by a brownfield redevelopment authority
created under the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2651 to 125.2670, behind each membership pupil for reimbursement of
personal property exemption loss under the local community stabilization
authority act, 2014 PA 86, MCL 123.1341 to 123.1362, and reimbursements paid
under section 26d for tax increment revenues captured by a brownfield
redevelopment authority under the brownfield redevelopment financing act, 1996
PA 381, MCL 125.2651 to 125.2670. For the purposes of the calculation described
in the previous sentence only, for an intermediate district receiving funds
under this section and section 56, reimbursements paid under section 26d must
be multiplied by the ratio of vocational-technical education millage levied, as
defined in this section, and the sum of vocational-technical education millage
levied and special education millage levied, as defined in section 56.

(4) Reimbursement for those millages levied in 2025-2026 is
made in 2026-2027 at an amount per 2025-2026 membership pupil computed by
subtracting from $302,800.00 the 2025-2026 taxable value behind each membership
pupil and multiplying the resulting difference by the 2025-2026 millage levied,
and then subtracting from that amount the 2025-2026 local community
stabilization share revenue for area vocational technical education and
2025-2026 tax increment revenues captured by a brownfield redevelopment authority
created under the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2651 to 125.2670, behind each membership pupil for reimbursement of
personal property exemption loss under the local community stabilization
authority act, 2014 PA 86, MCL 123.1341 to 123.1362, and reimbursements paid
under section 26d for tax increment revenues captured by a brownfield
redevelopment authority under the brownfield redevelopment financing act, 1996
PA 381, MCL 125.2651 to 125.2670. For the purposes of the calculation described
in the previous sentence only, for an intermediate district receiving funds
under this section and section 56, reimbursements paid under section 26d must
be multiplied by the ratio of vocational-technical education millage levied, as
defined in this section, and the sum of vocational-technical education millage
levied and special education millage levied, as defined in section 56.

(5) The department shall ensure that the amount paid to a
single intermediate district under this section does not exceed 38.4% of the
total amount allocated under subsection (2).

(6) The department shall ensure that the amount paid to a
single intermediate district under this section is not less than 75% of the
amount allocated to the intermediate district under this section for the
immediately preceding fiscal year.

Sec.
65. (1) From the state school aid pupil support reserve fund money appropriated
in section 11, there is allocated an amount not to exceed $900,000.00 for
2026-2027 only for a pre-college engineering K to 12 educational program that
is focused on the development of a diverse future Michigan workforce, that
serves multiple communities within southeast Michigan, that enrolls pupils from
multiple districts, and that received funds appropriated for this purpose in
the appropriations act that provided the Michigan strategic fund budget for
2014-2015. It is the intent of the legislature that the appropriation under
this section will be funded with state school aid pupil support reserve fund
money through 2027-2028.

(2) To be eligible for funding under this section, a program
must have the ability to expose pupils to, and motivate and prepare pupils for,
science, technology, engineering, and mathematics careers and postsecondary
education with special attention given to groups of pupils who are at-risk and
underrepresented in technical professions and careers.

Sec.
67. (1) From the general fund money appropriated in section 11, there is
allocated an amount not to exceed $3,000,000.00 for 2026-2027 for college
access programs. The programs funded under this section are intended to inform
students of college and career options, to provide resources intended to
increase the number of pupils who are adequately prepared with the information
needed to make informed decisions on college and career, support adult
learners, support college completion, and support workforce and employer
engagement. The funds appropriated under this section are intended to be used
to increase the number of Michigan residents with high-quality degrees or
credentials. Funds appropriated under this section must not be used to supplant
funding for counselors already funded by districts.

(2) The department of lifelong education, advancement, and
potential shall administer funds allocated under this section in collaboration
with the Michigan college access network. These funds may be used for any of
the following purposes:

(a) Michigan college access network operations, programming,
and services to local college access networks.

(b) Local college access networks, which are community-based
college access/success partnerships committed to increasing the college
participation and completion rates within geographically defined communities
through a coordinated strategy.

(c) The Michigan college advising program, a program intended
to place trained, recently graduated college advisors in high schools that
serve significant numbers of low-income and first-generation college-going
pupils. State funds used for this purpose may not exceed 33% of the total funds
available under this subsection.

(d) Subgrants of up to $5,000.00 to districts with
comprehensive high schools that establish a college access team and implement
specific strategies to create a college-going culture in a high school in a
form and manner approved by the Michigan college access network and the
department of lifelong education, advancement, and potential.

(e) The Michigan college access portal, an online one-stop
portal to help pupils and families plan and apply for college.

(f) Public awareness and outreach campaigns to encourage
low-income and first-generation college-going pupils to take necessary steps
toward college and to assist pupils and families in completing a timely and
accurate free application for federal student aid.

(g) Subgrants to postsecondary institutions to recruit, hire,
and train college student mentors and college advisors to assist high school
pupils in navigating the postsecondary planning and enrollment process.

(3) For the purposes of this section, “college” means any
postsecondary educational opportunity that leads to a career, including, but
not limited to, a postsecondary degree, industry-recognized technical
certification, or registered apprenticeship.

Sec.
67d. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $900,000.00 to districts and
intermediate districts to partner with nonprofit organizations for the
provision of hospitality and tourism CTE programs.

(2) Districts and intermediate districts shall apply for
funding under this section in a form and manner determined by the department.

(3) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

(4) As used in this section, “hospitality and tourism CTE
programs” means career and technical education programs that teach or train
students in restaurant management, culinary arts or hospitality, and tourism
management as part of career and professional development.

Sec.
67f. (1) From the state school aid pupil support reserve fund money
appropriated in section 11, there is allocated for 2026-2027 only an amount not
to exceed $10,000,000.00 for districts to improve FAFSA completion rates. It is
the intent of the legislature that the appropriation under this section will be
funded with state school aid pupil support reserve fund money through 2027-2028.

(2) To be eligible to receive funding under this section,
each district must apply in a form and manner determined by the department of
lifelong education, advancement, and potential. In the application, the
department of lifelong education, advancement, and potential shall only require
a district to certify that it will do both of the following:

(a) Except as otherwise provided in subsection (3), require
all students to complete the FAFSA to graduate from high school.

(b) Use funds received under this section for participation
in and implementation of activities that are known to drive FAFSA completion,
as determined by the department of lifelong education, advancement, and
potential, in collaboration with the Michigan College Access Network.

(3) A district shall exempt a student from the requirement to
complete the FAFSA if any of the following are met:

(a) The student’s parent or legal guardian, or the student if
the student is 18 years of age or older, is an emancipated minor, or is an
unaccompanied youth, has submitted a parental waiver to the district exempting
the student from completing the FAFSA. The parental waiver described in this
subdivision must be obtained through a standard form developed by the
department of lifelong education, advancement, and potential.

(b) The student is unable to complete the FAFSA because of
privacy concerns.

(c) All of the following are met:

(i) After a good-faith effort, the student’s
parent or legal guardian refuses to sign the parental waiver, is unresponsive,
or cannot sign the parental waiver.

(ii) The student is unable to complete the
FAFSA as an independent student.

(iii) The student agrees to opt out of
completing the FAFSA.

(iv) Other than the requirements in
subsection (2), the student is on track to graduate.

(v) A school administrator of the student’s
high school demonstrates to the board that good-faith efforts have been made to
assist the student or the student’s parent or legal guardian in completing the
FAFSA or obtaining a parental waiver.

(vi) The board ensures compliance with 42 USC
11432(g)(6)(A).

(4) The department of lifelong education, advancement, and
potential may use past participation in the FAFSA Completion Challenge under
this section as a factor in determining district eligibility.

(5) The department of lifelong education, advancement, and
potential shall pay each eligible district an equal amount per pupil multiplied
by the number of pupils enrolled and attending grade 12 in the district.
Initial payments must be made by not later than January 31, 2027.

(6) Notwithstanding section 17b, the department of lifelong
education, advancement, and potential shall make payments under this section on
a schedule determined by the department of lifelong education, advancement, and
potential.

(7) As used in this section, “FAFSA” means the free
application for federal student aid form.

Sec.
74. (1) From the state school aid fund money appropriated in section 11, there
is allocated an amount not to exceed $4,753,100.00 for 2026-2027 for the
purposes of this section.

(2) From the allocation in subsection (1), there is allocated
for 2026-2027 the amount necessary for payments to state supported colleges or
universities and intermediate districts providing school bus driver safety
instruction under section 51 of the pupil transportation act, 1990 PA 187, MCL
257.1851. The department shall make payments in an amount determined by the
department not to exceed the actual cost of instruction and driver compensation
for each public or nonpublic school bus driver attending a course of
instruction. For the purpose of computing compensation, the hourly rate allowed
each school bus driver must not exceed the hourly rate received for driving a
school bus. The department shall make reimbursement compensating the driver
during the course of instruction to the college or university or intermediate
district providing the course of instruction.

(3) From the allocation in subsection (1), there is allocated
for 2026-2027 the amount necessary to pay the reasonable costs of nonspecial
education auxiliary services transportation provided under section 1323 of the
revised school code, MCL 380.1323. Districts funded under this subsection do
not receive funding under any other section of this article for nonspecial
education auxiliary services transportation.

(4) From the funds allocated in subsection (1), there is
allocated an amount not to exceed $1,978,100.00 for 2026-2027 for the
inspection of school buses and pupil transportation vehicles by the department
of state police as required under section 715a of the Michigan vehicle code,
1949 PA 300, MCL 257.715a, and section 39 of the pupil transportation act, 1990
PA 187, MCL 257.1839. The department of state police shall prepare a statement
of costs and submit it to the department and to an intermediate district
serving as fiduciary in a time and manner determined jointly by the department
and the department of state police. Upon review and approval of the statement
of cost, the department shall forward to the designated intermediate district
serving as fiduciary the amount detailed on the statement within 45 days after
receipt of the statement. The designated intermediate district fiduciary shall
make payment in the amount specified on the statement to the department of
state police within 45 days after receipt of the statement. The total
reimbursement of costs under this subsection must not exceed the amount
allocated under this subsection. Notwithstanding section 17b, the department
shall make payments to eligible entities under this subsection on a schedule
prescribed by the department.

Sec.
81. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 to intermediate districts the sum necessary, but not
to exceed $85,236,600.00, to provide state aid to intermediate districts under
this section.

(2) The amount allocated under this section to each
intermediate school district for the current fiscal year is equal to the
allocation for the immediately preceding fiscal year plus an equal percentage
increase for all intermediate school districts. An intermediate district shall
use funding provided under this section to comply with requirements of this
article and the revised school code that are applicable to intermediate
districts, and for which funding is not provided elsewhere in this article, and
to provide technical assistance to districts as authorized by the intermediate
school board.

(3) Intermediate districts receiving funds under this section
shall collaborate with the department to develop expanded professional
development opportunities for teachers to update and expand their knowledge and
skills needed to support the Michigan merit curriculum.

(4) From the allocation in subsection (1), there is allocated
to an intermediate district, formed by the consolidation or annexation of 2 or
more intermediate districts or the attachment of a total intermediate district
to another intermediate district or the annexation of all of the constituent K
to 12 districts of a previously existing intermediate district which has
disorganized, an additional allotment of $3,500.00 each fiscal year for each
intermediate district included in the new intermediate district for 3 years
following consolidation, annexation, or attachment.

(5) To receive funding under this section, an intermediate
district shall do all of the following:

(a) Demonstrate to the satisfaction of the department that
the intermediate district employs at least 1 person who is trained in pupil
accounting and auditing procedures, rules, and regulations.

(b) Demonstrate to the satisfaction of the department that
the intermediate district employs at least 1 person who is trained in rules,
regulations, and district reporting procedures for the individual-level student
data that serves as the basis for the calculation of the district and high
school graduation and dropout rates.

(c) Comply with sections 1278a and 1278b of the revised
school code, MCL 380.1278a and 380.1278b.

(d) Furnish data and other information required by state and
federal law to the center and the department in the form and manner specified
by the center or the department, as applicable.

(e) Comply with section 1230g of the revised school code, MCL
380.1230g.

(f) Ensure that all districts located within the intermediate
district’s geographic boundaries have equitable access to the intermediate
district’s coordination activities and services, intermediate district-wide or
regional meetings, regularly scheduled superintendent meetings, programming,
events, email distribution lists, listservs, or other coordination or
collaboration activities organized by or hosted in the intermediate district.
In ensuring that all districts located within the geographic boundaries of the
intermediate district have equitable access to the services, meetings,
programming, events, email distribution lists, listservs, or activities, the
intermediate district shall ensure that districts that are public school
academies and that are located within the intermediate district’s geographic
boundaries are not excluded from the services, meetings, programming, events,
email distribution lists, listservs, or activities organized by or hosted in
the intermediate district if districts that are not public school academies and
that are located within the geographic boundaries of the intermediate district
are not excluded.

Sec.
94. (1) From the general fund money appropriated in section 11, there is
allocated to the department for 2026-2027 an amount not to exceed $1,200,000.00
and from the state school aid fund money appropriated in section 11, there is
allocated for 2026-2027 only an amount not to exceed $1,600,000.00 to an
intermediate district identified by the department for efforts to increase the
number of pupils who participate and succeed in advanced placement and
international baccalaureate programs, and to support the college-level
examination program (CLEP). The department must maintain administrative
oversight of the billing and reimbursement process.

(2) From the funds allocated under this section, the
department shall award funds to cover all or part of the costs of advanced
placement test fees or international baccalaureate test fees and international
baccalaureate registration fees for low-income pupils who take an advanced
placement or an international baccalaureate test and CLEP fees for low-income
pupils who take a CLEP test.

(3) The department shall only award funds under this section
if the department determines that all of the following criteria are met:

(a) Each pupil for whom payment is made meets eligibility
requirements of the federal advanced placement test fee program under the no
child left behind act of 2001, Public Law 107-110, or the every student
succeeds act, Public Law 114-95, as applicable.

(b) The tests are administered by the college board, the
international baccalaureate organization, or another test provider approved by
the department.

(c) The pupil for whom payment is made pays at least $5.00
toward the cost of each test for which payment is made.

(4) If funds remain after the awards granted in subsection
(2), the department shall award funds to reimburse a portion of the costs
associated with the provision of advanced placement (AP), international
baccalaureate (IB), or college-level examination program (CLEP) exams for
students whose family income exceeds low-income status as determined by the
department.

(5) The department shall establish procedures for awarding
funds under this section.

(6) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
94a. (1) There is created within the state budget office in the department of
technology, management, and budget the center for educational performance and
information. The center shall do all of the following:

(a) Coordinate the collection of all data required by state
and federal law from districts, intermediate districts, and postsecondary
institutions.

(b) Create, maintain, and enhance this state’s P-20
longitudinal data system and ensure that it meets the requirements of
subsection (4).

(c) Collect data in the most efficient manner possible to
reduce the administrative burden on reporting entities, including, but not
limited to, electronic transcript services.

(d) Create, maintain, and enhance this state’s web-based
educational portal to provide information to school leaders, teachers,
researchers, and the public in compliance with all federal and state privacy
laws. Data must include, but are not limited to, all of the following:

(i) Data sets that link teachers to student
information, allowing districts to assess individual teacher impact on student
performance and consider student growth factors in teacher and principal
evaluation systems.

(ii) Data access or, if practical, data sets,
provided for regional data hubs that, in combination with local data, can
improve teaching and learning in the classroom.

(iii) Research-ready data sets for researchers
to perform research that advances this state’s educational performance.

(e) Provide data in a useful manner to allow state and local
policymakers to make informed policy decisions.

(f) Provide public reports to the residents of this state to
allow them to assess allocation of resources and the return on their investment
in the education system of this state.

(g) Other functions as assigned by the state budget director.

(2) Each state department, officer, or agency that collects
information from districts, intermediate districts, or postsecondary
institutions as required under state or federal law shall make arrangements
with the center to ensure that the state department, officer, or agency is in
compliance with subsection (1). This subsection does not apply to information
collected by the department of treasury under the uniform budgeting and
accounting act, 1968 PA 2, MCL 141.421 to 141.440a; the revised municipal finance
act, 2001 PA 34, MCL 141.2101 to 141.2821; the school bond qualification,
approval, and loan act, 2005 PA 92, MCL 388.1921 to 388.1939; or section 1351a
of the revised school code, MCL 380.1351a.

(3) The center may enter into any interlocal agreements
necessary to fulfill its functions.

(4) The center shall ensure that the P-20 longitudinal data
system required under subsection (1)(b) meets all of the following:

(a) Includes data at the individual student level from
preschool through postsecondary education and into the workforce.

(b) Supports interoperability by using standard data
structures, data formats, and data definitions to ensure linkage and
connectivity in a manner that facilitates the exchange of data among agencies
and institutions within the state and between states.

(c) Enables the matching of individual teacher and student
records so that an individual student may be matched with those teachers
providing instruction to that student.

(d) Enables the matching of individual teachers with
information about their certification and the institutions that prepared and
recommended those teachers for state certification.

(e) Enables data to be easily generated for continuous
improvement and decision-making, including timely reporting to parents,
teachers, and school leaders on student achievement.

(f) Ensures the reasonable quality, validity, and reliability
of data contained in the system.

(g) Provides this state with the ability to meet federal and
state reporting requirements.

(h) For data elements related to preschool through grade 12
and postsecondary, meets all of the following:

(i) Contains a unique statewide student
identifier that does not permit a student to be individually identified by
users of the system, except as allowed by federal and state law.

(ii) Contains student-level enrollment,
demographic, and program participation information, including data associated
with students who have been identified as having an affiliation to 1 or more
federally recognized Indian tribes and student participation in federal
programs funded under 20 USC 7401 to 7546 and participation in federal programs
funded under the Johnson-O’Malley supplemental Indian education program
modernization act, Public Law 115-404. Any reports or data access related
specifically to tribal affiliation must be done through ongoing consultation
with the federally recognized tribes in the state with the expectation that the
center, the department, and the tribes will work iteratively toward meaningful
reports, access, and use of these records to improve shared education interests
and outcomes.

(iii) Contains student-level information about
the points at which students exit, transfer in, transfer out, drop out, or
complete education programs.

(iv) Has the capacity to communicate with
higher education data systems.

(i) For data elements related to preschool through grade 12
only, meets all of the following:

(i) Contains yearly test records of
individual students for assessments approved by DED-OESE for accountability
purposes under section 1111(b) of the elementary and secondary education act of
1965, 20 USC 6311, including information on individual students not tested, by
grade and subject.

(ii) Contains student-level transcript
information, including information on courses completed and grades earned.

(iii) Contains student-level college readiness
test scores.

(j) For data elements related to postsecondary education
only:

(i) Contains data that provide information
regarding the extent to which individual students transition successfully from
secondary school to postsecondary education, including, but not limited to, all
of the following:

(A) Enrollment in remedial coursework.

(B) Completion of 1 year’s worth of college credit applicable
to a degree within 2 years of enrollment.

(ii) Contains data that provide other
information determined necessary to address alignment and adequate preparation
for success in postsecondary education.

(5) From the general fund money appropriated in section 11,
there is allocated an amount not to exceed $19,548,500.00 for 2026-2027 to the
department of technology, management, and budget to support the operations of
the center. In addition, from the federal funds appropriated in section 11,
there is allocated for 2026-2027 the amount necessary, estimated at $100.00 to
support the operations of the center and to establish a P‑20 longitudinal
data system necessary for state and federal reporting purposes. The center
shall cooperate with the department to ensure that this state is in compliance
with federal law and is maximizing opportunities for increased federal funding
to improve education in this state.

(6) From the funds allocated in subsection (5), the center
may use an amount determined by the center for competitive grants for 2026-2027
to support collaborative efforts on the P-20 longitudinal data system. All of
the following apply to grants awarded under this subsection:

(a) The center shall award competitive grants to eligible
intermediate districts or a consortium of intermediate districts based on
criteria established by the center.

(b) Activities funded under the grant must support the P-20
longitudinal data system portal and may include portal hosting, hardware and
software acquisition, maintenance, enhancements, user support and related
materials, and professional learning tools and activities aimed at improving
the utility of the P-20 longitudinal data system.

(c) An applicant that received a grant under this subsection
for the immediately preceding fiscal year has priority for funding under this
section. However, after 3 fiscal years of continuous funding, an applicant is
required to compete openly with new applicants.

(7) Funds allocated under this section that are not expended
in the fiscal year in which they were allocated may be carried forward to a
subsequent fiscal year and are appropriated for the purposes for which the
funds were originally allocated.

(8) The center may bill departments as necessary to fulfill
reporting requirements of state and federal law. The center may also enter into
agreements to supply custom data, analysis, and reporting to other principal
executive departments, state agencies, local units of government, and other
individuals and organizations. The center may receive and expend funds in
addition to those authorized in subsection (5) to cover the costs associated
with salaries, benefits, supplies, materials, and equipment necessary to
provide such data, analysis, and reporting services.

(9) As used in this section, “DED-OESE” means the United
States Department of Education Office of Elementary and Secondary Education.

(10) From the state school aid fund money appropriated in
section 11, there is allocated for 2026-2027 an amount not to exceed
$500,000.00 for payments on behalf of districts for costs associated with
e-transcript services for high schools and pupils.

Sec.
94e. (1) From the state school aid fund money appropriated under section 11,
there is allocated for 2026-2027 an amount not to exceed $1,000,000.00 for
support of the Michigan Education Research Institute.

(2) Funding allocated under this section must be distributed
to the University of Michigan’s Michigan Education Data Center and Michigan
State University’s Education Policy Innovation Center for the purpose of
working collaboratively with the department, the department of lifelong
education, advancement, and potential, and the center to build and maintain a
research ready dataset, and to conduct research of critical importance to the
state’s education goals.

(3) The Michigan Education Research Institute shall use funds
received under this section for the purpose of expanding on research that
includes, but is not limited to, all the following:

(a) Educator shortage.

(b) Literacy initiative outcomes.

(c) Early childhood development programming outcomes.

(4) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
94f. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $3,000,000.00 to a public university
in this state with an existing research partnership with the department and
districts for research and program evaluation activities supporting statewide
literacy initiatives. The public university described in this subsection shall
use funds received under this section to collect and analyze data, assess
program implementation and outcomes, develop and report on key performance
indicators, and provide recommendations to improve literacy achievement and
inform state implementation, policy, and investment decisions.

(2) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
95b. (1) From
the state school aid fund money appropriated under section 11, there is
allocated for 2026-2027 only an amount not to exceed $2,000,000.00 for a growth
and projection analytics system with student and teacher growth reports.

(2) The growth and projections reporting platform must
provide continued hosting and delivery of reporting and offer the department
additional supports in the areas of research, analysis, web reporting, and
training. The platform must use historical student-level data from the state
and have experience providing student growth reports.

(3) Funding under this section must be awarded to an
intermediate district to partner with the department and a platform vendor to
meet the requirements of this section. The platform vendor must be determined
through a competitive grant process.

(4) The department and the platform vendor shall provide
statewide training for educators to understand the reporting that details the
impact to student learning and growth.

(5) The department shall provide internet-based electronic
student growth and projection reporting under this section to educators at the
school, district, and state levels. The reporting must include role-based
permissions that allow educators to access information about the performance of
the students within their immediate responsibility in accordance with
applicable privacy laws.

(6) By not later than March 31, the department shall work
with the center to make data available on a publicly accessible website that
provides student growth metrics at the district and school level by grade and
subject.

(7) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
97n. (1) From the state school aid fund money appropriated in section 11, there
is allocated for 2026-2027 only $10,000,000.00 for grants to districts to
support the efforts of community violence intervention plans to reduce or
prevent youth violence.

(2) Districts must apply on a competitive basis for funding
under this section in a form and manner determined by the department. The
department shall coordinate with the office of community violence intervention
in the department of health and human services to evaluate applications
submitted under this section. Awards must be granted based on competitive
criteria determined by the department and the department of health and human
services, but must prioritize grants for local district plans that include comprehensive
strategies with demonstrated external partnerships to support successful
implementation.

(3) Districts may use funding received under this section to
contract with nonprofits, community-based organizations, subject matter
experts, or other governmental entities to implement a plan to reduce or
prevent youth violence. A plan to reduce or prevent youth violence implemented
under this subsection must use evidence-based practices, include mentorship and
community engagement strategies, and may include, but is not limited to,
increased academic, counseling, health, and wrap-around services to youth.

(4) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
98. (1) From the general fund money appropriated in section 11, there is
allocated an amount not to exceed $9,800,000.00 for 2026-2027 only for the
purposes described in this section. The Michigan Virtual University shall
provide a report to the legislature not later than November 1 of each fiscal
year for which funding is allocated under this section that includes its
mission, its plans, and proposed benchmarks it must meet, including a plan to
achieve the organizational priorities identified in this section, to receive
full funding for the next fiscal year for which funding is allocated under this
section. By not later than March 1 of each fiscal year for which funding is
allocated under this section, the Michigan Virtual University shall provide an
update to the house and senate appropriations subcommittees on school aid to
show the progress being made to meet the benchmarks identified.

(2) The Michigan Virtual University shall operate the
Michigan Virtual Learning Research Institute. The Michigan Virtual Learning
Research Institute shall do all of the following:

(a) Support and accelerate innovation in education through
the following activities:

(i) Test, evaluate, and recommend as
appropriate new technology-based instructional tools and resources.

(ii) Research, design, and recommend virtual
education delivery models for use by pupils and teachers that include
age-appropriate multimedia instructional content.

(iii) Research, develop, and recommend
annually to the department criteria by which cyber schools and virtual course
providers should be monitored and evaluated to ensure a quality education for
their pupils.

(iv) Based on pupil completion and
performance data reported to the department or the center from cyber schools
and other virtual course providers operating in this state, analyze the
effectiveness of virtual learning delivery models in preparing pupils to be
college- and career-ready and publish a report that highlights enrollment
totals, completion rates, and the overall impact on pupils. The Michigan
Virtual Learning Research Institute shall submit the report to the house and
senate appropriations subcommittees on school aid, the state budget director,
the house and senate fiscal agencies, the department, districts, and
intermediate districts by not later than March 31 of each fiscal year for
which funding is allocated under this section.

(v) Provide an extensive professional
development program to at least 30,000 educational personnel, including
teachers, school administrators, and school board members, that focuses on the
effective integration of virtual learning into curricula and instruction. The
Michigan Virtual Learning Research Institute is encouraged to work with the
MiSTEM council described in section 99s to coordinate professional development
of teachers in applicable fields. In addition, the Michigan Virtual Learning
Research Institute and external stakeholders are encouraged to coordinate with
the department for professional development in this state, including
professional development for employees in child care facilities, early
childhood facilities, and after-school programs. By not later than December 1
of each fiscal year for which funding is allocated under this section, the
Michigan Virtual Learning Research Institute shall submit a report to the house
and senate appropriations subcommittees on school aid, the state budget
director, the house and senate fiscal agencies, and the department on the
number of teachers, school administrators, and school board members who have
received professional development services from the Michigan Virtual
University. The report must also include both of the following:

(A) The identification of barriers and other opportunities to
encourage the adoption of virtual learning in the public education system.

(B) A link to, and explanation of, the Michigan Virtual
University’s online course standards for professional development programming.
The standards described in this sub-subparagraph must inform learners how to
file a complaint about course content and detail the steps that will be taken
for the review and resolution of complaints.

(vi) Identify and share best practices for
planning, implementing, and evaluating virtual and blended education delivery
models with intermediate districts, districts, and public school academies to
accelerate the adoption of innovative education delivery models statewide.

(b) Provide leadership for this state’s system of virtual
learning education by doing the following activities:

(i) Develop and report policy
recommendations to the governor and the legislature that accelerate the
expansion of effective virtual learning in this state’s schools.

(ii) Provide a clearinghouse for research
reports, academic studies, evaluations, and other information related to
virtual learning.

(iii) Promote and distribute the most current
instructional design standards and guidelines for virtual teaching.

(iv) In collaboration with the department and
interested colleges and universities in this state, support implementation and
improvements related to effective virtual learning instruction.

(v) Pursue public/private partnerships that
include districts to study and implement competency-based technology-rich
virtual learning models.

(vi) Create a statewide network of
school-based mentors serving as liaisons between pupils, virtual instructors,
parents, and school staff, as provided by the department or the center, and
provide mentors with research-based training and technical assistance designed
to help more pupils be successful virtual learners.

(vii) Convene focus groups and conduct annual
surveys of teachers, administrators, pupils, parents, and others to identify
barriers and opportunities related to virtual learning.

(viii) Produce an annual consumer awareness
report for schools and parents about effective virtual education providers and
education delivery models, performance data, cost structures, and research
trends.

(ix) Provide an internet-based platform that
educators can use to create student-centric learning tools and resources for
sharing in the state’s open educational resource repository and facilitate a
user network that assists educators in using the content creation platform and
state repository for open educational resources. As part of this initiative,
the Michigan Virtual University shall work collaboratively with districts and
intermediate districts to establish a plan to make available virtual resources
that align to Michigan’s K to 12 curriculum standards for use by students,
educators, and parents.

(x) Create and maintain a public statewide
catalog of virtual learning courses being offered by all public schools and
community colleges in this state. The Michigan Virtual Learning Research
Institute shall identify and develop a list of nationally recognized best
practices for virtual learning and use this list to support reviews of virtual
course vendors, courses, and instructional practices. The Michigan Virtual
Learning Research Institute shall also provide a mechanism for intermediate
districts to use the identified best practices to review content offered by
constituent districts. The Michigan Virtual Learning Research Institute shall
review the virtual course offerings of the Michigan Virtual University, and
make the results from these reviews available to the public as part of the
statewide catalog. The Michigan Virtual Learning Research Institute shall
ensure that the statewide catalog is made available to the public on the
Michigan Virtual University website and shall allow the ability to link it to each
district’s website as provided for in section 21f. The statewide catalog must
also contain all of the following:

(A) The number of enrollments in each virtual course in the
immediately preceding school year.

(B) The number of enrollments that earned 60% or more of the
total course points for each virtual course in the immediately preceding school
year.

(C) The pass rate for each virtual course.

(xi) Support registration, payment services,
and transcript functionality for the statewide catalog and train key
stakeholders on how to use new features.

(xii) Collaborate with key stakeholders to
examine district level accountability and teacher effectiveness issues related
to virtual learning under section 21f and make findings and recommendations
publicly available.

(xiii) Provide a report on the activities of
the Michigan Virtual Learning Research Institute.

(3) To further enhance its expertise and leadership in
virtual learning, the Michigan Virtual University shall continue to operate the
Michigan Virtual School as a statewide laboratory and quality model of
instruction by implementing virtual and blended learning solutions for Michigan
schools in accordance with the following parameters:

(a) The Michigan Virtual School must maintain its
accreditation status from recognized national and international accrediting
entities.

(b) The Michigan Virtual University shall use no more than
$1,000,000.00 of the amount allocated under this section to subsidize the cost
paid by districts for virtual courses.

(c) In providing educators responsible for the teaching of
virtual courses as provided for in this section, the Michigan Virtual School
shall follow the requirements to request and assess, and the department of
state police shall provide, a criminal history check and criminal records check
under sections 1230 and 1230a of the revised school code, MCL 380.1230 and
380.1230a, in the same manner as if the Michigan Virtual School were a school
district under those sections.

(4) From the funds allocated under subsection (1), the
Michigan Virtual University shall support the expansion of new online and
blended educator professional development programs.

(5) From the funds allocated under subsection (1), the
Michigan Virtual University shall operate a comprehensive statewide laboratory
designed to function as a hub for cutting-edge research, the identification and
dissemination of best practices, rigorous experimentation, policy formulation,
and proactive efforts to enhance awareness about the responsible utilization of
artificial intelligence in schools.

(6) If the course offerings are included in the statewide
catalog of virtual courses under subsection (2)(b)(x), the Michigan Virtual School operated by the Michigan
Virtual University may offer virtual course offerings, including, but not
limited to, all of the following:

(a) Information technology courses.

(b) College level equivalent courses, as that term is defined
in section 1471 of the revised school code, MCL 380.1471.

(c) Courses and dual enrollment opportunities.

(d) Programs and services for at-risk pupils.

(e) High school equivalency test preparation courses for
adjudicated youth.

(f) Special interest courses.

(g) Professional development programs for teachers, school
administrators, other school employees, and school board members.

(7) If a home-schooled or nonpublic school student is a
resident of a district that subscribes to services provided by the Michigan
Virtual School, the student may use the services provided by the Michigan
Virtual School to the district without charge to the student beyond what is
charged to a district pupil using the same services.

(8) By not later than December 1 of each fiscal year for
which funding is allocated under this section, the Michigan Virtual University
shall provide a report to the house and senate appropriations subcommittees on
school aid, the state budget director, the house and senate fiscal agencies,
and the department that includes at least all of the following information
related to the Michigan Virtual School for the preceding fiscal year:

(a) A list of the districts served by the Michigan Virtual
School.

(b) A list of virtual course titles available to districts.

(c) The total number of virtual course enrollments and
information on registrations and completions by course.

(d) The overall course completion rate percentage.

(9) In addition to the information listed in subsection (8),
the report under subsection (8) must also include a plan to serve at least 600
schools with courses from the Michigan Virtual School or with content available
through the internet-based platform identified in subsection (2)(b)(ix).

(10) The governor may appoint an advisory group for the
Michigan Virtual Learning Research Institute established under subsection (2).
The members of the advisory group serve at the pleasure of the governor and
without compensation. The purpose of the advisory group is to make
recommendations to the governor, the legislature, and the president and board
of the Michigan Virtual University that will accelerate innovation in this
state’s education system in a manner that will prepare elementary and secondary
students to be career and college ready and that will promote the goal of
increasing the percentage of residents of this state with high-quality degrees
and credentials to at least 60% by 2030.

(11) By not later than November 1 of each fiscal year for
which funding is allocated under this section, the Michigan Virtual University
shall submit to the house and senate appropriations subcommittees on school
aid, the state budget director, and the house and senate fiscal agencies a
detailed budget for that fiscal year that includes a breakdown on its projected
costs to deliver virtual educational services to districts and a summary of the
anticipated fees to be paid by districts for those services. By not later than
March 1 each fiscal year for which funding is allocated under this section, the
Michigan Virtual University shall submit to the house and senate appropriations
subcommittees on school aid, the state budget director, and the house and senate
fiscal agencies a breakdown on its actual costs to deliver virtual educational
services to districts and a summary of the actual fees paid by districts for
those services based on audited financial statements for the immediately
preceding fiscal year.

(12) As used in this section:

(a) “Blended learning” means a hybrid instructional delivery
model where pupils are provided content, instruction, and assessment, in part
at a supervised educational facility away from home where the pupil and a
teacher with a valid Michigan teaching certificate are in the same physical
location and in part through internet-connected learning environments with some
degree of pupil control over time, location, and pace of instruction.

(b) “Cyber school” means a full-time instructional program of
virtual courses for pupils that may or may not require attendance at a physical
school location.

(c) “Virtual course” means a course of study that is capable
of generating a credit or a grade and that is provided in an interactive
learning environment in which the majority of the curriculum is delivered using
the internet and in which pupils are separated from their instructor or teacher
of record by time or location, or both.

Sec.
98d. (1) From
the state school aid fund money appropriated under section 11, there is
allocated for 2026-2027 only an amount not to exceed $3,000,000.00 to a public
university that has previously partnered with a statewide, public, nonprofit
educational media service providing free, standards-aligned instructional
programming to Michigan schools. The public university described in this
subsection shall not retain any portion of the funding received under this
section for administrative purposes. The statewide, public, nonprofit
educational media service described in this subsection must meet all of the
following requirements:

(a) Provide free, curriculum-aligned educational programming
and instructional resources for pupils, families, and educators through
over-the-air broadcast, digital streaming, and online platforms.

(b) Deliver educational programming that is aligned with this
state’s pre-K through grade 12 academic standards and supports literacy
instruction grounded in evidence-based reading practices.

(c) Operate in partnership with Michigan public broadcasting
stations to provide statewide educational programming and classroom resources.

(d) Demonstrate the capability to produce and distribute
Michigan-specific educational content statewide through broadcast and digital
platforms.

(e) Maintain an online library of instructional resources for
educators, pupils, and families that is available statewide at no cost.

(f) Use the funding allocated under this section solely for
the expansion of literacy programming, educator resources, and family
engagement activities.

(2) By not later than February 1, 2028, the statewide,
public, nonprofit educational media service described in subsection (1) shall
provide a report to the house and senate appropriations subcommittees
responsible for school aid, the house and senate fiscal agencies, and the state
budget director detailing its compliance with ensuring that conditions listed
under subsection (1) were met.

(3) Notwithstanding section 17b, the department shall make
payments under this section by not later than December 1, 2026.

Sec.
99h. (1) From the state school aid pupil support reserve fund money
appropriated in section 11, there is allocated an amount not to exceed $5,000,000.00
for 2026-2027 only for competitive grants to districts and intermediate
districts, and from the general pupil support reserve fund money appropriated
in section 11, there is allocated $600,000.00 for 2026-2027 only for
competitive grants to nonpublic schools, that provide pupils in grades pre-K to
12 with expanded opportunities to improve mathematics, science, computer
science, and technology skills by participating in robotics competition programs
hosted by program providers including, but not limited to, FIRST (for
inspiration and recognition of science and technology) Robotics, including
FIRST Lego League - Discover, Explore, and Challenge, FIRST Tech challenge, and
FIRST Robotics competition, LTU Robofest, MATE (Marine Advanced Technical
Education), REC (Robotics Education Competition) Foundation, Square One
Education Network, VEX, and other providers approved by the department. It is
the intent of the legislature that the appropriations under this section will
be funded with state school aid pupil support reserve fund money and general
pupil support reserve fund money through 2027-2028. All approved providers
shall make all programs available to students in this state regardless of
geographical location. Programs funded under this section are intended to
increase the number of pupils demonstrating proficiency in science and
mathematics on the state assessments and to increase the number of pupils who
are college- and career-ready upon high school graduation. Notwithstanding
section 17b, the department shall make grant payments to districts, nonpublic
schools, and intermediate districts under this section on a schedule determined
by the department. The department shall set maximum grant awards for each different
level of programming and competition in a manner that both maximizes the number
of teams that will be able to receive funds and expands the geographical
distribution of teams. Districts and intermediate districts that receive funds
under this section must provide relevant student participation information, as
determined by the department, to program and competition providers described in
this section. For a district or intermediate district to count a program
competition provider for purposes of payments under this section, the program
and competition providers must agree to aggregate data received by districts
and intermediate districts and provide this information to the department in a
form and manner determined by the department.

(2) The department shall do all of the following for purposes
of this section:

(a) Both of the following by not later than 60 days after the
state school aid appropriations bill for the current fiscal year is enacted
into law or October 1 of the current fiscal year, whichever is later:

(i) Open applications for funding under this
section to all districts, nonpublic schools, and intermediate districts.

(ii) Publish a list of approved programs and
vendors for purposes of this section in a manner that is accessible to all
applicants. To obtain approval under this subparagraph, a program or vendor
must submit to the department registration information, including any fees;
pledge that it will post this information on its website; and, by not later
than January 1 of the current fiscal year, submit this information to the
department for publication on the department’s website.

(b) By not later than 60 days after applications are opened
as described in subdivision (a), close applications under this section.

(c) By not later than 60 days after applications are closed
as described in subdivision (b), make all determinations concerning funding
under this section.

(d) By not later than July 1 of the current fiscal year,
publish a document listing the requirements for becoming an approved program or
vendor under subdivision (a).

(3) Except as otherwise provided under this subsection, if
funding under this section is insufficient to fulfill all funding requests by
qualified applicants under this section, the department shall prorate the total
funding allocated under this section equally among all qualified applicants.
However, for funding under this section toward grants under subsection (5)(b),
in its proration under this subsection, the department shall ensure that each
district is paid in an amount equal to the percentage the department would have
paid the district in grant funding under subsection (5)(b), but for proration
under this subsection, with no district receiving a grant under subsection
(5)(b) in an amount that is greater than the district’s total accrued costs
under subsection (5)(b).

(4) A district, nonpublic school, or intermediate district
applying for a grant under this section must submit an application in a form
and manner prescribed by the department. To be eligible for a grant, a
district, nonpublic school, or intermediate district must demonstrate in its
application that the district, nonpublic school, or intermediate district has
established a partnership for the purposes of the robotics program with at
least 1 sponsor, business entity, higher education institution, technical
school, or individual, must submit a budget, and must provide a local in-kind
or cash match from other private or local funds of at least 25% of the cost of
the robotics program award.

(5) The department shall distribute the grant funding under
this section for the following purposes:

(a) Grants to districts, nonpublic schools, or intermediate
districts to pay for stipends not to exceed $1,500.00 per building for
coaching.

(b) Grants to districts, nonpublic schools, or intermediate
districts for event registrations, materials, travel costs, and other expenses
associated with the preparation for and attendance at robotics events and
competitions.

(c) Grants to districts, nonpublic schools, or intermediate
districts for awards to teams that advance to the next levels of competition as
determined by the department. The department shall determine an equal amount
per team for those teams that advance.

(6) A nonpublic school that receives a grant under this
section may use the funds for either robotics or Science Olympiad programs.

(7) To be eligible to receive funds under this section, a
nonpublic school must be a nonpublic school registered with the department and
must meet all applicable state reporting requirements for nonpublic schools.

(8) To be eligible to receive a grant under this section, a
district, nonpublic school, or intermediate district must do all of the
following:

(a) If the district, nonpublic school, or intermediate
district is requesting funding for more than 1 team for a building, meet the
minimum requirements for team size as determined by the approved program
provider.

(b) Participate in at least the minimum number of
competitions as determined by the approved program provider.

(c) Participate in at least 1 in-person competition.

(9) For purposes of this section, an approved program or
vendor under this section that provides a program under this section shall not
work with the department to set prices or policies for the program.

(10) As used in this section, “current fiscal year” means the
fiscal year for which an allocation is made under this section.

Sec.
99s. (1) From
state school aid fund money appropriated under section 11, there is allocated
for 2026-2027 an amount not to exceed $8,000,000.00 for Michigan science,
technology, engineering, and mathematics programs. Programs funded under this
section are intended to increase the number of pupils demonstrating proficiency
in science and mathematics on the state assessments, to increase the number of
pupils who are college- and career-ready upon high school graduation, and to
promote certificate and degree attainment in STEM fields. Notwithstanding
section 17b, the department shall make payments under this section on a
schedule determined by the department.

(2) The MiSTEM council annually shall review and make
recommendations to the governor, the legislature, and the department concerning
changes to the statewide strategy adopted by the council for delivering STEM
education-related opportunities to pupils. The MiSTEM council shall use funds
received under this section to ensure that the MiSTEM council’s members or
their designees are trained in a third-party evaluation system such as the
Change the Equation STEMworks program for the purpose of rating STEM programs.

(3) The MiSTEM council shall make specific funding
recommendations for the funds allocated under subsection (4) by December
15 of each fiscal year. Each specific funding recommendation must be for a
program or demonstration grant approved by the MiSTEM council. All of the
following apply:

(a) To be eligible for MiSTEM council approval as described
in this subsection, a program must satisfy all of the following:

(i) Align with this state’s academic
standards.

(ii) Have STEMworks or other third-party
certification.

(iii) Provide project-based experiential
learning, student programming, or educator professional learning experiences.

(iv) Focus predominantly on classroom-based
STEM experiences or professional learning experiences.

(b) The MiSTEM council shall approve programs that represent
all network regions and include a diverse array of options for students and
educators.

(c) To be eligible for MiSTEM council approval as described
in this subsection, a demonstration grant must satisfy all of the following:

(i) Align with this state’s academic
standards.

(ii) In collaboration with the department,
scale project, problem, or place-based learning in a building or district in
support of the statewide STEM strategy as recommended by the MiSTEM council.

(d) The MiSTEM council is encouraged to work with the MiSTEM
network to develop locally and regionally developed programs, demonstration
grants, and professional learning experiences for the programs on the list of
approved programs. At the direction of the MiSTEM council, funds can be used to
evaluate and market regions, programs, and demonstration grants.

(e) If the MiSTEM council is unable to make specific funding
recommendations by December 15 of a fiscal year, the department shall award and
distribute the funds allocated under subsection (4) on a competitive grant
basis that at least follows the statewide STEM strategy plan and rating system
recommended by the MiSTEM council. Each grant must provide STEM
education-related opportunities for pupils.

(4) From the state school aid fund money allocated under
subsection (1), there is allocated for 2026-2027 an amount not to exceed
$3,800,000.00 for the purpose of funding programs or demonstration grants under
this section for 2026-2027 as recommended by the MiSTEM council.

(5) From the state school aid fund money allocated under
subsection (1), there is allocated an amount not to exceed $4,200,000.00 for
2026-2027 to support the activities and programs of the MiSTEM network regions.
From the funds allocated under this subsection, the department shall award the
fiscal agent for each MiSTEM network region $220,000.00 for the base operations
of each region. The department shall distribute the remaining funds to each fiscal
agent in an equal amount per pupil, based on the number of K to 12 pupils
enrolled in districts within each region in the immediately preceding fiscal
year.

(6) A MiSTEM network region shall do all of the following:

(a) Collaborate with the career and educational advisory
council that is located in the MiSTEM region and the department to develop a
regional strategic plan for STEM education that creates a robust regional STEM
culture, that empowers STEM teachers, that integrates business and education
into the STEM network, and that ensures high-quality STEM experiences for
pupils. At a minimum, a regional STEM strategic plan described in this
subdivision should do all of the following in collaboration with the
department:

(i) Identify regional employer need for
STEM.

(ii) Identify processes for regional
employers and educators to create guided pathways for STEM careers that include
internships or externships, apprenticeships, and other experiential engagements
for pupils.

(iii) Identify educator professional learning
opportunities, including internships or externships and apprenticeships, that
integrate this state’s science standards into high-quality STEM experiences
that engage pupils.

(b) Facilitate regional STEM events such as educator and
employer networking and STEM career fairs to raise STEM awareness.

(c) Contribute to the MiSTEM website and engage in other
MiSTEM network functions to further the mission of STEM in this state in
coordination with the MiSTEM council and the department of labor and economic
opportunity.

(d) Facilitate application and implementation of state and
federal funds under this subsection and any other grants or funds for the
MiSTEM network region.

(e) Work with districts to provide STEM programming and
professional learning.

(f) Coordinate recurring discussions and work with the career
and educational advisory council to ensure that feedback and best practices are
being shared, including funding, program, professional learning opportunities,
and regional strategic plans.

(g) In collaboration with the department, deploy marketing
and outreach efforts to publish the availability of STEM learning
opportunities.

(7) To receive funds under this section, a grant recipient
must allow access for the department or the department’s designee to audit all
records related to the program for which the grant recipient received those
funds. The grant recipient shall reimburse the state for all disallowances
found in the audit.

(8) To receive funds under this section, a grant recipient
must provide at least a 10% local match from local public or private resources
for the funds received under this subsection.

(9) By not later than July 1 of each fiscal year for which
funding is allocated under this section, grant recipients shall report to the
executive director of the MiSTEM network in a form and manner prescribed by the
executive director on performance measures developed by the MiSTEM network
regions and approved by the executive director. The performance measures must
be designed to ensure that the activities of the MiSTEM network are improving
student academic outcomes. The report described in this subsection must be
published on a publicly accessible website.

(10) The MiSTEM network may receive funds from private
sources. If the MiSTEM network receives funds from private sources, the MiSTEM
network shall expend those funds in alignment with the statewide STEM strategy.

(11) Not more than 5% of funds awarded under this section may
be retained by a fiscal agent.

(12) As used in this section:

(a) “Career and educational advisory council” means an
advisory council to the local workforce development boards located in a
prosperity region consisting of educational, employer, labor, and parent
representatives.

(b) “Department” means the department of labor and economic
opportunity.

(c) “MiSTEM council” means the Michigan Science, Technology,
Engineering, and Mathematics Education Advisory Council created as an advisory
body within the department of labor and economic opportunity by Executive
Reorganization Order No. 2019-3, MCL 125.1998.

(d) “STEM” means science, technology, engineering, and
mathematics delivered in an integrated fashion using cross-disciplinary
learning experiences that can include language arts, performing and fine arts,
and career and technical education.

Sec. 99nn. (1) From the state school aid fund money appropriated in section 11,
there is allocated for 2026-2027 only an amount not to exceed $2,900,000.00 to
an intermediate district to partner with the department and a virtual reality
program provider to serve up to 9,000 students in up to 8 districts in a
virtual reality simulation pilot program that improves math and science
education for students in grades 6 to 12.

(2) A virtual reality simulation pilot program described in
this section must do all of the following:

(a) Offer tactile, multimodal learning experiences that teach
core state standards-aligned concepts and skills for grades 6 to 12 mathematics
and science, with a focus on improving outcomes on standards-aligned algebra I
and middle school math benchmarks.

(b) Immerse students in real-world problems across
occupations and career clusters to build career exposure and relevance, using
3-D models and interactives that visualize and manipulate abstract mathematical
and science concepts. A virtual reality program provider described in this
section must have already conducted a randomized controlled trial by a
third-party evaluator that demonstrated double-digit growth outcomes in algebra I
benchmark assessments.

(c) Align with high-skill, high-wage, and high-demand
occupations across career clusters aligned with local and market needs.
Districts participating in a pilot program described in this section shall
provide access to all mathematics and science teachers in a district for the
purpose of building the strong quantitative and critical thinking foundations
that every student requires to be successful across career clusters.

(3) An intermediate district receiving funds under this
section shall forward funds received to a virtual reality program provider
determined by the department within 30 days of the receipt of funds. The
intermediate district may retain up to 2.5% of funds received for
administrative costs. The intermediate district bears no responsibility for the
operation of the virtual reality pilot program described in this section.

(4) To be eligible for funding under this section, an
intermediate district must apply in a form and manner determined by the
department.

(5) To be eligible to participate in the pilot program,
districts must apply in a form and manner determined by the department.

(6) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
101. (1) To be eligible to receive state aid under this article, not later than
the fifth Wednesday after the pupil membership count day and not later than the
fifth Wednesday after the supplemental count day, each district superintendent
shall submit and certify to the center and the intermediate superintendent, in
the form and manner prescribed by the center, the number of pupils enrolled and
in regular daily attendance, including identification of tuition-paying pupils,
in the district as of the pupil membership count day and as of the supplemental
count day, as applicable, for the current school year. In addition, a district
maintaining school during the entire year shall submit and certify to the
center and the intermediate superintendent, in the form and manner prescribed
by the center, the number of pupils enrolled and in regular daily attendance in
the district for the current school year pursuant to rules promulgated by the
superintendent. Not later than the sixth Wednesday after the pupil
membership count day and not later than the sixth Wednesday after the
supplemental count day, the district shall resolve any pupil membership
conflicts with another district, correct any data issues, and recertify the
data in a form and manner prescribed by the center and file the certified data
with the intermediate superintendent. If a district fails to submit and certify
the attendance data, as required under this subsection, the center shall notify
the department and the department shall withhold state aid due to be
distributed under this article from the defaulting district immediately,
beginning with the next payment after the failure and continuing with each
payment until the district complies with this subsection. If a district does
not comply with this subsection by the end of the fiscal year, the district
forfeits the amount withheld. A person who willfully falsifies a figure or
statement in the certified and sworn copy of enrollment is subject to penalty
as prescribed by section 161.

(2) To be eligible to receive state aid under this article,
not later than the twenty-fourth Wednesday after the pupil membership count day
and not later than the twenty-fourth Wednesday after the supplemental count
day, an intermediate district shall submit to the center, in a form and manner
prescribed by the center, the audited enrollment and attendance data as
described in subsection (1) for the pupils of its constituent districts and of
the intermediate district. If an intermediate district fails to submit the
audited data as required under this subsection, the department shall withhold
state aid due to be distributed under this article from the defaulting
intermediate district immediately, beginning with the next payment after the
failure and continuing with each payment until the intermediate district
complies with this subsection. If an intermediate district does not comply with
this subsection by the end of the fiscal year, the intermediate district
forfeits the amount withheld.

(3) Except as otherwise provided in subsections (11) and (12)
all of the following apply to the provision of pupil instruction:

(a) Except as otherwise provided in this section, each
district shall provide at least 1,098 hours and 180 days of pupil instruction.
If a collective bargaining agreement that provides a complete school calendar
was in effect for employees of a district as of June 24, 2014, and if that
school calendar is not in compliance with this subdivision, then this
subdivision does not apply to that district until after the expiration of that
collective bargaining agreement. A district may apply for a waiver under subsection
(9) or subdivision (h) from the requirements of this subdivision.

(b) Except as otherwise provided in this article, a district
failing to comply with the required minimum hours and days of pupil instruction
under this subsection forfeits from its total state aid allocation an amount
determined by applying a ratio of the number of hours or days the district was
in noncompliance in relation to the required minimum number of hours and days
under this subsection. Not later than the first business day in August, the
board of each district shall either certify to the department that the district
was in full compliance with this section regarding the number of hours and days
of pupil instruction in the previous school year, or report to the department,
in a form and manner prescribed by the center, each instance of noncompliance.
If the district did not provide at least the required minimum number of hours
and days of pupil instruction under this subsection, the department shall make
the deduction of state aid in the following fiscal year from the first payment
of state school aid. A district is not subject to forfeiture of funds under
this subsection for a fiscal year in which a forfeiture was already imposed
under subsection (6).

(c) Hours or days lost because of strikes or teachers’
conferences are not counted as hours or days of pupil instruction.

(d) Except as otherwise provided in this subsection, if a
district does not have at least 75% of the district’s membership in attendance
on any day of pupil instruction, the department shall pay the district state
aid in that proportion of 1/180 that the actual percent of attendance bears to
75%.

(e) If a district adds 1 or more days of pupil instruction to
the end of its instructional calendar for a school year to comply with
subdivision (a) because the district otherwise would fail to provide the
required minimum number of days of pupil instruction even after the operation
of subsection (4) due to conditions not within the control of school
authorities, then subdivision (d) does not apply for any day of pupil
instruction that is added to the end of the instructional calendar. Instead,
for any of those days, if the district does not have at least 60% of the
district’s membership in attendance on that day, the department shall pay the
district state aid in that proportion of 1/180 that the actual percentage of
attendance bears to 60%. For any day of pupil instruction added to the
instructional calendar as described in this subdivision, the district shall
report to the department the percentage of the district’s membership that is in
attendance, in the form and manner prescribed by the department.

(f) At the request of a district that operates a
department-approved alternative education program and that does not provide
instruction for pupils in all of grades K to 12, the superintendent shall grant
a waiver from the requirements of subdivision (d). The waiver must provide that
an eligible district is subject to the proration provisions of subdivision (d)
only if the district does not have at least 50% of the district’s membership in
attendance on any day of pupil instruction. In order to be eligible for this
waiver, a district must maintain records to substantiate its compliance with
the following requirements:

(i) The district offers the minimum hours of
pupil instruction as required under this section.

(ii) For each enrolled pupil, the district
uses appropriate academic assessments to develop an individual education plan
that leads to a high school diploma.

(iii) The district tests each pupil to
determine academic progress at regular intervals and records the results of
those tests in that pupil’s individual education plan.

(g) All of the following apply to a waiver granted under
subdivision (f):

(i) If the waiver is for a blended model of
delivery, a waiver that is granted for the 2011-2012 fiscal year or a
subsequent fiscal year remains in effect unless it is revoked by the
superintendent.

(ii) If the waiver is for a 100% online model
of delivery and the educational program for which the waiver is granted makes
educational services available to pupils for a minimum of at least 1,098 hours
during a school year and ensures that each pupil participates in the
educational program for at least 1,098 hours during a school year, a waiver
that is granted for the 2011-2012 fiscal year or a subsequent fiscal year
remains in effect unless it is revoked by the superintendent.

(iii) A waiver that is not a waiver described
in subparagraph (i) or (ii) is
valid for 3 fiscal years, unless it is revoked by the superintendent, and must
be renewed at the end of the 3-year period to remain in effect.

(h) Subdivision (d) does not apply to a district-operated
special education program approved by the department if the district-operated
special education program’s instructional calendar exceeds 180 days of pupil
instruction. For any day of instruction provided as part of a district-operated
special education program described in this subdivision, the district-operated
special education program is exempt from the attendance threshold established
under subdivision (d), provided that the district-operated special education
program offers the minimum hours of pupil instruction required under this
section and maintains documentation of the program’s approved instructional
calendar.

(i) At the request of a district with fewer than 100 pupils
in membership as reported in the most recent fall pupil count, the
superintendent shall grant a waiver from the requirements of subdivision (d) if
the district demonstrates that the absence of a single household may materially
reduce the district’s daily attendance percentage below the threshold
established in subdivision (d). A waiver granted under this subdivision must
provide that the district is subject to the proration provisions of subdivision
(d) only if the district does not have at least 60% of the district’s
membership in attendance on any day of pupil instruction. The district shall
maintain records necessary to substantiate the district’s eligibility for a
waiver granted under this subdivision.

(j) The superintendent shall promulgate rules for the
implementation of this subsection.

(4) All of the following apply to the counting of hours and
days of pupil instruction under this section:

(a) Except as otherwise provided in this subsection, the
first 6 days or the equivalent number of hours for which pupil instruction is
not provided because of conditions not within the control of school
authorities, such as severe storms, fires, epidemics, utility power
unavailability, water or sewer failure, or health conditions as defined by the
city, county, or state health authorities, are counted as hours and days of
pupil instruction. For the 2025-2026 school year only, a district may count up
to 4 additional days in which pupil instruction is not provided because of
conditions not within the control of school authorities as described in this
subdivision as hours and days of pupil instruction if all of the following
apply:

(i) A district seeking to count up to 4
additional days as hours and days of pupil instruction under this subdivision
is located wholly or partially in any of the following counties:

(A) Mason County.

(B) Lake County.

(C) Osceola County.

(D) Clare County.

(E) Gladwin County.

(F) Arenac County.

(G) Manistee County.

(H) Wexford County.

(I) Missaukee County.

(J) Roscommon County.

(K) Ogemaw County.

(L) Iosco County.

(M) Benzie County.

(N) Grand Traverse County.

(O) Kalkaska County.

(P) Crawford County.

(Q) Oscoda County.

(R) Alcona County.

(S) Leelanau County.

(T) Antrim County.

(U) Otsego County.

(V) Montmorency County.

(W) Alpena County.

(X) Charlevoix County.

(Y) Emmet County.

(Z) Cheboygan County.

(AA) Presque Isle County.

(BB) Gogebic County.

(CC) Ontonagon County.

(DD) Houghton County.

(EE) Iron County.

(FF) Baraga County.

(GG) Marquette County.

(HH) Dickinson County.

(II) Menominee County.

(JJ) Alger County.

(KK) Delta County.

(LL) Schoolcraft County.

(MM) Luce County.

(NN) Chippewa County.

(OO) Mackinac County.

(PP) Keweenaw County.

(ii) A district described in subparagraph (i) was not able to provide pupil instruction on March 12, 13,
16, or 17 due to conditions not within the control of school authorities as
described in this subdivision.

(iii) A district described in subparagraph (i) counts only the dates described in subparagraph (ii) in which pupil instruction was not provided as additional
hours and days of pupil instruction under this subdivision.

(b) For the 2025-2026 school year only, a district located in
a county described in Executive Order No. 2026-7 or Executive Order No. 2026-9
may count up to 5 additional days in which pupil instruction is not provided
because of conditions not within the control of school authorities as described
in Executive Order No. 2026-7 or Executive Order No. 2026-9 as hours and days
of pupil instruction.

(c) For the 2025-2026 school year only, a district located in
a county or region described in Executive Order No. 2026-11 may count up to 4
additional days in which pupil instruction is not provided because of
conditions not within the control of school authorities as described in
Executive Order No. 2026-11 as hours and days of pupil instruction.

(d) With the approval of the superintendent of public
instruction, the department shall count as hours and days of pupil instruction
for a fiscal year not more than 3 additional days or the equivalent number of
additional hours for which pupil instruction is not provided in a district due
to unusual and extenuating occurrences resulting from conditions not within the
control of school authorities such as those conditions described in this
subsection.

(e) A district that counts hours or days of professional
development for teachers as hours or days of pupil instruction, as provided
under subsection (10), is eligible to have additional hours or days counted as
hours and days of pupil instruction as provided under subdivision (d) to the
same extent as a district that does not count hours or days of professional
development for teachers as hours or days of pupil instruction.

(f) In deciding whether to approve the counting of additional
hours or days of pupil instruction under subdivision (d) for a district, the
superintendent of public instruction shall not take into account whether or not
the district counts hours or days of professional development for teachers as
hours or days of pupil instruction, as provided under subsection (10).

(g) Subsequent hours or days beyond those described in
subdivisions (a) to (d) are not counted as hours or days of pupil instruction.

(5) A district does not forfeit part of its state aid
appropriation because it adopts or has in existence an alternative scheduling
program for pupils in kindergarten if the program provides at least the number
of hours required under subsection (3) for a full-time equated membership for a
pupil in kindergarten as provided under section 6(4).

(6) In addition to any other penalty or forfeiture under this
section, if at any time the department determines that 1 or more of the
following have occurred in a district, the district forfeits in the current
fiscal year beginning in the next payment to be calculated by the department a
proportion of the funds due to the district under this article that is equal to
the proportion below the required minimum number of hours and days of pupil
instruction under subsection (3), as specified in the following:

(a) The district fails to operate its schools for at least
the required minimum number of hours and days of pupil instruction under
subsection (3) in a school year, including hours and days counted under
subsection (4).

(b) The board of the district takes formal action not to
operate its schools for at least the required minimum number of hours and days
of pupil instruction under subsection (3) in a school year, including hours and
days counted under subsection (4).

(7) In providing the minimum number of hours and days of
pupil instruction required under subsection (3), a district shall use the
following guidelines, and a district shall maintain records to substantiate its
compliance with the following guidelines:

(a) Except as otherwise provided in this subsection, a pupil
must be scheduled for at least the required minimum number of hours of
instruction, excluding study halls, or at least the sum of 90 hours plus the
required minimum number of hours of instruction, including up to 2 study halls.

(b) The time a pupil is assigned to any tutorial activity in
a block schedule may be considered instructional time, unless that time is
determined in an audit to be a study hall period.

(c) Except as otherwise provided in this subdivision, a pupil
in grades 9 to 12 for whom a reduced schedule is determined to be in the
individual pupil’s best educational interest, or a pupil in grades 6 to 8 for
whom a reduced schedule is determined to be in the individual pupil’s best
educational interest due to the pupil’s participation in an advanced
curriculum, must be scheduled for a number of hours equal to at least 80% of
the required minimum number of hours of pupil instruction to be considered a
full-time equivalent pupil. A pupil in grades 6 to 12 who is scheduled in a
4-block schedule may receive a reduced schedule under this subsection if the
pupil is scheduled for a number of hours equal to at least 75% of the required
minimum number of hours of pupil instruction to be considered a full-time
equivalent pupil.

(d) For a pupil in grades 9 to 12 enrolled in a cooperative
education program, or for a special education pupil, in determining full-time
equated membership for that pupil, the pupil is not considered less than a
full-time equated pupil solely because of the effect of the pupil’s enrollment
in the cooperative education program or special education program, including
necessary travel time, on the number of class hours provided by the district to
the pupil.

(e) In grades 7 through 12, instructional time that is part
of a Junior Reserve Officer Training Corps (JROTC) program is considered to be
pupil instruction time regardless of whether the instructor is a certificated
teacher if all of the following are met:

(i) The instructor has met all of the
requirements established by the United States Department of Defense and the
applicable branch of the armed services for serving as an instructor in the
Junior Reserve Officer Training Corps program.

(ii) The board of the district or
intermediate district employing or assigning the instructor complies with the
requirements of sections 1230 and 1230a of the revised school code, MCL
380.1230 and 380.1230a, with respect to the instructor to the same extent as if
employing the instructor as a regular classroom teacher.

(8) Except as otherwise provided in subsections (11) and
(12), the department shall apply the guidelines under subsection (7) in
calculating the full-time equivalency of pupils.

(9) Upon application by the district for a particular fiscal
year, the superintendent shall waive for a district the minimum number of hours
and days of pupil instruction requirement of subsection (3) for a
department-approved alternative education program or another innovative program
approved by the department, including a 4-day school week. If a district
applies for and receives a waiver under this subsection and complies with the
terms of the waiver, the district is not subject to forfeiture under this section
for the specific program covered by the waiver. If the district does not comply
with the terms of the waiver, the amount of the forfeiture is calculated based
upon a comparison of the number of hours and days of pupil instruction actually
provided to the minimum number of hours and days of pupil instruction required
under subsection (3). A district shall report pupils enrolled in a
department-approved alternative education program under this subsection to the
center in a form and manner determined by the center. All of the following
apply to a waiver granted under this subsection:

(a) If the waiver is for a blended model of delivery, a
waiver that is granted for the 2011-2012 fiscal year or a subsequent fiscal
year remains in effect unless it is revoked by the superintendent.

(b) If the waiver is for a 100% online model of delivery and
the educational program for which the waiver is granted makes educational
services available to pupils for a minimum of at least 1,098 hours during a
school year and ensures that each pupil is on track for course completion at
proficiency level, a waiver that is granted for the 2011-2012 fiscal year or a
subsequent fiscal year remains in effect unless it is revoked by the
superintendent.

(c) A waiver that is not a waiver described in subdivision
(a) or (b) is valid for 3 fiscal years, unless it is revoked by the
superintendent, and must be renewed at the end of the 3-year period to remain
in effect.

(10) A district may count up to 38 hours of professional
development for teachers as hours of pupil instruction. All of the following
apply to the counting of professional development as pupil instruction under
this subsection:

(a) If the professional development exceeds 5 hours in a
single day, that day may be counted as a day of pupil instruction.

(b) At least 8 hours of the professional development counted
as hours of pupil instruction under this subsection must be recommended by a
districtwide professional development advisory committee appointed by the
district board. The advisory committee must be composed of teachers employed by
the district who represent a variety of grades and subject matter
specializations, including special education; nonteaching staff; parents; and
administrators. The majority membership of the committee must be composed of
teaching staff.

(c) Professional development provided online is allowable and
encouraged, as long as the instruction has been approved by the district. The
department shall issue a list of approved online professional development
providers that must include the Michigan Virtual School.

(d) Professional development may only be counted as hours of
pupil instruction under this subsection for the pupils of those teachers
scheduled to participate in the professional development.

(e) The professional development must meet all of the
following to be counted as pupil instruction under this subsection:

(i) Be aligned to the school or district
improvement plan for the school or district in which the professional
development is being provided.

(ii) Be linked to 1 or more criteria in the
evaluation tool developed or adopted by the district or intermediate district
under section 1249 of the revised school code, MCL 380.1249.

(iii) Has been approved by the department as
counting for state continuing education clock hours. The number of hours of
professional development counted as hours of pupil instruction under this
subsection may not exceed the number of state continuing education clock hours
for which the professional development was approved.

(iv) Not more than a combined total of 10
hours of the professional development takes place before the first scheduled
day of school for the school year ending in the fiscal year and after the last
scheduled day of school for that school year.

(v) Not more than 10 hours of the
professional development takes place in a single month.

(vi) At least 75% of teachers scheduled to
participate in the professional development are in attendance.

(11) Subsections (3) and (8) do not apply to a school of
excellence 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. 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.

(12) Subsections (3) and (8) do not apply to eligible pupils
enrolled in a dropout recovery program that meets the requirements of section
23a. As used in this subsection, “eligible pupil” means that term as defined in
section 23a.

(13) At least every 2 years the superintendent shall review
the waiver standards set forth in the pupil accounting and auditing manuals to
ensure that the waiver standards and waiver process continue to be appropriate
and responsive to changing trends in online learning. The superintendent shall
solicit and consider input from stakeholders as part of this review.

Sec.
104. (1) To receive state aid under this article, a district shall comply with
sections 1249, 1278a, 1278b, 1279g, and 1280b of the revised school code, MCL
380.1249, 380.1278a, 380.1278b, 380.1279g, and 380.1280b, and 1970 PA 38, MCL
388.1081 to 388.1086. Subject to subsection (2), from the state school aid fund
money appropriated in section 11, there is allocated for 2025-2026
$40,000,000.00, and there is allocated for 2026-2027 $44,500,000.00, for
payments on behalf of districts for costs associated with complying with those
provisions of law. In addition, from the federal funds appropriated in section
11, there is allocated for 2025-2026 an amount estimated at $8,000,000.00 and
for 2026-2027 an amount estimated at $100.00 funded from DED-OESE, title VI,
state assessment funds, and from DED-OSERS, part B of the individuals with
disabilities education act, 20 USC 1411 to 1419, plus any carryover federal
funds from previous year appropriations, for the purposes of complying with the
every student succeeds act, Public Law 114-95.

(2) The results of each test administered as part of the
Michigan student test of educational progress (M‑STEP), including tests
administered to high school students, must include an item analysis that lists
all items that are counted for individual pupil scores and the percentage of
pupils choosing each possible response. The department shall work with the center
to identify the number of students enrolled at the time assessments are given
by each district. In calculating the percentage of pupils assessed for a
district’s scorecard, the department shall use only the number of pupils
enrolled in the district at the time the district administers the assessments
and shall exclude pupils who enroll in the district after the district
administers the assessments.

(3) The department shall distribute federal funds allocated
under this section in accordance with federal law and with flexibility
provisions outlined in Public Law 107-116, and in the education flexibility
partnership act of 1999, Public Law 106-25.

(4) The department may recommend, but may not require,
districts to allow pupils to use an external keyboard with tablet devices for
online M-STEP testing, including, but not limited to, open-ended test items
such as constructed response or equation builder items.

(5) Notwithstanding section 17b, the department shall make
payments on behalf of districts, intermediate districts, and other eligible
entities under this section on a schedule determined by the department.

(6) From the allocation in subsection (1), there is allocated
$500,000.00 for 2025-2026 and 2026-2027 for the operation of an online
reporting tool to provide student-level assessment data in a secure environment
to educators, parents, and pupils immediately after assessments are scored. The
department and the center shall ensure that any data collected by the online
reporting tool do not provide individually identifiable student data to the
federal government.

(7) As used in this section:

(a) “DED” means the United States Department of Education.

(b) “DED-OESE” means the DED Office of Elementary and
Secondary Education.

(c) “DED-OSERS” means the DED Office of Special Education and
Rehabilitative Services.

Sec.
104h. (1) From the state school aid fund money appropriated under section 11,
there is allocated for 2026-2027 an amount not to exceed $11,500,000.00 to
districts to implement benchmark assessments during the 2026-2027 school year. All
of the following apply to the benchmark assessment system described in this
subsection:

(a) The system must provide for all of the following:

(i) That, within the first 9 weeks of the
school year, the district shall administer 1 or more benchmark assessments
provided by a provider approved under subsection (5), benchmark assessments
described in subdivision (b), or local benchmark assessments, or any
combination thereof, to all pupils in grades K to 8 to measure proficiency in
reading and mathematics.

(ii) That, in addition to the benchmark
assessment or benchmark assessments administered under subparagraph (i), by not later than the last day of the school year, the
district shall administer the benchmark assessment or assessments administered
under subparagraph (i) to all pupils in grades K to 8 to
measure proficiency in reading and mathematics. To support fall to spring
growth calculations, the same benchmark assessment that is administered in the
fall must be administered in the last marking period of the school year.

(b) Except as otherwise provided in this section, a district
may administer 1 or more of the following benchmark assessments toward meeting
the requirements under subdivision (a):

(i) A benchmark assessment in reading for
students in grades K to 9 that contains progress monitoring tools and enhanced
diagnostic assessments.

(ii) A benchmark assessment in math for
students in grades K to 8 that contains progress monitoring tools.

(c) The system must provide that, to the extent practicable,
if a district administers a benchmark assessment or benchmark assessments under
this section, the district shall administer the same benchmark assessment or
benchmark assessments provided by a provider approved under subsection (5),
benchmark assessment or benchmark assessments described in subdivision (b), or
local benchmark assessment or local benchmark assessments that it administered
to pupils in previous school years, as applicable.

(d) The system must provide that, if a district administers a
benchmark assessment or benchmark assessments under this section, the district
shall provide each pupil’s data from the benchmark assessment or benchmark
assessments, as available, to the pupil’s parent or legal guardian within 30
days of administering the benchmark assessment or benchmark assessments.

(e) The system must provide that, if a local benchmark
assessment or local benchmark assessments are administered under subdivision
(a), the district shall report to the department, in a form and manner
prescribed by the department, the local benchmark assessment or local benchmark
assessments that were administered and how that assessment or those assessments
measure changes, including any losses, as applicable, in learning, and the
district’s plan for addressing any losses in learning.

(2) To receive funding under this section, a district must do
all of the following:

(a) Apply for the funding in a form and manner prescribed by
the department.

(b) Administer 1 or more of the benchmark assessments
described in subsection (5), excluding the benchmark assessment described in
subsection (4).

(c) Administer the same benchmark assessment or assessments
in both the fall and spring, as required under this section.

(d) Meet all reporting requirements to parents and legal
guardians as described in this section.

(3) Subject to subsection (2), the department shall pay an
equal amount per membership pupil in grades K to 8 in the district to each
district that applies for funding under this section.

(4) The department shall make 1 of the benchmark assessments
provided by a provider approved under subsection (5) available to districts at
no cost to the districts for purposes of meeting the requirements under this
section. The benchmark assessment described in this subsection must meet all of
the following:

(a) Be aligned to the content standards of this state.

(b) Complement this state’s summative assessment system.

(c) Be internet-delivered and include a standards-based
assessment.

(d) Provide information on pupil achievement with regard to
learning content required in a given year or grade span.

(e) Provide timely feedback to pupils and teachers.

(f) Be nationally normed.

(g) Provide information to educators about student growth and
allow for multiple testing opportunities.

(h) Include a digital library of teaching resources that are
tied directly to the benchmark assessment and aligned to this state’s
standards.

(5) The department shall approve at least 4 but not more than
6 providers of benchmark assessments for the purposes of this section. The
department shall inform districts of all of the providers approved under this
subsection in an equitable manner. The benchmark assessments, with the
exclusion of the benchmark assessment described in subsection (4), provided by
approved providers under this subsection must meet all of the following:

(a) Be aligned to the content standards of this state.

(b) Complement the state’s summative assessment system.

(c) Be internet-delivered and include a standards-based
remote, in-person, or both remote and in-person assessment using a
computer-adaptive model to target the instructional level of each pupil.

(d) Provide information on pupil achievement with regard to
learning content required in a given year or grade span.

(e) Provide immediate feedback to pupils and teachers.

(f) Be nationally normed.

(g) Provide multiple measures of growth and provide for
multiple testing opportunities.

Sec.
107. (1) From the state school aid fund appropriation in section 11, there is
allocated an amount not to exceed $42,525,000.00 for 2026-2027 for adult
education programs authorized under this section. Except as otherwise provided
under subsections (14) and (15), funds allocated under this section are
restricted for adult education programs as authorized under this section only.
A recipient of funds under this section shall not use those funds for any other
purpose.

(2) To be eligible for funding under this section, an
eligible adult education provider shall employ certificated teachers and
qualified administrative staff and shall offer continuing education
opportunities for teachers to allow them to maintain certification.

(3) To be eligible to be a participant funded under this
section, an individual must be enrolled in an adult basic education program, an
adult secondary education program, an adult English as a second language
program, a high school equivalency test preparation program, or a high school
completion program, that meets the requirements of this section, and for which
instruction is provided, and the individual must be at least 18 years of age by
July 1 of the program year and the individual’s graduating class must have
graduated.

(4) By April 1 of each fiscal year for which funding is
allocated under this section, the intermediate districts within a prosperity
region or subregion shall determine which intermediate district will serve as
the prosperity region’s or subregion’s fiscal agent for the next fiscal year
and shall notify the department in a form and manner determined by the
department. The department shall approve or disapprove of the prosperity region’s
or subregion’s selected fiscal agent. From the funds allocated under subsection
(1), an amount as determined under this subsection is allocated to each
intermediate district serving as a fiscal agent for adult education programs in
each of the prosperity regions or subregions identified by the department. An
intermediate district shall not use more than 5% of the funds allocated under
this subsection for administration costs for serving as the fiscal agent. The
allocation provided to each intermediate district serving as a fiscal agent
must be calculated as follows:

(a) Sixty percent of this portion of the funding must be
distributed based upon the proportion of the state population of individuals
between the ages of 18 and 24 that are not high school graduates that resides
in each of the prosperity regions or subregions located within the intermediate
district, as reported by the most recent 5‑year estimates from the
American Community Survey (ACS) from the United States Census Bureau.

(b) Thirty-five percent of this portion of the funding must
be distributed based upon the proportion of the state population of individuals
age 25 or older who are not high school graduates that resides in each of the
prosperity regions or subregions located within the intermediate district, as
reported by the most recent 5-year estimates from the ACS from the United
States Census Bureau.

(c) Five percent of this portion of the funding must be
distributed based upon the proportion of the state population of individuals
age 18 or older who lack basic English language proficiency that resides in
each of the prosperity regions or subregions located within the intermediate
district, as reported by the most recent 5-year estimates from the ACS from the
United States Census Bureau.

(5) To be an eligible fiscal agent, an intermediate district
must agree to do the following in a form and manner determined by the
department:

(a) Distribute funds to adult education programs in a
prosperity region or subregion as described in this section.

(b) Collaborate with the career and educational advisory
council, which is an advisory council of the workforce development boards
located in the prosperity region or subregion, or its successor, to develop a
regional strategy that aligns adult education programs and services into an
efficient and effective delivery system for adult education learners, with
special consideration for providing contextualized learning and career pathways
and addressing barriers to education and employment.

(c) Collaborate with the career and educational advisory
council, which is an advisory council of the workforce development boards
located in the prosperity region or subregion, or its successor, to create a
local process and criteria that will identify eligible adult education
providers to receive funds allocated under this section based on location,
demand for services, past performance, quality indicators as identified by the
department, and cost to provide instructional services. The fiscal agent shall determine
all local processes, criteria, and provider determinations. However, the local
processes, criteria, and provider services must be approved by the department
before funds may be distributed to the fiscal agent.

(d) Provide oversight to its adult education providers
throughout the program year to ensure compliance with the requirements of this
section.

(e) Report adult education program and participant data and
information as prescribed by the department.

(6) An adult basic education program, an adult secondary
education program, or an adult English as a second language program operated on
a year-round or school year basis may be funded under this section, subject to
all of the following:

(a) The program enrolls adults who are determined by a
department-approved assessment, in a form and manner prescribed by the
department, to be below twelfth grade level in reading or mathematics, or both,
or to lack basic English proficiency.

(b) The program tests individuals for eligibility under
subdivision (a) before enrollment and upon completion of the program in
compliance with the state-approved assessment policy.

(c) A participant in an adult basic education program is
eligible for reimbursement until 1 of the following occurs:

(i) The participant’s reading and
mathematics proficiency are assessed at or above the ninth grade level.

(ii) The participant fails to show progress
on 2 successive assessments after having completed at least 450 hours of
instruction.

(d) A participant in an adult secondary education program is
eligible for reimbursement until 1 of the following occurs:

(i) The participant’s reading and
mathematics proficiency are assessed above the twelfth grade level.

(ii) The participant fails to show progress
on 2 successive assessments after having at least 450 hours of instruction.

(e) A funding recipient enrolling a participant in an English
as a second language program is eligible for funding according to subsection
(9) until the participant meets 1 of the following:

(i) The participant is assessed as having
attained basic English proficiency as determined by a department-approved
assessment.

(ii) The participant fails to show progress
on 2 successive department-approved assessments after having completed at least
450 hours of instruction. The department shall provide information to a funding
recipient regarding appropriate assessment instruments for this program.

(7) A high school equivalency test preparation program
operated on a year-round or school year basis may be funded under this section,
subject to all of the following:

(a) The program enrolls adults who do not have a high school
diploma or a high school equivalency certificate.

(b) The program administers a pre-test approved by the
department before enrolling an individual to determine the individual’s
literacy levels, administers a high school equivalency practice test to
determine the individual’s potential for success on the high school equivalency
test, and administers a post-test upon completion of the program in compliance
with the state-approved assessment policy.

(c) A funding recipient receives funding according to
subsection (9) for a participant, and a participant may be enrolled in the
program until 1 of the following occurs:

(i) The participant achieves a high school
equivalency certificate.

(ii) The participant fails to show progress
on 2 successive department-approved assessments used to determine readiness to
take a high school equivalency test after having completed at least 450 hours
of instruction.

(8) A high school completion program operated on a year-round
or school year basis may be funded under this section, subject to all of the
following:

(a) The program enrolls adults who do not have a high school
diploma.

(b) The program tests participants described in subdivision
(a) before enrollment and upon completion of the program in compliance with the
state-approved assessment policy.

(c) A funding recipient receives funding according to
subsection (9) for a participant in a course offered under this subsection
until 1 of the following occurs:

(i) The participant passes the course and
earns a high school diploma.

(ii) The participant fails to earn credit in
2 successive semesters or terms in which the participant is enrolled after
having completed at least 900 hours of instruction.

(9) The department shall make payments to a funding recipient
under this section in accordance with all of the following:

(a) Statewide allocation criteria, including 3-year average
enrollments, census data, and local needs.

(b) Participant completion of the adult basic education
objectives by achieving an educational gain as determined by the national
reporting system levels; for achieving basic English proficiency, as determined
by the department; for achieving a high school equivalency certificate or
passage of 1 or more individual high school equivalency tests; for attainment
of a high school diploma or passage of a course required for a participant to
attain a high school diploma; for enrollment in a postsecondary institution; or
for entry into or retention of employment, as applicable.

(c) Participant completion of core indicators as identified
in the workforce innovation and opportunity act, Public Law 113-128.

(d) Allowable expenditures.

(10) An individual who is not eligible to be a participant
funded under this section may receive adult education services upon the payment
of tuition. In addition, an individual who is not eligible to be served in a
program under this section due to the program limitations specified in
subsection (6), (7), or (8) may continue to receive adult education services in
that program upon the payment of tuition. The local or intermediate district
conducting the program shall determine the tuition amount.

(11) An individual who is an inmate in a state correctional
facility is not counted as a participant under this section.

(12) A funding recipient shall not commingle money received
under this section or from another source for adult education purposes with any
other funds and shall establish a separate ledger account for funds received
under this section. This subsection does not prohibit a district from using
general funds of the district to support an adult education or community
education program.

(13) A funding recipient receiving funds under this section
may establish a sliding scale of tuition rates based upon a participant’s
family income. A funding recipient may charge a participant tuition to receive
adult education services under this section from that sliding scale of tuition
rates on a uniform basis. The amount of tuition charged per participant must
not exceed the actual operating cost per participant minus any funds received
under this section per participant. A funding recipient may not charge a
participant tuition under this section if the participant’s income is at or
below 200% of the federal poverty guidelines published by the United States
Department of Health and Human Services.

(14) To receive funds under this section, a funding recipient
shall furnish to the department, in a form and manner determined by the
department, all information needed to administer this program and meet federal
reporting requirements; shall allow the department or the department’s designee
to review all records related to the program for which it receives funds; and
shall reimburse the state for all disallowances found in the review, as
determined by the department. In addition, a funding recipient shall agree to
pay to a career and technical education program under section 61a the amount of
funding received under this section in the proportion of career and technical
education coursework used to satisfy adult basic education programming, as
billed to the funding recipient by programs operating under section 61a.

(15) From the amount appropriated in subsection (1), an
amount not to exceed $4,000,000.00 is allocated for 2026-2027 to approved adult
education programs that connect adult education participants with employers as
provided under this subsection. The department shall determine regional
planning allocations under this subsection to each intermediate district
serving as a fiscal agent for adult education programs in each of the
prosperity regions or subregions identified by the department in the same proportion
as funding calculated and allocated under subsection (4). Funds not fully
utilized within a region may be transferred to other regions as appropriate. To
be eligible for funding under this subsection, a program must provide a
collaboration linking adult education programs within the county,
state-approved career and technical education programs, and local employers. To
receive funding under this subsection, an eligible program must satisfy all of
the following:

(a) Connect adult education participants directly with
employers by linking adult education, career and technical skills, and
workforce development.

(b) Require adult education staff to work with Michigan
Works! agency to identify a cohort of participants who are most prepared to
successfully enter the workforce. Except as otherwise provided under this
subdivision, participants identified under this subsection must be dually
enrolled in adult education programming and in at least 1 state-approved
technical course through a career and technical education program. A program
that links participants identified under this subsection with adult education programming
and commercial driver license courses does not need to enroll the participants
in at least 1 state-approved technical course through a career and technical
education program to be considered an eligible program under this subsection.

(c) Employ an individual staffed as an adult education
navigator who will serve as a caseworker for each participant identified under
subdivision (b). The navigator shall work with adult education staff and
potential employers to design an educational program best suited to the
personal and employment needs of the participant and shall work with human
service agencies or other entities to address any barrier in the way of
participant access.

(16) By not later than December 1 of each year, a program
funded under subsection (15) shall provide a report to the senate and house
appropriations subcommittees on school aid, to the senate and house fiscal
agencies, and to the state budget director identifying the number of
participants, graduation rates, and a measure of transition to employment.

(17) Except as otherwise provided in this subsection,
participants under subsection (15) must be concurrently enrolled and actively
working toward obtaining a high school diploma or a high school equivalency
certificate. Concurrent enrollment is not required under this subsection for a
participant that was enrolled in adult education during the same program year
and obtained a high school diploma or a high school equivalency certificate
before enrollment in an eligible career and technical skills program under
subsection (15). Up to 10% of adult education participants served under
subsection (15) may already have a high school diploma or a high school
equivalency certificate at the time of enrollment in an eligible career and
technical skills program under subsection (15) and receive remediation
services. It is intended that the cap described in the immediately preceding
sentence is continually lowered on an annual basis until it eventually is 0%.

(18) The department shall approve at least 2 high school
equivalency tests and determine whether a high school equivalency certificate
meets the requisite standards for high school equivalency in this state.

(19) As used in this section:

(a) “Career and educational advisory council” means an
advisory council to the local workforce development boards located in a
prosperity region consisting of educational, employer, labor, and parent
representatives.

(b) “Career pathway” means a combination of rigorous and
high-quality education, training, and other services that comply with all of
the following:

(i) Aligns with the skill needs of
industries in the economy of this state or in the regional economy involved.

(ii) Prepares an individual to be successful
in any of a full range of secondary or postsecondary education options,
including apprenticeships registered under the act of August 16, 1937, commonly
referred to as the national apprenticeship act, 29 USC 50 et seq.

(iii) Includes counseling to support an
individual in achieving the individual’s education and career goals.

(iv) Includes, as appropriate, education
offered concurrently with and in the same context as workforce preparation
activities and training for a specific occupation or occupational cluster.

(v) Organizes education, training, and other
services to meet the particular needs of an individual in a manner that
accelerates the educational and career advancement of the individual to the
extent practicable.

(vi) Enables an individual to attain a
secondary school diploma or its recognized equivalent, and at least 1
recognized postsecondary credential.

(vii) Helps an individual enter or advance
within a specific occupation or occupational cluster.

(c) “Department” means the department of labor and economic
opportunity.

(d) “Eligible adult education provider” means a district,
intermediate district, a consortium of districts, a consortium of intermediate
districts, or a consortium of districts and intermediate districts that is
identified as part of the local process described in subsection (5)(c) and
approved by the department.

Sec.
147. (1) The allocation for 2026-2027 for the public school employees’
retirement system pursuant to the public school employees retirement act of
1979, 1980 PA 300, MCL 38.1301 to 38.1437, is made using the individual
projected benefit entry age normal cost method of valuation and risk
assumptions adopted by the public school employees retirement board and the
department of technology, management, and budget.

(2) The annual level percentage of payroll contribution rates
for the 2026-2027 fiscal year, as determined by the retirement system, are
estimated as follows:

(a) For public school employees who first worked for a public
school reporting unit before July 1, 2010 and who are enrolled in the health
premium subsidy, the annual level percentage of payroll contribution rate is
estimated at 41.02% with 27.51% paid directly by the employer.

(b) For public school employees who first worked for a public
school reporting unit on or after July 1, 2010 and who are enrolled in the
health premium subsidy, the annual level percentage of payroll contribution
rate is estimated at 36.28% with 22.77% paid directly by the employer.

(c) For public school employees who first worked for a public
school reporting unit on or after July 1, 2010 and who participate in the
personal healthcare fund, the annual level percentage of payroll contribution
rate is estimated at 34.85% with 21.34% paid directly by the employer.

(d) For public school employees who first worked for a public
school reporting unit on or after September 4, 2012, who elect defined
contribution, and who participate in the personal healthcare fund, the annual
level percentage of payroll contribution rate is estimated at 28.72% with
15.21% paid directly by the employer.

(e) For public school employees who first worked for a public
school reporting unit before July 1, 2010, who elect defined contribution, and
who are enrolled in the health premium subsidy, the annual level percentage of
payroll contribution rate is estimated at 30.15% with 16.64% paid directly by
the employer.

(f) For public school employees who first worked for a public
school reporting unit before July 1, 2010, who elect defined contribution, and
who participate in the personal healthcare fund, the annual level percentage of
payroll contribution rate is estimated at 28.72% with 15.21% paid directly by
the employer.

(g) For public school employees who first worked for a public
school reporting unit before July 1, 2010 and who participate in the personal
healthcare fund, the annual level percentage of payroll contribution rate is
estimated at 39.59% with 26.08% paid directly by the employer.

(h) For public school employees who first worked for a public
school reporting unit after January 31, 2018 and who elect to become members of
the MPSERS plan, the annual level percentage of payroll contribution rate is
estimated at 34.92% with 21.41% paid directly by the employer.

(3) In addition to the employer payments described in
subsection (2), the employer shall pay the applicable contributions to the Tier
2 plan, as determined by the public school employees retirement act of 1979,
1980 PA 300, MCL 38.1301 to 38.1437.

(4) The contribution rates in subsection (2) reflect an
amortization period of 12 years for 2026-2027. 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.

Sec.
147a. From the state school aid fund money appropriated under section 11, there
is allocated an amount not to exceed $379,900,000.00 for 2025-2026 and an
amount not to exceed $351,100,000.00 for 2026-2027 for payments to
participating districts and intermediate districts and from the general fund
money appropriated under section 11, there is allocated an amount not to exceed
$100,000.00 for 2025-2026 and 2026-2027 for payments to participating district
libraries. The amount allocated to each participating entity under this
subsection is based on each participating entity’s reported quarterly payroll
for members that became tier 1 before February 1, 2018 for the current fiscal
year. A participating entity that receives money under this subsection shall
use that money solely for the purpose of offsetting a portion of the normal
cost contribution rate. As used in this section:

(a) “District library” means a district library established
under the district library establishment act, 1989 PA 24, MCL 397.171 to
397.196.

(b) “Participating entity” means a district, intermediate
district, or district library that is a reporting unit of the Michigan public
school employees’ retirement system under the public school employees
retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437, and that reports
employees to the Michigan public school employees’ retirement system for the
applicable fiscal year.

Sec.
147b. (1) The MPSERS retirement obligation reform reserve fund is created as a
separate account within the state school aid fund.

(2) The state treasurer may receive money or other assets
from any source for deposit into the MPSERS retirement obligation reform
reserve fund. The state treasurer shall direct the investment of the MPSERS
retirement obligation reform reserve fund. The state treasurer shall credit to
the MPSERS retirement obligation reform reserve fund interest and earnings from
the MPSERS retirement obligation reform reserve fund.

(3) Money available in the MPSERS retirement obligation
reform reserve fund must not be expended without a specific appropriation.

(4) Money in the MPSERS retirement obligation reform reserve
fund at the close of the fiscal year lapses to the state school aid fund. The
department of treasury is the administrator of the MPSERS retirement obligation
reform reserve fund for auditing purposes.

Sec.
147c. (1) From the state school aid fund money appropriated in section 11,
there is allocated for 2025-2026 an amount not to exceed $1,536,500,000.00 and
there is allocated for 2026-2027 an amount not to exceed $1,454,400,000.00 for
payments to districts and intermediate districts that are participating
entities of the Michigan public school employees’ retirement system. In
addition, from the general fund money appropriated in section 11, there is
allocated for 2025-2026 and 2026-2027 an amount not to exceed $300,000.00 for
payments to district libraries that are participating entities of the Michigan
public school employees’ retirement system. All of the following apply to
funding under this subsection:

(a) The amounts allocated under this subsection are estimated
to provide an average MPSERS rate cap per pupil amount for districts of
$1,100.00.

(b) Payments made under this subsection are equal to the
difference between the unfunded actuarial accrued liability contribution rate
as calculated under section 41 of the public school employees retirement act of
1979, 1980 PA 300, MCL 38.1341, as calculated without taking into account the
maximum employer rate of 15.21% included in section 41 of the public school
employees retirement act of 1979, 1980 PA 300, MCL 38.1341, and the maximum
employer rate of 15.21% included in section 41 of the public school employees
retirement act of 1979, 1980 PA 300, MCL 38.1341.

(c) The amount allocated to each participating entity under
this subsection is based on each participating entity’s proportion of the total
covered payroll for the immediately preceding fiscal year for the same type of
participating entities. A participating entity that receives funds under this
subsection shall use the funds solely for the purpose of retirement contributions
as specified in subdivision (d).

(d) Each participating entity receiving funds under this
subsection shall forward an amount equal to the amount allocated under
subdivision (c) to the retirement system in a form, manner, and time frame
determined by the retirement system.

(e) Funds allocated under this subsection should be
considered when comparing a district’s growth in total state aid funding from 1
fiscal year to the next.

(f) By not later than December 20 of each fiscal year for
which funding is allocated under this subsection, the department shall publish
and post on its website an estimated MPSERS rate cap per pupil for each
district.

(2) As used in this section:

(a) “District library” means a district library established
under the district library establishment act, 1989 PA 24, MCL 397.171 to
397.196.

(b) “MPSERS rate cap per pupil” means an amount equal to the
quotient of the district’s payment under this section divided by the district’s
pupils in membership.

(c) “Participating entity” means, except as otherwise
provided in this subdivision, a district, intermediate district, or district
library that is a reporting unit of the Michigan public school employees’
retirement system under the public school employees retirement act of 1979,
1980 PA 300, MCL 38.1301 to 38.1437, and that reports employees to the Michigan
public school employees’ retirement system for the applicable fiscal year.

(d) “Retirement system” means the Michigan public school
employees’ retirement system under the public school employees retirement act
of 1979, 1980 PA 300, MCL 38.1301 to 38.1437.

Sec.
147e. (1) From the state school aid fund money appropriated in section 11,
there is allocated for 2025-2026 an amount not to exceed $71,000,000.00 and
there is allocated for 2026-2027 an amount not to exceed $88,800,000.00 for
payments to participating entities.

(2) The payment to each participating entity under this
section is the sum of the amounts under this subsection as follows:

(a) An amount equal to the contributions made by a
participating entity for the additional contribution made to a qualified
participant’s Tier 2 account in an amount equal to the contribution made by the
qualified participant not to exceed 3% of the qualified participant’s
compensation as provided for under section 131(6) of the public school
employees retirement act of 1979, 1980 PA 300, MCL 38.1431.

(b) Beginning October 1, 2017, an amount equal to the
contributions made by a participating entity for a qualified participant who is
only a Tier 2 qualified participant under section 81d of the public school
employees retirement act of 1979, 1980 PA 300, MCL 38.1381d, not to exceed 4%,
and, beginning February 1, 2018, not to exceed 1%, of the qualified participant’s
compensation.

(c) An amount equal to the increase in employer normal cost
contributions under section 41b(2) of the public school employees retirement
act of 1979, 1980 PA 300, MCL 38.1341b, for a member that was hired after
February 1, 2018 and chose to participate in Tier 1, compared to the
employer normal cost contribution for a member under section 41b(1) of the
public school employees retirement act of 1979, 1980 PA 300, MCL 38.1341b.

(3) As used in this section:

(a) “Member” means that term as defined under the public
school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to
38.1437.

(b) “Participating entity” means a district, intermediate
district, or community college that is a reporting unit of the Michigan public
school employees’ retirement system under the public school employees
retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437, and that reports
employees to the Michigan public school employees’ retirement system for the
applicable fiscal year.

(c) “Qualified participant” means that term as defined under
section 124 of the public school employees retirement act of 1979, 1980 PA 300,
MCL 38.1424.

Sec.
152a. (1) As required by the court in the consolidated cases known as Adair
v State of Michigan, 486 Mich 468 (2010), from the state school aid fund
money appropriated in section 11, there is allocated for 2026-2027 an amount
not to exceed $41,000,500.00 to be used solely for the purpose of paying
necessary costs related to the state-mandated collection, maintenance, and
reporting of data to this state. From this allocation, $3,000,000.00 is
allocated for costs associated with collecting data necessary to provide
reporting to tribal governments on the status of students affiliated with their
particular tribe and data necessary to determine student participation in
federal programs funded under 20 USC 7401 to 7546 and participation in federal
programs funded under the Johnson-O’Malley supplemental Indian education
program modernization act, Public Law 115-404.

(2) From the allocation in subsection (1), the department
shall make payments to districts and intermediate districts in an equal amount
per pupil based on the total number of pupils in membership in each district
and intermediate district. The department shall not make any adjustment to
these payments after the final installment payment under section 17b is made.

Sec.
152b. (1) From the general fund money appropriated under section 11, there is
allocated an amount not to exceed $1,000,000.00 for 2026-2027 to reimburse
actual costs incurred by nonpublic schools in complying with a health, safety,
or welfare requirement mandated by a law or administrative rule of this state.

(2) By January 1 of each applicable fiscal year, the
department shall publish a form for reporting actual costs incurred by a
nonpublic school in complying with a health, safety, or welfare requirement
mandated under state law containing each health, safety, or welfare requirement
mandated by a law or administrative rule of this state applicable to a
nonpublic school and with a reference to each relevant provision of law or
administrative rule for the requirement. The form must be posted on the
department’s website in electronic form.

(3) By June 30 of each applicable fiscal year, a nonpublic
school seeking reimbursement for actual costs incurred in complying with a
health, safety, or welfare requirement under a law or administrative rule of
this state during each applicable school year must submit a completed form
described in subsection (2) to the department. This section does not require a
nonpublic school to submit a form described in subsection (2). A nonpublic
school is not eligible for reimbursement under this section if the nonpublic
school does not submit the form described in subsection (2) in a timely manner.

(4) By August 15 of each applicable fiscal year, the
department shall distribute funds to each nonpublic school that submits a
completed form described under subsection (2) in a timely manner. The
superintendent shall determine the amount of funds to be paid to each nonpublic
school in an amount that does not exceed the nonpublic school’s actual costs in
complying with a health, safety, or welfare requirement under a law or
administrative rule of this state. The superintendent shall calculate a
nonpublic school’s actual cost in accordance with this section.

(5) If the funds allocated under this section are
insufficient to fully fund payments as otherwise calculated under this section,
the department shall distribute funds under this section on a prorated or other
equitable basis as determined by the superintendent.

(6) The department may review the records of a nonpublic
school submitting a form described in subsection (2) only for the limited
purpose of verifying the nonpublic school’s compliance with this section. If a
nonpublic school does not allow the department to review records under this
subsection, the nonpublic school is not eligible for reimbursement under this
section.

(7) The funds appropriated under this section are for
purposes that are incidental to teaching and the provision of educational
services to nonpublic school students; that are noninstructional in nature;
that do not constitute a primary function or element necessary for a nonpublic
school’s existence, operation, and survival; that do not involve or result in
excessive religious entanglement; and that are intended for the public purpose
of ensuring the health, safety, and welfare of the children in nonpublic
schools and to reimburse nonpublic schools for costs described in this section.

(8) Funds allocated under this section are not intended to
aid or maintain any nonpublic school, support the attendance of any student at
a nonpublic school, employ any person at a nonpublic school, support the
attendance of any student at any location where instruction is offered to a
nonpublic school student, or support the employment of any person at any
location where instruction is offered to a nonpublic school student.

(9) For purposes of this section, “actual cost” means the
hourly wage for the employee or employees performing a task or tasks required
to comply with a health, safety, or welfare requirement under a law or
administrative rule of this state identified by the department under subsection
(2) and is to be calculated in accordance with the form published by the
department under subsection (2), which must include a detailed itemization of
costs. The nonpublic school shall not charge more than the hourly wage of its
lowest-paid employee capable of performing a specific task regardless of
whether that individual is available and regardless of who actually performs a
specific task. Labor costs under this subsection must be estimated and charged
in increments of 15 minutes or more, with all partial time increments rounded
down. When calculating costs under subsection (4), fee components must be
itemized in a manner that expresses both the hourly wage and the number of
hours charged. The nonpublic school may not charge any applicable labor charge
amount to cover or partially cover the cost of health or fringe benefits. A
nonpublic school shall not charge any overtime wages in the calculation of
labor costs.

(10) Training fees, inspection fees, and criminal background
check fees are considered actual costs in complying with a health, safety, or
welfare requirement under a law or administrative rule of this state.

(11) The department shall reimburse nonpublic schools for
actual costs incurred in complying with health, safety, or welfare requirements
under a law or administrative rule of this state from 2017-2018 through
2022-2023 using work project funds or, if those funds are insufficient to fund
reimbursements under this subsection, from the allocation under subsection (1).

Sec.
152c. (1) From
the state school aid fund money appropriated in section 11, there is allocated
for 2026-2027 only an amount not to exceed $2,500,000.00 to Marquette-Alger
Regional Educational Agency to develop statewide supports for the federal
tribal consultation requirements under the every student succeeds act, Public
Law 114‑95.

(2) Marquette-Alger Regional Educational Agency shall use the
funds to support a collaboration that includes, but is not limited to:

(a) Elected tribal leadership from federally recognized
tribes in Michigan.

(b) The Confederation of Michigan Tribal Education
Departments.

(c) School, district, and intermediate district leadership,
including elected board members.

(d) Directors of programs impacted by the federal tribal
consultation requirements.

(e) The department’s indigenous education initiative.

(3) The collaboration described in subsection (2) shall do
both of the following:

(a) Create, disseminate, and evaluate professional learning
to support the implementation of the federal tribal consultation requirements.

(b) By not later than January 1, 2028, and January 1 of each
subsequent fiscal year, prepare a summary report that includes measurable
outcomes to evaluate the progress made in the development of effective
government-to-government relations. The report described in this subdivision
must be submitted to the house and senate appropriations subcommittees on
school aid, the house and senate fiscal agencies, and the state budget
director.

(4) All of the following apply to professional learning
described in subsection (3)(a):

(a) The professional learning must include at least the
following:

(i) Identification of native students,
including:

(A) Federal identification guidelines from the federal office
of management and budget under statistical policy directive number 15 for
American Indian and Alaska Native students.

(B) Tribal affiliation data collection guidelines under MCL
388.1694a.

(C) Program participation data collection guidelines under
MCL 388.1694a for federal programs funded under 20 USC 7401 to 7546 and the
Johnson-O’Malley supplemental Indian education program modernization act,
Public Law 115-404.

(ii) Guidelines and rules related to data
sharing from districts to federally recognized tribes as governed by the
federal education rights and privacy act, 20 USC 1232, 34 CFR Part 99; the
federal protection of pupil rights amendment, 20 USC 1232g, 34 CFR Part 98; and
section 1136 of the revised school code, MCL 380.1136.

(iii) The federal tribal consultation
requirements under the every student succeeds act, Public Law 114-95.

(iv) Key elements of effective tribal
consultation.

(b) The initial professional learning must be made available
to all administrators, staff, and board members in each district and
intermediate district by September 30, 2027, with additional resources released
at least annually during the course of the work project.

(5) Notwithstanding section 17b, the department shall make
payments under this section on a schedule determined by the department.

Sec.
163. (1) Except as otherwise provided in the revised school code or rules
promulgated by the department, the board of a district or intermediate district
shall not permit any of the following:

(a) An individual who is not appropriately placed under a
valid certificate, valid substitute permit, authorization, or approval issued
under rules promulgated by the department to teach in an elementary or
secondary school.

(b) An individual who does not satisfy the requirements of
section 1233 of the revised school code, MCL 380.1233, and rules
promulgated by the department to provide school counselor services to pupils in
an elementary or secondary school.

(c) An individual who does not satisfy the requirements of
section 1246 of the revised school code, MCL 380.1246, and rules
promulgated by the department to be employed as a superintendent, principal,
assistant principal, or as an individual whose primary responsibility is to
administer instructional programs in an elementary or secondary school or in a
district or intermediate district, unless the individual is working under a
valid substitute permit issued under rules promulgated by the department.

(2) If the department or the department’s designee determines
that a district or intermediate district has employed or assigned an individual
in violation of this section, the department or the department’s designee shall
provide written notice of noncompliance to the district or intermediate
district. The written notice must identify the individual, the affected
assignment, the nature of the noncompliance, and the date on which the notice
is issued. The written notice must also state that the district or intermediate
district has 15 school days after receiving the notice to correct the
noncompliance before a state aid adjustment is imposed under this section.

(3) Except as otherwise provided under subsection (5), if a
district or intermediate district does
not correct an instance of noncompliance within 15 school days after receiving
the written notice under subsection (2), the department shall make a state aid
adjustment as follows:

(a) If the district or intermediate district does not correct
the noncompliance within 15 school days after receiving written notice under
subsection (2), the department shall make a state aid adjustment of $50,000.00
on the sixteenth school day after the district or intermediate district
receives the notice.

(b) Beginning on the seventeenth school day after the
district or intermediate district receives the notice, the department shall
make an additional state aid adjustment of $1,000.00 for each school day the
individual continues to be employed or assigned in violation of this section.

(c) The total state aid adjustment under this subsection must
not exceed $100,000.00 per individual per assignment per fiscal year.

(d) No state aid adjustment shall be made for any period of
noncompliance that occurs before the district or intermediate district receives
written notice under subsection (2).

(e) No state aid adjustment shall be made if the district or
intermediate district corrects the noncompliance within 15 school days after
receiving written notice under subsection (2).

(4) A determination of noncompliance under subsection (2) is
final unless the district or intermediate district requests review by the
superintendent of public instruction within 30 calendar days after receiving
the written notice under subsection (2). A request for review does not stay the
15-school-day correction period or the accrual of a state aid adjustment under
subsection (3), unless the superintendent of public instruction determines that
a stay is warranted.

(5) A state aid adjustment under subsection (3) may be
reduced or waived, in whole or in part, if the superintendent of public
instruction finds that the district or intermediate district was hindered in
its ability to comply with this section due to unusual and extenuating
circumstances resulting from conditions not within the control of school
authorities. Unusual and extenuating circumstances under this subsection may
include, but are not limited to, a natural disaster, death or serious illness
of the individual or another employee, an emergency school closure, a
documented technical issue with the systems used to obtain the required
certification, permit, authorization, or approval, fraud or other intentional
wrongdoing of the individual or another employee, or an emergency health
condition as defined by city, county, or state health authorities. In determining whether to
reduce or waive a state aid adjustment, the superintendent of public
instruction may consider whether the district or intermediate district had
adequate systems and procedures in place to prevent noncompliance and whether
the district or intermediate district took timely and reasonable action to
correct the noncompliance after discovering or being notified of the violation.

(6) A state aid adjustment under this section for an educator
misplacement is in lieu of any membership adjustment under section 6 or section
15 based on the same individual, district or intermediate district, assignment,
and period of noncompliance.

(7) If a school official is notified by the department or the
department’s designee that the school official is employing or assigning an
individual in violation of this section and knowingly continues to employ or
assign that individual in violation of this section, the school official is
guilty of a misdemeanor punishable by a fine of $1,500.00 for each incident.
This penalty is in addition to any state aid adjustment imposed under this
section.

(8) As used in this section:

(a) “Assignment” means a specific class, course, subject
area, instructional setting, administrative position, school counselor
position, or other position for which an individual is responsible.

(b) “Educator misplacement” means the employment or
assignment of an individual in violation of subsection (1).

(c) “School day” means a day on which pupils are scheduled to
receive instruction in the affected building, program, or assignment.

(d) “Written notice” means notice issued by the department or
its designee to the district or intermediate district identifying a violation
of this section.

Sec.
164k. (1) If the department receives a report that a district or intermediate
district is violating any of the following requirements, and the department
confirms the violation, the department shall withhold 5% of the payment the
district is eligible to receive under section 22b, or 5% of the payment the
intermediate district is eligible to receive under section 81, as applicable,
for as long as the district or intermediate district is out of compliance:

(a) A district or intermediate district shall ensure that all
food made available to a student in the breakfast or lunch program complies
with all federal rules and regulations related to school meals, including provisions
restricting access to soda and candy as described in federal Smart Snacks
Standards.

(b) To the extent practicable under federal regulations, a
district or intermediate district shall require each student household to
complete the child nutrition and education benefits application, as provided by
the department, for free and reduced-price school meals regardless of whether
the district or intermediate district opts to provide universal breakfast or
lunch.

(c) For pupil membership count days after the fall 2025
count, a district or intermediate district shall not provide a financial
incentive to students for attending pupil membership count day.

(d) Beginning with the 2026-2027 school year, the board of a
district or intermediate district shall ensure that each school operated by the
board implements the presidential fitness test
for all students enrolled in
physical education classes, consistent with guidance developed by the
department under subsection (2) and except as otherwise stated in a student’s
individual education plan, in accordance with the suggestions and strategies
promulgated under federal Executive Order No. 14327, 90 Fed. Reg. 37993 (July
31, 2025).

(2) The department, in consultation with the Governor’s
Council on Physical Fitness, Health, and Sports, shall develop guidance for the
implementation of the presidential fitness test under subsection (1)(d). The
guidance must be consistent with applicable state and federal law. The
guidance must include, but is not limited to, both of the following:

(a) That any student with an individualized education plan
(IEP) is not required to participate in the presidential fitness test, unless
that student’s IEP otherwise requires the presidential fitness test.

(b) A requirement that the presidential fitness test may only
be administered in physical education classes, if such classes are offered by
the school.

Sec.
164l. (1) Not later than 30 days after the
enactment of any amendatory act to this article, the house and senate shall
provide to the responsible entity and the state budget director a list of
legislatively directed spending items, as defined in sections 364 and 364a of
the management and budget act, MCL 18.1364 and 18.1364a, that are funded by the
amendatory act. The list must include all information and documents pertaining
to the funded items as publicly disclosed under sections 364 and 364a of the
management and budget act, MCL 18.1364 and 18.1364a.

(2) In accordance with section 364 of the management and
budget act, 1984 PA 431, MCL 18.1364, the department or agency administering
the grant shall post a report in a publicly accessible location on its website
beginning March 15 of the current fiscal year. The department or agency shall
update the report and shall post an updated report not later than June 15 of
the current fiscal year and again not later than September 15 of the current
fiscal year. The department shall include in the report the most comprehensive
information the department has available at the time of posting for grants
awarded.

Sec.
164m. (1) Except as otherwise provided in section 22b(3)(g), a district that
receives funds under section 22b(4) must do all of the following:

(a) Use funds received for purposes including, but not
limited to, student achievement and success, literacy, mathematics, and
providing direct English language development instruction.

(b) Administer to English language learners the English
language proficiency assessment known as the “WIDA ACCESS for English language
learners” or the “WIDA Alternate ACCESS”.

(c) Agree to meet or exceed the minimum number of minutes per
week, as determined by the department under subsection (2), that the district
provides direct English language development instruction.

(d) Implement a multi-tiered system of supports that is an
evidence-based framework that uses data-driven problem solving to integrate
academic and behavioral instruction and that uses intervention delivered to all
pupils in varying intensities based on pupil needs. The multi-tiered system of
supports must be implemented in grades K to 12 or, if the district does not
operate all of grades K to 12, for all of the grades the district operates. The
multi-tiered system of supports described in this subdivision must provide at
least all of the following essential components:

(i) Team-based leadership.

(ii) A tiered delivery system.

(iii) Selection and implementation of
instruction, interventions, and supports.

(iv) A comprehensive screening and assessment
system.

(v) Continuous data-based decision making.

(e) Support pupil needs for pupils counted toward the
district’s weighted pupil membership, including, but not limited to, items
identified in a district’s Michigan Integrated Continuous Improvement Process
(MICIP) plan. An amount not to exceed 2% of the amount received under section
22b(4) may be used to support administrative costs related to complying with
this section. Administrative costs include, but are not limited to, central
office salaries and benefits, business and fiscal services, and school
administrative staff and expenses, and do not include costs associated with
direct instructional staff working with pupils counted toward the weighted
pupil membership.

(f) Provide information to the department, in a form and
manner determined by the department, necessary for the department to monitor
programs and services described in this section for compliance with the
requirements of this section and to ensure the multi-tiered system of supports
and English language learner programs are implemented with fidelity.

(g) Allow access for the department or the department’s
designee to audit all records related to the program for which the district
receives those funds. The district shall reimburse this state for all
disallowances found in any audit.

(h) Communicate the following information to parents and
legal guardians at least annually, as applicable for grades offered by the
district:

(i) Literacy-related results for the
district, including multiyear trend data, from the grade 3 Michigan student
test of educational progress (M-STEP), the grade 7 Michigan student test of
educational progress (M-STEP), and the SAT for pupils who are economically
disadvantaged or English language learners. The district shall ensure that
information described in this subparagraph is reported in a manner that
safeguards pupil privacy.

(ii) Information detailing the amount of
funding received under section 22b(4), how the district distributed that
funding, and what evidence-based interventions were implemented with that
funding. The information reported under this subparagraph must include a
method, including contact information, for parents or legal guardians to
provide feedback on the use of the funding as well as to seek more information
about services and interventions available for their children.

(2) The department shall establish English language learner
program models that establish a minimum number of minutes per week that
districts must provide direct English language development instruction for
pupils according to the pupil’s proficiency levels. The program models
described in this subsection must comply with federal requirements related to
English language learner program services.

(3) The department shall monitor districts for compliance
with this section and may require districts to provide any information to the
department, in a form and manner determined by the department, necessary to
fulfill this requirement.

(4) As used in this section, “English language learner” and “weighted
pupil membership” mean those terms as defined in section 6.

Sec.
164n. By not later than 6 months after the state budget office
issues work project letters, and again on or before April 15, the department
and the department of lifelong education, advancement, and potential shall
submit an annual report to the senate and house appropriations subcommittees on
school aid, the senate and house fiscal agencies, and the senate and house
policy offices that summarizes all work project accounts. The report described
in this section must include all of the following:

(a) A list of all work project accounts.

(b) The status of all work project accounts, including
amounts expended, amounts encumbered, and available balances for each account.

(c) The amount of funds that lapsed from any previously
designated work project accounts, the name and description of the work project
account, and the funds that received the lapsed amounts.

Sec.
164o. Districts
and intermediate districts are encouraged to evaluate and pursue efficiency and
cost-containment measures that maximize state funding. Districts and
intermediate districts shall identify practices that increase efficiencies,
including, but not limited to, establishing joint ventures, consolidating
services, utilizing program collaborations, maximizing educational benefits
through optimal class sizes and frequency of course offerings, eliminating
low-enrollment and high-cost instructional programs, using self-insurance,
practicing energy conservation, and utilizing group purchasing.

Sec.
201. (1) Subject to the conditions set forth in this article, the amounts
listed in this section are appropriated for community colleges for the fiscal
year ending September 30, 2027, from the funds indicated in this section. The
following is a summary of the appropriations in this section and section 201f:

(a) The gross appropriation is $496,663,500.00. After
deducting total interdepartmental grants and intradepartmental transfers in the
amount of $0.00, the adjusted gross appropriation is $496,663,500.00.

(b) The sources of the adjusted gross appropriation described
in subdivision (a) are as follows:

(i) Total federal revenues, $0.00.

(ii) Total local revenues, $0.00.

(iii) Total private revenues, $0.00.

(iv) Total other state restricted revenues,  $496,663,500.00.

(v) State general fund/general purpose
money, $0.00.

(2) Subject to subsection (3), the amount appropriated for
community college operations is $363,594,500.00, allocated as follows:

(a) The appropriation for Alpena Community College is
$6,431,400.00, $6,403,300.00 for operations, $0.00 for performance funding, and
$28,100.00 for costs incurred under the North American Indian tuition waiver.

(b) The appropriation for Bay de Noc Community College is $6,410,300.00,
$6,298,000.00 for operations, $0.00 for performance funding, and $112,300.00
for costs incurred under the North American Indian tuition waiver.

(c) The appropriation for Delta College is $16,928,400.00,
$16,882,400.00 for operations, $0.00 for performance funding, and $46,000.00
for costs incurred under the North American Indian tuition waiver.

(d) The appropriation for Glen Oaks Community College is
$2,984,500.00, $2,984,100.00 for operations, $0.00 for performance funding, and
$400.00 for costs incurred under the North American Indian tuition waiver.

(e) The appropriation for Gogebic Community College is
$5,417,900.00, $5,399,000.00 for operations, $0.00 for performance funding, and
$18,900.00 for costs incurred under the North American Indian tuition waiver.

(f) The appropriation for Grand Rapids Community College is
$21,387,200.00, $21,184,200.00 for operations, $0.00 for performance funding,
and $203,000.00 for costs incurred under the North American Indian tuition
waiver.

(g) The appropriation for Henry Ford College is
$25,308,100.00, $25,300,700.00 for operations, $0.00 for performance funding,
and $7,400.00 for costs incurred under the North American Indian tuition
waiver.

(h) The appropriation for Jackson College is $14,054,800.00,
$14,032,600.00 for operations, $0.00 for performance funding, and $22,200.00
for costs incurred under the North American Indian tuition waiver.

(i) The appropriation for Kalamazoo Valley Community College
is $14,744,600.00, $14,704,400.00 for operations, $0.00 for performance
funding, and $40,200.00 for costs incurred under the North American Indian
tuition waiver.

(j) The appropriation for Kellogg Community College is
$11,470,000.00, $11,426,700.00 for operations, $0.00 for performance funding,
and $43,300.00 for costs incurred under the North American Indian tuition
waiver.

(k) The appropriation for Kirtland Community College is
$3,881,400.00, $3,835,100.00 for operations, $0.00 for performance funding, and
$46,300.00 for costs incurred under the North American Indian tuition waiver.

(l) The appropriation for Lake Michigan
College is $6,417,300.00, $6,408,200.00 for operations, $0.00 for performance
funding, and $9,100.00 for costs incurred under the North American Indian
tuition waiver.

(m) The appropriation for Lansing Community College is
$36,206,200.00, $36,134,400.00 for operations, $0.00 for performance funding,
and $71,800.00 for costs incurred under the North American Indian tuition
waiver.

(n) The appropriation for Macomb Community College is
$38,187,600.00, $38,160,600.00 for operations, $0.00 for performance funding,
and $27,000.00 for costs incurred under the North American Indian tuition
waiver.

(o) The appropriation for Mid Michigan Community College is
$5,921,400.00, $5,837,000.00 for operations, $0.00 for performance funding, and
$84,400.00 for costs incurred under the North American Indian tuition waiver.

(p) The appropriation for Monroe County Community College is
$5,371,200.00, $5,368,500.00 for operations, $0.00 for performance funding, and
$2,700.00 for costs incurred under the North American Indian tuition waiver.

(q) The appropriation for Montcalm Community College is
$4,042,800.00, $4,033,300.00 for operations, $0.00 for performance funding, and
$9,500.00 for costs incurred under the North American Indian tuition waiver.

(r) The appropriation for C.S. Mott Community College is
$18,032,100.00, $18,017,800.00 for operations, $0.00 for performance funding,
and $14,300.00 for costs incurred under the North American Indian tuition
waiver.

(s) The appropriation for Muskegon Community College is
$10,412,100.00, $10,359,900.00 for operations, $0.00 for performance funding,
and $52,200.00 for costs incurred under the North American Indian tuition
waiver.

(t) The appropriation for North Central Michigan College is
$4,110,600.00, $3,947,700.00 for operations, $0.00 for performance funding, and
$162,900.00 for costs incurred under the North American Indian tuition waiver.

(u) The appropriation for Northwestern Michigan College is
$10,885,800.00, $10,619,800.00 for operations, $0.00 for performance funding,
and $266,000.00 for costs incurred under the North American Indian tuition
waiver.

(v) The appropriation for Oakland Community College is
$25,166,900.00, $25,130,000.00 for operations, $0.00 for performance funding,
and $36,900.00 for costs incurred under the North American Indian tuition
waiver.

(w) The appropriation for Schoolcraft College is $14,989,100.00,
$14,972,000.00 for operations, $0.00 for performance funding, and $17,100.00
for costs incurred under the North American Indian tuition waiver.

(x) The appropriation for Southwestern Michigan College is
$7,803,100.00, $7,786,600.00 for operations, $0.00 for performance funding, and
$16,500.00 for costs incurred under the North American Indian tuition waiver.

(y) The appropriation for St. Clair County Community College
is $8,351,300.00, $8,342,000.00 for operations, $0.00 for performance funding,
and $9,300.00 for costs incurred under the North American Indian tuition
waiver.

(z) The appropriation for Washtenaw Community College is
$16,289,700.00, $16,257,300.00 for operations, $0.00 for performance funding,
and $32,400.00 for costs incurred under the North American Indian tuition
waiver.

(aa) The appropriation for Wayne County Community College is
$19,464,000.00, $19,460,300.00 for operations, $0.00 for performance funding,
and $3,700.00 for costs incurred under the North American Indian tuition
waiver.

(bb) The appropriation for West Shore Community College is
$2,924,700.00, $2,896,700.00 for operations, $0.00 for performance funding, and
$28,000.00 for costs incurred under the North American Indian tuition waiver.

(3) The amount appropriated in subsection (2) for community
college operations is $363,594,500.00 and is appropriated from the state school
aid fund.

(4) From the appropriations described in subsection (1), both
of the following apply:

(a) Subject to section 207a, the amount appropriated for
fiscal year 2026-2027 to offset certain fiscal year 2026-2027 retirement
contributions is $7,189,000.00, appropriated from the state school aid fund.

(b) For fiscal year 2026-2027, there is allocated an amount
not to exceed $20,750,000.00 for payments to participating community colleges,
appropriated from the state school aid fund. A community college that receives
money under this subdivision shall use that money solely for the purpose of
offsetting the normal cost contribution rate.

(5) From the appropriations described in subsection (1),
subject to section 207b, the amount appropriated for payments to community
colleges that are participating entities of the retirement system is
$84,800,000.00 appropriated from the state school aid fund.

(6) From the appropriations described in subsection (1),
subject to section 207c, the amount appropriated for renaissance zone tax
reimbursements is $2,200,000.00, appropriated from the state school aid fund.
Each community college receiving funds in this subsection shall accrue these
payments to its institutional fiscal year ending June 30, 2027.

(7) For fiscal year 2026-2027 only, from the appropriations
described in subsection (1), a grant must be made available to a community
college for the continuation of the Michigan Maritime Manufacturing Initiative
that is $3,500,000.00, appropriated from the state school aid fund. The
department of labor and economic opportunity shall administer the funds under
this subsection for up to $3,500,000.00 for the Michigan Maritime Manufacturing
Initiative, which is a partnership between the state and federal government
aimed at building a workforce ready to lead the future of defense manufacturing
through the teaching of critical skills for maritime construction, particularly
in maritime welding and maritime machining. Funds allocated under this grant
must be used to provide instruction and certification in maritime welding,
maritime machining, and maritime construction. Grant applicants must be a
community college with a program that can be used to support the purpose of the
project by providing instruction and certifications in maritime welding,
maritime machining, and maritime construction.

Sec.
201f. For fiscal year 2026-2027 only, from the appropriations described in
section 201(1), $14,630,000.00 is appropriated from the state school aid fund
for a 1-time performance funding payment. Funds appropriated under this
section, subject to conditions described in sections 217b and 230, must be
distributed as follows:

(a) Alpena Community College, $233,300.00.

(b) Bay de Noc Community College, $234,700.00.

(c) Delta College, $644,400.00.

(d) Glen Oaks Community College, $132,700.00.

(e) Gogebic Community College, $212,000.00.

(f) Grand Rapids Community College, $902,800.00.

(g) Henry Ford College, $990,300.00.

(h) Jackson College, $513,000.00.

(i) Kalamazoo Valley Community College, $615,100.00.

(j) Kellogg Community College, $433,800.00.

(k) Kirtland Community College, $212,400.00.

(l) Lake Michigan College, $284,000.00.

(m) Lansing Community College, $1,189,000.00.

(n) Macomb Community College, $1,450,400.00.

(o) Mid Michigan Community College, $254,500.00.

(p) Monroe County Community College, $230,100.00.

(q) Montcalm Community College, $162,700.00.

(r) C.S. Mott Community College, $658,400.00.

(s) Muskegon Community College, $394,200.00.

(t) North Central Michigan College, $217,800.00.

(u) Northwestern Michigan College, $387,800.00.

(v) Oakland Community College, $1,146,800.00.

(w) Schoolcraft College, $684,300.00.

(x) Southwestern Michigan College, $276,800.00.

(y) St. Clair County Community College, $360,200.00.

(z) Washtenaw Community College, $881,100.00.

(aa) Wayne County Community College, $792,600.00.

(bb) West Shore Community College, $134,800.00.

Sec.
201h. In addition to funds appropriated under section 201(4)(b), as amended by
2025 PA 15, for fiscal year 2025-2026 only, $2,400,000.00 is appropriated from
the state school aid fund for payments to participating community colleges. A
community college that receives money under this section shall use that money
solely for the purpose of offsetting the normal cost contribution rate.

Sec.
201i. (1) Within 30 days of the enactment of an amendatory act to this article,
the house and senate shall provide to the state budget office a jointly agreed
upon list of legislatively directed spending items funded by the amendatory
act. The list must include all information and documents pertaining to the
funded items as publicly disclosed in accordance with sections 364 and 364a of the management
and budget act, 1984 PA 431, MCL 18.1364 and 18.1364a. As used
in this subsection, “legislatively directed spending item” means that term as
defined in section 364 of the management and budget act, 1984 PA 431, MCL
18.1364.

(2) In accordance with section 364(4) of the management and
budget act, 1984 PA 431, MCL 18.1364, the department or agency administering
the grant described in subsection (1) shall post a report in a publicly
accessible location on its website beginning March 15 of the current fiscal
year. The department or agency shall update the report and shall post an
updated report not later than June 15 of the current fiscal year and again not
later than September 15 of the current fiscal year. The department or agency
shall include in the report the most comprehensive information the department
or agency has available at the time of posting for grants awarded.

Sec.
202a. As used in this article:

(a) “Center” means the center for educational performance and
information created in section 94a.

(b) “College level equivalent credit examination” means an
examination that is administered by an independent testing service and that is
used by colleges and universities generally to award postsecondary credit for
achievement of a particular score, and includes, but is not limited to,
advanced placement examinations, the DANTES Subject Standardized Test (DSST),
and college-level examination program (CLEP) examinations.

(c) “Participating college” means a community college that is
a reporting unit of the retirement system and that reports employees to the
retirement system for the state fiscal year.

(d) “Retirement system” means the Michigan public school
employees’ retirement system under the public school employees retirement act
of 1979, 1980 PA 300, MCL 38.1301 to 38.1437.

(e) “Standard report recipients” means the senate and house
appropriations committees, the senate and house appropriations subcommittees on
community colleges, the senate and house fiscal agencies, the senate and house
policy offices, and the state budget office.

Sec.
203. (1) Unless otherwise specified, a community college that receives
appropriations in section 201 and the center shall use the internet to fulfill
the reporting requirements of this article. This requirement includes
transmission of reports via electronic mail to the recipients identified for
each reporting requirement and placement of each required report in a single
archivable location on an internet site, not later than the due date required
for each report.

(2) In addition to placing all required reports in the
current fiscal year on the community college’s website, a community college
shall maintain on its website all reports placed on the website from previous 7
fiscal years, posted by fiscal year in the same single archivable location.
This requirement does not apply to the center.

Sec.
205. To the extent possible, the principal executive officer of each community
college that receives appropriations in section 201 shall take all reasonable
steps to ensure that geographically disadvantaged business enterprises compete
for and perform contracts to provide services or supplies, or both. Each
principal executive officer shall strongly encourage businesses with which the
community college contracts to subcontract with certified geographically
disadvantaged business enterprises for services or supplies, or both. As used
in this section, “geographically disadvantaged business enterprises” means that
term as defined in Executive Directive No. 2019-8.

Sec.
206. (1) Except for the funds appropriated in sections 201(4)(b) and 201(7),
the funds appropriated in sections 201 and 201f are appropriated for community
colleges with fiscal years ending June 30, 2027 and must be paid out of the
state treasury and distributed by the state treasurer to the respective
community colleges in 11 monthly installments on the sixteenth of each
month, or the next succeeding business day, beginning with October 16, 2026.
Each community college shall accrue its July and August 2027 payments to its
institutional fiscal year ending June 30, 2027.

(2) The funds appropriated in section 201(4)(b) are
appropriated for community colleges with fiscal years ending June 30, 2027 and
must be distributed to the respective community colleges in quarterly
installments on the sixteenth of each November, February, May, and August. Each
community college shall accrue its August 2027 payments to its
institutional fiscal year ending June 30, 2027.

Sec.
207c. All of the following apply to the allocation of the appropriations
described in section 201(6) to community colleges described in section 12(3) of
the Michigan renaissance zone act, 1996 PA 376, MCL 125.2692:

(a) The amount allocated to each community college under
section 201(6) for fiscal year 2026-2027 must be based on that community
college’s proportion of total revenue lost by community colleges as a result of
the exemption of property taxes levied in 2026 under the Michigan renaissance
zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(b) The appropriations described in section 201(6) must be
made to each eligible community college within 60 days after the
department of treasury certifies to the state budget director that it has
received all necessary information to properly determine the amounts payable to
each eligible community college under section 12 of the Michigan renaissance
zone act, 1996 PA 376, MCL 125.2692.

Sec.
210b. By March 1 of each year, the Michigan Community College Association and
the Michigan Association of State Universities shall submit a report to the
standard report recipients and the department of lifelong education,
advancement, and potential on the activities and programs focused on improving
transfer student outcomes since March 1 of the previous year, including all of
the following:

(a) The direct transferability of mathematics gateway courses
between and among community colleges and universities.

(b) The implementation of MiTransfer pathways.

(c) The progress on increasing participation in MiTransfer
pathways among community colleges and public universities.

(d) The implementation of the Michigan Transfer Network at
mitransfer.org.

(e) A progress report on the implementation of the Michigan
transfer agreement.

Sec.
212. Community college districts are encouraged to evaluate and pursue
efficiency and cost-containment measures that maximize state funding. Community
colleges shall identify practices that increase efficiencies, including, but
not limited to, establishing joint ventures, consolidating services, utilizing
program collaborations, maximizing educational benefits through optimal class
sizes and frequency of course offerings, increasing web-based instruction,
eliminating low-enrollment and high-cost instructional programs, using
self-insurance, practicing energy conservation, and utilizing group purchasing.
Community colleges shall also review proposed capital outlay projects to
increase coordination and utilization of new facilities, renovation projects,
and technology improvements.

Sec.
213. Not later than 6 months after the state budget office issues work project
letters, and again on or by April 15, the state budget office shall submit an
annual report that summarizes all work project accounts to the standard report
recipients. The report must include all of the following:

(a) A list of all work project accounts.

(b) The status of all work project accounts, including
amounts expended, amounts encumbered, and available balances for each account.

(c) The amount of funds that lapsed from any previously
designated work project accounts, the name and description of the work project
account, and the funds that received the lapsed amounts.

Sec.
217a. (1) Each community college that receives an appropriation in sections 201
and 201f shall submit all of the following information in the form and manner
specified by the center:

(a) The Michigan community colleges verified data inventory
data for the preceding academic year to the center by the first business day of
November of each year as specified in section 217.

(b) Tuition and mandatory fees information as specified in
section 217b.

(c) The longitudinal data set to the center as specified in
section 219.

(d) The number and type of associate degrees, baccalaureate
degrees, and other certificates awarded as specified in section 219.

(e) The annual independent audit as specified in section 222.

(f) The certifications described in subsections (4) through
(7).

(2) If the state budget director determines that a community
college failed to submit any of the information described in subsection (1) in
the form and manner specified by the center, the state budget director may
withhold the monthly state operations installments described in sections 201
and 201f from that community college until those data are submitted. If a
community college does not submit any of the information described in
subsection (1) by the end of the fiscal year, the community college
forfeits any withheld amount. The state budget director shall notify the
standard report recipients at least 10 days before withholding funds from any
community college.

(3) It is intended that accountability reporting for
community colleges will be streamlined through the center. The state budget
director and the center shall work to combine the reporting requirements
outlined in this subsection with the existing Michigan community colleges
verified data inventory collection cycle. All of the following must be reported
to the standard report recipients:

(a) Each community college’s certification of its compliance
with the requirements described in subsections (4) and (5).

(b) The reporting and certification requirements of
subsections (6) and (7) and section 217b.

(4) No later than the first business day of November of each
year, each community college that receives an appropriation in section 201
shall make all of the information described in subdivisions (a) to (h)
available through a link on its website homepage, subject to subdivision (i),
as follows, and shall archive the previous versions from the prior 7 fiscal
years:

(a) The annual operating budget and subsequent budget
revisions.

(b) A link to the most recent “Michigan Community College
Data Inventory Report”.

(c) General fund revenue and expenditure projections for the
current fiscal year and the next fiscal year.

(d) A listing of all debt service obligations, detailed by
project, anticipated payment of each project, and total outstanding debt for
the current fiscal year.

(e) Links to all of the following for the community college:

(i) The current collective bargaining
agreement for each bargaining unit.

(ii) Each health care benefits plan,
including, but not limited to, medical, dental, vision, disability, long-term
care, or any other type of benefits that would constitute health care services,
offered to any bargaining unit or employee of the community college.

(iii) Audits and financial reports for the
most recent fiscal year for which they are available.

(iv) A copy of the board of trustees
resolution regarding compliance with best practices for the local strategic
value component described in section 230(2).

(f) A map that includes the boundaries of the community
college district.

(g) A prominent link to the financial aid website created
under section 260.

(h) A list of severance payments and the amounts of those
severance payments made to former employees of the community college.

(i) For statewide consistency and public visibility,
community colleges shall use the icon badge provided by the department of
technology, management, and budget consistent with the icon badge developed by
the department of education for K-12 school districts. It must appear on the
front of each community college’s homepage. The size of the icon may be reduced
to 150 x 150 pixels.

(5) No later than the first business day of November of each
year, each community college that receives an appropriation in section 201
shall develop, maintain, and update a “campus safety information and resources”
link, prominently displayed on the homepage of its website, that links to a
section of the community college’s website containing, at a minimum, all of the
following information:

(a) Emergency contact numbers for police, fire, health, and
other services.

(b) Hours, locations, telephone numbers, and email contacts
for campus public safety offices and title IX offices.

(c) A list of safety and security services provided by the
community college, including transportation, escort services, building
surveillance, anonymous tip lines, and other available security services.

(d) The community college’s policies applicable to minors on
community college property.

(e) A directory of resources available at the community
college or in the surrounding community for students or employees who are
survivors of sexual assault or sexual abuse.

(f) An electronic copy of “A Resource Handbook for Campus
Sexual Assault Survivors, Friends and Family”, published in 2018.

(g) Campus security policies and crime statistics pursuant to
the student right-to-know and campus security act, Public Law 101-542, 104 Stat
2381. Information must include all material prepared pursuant to the public
information reporting requirements under the crime awareness and campus
security act of 1990, title II of the student right-to-know and campus security
act, Public Law 101-542, 104 Stat 2381.

(6) No later than the first business day of November of each
year, each community college that receives an appropriation in section 201
shall report to the standard report recipients its annual title IX report, also
known as the student sexual misconduct report, issued by the title IX
coordinator, as required under the federal campus SaVE act of 2013, Public Law
113-4, section 304, 127 Stat 54, 89-92 (2013).

(7) No later than the first business day of November of each
year, each community college that receives an appropriation in section 201
shall certify that the community college complies with federal regulations
under title IX, as required by the United States Department of Education,
including, but not limited to, the following:

(a) Use of medical experts that do not have an actual or
apparent conflict of interest.

(b) Issuance of title IX reports to complainants and
respondents that are not divergent.

(c) Notification of resources to each individual who reports
having experienced sexual assault by a member of the community college.

Sec.
217b. (1) Each community college that receives an appropriation in section 201
shall report to the center by the last business day of August of each year the
tuition and mandatory fees paid by a full-time in-district student and a
full-time out-of-district student as established by the community college
governing board for the current academic year. This report should also include
the annual cost of tuition and fees based on a full-time course load of 30
credits. This report must also specify the amount that tuition and fees have
increased for the community college from the prior academic year. Each
community college shall also report any revisions to the reported current
academic year tuition and mandatory fees adopted by the community college
governing board to the center within 15 days of being adopted. The center shall
provide this information and any revisions to the standard report recipients.

(2) Each community college that receives an appropriation in
section 201 shall certify to the state budget director by the last business day
of August of each year that its board will not adopt an increase in tuition and
fee rates for in-district students for the academic year that is greater than
the tuition restraint described in this subsection. For the academic year
2026-2027, the tuition restraint level is equal to the greater of 4.0% or
$199.00. For the academic year 2027-2028, the tuition restraint level is equal
to the greater of 4.0% or $199.00. It is intended that in the next fiscal year,
the tuition restraint rate will be adjusted only for the subsequent academic
year. As used in this subsection:

(a) “Fee” means any board-authorized fee that will be paid by
more than 1/2 of all in-district students at least once during their enrollment
at a community college. A community college increasing a fee that applies to a
specific subset of students or courses shall provide sufficient information to
prove that the increase applied to that subset will not cause the increase in
the average amount of board-authorized total tuition and fees paid by
in-district students in the academic year to exceed the limit established in
this section.

(b) “Tuition and fee rate” means the average of full-time
rates paid by a majority of students in each class, based on an unweighted
average of the rates authorized by the community college board and actually
charged to students, deducting any uniformly rebated or refunded amounts, for
the 2 semesters with the highest levels of full-time equated in-district
enrollment during the academic year.

(3) Community colleges that exceed the tuition and fee rate
cap described in subsection (2) are not eligible to receive payments under
section 201f for 1-time performance funding payments for fiscal year 2026-2027.
The state budget director shall implement uniform reporting requirements to
ensure that a community college receiving a payment under section 201f for 1-time
performance funding has satisfied the tuition restraint requirements of this
section. The state budget director has the sole authority to determine if a
community college has met the requirements of this section. Information
reported by a community college to the state budget director under this
subsection must also be reported to the standard report recipients.

(4) Notwithstanding any other provision of this act, the
legislature may at any time adjust appropriations for a community college that
adopts an increase in tuition and fee rates for in-district students that
exceeds the rate cap established in subsection (2).

Sec.
217c. (1) Not later than December 1 of each year, each community college or
federally recognized tribal college that, in the current or previous academic
year, serves or has served as an authorizing body shall submit a report to the
house and senate appropriations subcommittees on higher education, the house
and senate fiscal agencies, the state budget director, and the department of
education containing, at a minimum, all of the following information, as
applicable:

(a) A list of all of the schools currently authorized.

(b) A list identifying any schools that were closed or lost
their authorization in the current or previous academic year.

(c) The academic performance of each school currently
authorized, including whether a school is identified by the department of
education as a partnership school. If a school is identified as a partnership
school under this subdivision, the authorizing body shall include a description
of corrective actions in the school’s partnership agreement, the duration of
the partnership agreement, and an assessment of progress toward improvement.

(d) The total number of fees, reimbursements, contributions,
or charges permitted under section 502(6) of the revised school code, 1976 PA
451, MCL 380.502, that are assigned to each school currently authorized in a
single academic year.

(e) A financial report of the authorizing body’s use of fees,
reimbursements, contributions, or charges collected or retained under section
502(6) of the revised school code, 1976 PA 451, MCL 380.502. This report must
include all of the following, at a minimum:

(i) The total amount of fees collected or
retained under section 502(6) of the revised school code, 1976 PA 451, MCL
380.502, by the authorizing body for the authorizing body’s most recent fiscal
year.

(ii) The amount of funds reported under
subparagraph (i) that were spent on compensation for
faculty and staff employed primarily to meet the functions of an authorizing
body. For the purpose of this subparagraph, an employee is presumed to be
primarily employed to meet the functions of an authorizing body if that
employee spends more than 50% of the employee’s time on those activities.

(iii) The number of positions, organized by
job title, associated with expenditures reported under subparagraph (ii).

(iv) The amount of funds reported under
subparagraph (i) that were spent on contractual services
to meet the functions of an authorizing body.

(v) The amount of funds reported under
subparagraph (i) that were spent on other overhead costs
to meet the functions of an authorizing body.

(vi) The amount of funds reported under
subparagraph (i) that were transferred to another
operating unit within the community college or federally recognized tribal
college.

(vii) The amount of funds reported under
subparagraph (i) that were spent on activities other than
functioning as an authorizing body, including a list of those activities and
the amount associated with each activity.

(f) An executive summary section that provides relevant
summary data for reporting requirements under subdivisions (a) to (e).

(2) A report submitted under this section must be in a format
that meets accessibility standards for viewing on the internet under the
Americans with disabilities act of 1990, Public Law 101-336.

(3) A report submitted under this section must be published
and updated through a link on the homepage of the institution’s website.

(4) In addition to the reporting requirements under this
section, each authorizing body that receives an appropriation under section 201
shall adopt a facilities policy ensuring that any structures or other property
vacated by a public school academy that ceases operation not contribute to
blight in the surrounding neighborhood or community in which the school had
previously operated.

(5) As used in this section, “authorizing body” means that
term as defined in section 501 of the revised school code, 1976 PA 451, MCL
380.501.

Sec.
222. Each community college shall have an annual audit of all income and
expenditures performed by an independent auditor and shall furnish the
independent auditor’s management letter and an annual audited accounting of all
general and current funds income and expenditures including audits of college
foundations to the center before November 15 of each year. The center shall
provide this information to the standard report recipients, the auditor
general, the department of labor and economic opportunity, and the department
of lifelong education, advancement, and potential. If a community college fails
to furnish the audit materials, the monthly state operations installments must
be withheld from that college until the information is submitted. All reporting
must conform to the requirements set forth in the “2001 Manual for Uniform
Financial Reporting, Michigan Public Community Colleges”. A community college
shall make the information the community college is required to provide under
this section available to the public on its website.

Sec.
223. (1) By January 15 of each year, the department of lifelong education,
advancement, and potential shall submit to the standard report recipients a
report on North American Indian tuition waivers for the preceding academic year
that includes, but is not limited to, all of the following information:

(a) The number of waiver applications received and the number
of waiver applications approved.

(b) For each community college submitting information under
subsection (2), all of the following:

(i) The number of Native American students
enrolled each term for the previous academic year.

(ii) The number of North American Indian
tuition waivers granted each term, including continuing education students.

(iii) The monetary value of the waivers
granted each term for the previous academic year.

(iv) The number of students attending under a
North American Indian tuition waiver who successfully transfer to a 4-year
public or private university, or complete a degree or certificate program,
separated by degree or certificate level.

(2) By January 1 of each year, a community college that
receives an appropriation in section 201 or a tribal institution that receives
funding for the North American Indian tuition waiver shall provide to the
department of lifelong education, advancement, and potential any information
necessary for preparing the report described in subsection (1), using
guidelines and procedures developed by the department of lifelong education,
advancement, and potential.

(3) The department of lifelong education, advancement, and
potential may consolidate the report required under this section with the
report required under section 268, but a consolidated report must separately
identify data for universities and data for community colleges.

Sec.
229a. Included in the fiscal year 2026-2027 appropriations for the department
of technology, management, and budget are appropriations totaling
$40,398,900.00 to provide funding for the state share of costs for previously
constructed capital projects for community colleges. Those appropriations for
state building authority rent represent additional state general fund support
for community colleges, and the following is an estimate of the amount of that
support to each community college:

(a) Alpena Community College, $855,000.00.

(b) Bay de Noc Community College, $515,000.00.

(c) Delta College, $2,881,000.00.

(d) Glen Oaks Community College, $380,000.00.

(e) Gogebic Community College, $56,000.00.

(f) Grand Rapids Community College, $2,430,000.00.

(g) Henry Ford College, $1,505,000.00.

(h) Jackson College, $2,044,000.00.

(i) Kalamazoo Valley Community College, $3,404,500.00.

(j) Kellogg Community College, $679,000.00.

(k) Kirtland Community College, $225,000.00.

(l) Lake Michigan College, $966,000.00.

(m) Lansing Community College, $757,000.00.

(n) Macomb Community College, $4,682,200.00.

(o) Mid Michigan Community College, $1,615,000.00.

(p) Monroe County Community College, $2,359,900.00.

(q) Montcalm Community College, $446,000.00.

(r) C.S. Mott Community College, $3,103,000.00.

(s) Muskegon Community College, $982,000.00.

(t) North Central Michigan College, $646,000.00.

(u) Northwestern Michigan College, $1,787,000.00.

(v) Oakland Community College, $0.00.

(w) Schoolcraft College, $2,232,000.00.

(x) Southwestern Michigan College, $822,500.00.

(y) St. Clair County Community College, $718,000.00.

(z) Washtenaw Community College, $1,676,000.00.

(aa) Wayne County Community College, $1,895,800.00.

(bb) West Shore Community College, $736,000.00.

Sec.
230. (1) Subject to subsection (4), money included in the appropriations for
community college operations under section 201 for performance funding and
allocated under section 201f for 1-time performance funding payments is
distributed based on the following formula:

(a) Allocated proportionate to fiscal year 2025-2026 base
appropriations, 30%.

(b) Based on a weighted student contact hour formula as
provided for in the 2016 recommendations of the performance indicators task
force, 30%.

(c) Based on the performance improvement as provided for in
the 2016 recommendations of the performance indicators task force and based on
data provided by the center, 10%.

(d) Based on the performance completion number as provided
for in the 2016 recommendations of the performance indicators task force, 10%.

(e) Based on the performance completion rate as provided for
in the 2016 recommendations of the performance indicators task force and based
on data provided by the center, 10%.

(f) Based on administrative costs, 5%.

(g) Based on the local strategic value component, as
developed in cooperation with the Michigan Community College Association and
described in subsection (2), 5%.

(2) Money included in the appropriations for community
college operations under section 201(2) and 201f for local strategic value is
allocated only to each community college that certifies to the state budget
director, through a board of trustees resolution on or before October 15, 2026,
that the college has met 4 out of 5 best practices listed in each category
described in subsection (3). The resolution must provide specifics as to how
the community college meets each best practice measure within each category.
One-third of funding available under the strategic value component is allocated
to each category described in subsection (3). Amounts distributed under local
strategic value must be on a proportionate basis to each college’s fiscal year
2025-2026 operations funding. Payments to community colleges that qualify for
local strategic value funding must be distributed with the November installment
payment described in section 206.

(3) For purposes of subsection (2), the following categories
of best practices reflect functional activities of community colleges that have
strategic value to the local communities and regional economies:

(a) For Category A, economic development and business or
industry partnerships, the following:

(i) The community college has active
partnerships with local employers including hospitals and health care
providers.

(ii) The community college provides
customized on-site training for area companies, employees, or both.

(iii) The community college supports
entrepreneurship through a small business assistance center or other training
or consulting activities targeted toward small businesses.

(iv) The community college supports
technological advancement through industry partnerships, incubation activities,
or operation of a Michigan technical education center or other advanced
technology center.

(v) The community college has active
partnerships with local or regional workforce and economic development
agencies.

(b) For Category B, educational partnerships, the following:

(i) The community college has active
partnerships with regional high schools, intermediate school districts, and
career-tech centers to provide instruction through dual enrollment, concurrent
enrollment, direct credit, middle college, or academy programs.

(ii) The community college hosts, sponsors,
or participates in enrichment programs for area K-12 students, such as college
days, summer or after-school programming, or Science Olympiad.

(iii) The community college provides,
supports, or participates in programming to promote successful transitions to
college for traditional age students, including grant programs such as talent
search, upward bound, or other activities to promote college readiness in area
high schools and community centers.

(iv) The community college provides,
supports, or participates in programming to promote successful transitions to
college for new or reentering adult students, such as adult basic education, a
high school equivalency test preparation program and testing, or recruiting,
advising, or orientation activities specific to adults. As used in this
subparagraph, “high school equivalency test preparation program” means that
term as defined in section 4.

(v) The community college has active
partnerships with regional 4-year colleges and universities to promote
successful transfer, such as articulation, 2+2, or reverse transfer agreements
or operation of a university center.

(c) For Category C, community services, the following:

(i) The community college provides
continuing education programming for leisure, wellness, personal enrichment, or
professional development.

(ii) The community college operates or
sponsors opportunities for community members to engage in activities that
promote leisure, wellness, cultural or personal enrichment such as community
sports teams, theater or musical ensembles, or artist guilds.

(iii) The community college operates public
facilities to promote cultural, educational, or personal enrichment for
community members, such as libraries, computer labs, performing arts centers,
museums, art galleries, or television or radio stations.

(iv) The community college operates public
facilities to promote leisure or wellness activities for community members,
including gymnasiums, athletic fields, tennis courts, fitness centers, hiking
or biking trails, or natural areas.

(v) The community college promotes,
sponsors, or hosts community service activities for students, staff, or
community members.

(4) Payments for performance funding under section 201 and
for 1-time performance funding payments under section 201f must be made to a
community college only if that community college actively participates in the
Michigan Transfer Network sponsored by the Michigan Association of Collegiate
Registrars and Admissions Officers and submits timely updates, including
updated course equivalencies at least every 6 months, to the Michigan Transfer
Network. The state budget director shall determine if a community college has
not satisfied this requirement. The state budget director may withhold payments
for performance funding under section 201 and 1-time performance funding under
section 201f until a community college is in compliance with this subsection.

Sec.
236. (1) Subject to the conditions set forth in this article, the amounts
listed in this section are appropriated for higher education for the fiscal
year ending September 30, 2027, from the funds indicated in this section. The
following is a summary of the appropriations in this section and sections 236d
and 236l:

(a) The gross appropriation is $2,609,832,800.00. After
deducting total interdepartmental grants and intradepartmental transfers in the
amount of $0.00, the adjusted gross appropriation is $2,609,832,800.00.

(b) The sources of the adjusted gross appropriation described
in subdivision (a) are as follows:

(i) Total federal revenues, $3,200,000.00.

(ii) Total local revenues, $0.00.

(iii) Total private revenues, $0.00.

(iv) Total other state restricted revenues,  $1,481,678,600.00.

(v) State general fund/general purpose
money, $1,124,954,200.00.

(2) Amounts appropriated for public universities are as
follows:

(a) The appropriation for Central Michigan University is
$99,759,800.00, $97,785,700.00 for operations, $0.00 for operations increase,
and $1,974,100.00 for costs incurred under the North American Indian tuition
waiver.

(b) The appropriation for Eastern Michigan University is
$86,660,200.00, $86,236,300.00 for operations, $0.00 for operations increase,
and $423,900.00 for costs incurred under the North American Indian tuition
waiver.

(c) The appropriation for Ferris State University is
$62,195,100.00, $61,423,600.00 for operations, $0.00 for operations increase,
and $771,500.00 for costs incurred under the North American Indian tuition
waiver.

(d) The appropriation for Grand Valley State University is
$98,788,400.00, $97,552,900.00 for operations, $0.00 for operations increase,
and $1,235,500.00 for costs incurred under the North American Indian tuition
waiver.

(e) The appropriation for Lake Superior State University is
$16,419,200.00, $14,854,300.00 for operations, $0.00 for operations increase,
and $1,564,900.00 for costs incurred under the North American Indian tuition
waiver.

(f) The appropriation for Michigan State University is
$396,750,000.00, $321,516,900.00 for operations, $0.00 for operations increase,
$2,413,500.00 for costs incurred under the North American Indian tuition
waiver, $39,096,200.00 for MSU AgBioResearch, and $33,723,400.00 for MSU
Extension.

(g) The appropriation for Michigan Technological University
is $56,727,800.00, $55,927,100.00 for operations, $0.00 for operations
increase, and $800,700.00 for costs incurred under the North American Indian
tuition waiver.

(h) The appropriation for Northern Michigan University is
$55,925,000.00, $54,270,400.00 for operations, $0.00 for operations increase,
and $1,654,600.00 for costs incurred under the North American Indian tuition
waiver.

(i) The appropriation for Oakland University is
$73,414,700.00, $73,036,400.00 for operations, $0.00 for operations increase,
and $378,300.00 for costs incurred under the North American Indian tuition
waiver.

(j) The appropriation for Saginaw Valley State University is
$34,436,800.00, $34,196,000.00 for operations, $0.00 for operations increase,
and $240,800.00 for costs incurred under the North American Indian tuition
waiver.

(k) The appropriation for University of Michigan – Ann Arbor
is $362,353,400.00, $360,607,300.00 for operations, $0.00 for operations
increase, and $1,746,100.00 for costs incurred under the North American Indian
tuition waiver.

(l) The appropriation for University of
Michigan – Dearborn is $31,762,500.00, $31,513,700.00 for operations, $0.00 for
operations increase, and $248,800.00 for costs incurred under the North
American Indian tuition waiver.

(m) The appropriation for University of Michigan – Flint is
$26,941,300.00, $26,403,700.00 for operations, $0.00 for operations increase,
and $537,600.00 for costs incurred under the North American Indian tuition
waiver.

(n) The appropriation for Wayne State University is
$227,908,900.00, $227,310,200.00 for operations, $0.00 for operations increase,
and $598,700.00 for costs incurred under the North American Indian tuition
waiver.

(o) The appropriation for Western Michigan University is
$125,265,800.00, $124,489,300.00 for operations, $0.00 for operations increase,
and $776,500.00 for costs incurred under the North American Indian tuition
waiver.

(3) The amount appropriated in subsection (2) for public
universities is $1,755,308,900.00, appropriated from the following:

(a) State school aid fund, $743,088,300.00.

(b) State general fund/general purpose money,
$1,012,220,600.00.

(4) The amount appropriated for Michigan public school
employees’ retirement system reimbursement is $0.00.

(5) The amount appropriated for state and regional programs
is $322,100.00, appropriated from general fund/general purpose money and
allocated as follows:

(a) Higher education database modernization and conversion,
$200,000.00.

(b) Midwestern Higher Education Compact, $122,100.00.

(6) The amount appropriated for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks program is $2,691,500.00,
appropriated from general fund/general purpose money and allocated as follows:

(a) Select student support services, $1,956,100.00.

(b) Michigan college/university partnership program,
$586,800.00.

(c) Morris Hood, Jr. educator development program,
$148,600.00.

(7) Subject to subsection (8), the amount appropriated for
grants and financial aid is $770,000,000.00, allocated as follows:

(a) Tuition incentive program,  $165,800,000.00.

(b) Children of veterans and officer’s survivor tuition grant
programs, $2,000,000.00.

(c) Project GEAR-UP, $3,200,000.00.

(d) Michigan achievement scholarships, $532,000,000.00. From
this amount, up to $10,000,000.00 may be used to award skills scholarships
under section 248a.

(e) Michigan reconnect, $67,000,000.00.

(8) The money appropriated in subsection (7) for grants and
financial aid is appropriated from the following:

(a) Federal revenues under the United States Department of
Education, Office of Elementary and Secondary Education, GEAR-UP program,
$3,200,000.00.

(b) Postsecondary scholarship fund,  $232,000,000.00.

(c) State school aid fund, $425,080,000.00.

(d) State general fund/general purpose money,
$109,720,000.00.

(e) At the close of the fiscal year, state money appropriated
in subsection (7) for grants and scholarships that is unspent must be deposited
into the postsecondary scholarship fund created in section 236j.

(9) For fiscal year 2026-2027 only, in addition to the
allocation under subsection (4), from the appropriations described in
subsection (1), there is allocated an amount not to exceed $1,750,000.00 for
payments to participating public universities, appropriated from the state
school aid fund. A public university that receives money under this subsection
shall use that money solely for the purpose of offsetting the normal cost
contribution rate. As used in this subsection, “participating public
universities” means public universities that are a reporting unit of the
Michigan public school employees’ retirement system under the public school
employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1437, and that
pay contributions to the Michigan public school employees’ retirement system
for the state fiscal year.

(10) Subject to section 236l, from
the appropriation described in subsection (1), $10,000,000.00 is appropriated
from the state school aid fund for a payment to a public university that
participates in the MiDocs consortium to support graduate medical education
programming.

Sec.
236c. In addition to the funds appropriated for fiscal year 2026-2027 in
section 236, appropriations to the department of technology, management, and
budget in the act providing general appropriations for fiscal year 2026-2027
for state building authority rent, totaling an estimated $153,218,900.00,
provide funding for the state share of costs for previously constructed capital
projects for state universities. These appropriations for state building
authority rent represent additional state general fund support provided to
public universities, and the following is an estimate of the amount of that
support to each public university:

(a) Central Michigan University, $12,914,000.00.

(b) Eastern Michigan University,  $8,272,000.00.

(c) Ferris State University, $9,546,000.00.

(d) Grand Valley State University,  $10,864,000.00.

(e) Lake Superior State University, $2,229,000.00.

(f) Michigan State University, $16,598,000.00.

(g) Michigan Technological University, $5,521,000.00.

(h) Northern Michigan University, $9,735,900.00.

(i) Oakland University, $13,310,000.00.

(j) Saginaw Valley State University, $7,820,000.00.

(k) University of Michigan - Ann Arbor, $14,068,000.00.

(l) University of Michigan - Dearborn,
$10,725,000.00.

(m) University of Michigan - Flint,  $8,307,000.00.

(n) Wayne State University, $12,322,000.00.

(o) Western Michigan University, $10,987,000.00.

Sec.
236d. (1) In addition to the funds appropriated under section 232(2) for
university operations, for fiscal year 2026-2027 only, there is appropriated an
amount not to exceed $69,760,300.00 from the school aid fund for 1-time
operations increase payments. These funds are intended to be used for the same
purposes as the funds appropriated under section 236(2) for university
operations.

(2) From the amount appropriated under subsection (1),
subject to sections 241a, 241b, 241c, and 244, each university is allocated the
following:

(a) Central Michigan University, $3,920,600.00.

(b) Eastern Michigan University, $3,457,500.00.

(c) Ferris State University, $2,462,700.00.

(d) Grand Valley State University,  $3,911,200.00.

(e) Lake Superior State University, $595,600.00.

(f) Michigan State University, $12,890,700.00.

(g) Michigan Technological University,$2,242,300.00.

(h) Northern Michigan University, $2,175,900.00.

(i) Oakland University, $2,928,300.00.

(j) Saginaw Valley State University, $1,371,000.00.

(k) University of Michigan – Ann Arbor, $14,458,000.00.

(l) University of Michigan – Dearborn,
$1,263,500.00.

(m) University of Michigan – Flint, $1,058,600.00.

(n) Wayne State University, $9,113,600.00.

(o) Western Michigan University, $4,991,200.00.

(3) In addition to the funds appropriated in section 236(2)
for MSU AgBioResearch, for fiscal year 2026-2027 only, there is appropriated an
amount not to exceed $1,567,500.00 from the state school aid fund for MSU
AgBioResearch.

(4) In addition to the funds appropriated in section 236(2)
for MSU Extension, for fiscal year 2026-2027 only, there is appropriated an
amount not to exceed $1,352,100.00 from the state school aid fund for MSU
Extension.

Sec.
236j. (1) The postsecondary scholarship fund is created in the department of
treasury for the purpose of providing scholarship awards to eligible students
who attend eligible postsecondary educational institutions in this state, as
provided in subsection (5).

(2) The state treasurer may receive money or other assets
from any source for deposit into the postsecondary scholarship fund. The state
treasurer shall direct the investment of the postsecondary scholarship fund.
The state treasurer shall credit to the postsecondary scholarship fund interest
and earnings from postsecondary scholarship fund investments.

(3) Money in the postsecondary scholarship fund at the close
of the fiscal year must remain in the postsecondary scholarship fund and not
lapse to the general fund.

(4) The department of treasury is the administrator of the
postsecondary scholarship fund for auditing purposes.

(5) Money must be expended from the postsecondary scholarship
fund for the purpose of supporting state grants and financial aid allocated in
section 236(7).

(6) It is the intent of the legislature that the
postsecondary scholarship fund serves as a funding source of the Michigan
achievement scholarship. To ensure the Michigan achievement scholarship
provides ongoing supports for students, it is the intent of the legislature to
provide annual ongoing increases for the Michigan achievement scholarship
allocated in section 236(7) and to use funds from the postsecondary scholarship
fund to support the scale up to the fully implemented costs of the Michigan
achievement scholarship.

(7) In addition to the appropriations in section 236, if the
amount of state money allocated in section 236(7)(a), (b), (d), or (e) is not
sufficient to fully fund 1 or more of those awards, there is appropriated from
the postsecondary scholarship fund the amount necessary to fully fund those
awards. The state budget director must determine if money is appropriated from
the postsecondary scholarship fund under this subsection and shall provide
written notification to the standard report recipients prior to any additional
appropriation described in this subsection.

(8) For the fiscal year ending September 30, 2027 only,
an amount not to exceed $100,000,000.00 from the school
aid stabilization fund is
deposited into the postsecondary scholarship fund. It is intended that this
deposit is funded first from unspent and unreserved state school aid fund
balances appropriated under section 11, as recorded as part of the state
book-closing process for the 2025-2026 fiscal year, and, if necessary, from
available fund balances of other funds created under article I and deposited
into the school aid stabilization fund.

Sec.
236k. From the
amount described under section 248(7) for marketing of the Michigan achievement
scholarship and other state scholarship programs, $1,000,000.00 must be
allocated for the FAFSA completion ticket to tuition incentive. The department
of lifelong education, advancement, and potential shall use funds described
under this section to run a promotional activity to promote completing the Free
Application for Federal Student Aid (FAFSA) for the first time consistent with
the promotional-activity exception provided for in section 372(2) of the
Michigan penal code, 1931 PA 328, MCL 750.372. The promotional activity must
offer prize funds that are available to a number, chosen by the department, of
Michigan residents who are selected at random in a manner that ensures
geographic diversity across this state, including at least 1 recipient from the
Upper Peninsula, who satisfactorily demonstrate to the department that
they have completed the FAFSA for the first time.

Sec.
236l. (1) Funds appropriated in section
236(10) must be paid to support graduate medical education programming.

(2) Payments under this section must be made in 1 lump sum to
a partnering public university identified by the department of health and human
services.

(3) A public university that receives a payment under this
section must contribute the entire amount received to the department of health
and human services, in a form and manner determined by the department of health
and human services, by no later than 30 days after the payment is received.

(4) The department of health and human services must use
funds received to support graduate medical education programs in this state.

Sec.
236s. (1) Within 30 days of the enactment of an amendatory act to this article,
the house and senate shall provide to the state budget office a jointly agreed
upon list of legislatively directed spending items funded by the amendatory
act. The list must include all information and documents pertaining to the
funded items as publicly disclosed in accordance with section 364 and 364a of
the management and budget act, 1984 PA 431, MCL 18.1364 and 18.1634a. As used
in this subsection, “legislatively directed spending item” means that term as
defined in section 364 of the management and budget act, 1984 PA 431, MCL
18.1364.

(2) In accordance with section 364(4) of the management and
budget act, 1984 PA 431, MCL 18.364(4), the department or agency administering
the grant shall post a report in a publicly accessible location on its website beginning
March 15 of the current fiscal year. The department or agency shall update the
report and post an updated report not later than June 15 of the current fiscal
year and again not later than September 15 of the current fiscal year. The
department or agency shall include in the report the most comprehensive
information the department or agency has available at the time of posting for
grants awarded.

Sec.
237b. As used in this article:

(a) “Center” means the center for educational performance and
information created in section 94a.

(b) “College level equivalent credit examination” means an
examination that is administered by an independent testing service and that is
used by colleges and universities generally to award postsecondary credit for
achievement of a particular score, and includes, but is not limited to,
advanced placement examinations, the DANTES Subject Standardized Test (DSST),
and college-level examination program (CLEP) examinations.

(c) “Standard report recipients” means the senate and house
appropriations committees, the senate and house appropriations subcommittees on
higher education, the senate and house fiscal agencies, the senate and house
policy offices, and the state budget office.

Sec.
237c. Not later than 6 months after the state budget office issues work project
letters, and again on or by April 15, the state budget office shall submit an
annual report that summarizes all work project accounts to the standard report
recipients. The report must include all of the following:

(a) A list of all work project accounts.

(b) The status of all work project accounts, including
amounts expended, amounts encumbered, and available balances for each account.

(c) The amount of funds that lapsed from any previously
designated work project accounts, the name and description of the work project
account, and the funds that received the lapsed amounts.

Sec.
238. (1) Unless otherwise specified, a public university receiving
appropriations in section 236 shall use the internet to fulfill the reporting
requirements of this article. This requirement includes transmission of reports
via electronic mail to the recipients identified for each reporting requirement
and placement of each required report in a single archivable location on an
internet site not later than the due date required for each report.

(2) In addition to placing all reports required in the
current fiscal year on the public university’s website, the public university
shall maintain on its website all reports placed on the website from the
previous 7 fiscal years, posted by fiscal year in the same single archivable
location.

Sec.
239a. Public
universities are encouraged to evaluate and pursue efficiency and
cost-containment measures that maximize state funding. Public universities
shall identify practices that increase efficiencies, including, but not limited
to, establishing joint ventures, consolidating services, utilizing program
collaborations, maximizing educational benefits through optimal class sizes and
frequency of course offerings, eliminating low-enrollment and high-cost
instructional programs, using self-insurance, practicing energy conservation,
and utilizing group purchasing. Public universities shall also review proposed
capital outlay projects to increase coordination and utilization of new
facilities, renovation projects, and technology improvements.

Sec.
241. Excluding section 236k, and subject to sections 236l, 241a, 241b, 241c, 241e, and 244, the funds appropriated in
sections 236 and 236d to public universities must be paid out of the state
treasury and distributed by the state treasurer to the respective institutions
in 11 equal monthly installments on the sixteenth of each month, or the next
succeeding business day, beginning with October 16, 2026. Except for Wayne
State University, each institution shall accrue its July and August 2027
payments to its institutional fiscal year ending June 30, 2027.

Sec.
241a. (1) All public universities shall submit higher education institutional
data inventory (HEIDI) data and associated financial aid program information
requested by and in a manner prescribed by the state budget director. For
public universities with fiscal years ending June 30, these data must be
submitted to the state budget director by October 15 of each fiscal year.
Public universities with a fiscal year ending September 30 shall submit
preliminary HEIDI data by November 15 and final data by December 15.

(2) It is intended that accountability reporting for public
universities will be streamlined through HEIDI. The state budget director and
the center will work to combine the reporting requirements outlined in this
subsection with the existing HEIDI collection cycle. All of the following must
be reported to the house and senate fiscal agencies and the state budget
director:

(a) Each public university’s certification of its compliance
with the requirements described in subsections (4), (5), and (6).

(b) The reporting requirements described in sections 241b and
241c.

(3) If a public university fails to submit HEIDI data and
associated reporting in sections 241a, 241b, 241c, and 244 in accordance with
the required reporting schedule, the state budget director may withhold the
monthly operations installments under sections 236 and 236d to the public
university until those reports are submitted. If a public university does not
comply with all of the requirements described in sections 241a, 241b, 241c, and
244 by the end of the fiscal year, the public university forfeits the amount
withheld. The state budget director shall notify the standard report recipients
at least 10 days before withholding funds from any public university.

(4) No later than the first business day of November of each
year, a public university shall maintain a public transparency website
available through a link on its website homepage. The website must include all
of the following concerning the public university and shall archive the previous versions
from the prior 7 fiscal years:

(a) The annual operating budget and subsequent budget
revisions.

(b) A summary of current expenditures for the most recent
fiscal year for which they are available, expressed as pie charts in the
following 2 categories:

(i) A chart of personnel expenditures,
broken into the following subcategories:

(A) Earnings and wages.

(B) Employee benefit costs, including, but not limited to,
medical, dental, vision, life, disability, and long-term care benefits.

(C) Retirement benefit costs.

(D) All other personnel costs.

(ii) A chart of all current expenditures the
public university reported as part of its higher education institutional data
inventory data under subsection (1), broken into the same subcategories in
which it reported those data.

(c) Links to all of the following for the public university:

(i) The current collective bargaining
agreement for each bargaining unit.

(ii) Each health care benefits plan,
including, but not limited to, medical, dental, vision, disability, long-term
care, or any other type of benefits that would constitute health care services,
offered to any bargaining unit or employee of the public university.

(iii) Audits and financial reports for the
most recent fiscal year for which they are available.

(d) General fund revenue and expenditure projections for the
current fiscal year and the next fiscal year.

(e) A listing of all debt service obligations, detailed by
project, anticipated fiscal year payment for each project, and total
outstanding debt for the current fiscal year.

(f) The institution’s policy regarding the transferability of
core college courses between community colleges and the public university.

(g) A listing of all community colleges that have entered
into reverse transfer agreements with the public university.

(h) A dashboard or report card demonstrating the public
university’s performance in several “best practice” measures. The dashboard or
report card must include at least all of the following for the 3 most recent
academic years for which the data are available:

(i) Enrollment.

(ii) Student retention rate.

(iii) Six-year graduation rates.

(iv) Number of Pell grant recipients and
graduating Pell grant recipients.

(v) Geographic origination of students,
categorized as in-state, out-of-state, and international.

(vi) Faculty to student ratios and total
public university employee to student ratios.

(vii) Teaching load by faculty classification.

(viii) Graduation outcome rates, including
employment and continuing education.

(i) An icon badge that provides statewide consistency and
public visibility. For this purpose, public universities shall use the icon
badge provided by the department of technology, management, and budget
consistent with the icon badge developed by the department of education for
K-12 school districts. It must appear on the front of each public university’s
homepage. The size of the icon may be reduced to 150 x 150 pixels. The font
size and style for this reporting must be consistent with other documents on
each public university’s website.

(j) A collection and report of the number and percentage of
all enrolled students who complete the Free Application for Federal Student
Aid, broken out by undergraduate and graduate/professional classifications,
reported to the center and posted on its website under the budget transparency
icon badge.

(k) The name of the current president, the names of the city
and state where the president currently resides, and the president’s annual
salary.

(l) A list of severance payments and the
amounts of those payments made to former employees of the university.

(5) No later than the first business day of November of each
year, a public university shall develop, maintain, and update a “campus safety
information and resources” link, prominently displayed on the homepage of its
website, to a section of its website containing, at a minimum, all of the
following information:

(a) Emergency contact numbers for police, fire, health, and
other services.

(b) Hours, locations, telephone numbers, and email contacts
for campus public safety offices and title IX offices.

(c) A list of safety and security services provided by the
public university, including transportation, escort services, building
surveillance, anonymous tip lines, and other available security services.

(d) The public university’s policies applicable to minors on
university property.

(e) A directory of resources available at the public
university or surrounding community for students or employees who are survivors
of sexual assault or sexual abuse.

(f) An electronic copy of “A Resource Handbook for Campus
Sexual Assault Survivors, Friends and Family”, published in 2018.

(g) Campus security policies and crime statistics pursuant to
the student right-to-know and campus security act, Public Law 101-542, 104 Stat
2381. Information must include all material prepared pursuant to the public
information reporting requirements under the crime awareness and campus
security act of 1990, title II of the student right-to-know and campus security
act, Public Law 101-542, 104 Stat 2381.

(6) Each public university shall certify to the state budget
director by the first business day of November of each year that it complies
with all of the following requirements:

(a) The public university participates in reverse transfer
agreements described in section 286 with at least 3 community colleges in
this state.

(b) The public university does not and will not apply any of
the following criteria when determining whether credits earned outside the
public university by a student count toward a degree or certificate program
offered by the public university:

(i) Whether the credits were earned in a
dual enrollment program that counted the credits toward high school graduation
requirements.

(ii) Whether the credits were earned in a
course that was delivered in a high school classroom, community college
classroom or campus, or another location.

(iii) Whether the credits were earned in a
course that was delivered online, in person, or hybrid.

(iv) Whether other students enrolled in the
course in which the credits were earned were enrolled in high school or counted
the course toward high school graduation requirements.

(c) The public university actively participates in and
submits timely updates to the Michigan Transfer Network created as part of the
Michigan Association of Collegiate Registrars and Admissions Officers transfer
agreement.

Sec.
241b. (1) No later than the first business day of November of each year, each
public university that receives an appropriation in section 236 shall report
its annual security report, also known as the Clery Act Report, as required
under 20 USC 1092(f). Each public university shall include a title IX summary
report that includes all of the following information:

(a) The amounts and descriptions of all fees incurred in
title IX-related civil and criminal litigation.

(b) The number of title IX complaints.

(c) The average length of time for investigation and
resolution of title IX complaints.

(d) The aggregate number of title IX cases, investigations,
and complaints for each of the categories described in subparagraphs (i) to (v), subject to subparagraph (vi), as follows:

(i) Cases investigated for less than 15
days.

(ii) Cases investigated for at least 15 days
and less than 30 days.

(iii) Cases investigated for at least 30 days
and less than 60 days.

(iv) Cases investigated for at least 60 days
and less than 90 days.

(v) Cases investigated for 90 days or more.

(vi) If, for any category of cases under
subparagraphs (i) to (v),
there is an aggregate of fewer than 5 cases investigated, the public university
shall not report the aggregate number of cases and instead shall report that
fewer than 5 cases were investigated.

(e) The number of title IX appeals and the resolutions of
those appeals.

(f) The number of title IX-related complaints filed by the
public university with law enforcement agencies.

(2) No later than the first business day of November of each
year, each public university that receives an appropriation in section 236
shall certify all of the following:

(a) The public university complies with federal regulations
under title IX, as required by the United States Department of Education,
including, but not limited to, the following:

(i) Use of medical experts that do not have
an actual or apparent conflict of interest.

(ii) Issuance of title IX reports to
complainants and respondents that are not divergent.

(iii) Notification of resources to each
individual who reports having experienced sexual assault by a public university
member.

(iv) Consistent annual training for title IX
staff and law enforcement.

(b) The public university provides both of the following:

(i) An in-person sexual misconduct
prevention presentation or course for all freshman and incoming transfer
students, which must include contact information for the title IX office of the
public university. For a student who does not have any in-person credit hours
on campus, the university may provide the presentation or course
electronically.

(ii) An online or electronic sexual
misconduct prevention presentation or course for all students not considered
freshmen or incoming transfer students.

(c) The public university had a third party review its title
IX compliance office and related policies and procedures by the end of the
2018-2019 academic year. A copy of the third-party review must be transmitted
to the standard report recipients. Each public university shall have a
third-party review once every 4 years and a copy of the third-party review must
be transmitted to the standard report recipients.

(d) The public university requires that the governing board
and the president or chancellor of the public university receive quarterly
reports from their title IX coordinator or title IX office. The report must
contain aggregated data of the number of sexual misconduct reports that the
office received for the academic year, the types of reports received, including
reports received against employees, and a summary of the general outcomes of
the reports and investigations. A member of the governing board may request to
review a title IX investigation report involving a complaint against an
employee, and the public university shall provide the report in a manner it
considers appropriate. The public university shall protect the complainant’s
anonymity, and the report must not contain specific identifying information.

(e) If allegations against an employee are made in more than
1 title IX complaint that resulted in the public university finding that no
misconduct occurred, the public university requires that the title IX officer
promptly notify the president or chancellor and a member of the public
university’s governing board in writing and take all appropriate steps to
ensure that the matter is being investigated thoroughly, including hiring an
outside investigator for future cases involving that employee. A third-party
title IX investigation under this subdivision does not prohibit the public
university from simultaneously conducting its own title IX investigation
through its own title IX coordinator.

(f) The public university’s president or chancellor and a
member of its governing board has reviewed all title IX reports involving
the alleged sexual misconduct of an employee of the public university.

(3) As used in this section, “sexual misconduct” includes,
but is not limited to, intimate partner violence, nonconsensual sexual conduct,
sexual assault, sexual exploitation, sexual harassment, and stalking.

Sec.
241c. (1) No later than the last business day of August of each year, each
public university that receives an appropriation in section 236 shall submit
the amount of tuition and fees actually charged to a full-time resident
undergraduate student for academic year 2026-2027 as part of the public
university’s higher education institutional data inventory (HEIDI) data. A
public university shall report any revisions for any semester of the reported
academic year to HEIDI within 15 days of being adopted.

(2) Payments under section 236d must be made only to a public
university that certifies to the state budget director by the last business day
of August of each year that its board did not adopt an increase in tuition and
fee rates for resident undergraduate students after September 1, 2025 for
the 2025-2026 academic year and that its board will not adopt an increase
in tuition and fee rates for resident undergraduate students for the 2026-2027 academic
year that is greater than 4.0% or $651.00,
whichever is greater. For the
academic year 2027-2028, the tuition and fee restraint rate for
resident undergraduate students is an increase of not greater than 4.0% or
$651.00, whichever is greater. It is the intent of the legislature that in the
next fiscal year, the tuition and fee restraint rate will be adjusted only for
the subsequent academic year. As used in this subsection:

(a) “Fee” means any board-authorized fee that will be paid by
more than 1/2 of all resident undergraduate students at least once during their
enrollment at a public university, as described in the higher education
institutional data inventory (HEIDI) user manual. A public university
increasing a fee that applies to a specific subset of students or courses shall
provide sufficient information to prove that the increase applied to that
subset will not cause the increase in the average amount of board-authorized total
tuition and fees paid by resident undergraduate students in the academic year
to exceed the limit established in this subsection.

(b) “Tuition and fee rate” means the average of full-time
rates paid by a majority of students in each undergraduate class, based on an
unweighted average of the rates authorized by the public university board and
actually charged to students, deducting any uniformly rebated or refunded
amounts, for the 2 semesters with the highest levels of full-time equated
resident undergraduate enrollment during the academic year, as described in the
higher education institutional data inventory (HEIDI) user manual.

(3) The state budget director shall implement uniform
reporting requirements to ensure that a public university receiving a payment
under section 236d has satisfied the tuition restraint requirements of this
section. The state budget director has the sole authority to determine if a
public university has met the requirements of this section. Information
reported by a public university to the state budget director under this
subsection must also be reported to the standard
report recipients.

Sec.
247. (1) The funds appropriated in section 236 for Michigan reconnect must be
distributed and administered by the department of lifelong education,
advancement, and potential pursuant to the Michigan reconnect grant act, 2020
PA 84, MCL 390.1701 to 390.1709, the Michigan reconnect grant recipient act,
2020 PA 68, MCL 390.1711 to 390.1723, and the department’s administrative
procedures for Michigan reconnect.

(2) For fiscal year 2026-2027 only, the department of
lifelong education, advancement, and potential may use the funds appropriated
in section 236 for Michigan reconnect to support students who are receiving
awards under the temporary “ARP - Michigan reconnect expansion to 21” program
described in 2023 PA 119.

Sec.
247a. (1) The appropriation in section 236(7)(e) may be used to support
last-dollar financial assistance to eligible individuals who are at least 21
years of age and seeking associate degrees, industry-recognized certificates,
or credentials. Funds expended under this section must be used to award grants
to eligible institutions consistent with the Michigan reconnect grant act, 2020
PA 84, MCL 390.1701 to 390.1709, to eligible students as defined in this
section, and to administer the program outlined in this section.

(2) Except as provided under subsection (3), the department
must develop and implement a program similar to requirements outlined in the
Michigan reconnect grant recipient act, 2020 PA 68, MCL 390.1711 to 390.1723.

(3) To receive an initial grant under this section, an
eligible individual must meet both of the following requirements:

(a) Be at least 21 years of age and not more than 24 years of
age.

(b) Complete the application in a timely manner and in a form
and manner determined by the department.

(4) The department must develop program guidelines and
eligibility criteria for the program and must post the information on its
publicly accessible website.

(5) The department may award funds under this section for
eligible individuals only until the money appropriated to Michigan reconnect in
section 236(7)(e) has been fully committed.

Sec.
248. (1) The funds appropriated in section 236 for Michigan achievement
scholarships must be distributed as provided in this section and section 248a,
pursuant to the administrative procedures for Michigan achievement scholarships
of the department.

(2) As used in this section:

(a) “Cost of attendance” means expenses for a student’s
tuition, mandatory fees, and contact hours for the student’s actual program of
study; books, supplies, and equipment required for courses of instruction;
housing and food costs; transportation expenses; federal student loan fees;
miscellaneous expenses, including a reasonable amount for the documented cost
of a personal computer, allowance for child care, or allowance for other
dependent care; costs related to a disability; costs of obtaining a license,
certification, or first professional credential; and reasonable costs for study
abroad programs.

(b) “Department” means the department of lifelong education,
advancement, and potential.

(c) “Eligible institution” means a public university that
receives an appropriation in section 236, a community college that receives an
appropriation in section 201, a federally recognized tribal college in this
state, or an independent nonprofit college or university in this state as
described in section 1 of 1966 PA 313, MCL 390.991.

(d) “Gift aid” includes federal Pell grants under 20 USC
1070a, tuition incentive program benefits under section 256, state tuition
grants under section 252, awards received for minimum payments awarded in
subsection (4), higher education expenses paid under the Michigan promise zone
authority act, 2008 PA 549, MCL 390.1661 to 390.1679, and all other federal,
state, local, or institutional aid in the form of grants, scholarships, or
discounts applied only toward tuition and mandatory fees. Gift aid does not
include student loans, work-study awards, qualified withdrawals made from
education savings accounts to pay higher education expenses pursuant to the
Michigan education savings program act, 2000 PA 161, MCL 390.1471 to 390.1486,
or higher education expenses paid under the Michigan education trust program
pursuant to the Michigan education trust act, 1986 PA 316, MCL 390.1421 to
390.1442.

(e) “High school equivalency certificate” means that term as
defined in section 4.

(f) “Last-dollar payment amount” means 1 of the following:

(i) For a student attending a community
college or federally recognized tribal college, an amount equal to the student’s
tuition, mandatory fees, and contact hours for the student’s actual program of
study, minus all gift aid received by the student.

(ii) For a student attending a public
university or an independent nonprofit college or university, or for a student
enrolled in a baccalaureate degree program described in section 121 of the
community college act of 1966, 1966 PA 331, MCL 389.121, an amount equal to the
student’s individual cost of attendance, minus all gift aid received by the
student.

(g) “Minimum payment” means a payment for any eligible cost
within the student’s individual cost of attendance. The minimum payment must be
awarded as a separate payment not included in the student’s need-based
financial aid. The minimum payment must not be reduced.

(h) “SAI eligible student” means a student who has completed
the Free Application for Federal Student Aid and meets at least 1 of the
following:

(i) Received the Michigan achievement
scholarship in academic year 2023-2024, was determined to have an expected
family contribution of $25,000.00 or less in academic year 2023-2024, and has
completed the Free Application for Federal Student Aid for the subsequent award
cycles.

(ii) For awards made during academic year
2024-2025 or a subsequent academic year, has completed the Free Application for
Federal Student Aid and has a student aid index number of 30,000 or less. If
the federal government replaces the student aid index number with a new metric,
the department shall collaborate with the state budget office and the house and
senate fiscal agencies to adopt a new eligibility metric equivalent to a
student aid number of 30,000 or less.

(3) Subject to subsection (5), an individual must meet all of
the following criteria each year to be eligible for a Michigan achievement
scholarship awarded under this section:

(a) Maintain residency in this state, as determined for
purposes of the Free Application for Federal Student Aid.

(b) Have graduated with a high school diploma or certificate
of completion or achieved a high school equivalency certificate in 2023 or
after.

(c) Be enrolled in an eligible institution as a full-time
undergraduate student, as defined by that eligible institution, for the
semester the award is received.

(d) Have enrolled for the first time in an eligible
institution during the 2023-2024 academic year, or a subsequent academic year,
within 15 months after high school graduation or attainment of a high school
equivalency certificate or have received a Michigan achievement scholarship or
Michigan achievement skills scholarship in a previous academic year. For the
purposes of this subdivision, participation in a dual enrollment, early
college, or other similar program while attending high school does not
disqualify a student from being considered a first-time enrollee.

(e) Maintain satisfactory academic progress, as defined by
the eligible institution in which the student is enrolled.

(f) Not be in default on a federal student loan.

(g) Apply for all available gift aid for each academic year
in which the individual applies for a Michigan achievement scholarship.

(h) For a student who is enrolled at an eligible institution
that is a public university or an independent nonprofit college or university,
or who is enrolled in a baccalaureate degree program described in section 121
of the community college act of 1966, 1966 PA 331, MCL 389.121, at an eligible
institution, be an SAI eligible student.

(4) The amount awarded to an eligible student at an eligible
institution must equal 1 of the following, as applicable:

(a) The amount awarded to an eligible student who is enrolled
at an eligible institution that is a community college or federally recognized
tribal college where the student is eligible for that institution’s in-district
tuition rate must be equal to the sum of the last-dollar payment amount. The
amount awarded to an eligible student who is eligible for a federal Pell grant
under 20 USC 1070a must include an additional amount of $1,000.00.

(b) The amount awarded to an eligible student who is enrolled
at an eligible institution that is a community college or federally recognized
tribal college where the student is not eligible for that institution’s
in-district tuition rate must be the lesser of the last-dollar payment amount,
or the in-district tuition and mandatory fees rate. The amount awarded to an
eligible student who is eligible for a federal Pell grant under 20 USC 1070a
must include an additional amount of $1,000.00.

(c) The amount awarded to an eligible student who is enrolled
at an eligible institution that is a public university or independent nonprofit
university, or is enrolled in a baccalaureate degree program described in
section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121, at
an eligible institution must equal the sum of following:

(i) A minimum payment of $2,500.00.

(ii) The lesser of $3,000.00 or the student’s
last-dollar payment amount.

(d) Money awarded under this subsection for a Michigan
achievement scholarship must be paid to the eligible institution for credit to
the student’s account.

(5) An eligible student may receive a Michigan achievement
scholarship award under this section or section 248a for a maximum of 5
consecutive academic years, starting when the eligible student enrolls at an
eligible institution for the first time as described in subsection (3)(d), less
any period of eligibility used for a Michigan achievement skills scholarship,
and not more than 3 of which may be for attending eligible institutions that
are community colleges or federally recognized tribal colleges unless the
student is enrolled in a baccalaureate degree program described in section 121
of the community college act of 1966, 1966 PA 331, MCL 389.121. A student may
not receive an award under this section and section 248a(3)(f)(i) during the same academic term.

(6) The department shall work closely with participating
institutions to provide the highest level of participation and ensure that all
requirements of the program are met.

(7) From the funds appropriated in section 236(7) for the
Michigan achievement scholarship, the department may use up to $10,000,000.00 annually
for the purposes of outreach programs to raise awareness of the Michigan
achievement scholarship and other state grants and financial aid allocated in
section 236(7). The department shall ensure that state grants and financial aid
are well publicized and that high school students are provided information on
the availability of financial aid. The department may receive and expend funds
received from outside sources for scholarships, marketing, or other purposes
related to the Michigan state grants and financial aid. The department shall
provide the necessary funding and staff to fully operate the program.

(8) The department shall convene a workgroup to advise the
department on the administration of the Michigan achievement scholarship. The
workgroup shall include participation from the Michigan Association of State
Universities and its institutional members, the Michigan College Access
Network, the Michigan Community College Association and its institutional
members, the Michigan Independent Colleges and Universities and its
institutional members, and any other interested stakeholders and offices as
determined by the department.

(9) The following reporting obligations apply to the Michigan
achievement scholarship program:

(a) By February 15 of each year, the department shall provide
a written report, organized by eligible institution, to the standard report
recipients that includes the following information for the previous academic
year:

(i) The number of students who qualified for
a Michigan achievement scholarship.

(ii) The number of students who received a
Michigan achievement scholarship.

(iii) The average number of credits earned by
students who received a Michigan achievement scholarship.

(iv) The number of Michigan achievement
scholarships that were canceled due to failure to maintain satisfactory
academic progress as described in subsection (3)(e).

(v) The number of Michigan achievement
scholarships that were canceled due to a student ceasing attendance at an
eligible institution. The number must not include any known transfers to
another eligible institution.

(vi) The number of Michigan achievement
scholarships that were canceled due to a student’s failure to maintain
full-time status.

(vii) The average Michigan achievement
scholarship award per student.

(viii) As applicable, a delineation of each
measure described in subparagraphs (i) to (vii) by sector, including community colleges, tribal colleges,
public universities, and independent colleges and universities.

(b) By September 30 of each year, starting with the fiscal
year ending September 30, 2027 and in partnership with the center, create and
maintain a publicly available online dashboard that includes all of the
following student success information for the previous academic year:

(i) The number of students who received a
Michigan achievement scholarship and completed a degree or credential by an
eligible institution.

(ii) Type of credentials, including a
breakdown of bachelor’s and associate degrees, earned by students who received
a Michigan achievement scholarship by an eligible institution.

(iii) The percentage of students who received
a Michigan achievement scholarship and were eligible for federal Pell grants
under 20 USC 1070a.

(iv) The average completion rate for students
who received a Michigan achievement scholarship by an eligible institution as
defined by the department.

(v) The average persistence rate and credits
earned for students who received a Michigan achievement scholarship by an
eligible institution as defined by the department.

(vi) As applicable, a delineation of each
measure described in subparagraphs (i) to (v) by sector, including community colleges, tribal colleges,
public universities, and independent colleges and universities.

(c) Each eligible institution whose students receive awards
under this section shall cooperate with the department in a timely manner to
facilitate the creation of the report under subdivision (a) and (b).

(10) By April 1 of each year, each eligible institution shall
submit a report to the department, the state budget office, and the house and
senate fiscal agencies providing information as to the average amount of
institutional grant aid awarded to full-time first-time undergraduate students
for the immediately preceding 2 institution fiscal years. If the average amount
of institutional grant aid awarded to full-time first-time undergraduate
students in the immediately preceding fiscal year is less than the average
amount of institutional grant aid awarded to full-time first-time undergraduate
students in the year preceding the immediately preceding institutional fiscal
year 2024-2025, the institution shall include in the report a description of
any changes to the institutional financial aid during the 2 immediately
preceding fiscal years. An institution’s report of the average amount of
institutional grant aid awarded to full-time first-time undergraduate students
pursuant to this subsection must be consistent with data most recently reported
to the Integrated Postsecondary Education Data System.

(11) For each fiscal year, an eligible institution shall
maintain and report its compliance with the following tuition restraint
requirements, as applicable:

(a) For an eligible institution that is a community college
or a federally recognized tribal college in this state, the tuition restraint
described in section 217b.

(b) For an eligible institution that is a public university
or independent nonprofit college or university, the tuition restraint described
in section 241c. The report of an eligible institution that
is an independent nonprofit college or university must include the actual
tuition and mandatory fee rates adopted by the institution’s governing body for
each academic year described in section 241c.

(12) The state budget director shall implement reporting
requirements to ensure that an eligible institution has satisfied the tuition
restraint requirements of this section. The state budget director has the sole
authority to determine if an eligible institution has met the requirements of
this section.

(13) If an eligible institution exceeds the applicable
tuition restraint level for 2 consecutive years, the state budget director may
consider the institution ineligible for funding under this section in the
subsequent academic year.

(14) If an institution is considered ineligible for funding
under this section, the state budget director shall reevaluate the status of
the ineligible institution annually.

(15) It is the intent of the legislature that an eligible
institution will not make reductive changes to institutional grant aid offered
by that eligible institution that have the goal or net effect of shifting the
cost burden of those programs to the program described in this section.

Sec.
248a. (1) The funds appropriated in section 236 for the Michigan achievement
skills scholarships must be distributed as provided in this section and section
248, pursuant to the administrative procedures for Michigan achievement skills
scholarship of the department.

(2) As used in this section:

(a) “Department” means the department of lifelong education,
advancement, and potential.

(b) “High school equivalency certificate” means that term as
defined in section 4.

(c) “Qualified occupational training program” means that term
as defined in section 13 of the Michigan reconnect grant recipient act, 2020 PA
68, MCL 390.1713, or a program that provides not less than 150 clock hours of
instructional time over a period of not less than 8 weeks in career-oriented skilled
trades instruction in maritime trades, at an independent nonprofit institution
incorporated in this state that is nationally accredited and approved for
federal financial aid.

(3) The department shall do all of the following:

(a) Develop and implement a process by which those seeking to
participate in the Michigan achievement skills scholarship as training
institutions offering qualified occupational training programs must apply to
the department.

(b) Approve as a qualified occupational training program a
program for which an application is submitted under subdivision (a) that meets
all of the criteria to qualify as a qualified occupational training program,
and post these criteria to the department’s website.

(c) Ensure that an applicant under subdivision (a) is first
included on this state’s eligible training provider list before each of the
applicant’s programs receives separate approval from the department as being a
qualified occupational training program.

(d) Require that training institutions accepted to
participate in the Michigan achievement skills scholarship comply with data
requests from the department as a condition of continued participation. For
purposes of this subdivision, the department shall require institutions
operating apprenticeship programs subject to this section to provide data that
tracks relevant work experience required to verify a student’s status as an
apprentice.

(e) Maintain on its website a list of all qualified
occupational training program options available to potential skills scholarship
recipients.

(f) Award skills scholarships, subject to all of the
following:

(i) A skills scholarship is a grant not to
exceed $2,000.00 per year to contribute to tuition costs for a qualified
occupational training program at a training institution, both of which are
approved under this section, for a training program participant who meets the
requirements of subparagraph (ii). A skills
scholarship must not exceed the full amount of the tuition charged for the
training program. A program participant may receive a skills scholarship under
this section for a maximum of 2 academic years.

(ii) To receive the skills scholarship
described in subparagraph (i), a qualified occupational training
program participant must meet all of the following:

(A) Be a resident of this state for at least the immediately
preceding year.

(B) Have graduated with a high school diploma or certificate
of completion or achieved a high school equivalency certificate in 2023 or
after.

(C) Have enrolled for the first time in a qualified
occupational training program during the 2023-2024 academic year, or a
subsequent academic year, within 15 months after high school graduation or
attainment of a high school equivalency certificate or have received a Michigan
achievement scholarship or Michigan achievement skills scholarship in a
previous academic year. For the purposes of this subdivision, participation in
a dual enrollment, early college, or other similar program while attending high
school does not disqualify a student from being considered a first-time
enrollee.

(D) Not have previously earned an associate or baccalaureate
degree.

(E) Not have previously earned a degree, certificate, or
other credential using a skills scholarship awarded under this section.

(F) Timely complete a Michigan achievement skills scholarship
application in a form and manner determined by the department.

(iii) The department may award skills
scholarships under this section only until money appropriated to the Michigan
achievement skills scholarship has been fully committed.

(g) Inform each recipient of a skills scholarship that the
recipient will remain eligible for the Michigan achievement scholarship under
section 248 for a maximum of 5 years, less any years of eligibility used for a
skills scholarship awarded under this section, to pursue an associate degree,
baccalaureate degree, or occupational certificate upon completion of a
certification course of study in a qualified occupational training program.

(h) By February 15 of each year, provide a written report,
organized by qualified occupational training programs, to the standard report
recipients that includes the following information for the previous academic
year:

(i) The number of program participants who
qualified for a Michigan achievement skills scholarship.

(ii) The number of program participants who
received a Michigan achievement skills scholarship.

(iii) The average Michigan achievement skills
scholarship award, per program participant, delineated by qualified
occupational training program.

(4) Except as otherwise provided in subsection (5), the
department shall promulgate rules to implement this section pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(5) It is the intent of the legislature that a training
institution will not make changes to scholarship or financial aid programs
offered by that training institution that have the goal or net effect of
shifting the cost burden of those programs to the program described in this
section. A training institution shall not do either of the following as a
result of an individual’s receipt of a scholarship under this act:

(a) Adjust tuition rates or tuition discounts.

(b) Change its tuition costs.

Sec.
249. (1) The funds appropriated in section 236 for the children of veterans and
officer’s survivor tuition grant programs shall be supported with revenue from
the restricted account created in section 5 of the children of veterans tuition
grant act, 2005 PA 248, MCL 390.1345. As provided in section 5 of the children
of veterans tuition grant act, 2005 PA 248, MCL 390.1345, unexpended funds
remaining in the restricted account at the end of the fiscal year shall not
lapse to the general fund.

(2) The funds appropriated in section 236 for the children of
veterans and officer’s survivor tuition grant programs shall be deposited into
the restricted account described in subsection (1), as required in section 5 of
the children of veterans tuition grant act, 2005 PA 248, MCL 390.1345.

(3) Funds deposited into the restricted account under
subsection (2) for the children of veterans and officer’s survivor tuition
grant programs are appropriated and available for allocation as required in the
children of veterans tuition grant act, 2005 PA 248, MCL 390.1341 to 390.1346.

Sec.
256. (1) The funds appropriated in section 236 for the tuition incentive
program must be distributed as provided in this section and pursuant to the
administrative procedures for the tuition incentive program of the department
of lifelong education, advancement, and potential.

(2) As used in this section:

(a) “Phase I” means the first part of the tuition incentive
program defined as the academic period of 80 semester or 120 term credits, or
less, leading to an associate degree or certificate. Students must be enrolled
in a certificate or associate degree program and taking classes within the
program of study for a certificate or associate degree. Tuition will not be
covered for courses outside of a certificate or associate degree program.

(b) “Phase II” means the second part of the tuition incentive
program that provides assistance in the third and fourth year of 4-year degree
programs.

(c) “Department” means the department of lifelong education,
advancement, and potential.

(d) “High school equivalency certificate” means that term as
defined in section 4.

(3) An individual must meet the following basic criteria and
financial thresholds to be eligible for tuition incentive program benefits:

(a) To be eligible for phase I, an individual must meet all
of the following criteria:

(i) Be less than 20 years of age at the time
the individual graduates from high school with a diploma or certificate of
completion or achieves a high school equivalency certificate or, for students
attending a 5-year middle college approved by the Michigan department of
education, be less than 21 years of age when the individual graduates from high
school, or be considered a special education pupil at the time the
individual graduated from high school as described in section 6(4)(l)(i).

(ii) Be a United States citizen and maintain
residency in this state, as determined for purposes of the Free Application for
Federal Student Aid.

(iii) Be at least a half-time student, earning
less than 80 semester or 120 term credits at a participating educational
institution within 4 years of high school graduation or achievement of a high
school equivalency certificate. All program eligibility expires 10 years after
initial enrollment at a participating educational institution.

(iv) Meet the satisfactory academic progress
policy of the educational institution attended by the individual.

(b) To be eligible for phase II, an individual must meet
either of the following criteria in addition to the criteria in subdivision
(a):

(i) Complete at least 56 transferable
semester or 84 transferable term credits.

(ii) Obtain an associate degree or
certificate at a participating institution.

(c) To be eligible for phase I or phase II, an individual
must be financially eligible as determined by the department. An individual is
financially eligible for the tuition incentive program if the individual was
eligible for Medicaid from this state for 24 months within any 36 months prior
to completion of high school or achievement of a high school equivalency
certificate. The department shall accept certification of Medicaid eligibility
only from the department of health and human services for the purposes of
verifying if a person is Medicaid eligible for 24 months within any 36
months prior to completion of high school or achievement of a high school
equivalency certificate. Certification of eligibility may begin in the sixth
grade.

(4) For phase I, the department shall provide payment on
behalf of a person eligible under subsection (3). The department shall
only accept standard per-credit hour tuition billings and shall reject billings
that are excessive or outside the guidelines for the type of educational
institution.

(5) For phase I, all of the following apply:

(a) Payments for associate degree or certificate programs
must not be made for more than 80 semester or 120 term credits for any
individual student at any participating institution. The department shall not
do either of the following:

(i) Adopt or apply any total semester-credit
or term-credit maximum that is less than the 80 semester-credit or 120
term-credit maximum provided in this subdivision.

(ii) Adopt or apply any per-semester or
per-term credit maximum for a student whose semester-credit or term-credit load
will not result in exceeding the total 80 semester-credit or 120 term-credit
maximum provided in this subdivision.

(b) For persons enrolled at a Michigan community college, the
department shall pay the current in-district tuition and mandatory fees. For
persons residing in an area that is not included in any community college
district, the out-of-district tuition rate may be authorized.

(c) For persons enrolled at a Michigan public university, the
department shall pay lower division resident tuition and mandatory fees for the
current year.

(d) For persons enrolled at a Michigan independent, nonprofit
degree-granting college or university or a Michigan federal tribally controlled
community college, the department shall pay mandatory fees for the current year
and a per-credit payment that does not exceed the average community college
in-district per-credit tuition rate as reported by the last business day of
August for the immediately preceding academic year.

(6) A person participating in phase II may be eligible for
additional funds not to exceed $500.00 per semester or $400.00 per term up to a
maximum of $2,000.00 subject to the following conditions:

(a) Credits are earned in a 4-year program at a Michigan
degree-granting 4-year college or university.

(b) The tuition reimbursement is for coursework completed
within 30 months of completion of the phase I requirements.

(7) The department shall work closely with participating
institutions to provide the highest level of participation and ensure that all
requirements of the program are met.

(8) The department shall notify students in an
age-appropriate manner of their financial eligibility for the program any time
after the student begins sixth grade.

(9) Except as otherwise provided in sections 13(c) and 17 of
the Michigan reconnect grant recipient act, 2020 PA 68, MCL 390.1713 and
390.1717, each institution shall ensure that all known available restricted
grants for tuition and fees are used before billing the tuition incentive
program for any portion of a student’s tuition and fees.

(10) The department shall ensure that the tuition incentive
program is well publicized and that eligible Medicaid clients are provided
information on the program. The department shall provide the necessary funding
and staff to fully operate the program.

(11) The department shall collaborate with the center to use
the P-20 longitudinal data system to report the following information for each
qualified postsecondary institution:

(a) The number of phase I students in the most recently
completed academic year who in any academic year received a tuition incentive
program award and who successfully completed a degree or certificate program.
Cohort graduation rates for phase I students must be calculated using the
established success rate methodology developed by the center in collaboration
with the postsecondary institutions.

(b) The number of students in the most recently completed
academic year who in any academic year received a Pell grant at the reporting
institution and who successfully completed a degree or certificate program.
Cohort graduation rates for students who received Pell grants must be
calculated using the established success rate methodology developed by the
center in collaboration with the postsecondary institutions.

(12) If a qualified postsecondary institution does not report
the data necessary to complete the reporting in subsection (11) to the P-20
longitudinal data system by October 15 for the prior academic year, the
department shall not award phase I tuition incentive program funding to
otherwise eligible students enrolled in that institution until the data are
submitted.

(13) By May 14, 2027, the department must compile a report,
and submit that report to the standard report recipients, that includes data
and trends regarding students who are eligible for phase I or phase II awards
under this section and who are also eligible for the Michigan reconnect program
as outlined in section 247, or the Michigan achievement scholarship as outlined
in section 248, or both. Using state scholarship data from preceding fiscal
years, the report shall recommend changes to the tuition incentive program that
would improve coordination among state financial aid programs, reduce ongoing
costs and state financial aid scholarship duplication, increase student access
to postsecondary education, improve on-time completion of postsecondary credentials
and degrees, and advance the statewide postsecondary attainment goal described
in sections 226e and 275j of this act. The department must coordinate with
stakeholders from public and private institutions of higher education in this
state and other relevant stakeholders.

Sec.
263. (1) Included in the appropriation in section 236 for fiscal year 2026-2027
for MSU AgBioResearch is $2,982,900.00 and included in the appropriation in
section 236 for MSU Extension is $2,645,200.00 for Project GREEEN. Project
GREEEN is intended to address critical regulatory, food safety, economic, and
environmental problems faced by this state’s plant-based agriculture, forestry,
and processing industries. “GREEEN” is an acronym for Generating Research and
Extension to Meet Environmental and Economic Needs.

(2) The department of agriculture and rural development and
Michigan State University, in consultation with agricultural commodity groups
and other interested parties, shall develop Project GREEEN and its program
priorities.

Sec.
263b. Included in the appropriation in section 236 for fiscal year 2026-2027
for MSU AgBioResearch and MSU Extension is funding for the Agricultural Climate
Resiliency Program. The Agricultural Climate Resiliency Program is intended to
address environmental sustainability of Michigan agriculture and promote the
protection and efficient use of Michigan’s water resources.

Sec.
264. Included in the appropriation in section 236 for fiscal year 2026-2027 for
Michigan State University is $80,000.00 for the Michigan Future Farmers of
America Association. This $80,000.00 allocation must not supplant any existing
support that Michigan State University provides to the Michigan Future Farmers
of America Association.

Sec.
268. (1) For the fiscal year ending September 30, 2027, it is the intent of the
legislature that funds be allocated for unfunded North American Indian tuition
waiver costs incurred by public universities under 1976 PA 174, MCL
390.1251 to 390.1253, from the state school aid fund.

(2) By January 15 of each year, the department of lifelong
education, advancement, and potential shall annually submit to the standard
report recipients a report on North American Indian tuition waivers for the
preceding academic year that includes, but is not limited to, all of the
following information:

(a) The number of waiver applications received and the number
of waiver applications approved.

(b) For each public university submitting information under
subsection (3), all of the following:

(i) The number of graduate and undergraduate
Native American students enrolled each term for the previous academic year.

(ii) The number of North American Indian
tuition waivers granted each term, including to continuing education students, for
the previous academic year.

(iii) The monetary value of the waivers
granted each term for the previous academic year.

(iv) The number of graduate and undergraduate
students attending under a North American Indian tuition waiver who
successfully transfer to a 4-year public or private university, or complete a
degree or certificate program, separated by degree or certificate level.

(3) By January 1 of each year, a public university that
receives an appropriation in section 236, or a tribal college receiving
pass-through funds under section 269, 270, or 270c, shall provide to the
department of lifelong education, advancement, and potential any information
necessary for preparing the report detailed in subsection (2), using
guidelines and procedures developed by the department of lifelong education,
advancement, and potential.

(4) The department of lifelong education, advancement, and
potential may consolidate the report required under this section with the
report required under section 223, but a consolidated report must separately
identify data for public universities and data for community colleges.

Sec.
269. For fiscal year 2026-2027, from the amount appropriated in section 236 to
Central Michigan University for costs incurred under the North American Indian
tuition waiver, $96,700.00 must be paid to Saginaw Chippewa Tribal College for
the costs of waiving tuition for North American Indians under 1976 PA 174, MCL
390.1251 to 390.1253. It is the intent of the legislature that Saginaw Chippewa
Tribal College provide the department of lifelong education, advancement, and
potential the necessary information for the college to be included in the
report required under section 268.

Sec.
270. For fiscal year 2026-2027, from the amount appropriated in section 236 to
Lake Superior State University for costs incurred under the North American
Indian tuition waiver, $465,000.00 must be paid to Bay Mills Community College
for the costs of waiving tuition for North American Indians under 1976 PA 174,
MCL 390.1251 to 390.1253. It is the intent of the legislature that Bay
Mills Community College provide the department of lifelong education,
advancement, and potential the necessary information for the college to be
included in the report required under section 268.

Sec.
270c. For fiscal year 2026-2027, from the amount appropriated in section 236 to
Northern Michigan University for costs incurred under the North American Indian
tuition waiver, $112,200.00 is to be paid to Keweenaw Bay Ojibwa Community
College for the costs of waiving tuition for North American Indians under 1976
PA 174, MCL 390.1251 to 390.1253. It is the intent of the legislature that
Keweenaw Bay Ojibwa Community College provide the department of lifelong
education, advancement, and potential the necessary information for the
community college to be included in the report required under section 268.

Sec.
275k. (1) Not later than December 1 of each year, each university that receives
an appropriation in section 236 that, in the current or previous academic year,
serves or has served as an authorizing body shall submit a report to the house
and senate appropriations subcommittees on higher education, the house and
senate fiscal agencies, the state budget director, and the department of
education containing, at a minimum, all of the following information, as
applicable:

(a) A list of all of the schools currently authorized.

(b) A list identifying any schools that were closed or lost
their authorization in the current or previous academic year.

(c) The academic performance of each school currently
authorized, including whether a school is identified by the department of
education as a partnership school. If a school is identified as a partnership
school under this subdivision, the authorizing body shall include a description
of corrective actions in the school’s partnership agreement, the duration of
the partnership agreement, and an assessment of progress toward improvement.

(d) The total number of fees, reimbursements, contributions,
or charges permitted under section 502(6) of the revised school code, 1976 PA
451, MCL 380.502, that are assigned to each school currently authorized in a
single academic year.

(e) A financial report of the authorizing body’s use of fees,
reimbursements, contributions, or charges collected or retained under section
502(6) of the revised school code, 1976 PA 451, MCL 380.502. This report must
include all of the following, at a minimum:

(i) The total amount of fees collected or
retained under section 502(6) of the revised school code, 1976 PA 451, MCL
380.502, by the authorizing body for the authorizing body’s most recent fiscal
year.

(ii) The amount of funds reported under
subparagraph (i) that were spent on compensation for
faculty and staff employed primarily to meet the functions of an authorizing
body. For the purpose of this subparagraph, an employee is presumed to be
primarily employed to meet the functions of an authorizing body if that
employee spends more than 50% of the employee’s time on those activities.

(iii) The number of positions, organized by
job title, associated with expenditures reported under subparagraph (ii).

(iv) The amount of funds reported under
subparagraph (i) that were spent on contractual services
to meet the functions of an authorizing body.

(v) The amount of funds reported under
subparagraph (i) that were spent on other overhead costs
to meet the functions of an authorizing body.

(vi) The amount of funds reported under
subparagraph (i) that were transferred to another
operating unit within the university.

(vii) The amount of funds reported under
subparagraph (i) that were spent on activities other than
functioning as an authorizing body, including a list of those activities and
the amount associated with each activity.

(f) An executive summary section that provides relevant
summary data for reporting requirements under subdivisions (a) to (e).

(2) A report submitted under this section must be in a format
that meets accessibility standards for viewing on the internet under the
Americans with disabilities act of 1990, Public Law 101-336.

(3) A report submitted under this section must be published
and updated through a link on the homepage of the public university’s website.

(4) In addition to the reporting requirements under this
section, each authorizing body that receives an appropriation under section 236
shall adopt a facilities policy ensuring that any structures or other property
vacated by a public school academy that ceases operation not contribute to
blight in the surrounding neighborhood or community in which the school had
previously operated.

(5) As used in this section, “authorizing body” means that
term as defined in section 501 of the revised school code, 1976 PA 451, MCL
380.501.

Sec.
276. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks future faculty fellowship program
that is intended to increase the pool of academically or economically
disadvantaged candidates pursuing faculty or administration careers in
postsecondary education in this state. Preference may not be given to
applicants on the basis of race, color, ethnicity, gender, or national origin.
Institutions should encourage applications from applicants who would otherwise
not adequately be represented in the graduate student, faculty, or
administration populations. Each public university shall apply the percentage
change applicable to every public university in the calculation of
appropriations in section 236 to the amount of funds allocated to the future
faculty fellowship program.

(2) Each public university shall administer the program in a
manner prescribed by the department of labor and economic opportunity. The
department of labor and economic opportunity shall use a good-faith effort
standard to evaluate whether a fellowship is in default. All of the following
apply to the program:

(a) By June 15 of each year, public universities shall report
any anticipated unexpended or unencumbered program funds to the department of
labor and economic opportunity. Encumbered funds are those funds that were
committed by a fellowship agreement that is signed during the current fiscal
year or administrative expenses that have been approved by the department of
labor and economic opportunity.

(b) Before September 1 of each year, unexpended or
unencumbered funds may be transferred, under the direction of the department of
labor and economic opportunity, to a future faculty fellowship program at
another public university to be awarded to an eligible candidate at that public
university.

(c) Program allocations not expended or encumbered by
September 30, 2028 must be returned to the department of labor and economic
opportunity so that those funds may lapse to the state general fund.

(d) Not more than 5% of each public university’s allocation
for the program may be used for administration of the program.

(e) In addition to the appropriation for fiscal year
2026-2027, any revenue received during prior fiscal years by the department of
labor and economic opportunity from defaulted fellowship agreements is
appropriated for the purposes originally intended.

Sec.
277. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks college day program that is
intended to introduce academically or economically disadvantaged schoolchildren
to the potential of a college education in this state. Preference may not be
given to participants on the basis of race, color, ethnicity, gender, or
national origin. Public universities should encourage participation from those
who would otherwise not adequately be represented in the student population.

(2) Individual program plans of each public university must
include a budget of equal contributions from this program, the participating
public university, the participating school district, and the participating
independent degree-granting college. College day funds must not be expended to
cover indirect costs. Not more than 20% of the university match may be
attributable to indirect costs. Each public university shall apply the
percentage change applicable to every public university in the calculation of appropriations
in section 236 to the amount of funds allocated to the college day program.

(3) Each public university shall administer the program
described in this section in a manner prescribed by the department of labor and
economic opportunity.

Sec.
278. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks select student support services
program for developing academically or economically disadvantaged student
retention programs for 4‑year public and independent educational
institutions in this state. Preference may not be given to participants on the
basis of race, color, ethnicity, gender, or national origin. Institutions
should encourage participation from those who would otherwise not adequately be
represented in the student population.

(2) An award made under this program to any 1 institution
must not be greater than $150,000.00, must have an award period of no more than
2 years, and must be matched on a 70% state, 30% college or university basis.

(3) The department of labor and economic opportunity shall
administer the program described in this section.

Sec.
279. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks college/university partnership
program between 4-year public and independent colleges and universities and
public community colleges, which is intended to increase the number of
academically or economically disadvantaged students who transfer from community
colleges into baccalaureate programs in this state. Preference may not be given
to participants on the basis of race, color, ethnicity, gender, or national
origin. Institutions should encourage participation from those who would
otherwise not adequately be represented in the transfer student population.

(2) The grants must be made under the program described in
this section to Michigan public and independent colleges and universities. An
award to any 1 institution must not be greater than $150,000.00, must have an
award period of no more than 2 years, and must be matched on a 70% state, 30%
college or university basis.

(3) The department of labor and economic opportunity shall
administer the program described in this section.

Sec.
280. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding for the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks visiting professors program,
which is intended to increase the number of instructors in the classroom to
provide role models for academically or economically disadvantaged students.
Preference may not be given to participants on the basis of race, color,
ethnicity, gender, or national origin. Public universities should encourage
participation from those who would otherwise not adequately be represented in
the student population.

(2) The department of labor and economic opportunity shall
administer the program described in this section.

(3) The amount allocated to each public university is
$11,184.00 and is subject to an award period of no more than 2 years. Each
public university receiving funds for fiscal year 2026-2027 under this section
shall report to the department of labor and economic opportunity by April 15,
2027 the amount of its unobligated and unexpended funds as of March 31, 2027
and a plan to expend the remaining funds by the end of the fiscal year. The
amount of funding reported as not being expended may be transferred, under the
direction of the department, to another public university for use under this
section.

Sec.
281. (1) Included in the appropriation for fiscal year 2026-2027 for each
public university in section 236 is funding under the Martin Luther King, Jr. -
Dolores Huerta – Morris Hood Jr. - Rosa Parks initiative for the Morris Hood,
Jr. educator development program, which is intended to increase the number of
academically or economically disadvantaged students who enroll in and complete
K-12 teacher education programs at the baccalaureate level and teach in this
state. Preference may not be given to participants on the basis of race, color,
ethnicity, gender, or national origin. Institutions should encourage
participation from those who would otherwise not adequately be represented in
the teacher education student population.

(2) The program described in this section must be
administered by each state-approved teacher education institution in a manner
prescribed by the department of labor and economic opportunity.

(3) Approved teacher education institutions may and are
encouraged to use select student support services funding in coordination with
the Morris Hood, Jr. funding to achieve the goals of the program described in
this section.

Sec.
282. (1) Each institution receiving funds for fiscal year 2026-2027 under
section 278, 279, or 281 shall provide to the department of labor and economic
opportunity by April 15, 2027 the unobligated and unexpended funds as of March
31, 2027 and a plan to expend the remaining funds by the end of the fiscal
year. Notwithstanding the award limitations in sections 278 and 279, the amount
of funding reported as not being expended will be reallocated to the
institutions that intend to expend all funding received under section 278, 279,
or 281.

(2) Funds received for the purpose of administering programs
under sections 278, 279, and 281 must not be used for direct financial aid or
indirect financial aid. However, a public university may provide academic
incentives to motivate participating students as approved by the department. As
used in this subsection:

(a) “Direct financial aid” includes, but is not limited to,
scholarships, payment of tuition, stipends, and work-studies.

(b) “Indirect financial aid” includes, but is not limited to,
transportation, textbook allowances, child care support, and assistance with
medical premiums or expenses.

ARTICLE IV

Sec.
295. The state
budget director shall take steps to ensure that all state fiscal recovery funds
allocated to this state under the American rescue plan
act of 2021, Public Law 117-2, are expended by December 31, 2026, as required by law. Any state fiscal
recovery funds that would otherwise lapse after September 30, 2026 are
automatically reappropriated for the same purpose as originally authorized and
available for expenditure through December 31, 2026 and any subsequent
financial closeout period.

Sec.
295a. (1) The
state budget director shall take steps to ensure that all state fiscal recovery
funds allocated to
this state under the American
rescue plan act of 2021, Public Law 117-2, are expended by December 31, 2026,
as required by law. The state budget director may reallocate appropriated funds
for the purpose of fully utilizing state fiscal recovery funds that are in
jeopardy of not meeting the expenditure deadline for reasons that may include,
but are not limited to, completed projects coming in under budget or funds
unable to be fully used by subrecipients. The state budget director shall
reallocate any of the funds reallocated under this subsection to the programs
or purposes specified in this section. Any funds reallocated are unappropriated
and immediately reappropriated for the following purposes:

(a) To reclassify general fund/general purpose appropriations
for payroll and covered benefits for eligible public health and safety
employees at the department of corrections.

(b) To reclassify general fund/general purpose appropriations
for payroll and covered benefits for eligible public health and safety
employees at the department of state police.

(2) All applicable guidance, implementation, and reporting
provisions of Public Law 117-2 must be followed for state fiscal recovery funds
reallocated and reappropriated under subsection (1).

(3) The state budget director shall notify the senate and
house appropriations committees not later than 10 business days after
making any reallocations under subsection (1). The notification must include
the authorized program under which funds were originally appropriated, the
amount of the reallocation, the program, or programs, or purpose, and the
department to which the funds are being reallocated under subsection (1), and
the amount reallocated to each program or purpose.

Enacting
section 1. (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, as amended
by 2025 PA 15 and this amendatory act, from state sources for fiscal year
2025-2026 is estimated at $18,693,813,800.00 and state appropriations for
school aid to be paid to local units of government for fiscal year 2025-2026
are estimated at $17,245,994,700.00. 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, as amended by this amendatory act, from state sources for fiscal year
2026-2027 is estimated at $19,390,174,600.00 and state appropriations for
school aid to be paid to local units of government for fiscal year 2026-2027
are estimated at $17,908,356,700.00.

(2) In accordance with section 30 of
article IX of the state constitution of 1963, total state spending from state
sources for community colleges for fiscal year 2026-2027 under article II of
the state school aid act of 1979, 1979 PA 94, MCL 388.1801 to 388.1830, as
amended by this amendatory act, is estimated at $496,663,500.00 and the amount
of that state spending from state sources to be paid to local units of
government for fiscal year 2026-2027 is estimated at $496,663,500.00.

(3) In accordance with section 30 of
article IX of the state constitution of 1963, total state spending from state
sources for higher education for fiscal year 2026-2027 under article III of the
state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891, as
amended by this amendatory act, is estimated at $2,606,632,800.00 and the
amount of that state spending from state sources to be paid to local units of
government for fiscal year 2026-2027 is estimated at $0.00.

Enacting section 2. Sections 11y, 11aa,
11bb, 23g, 25g, 27k, 35e, 41, 41b, 55, 61d, 97k, 99, 99aa, 99ee, 99mm, 107a,
147g, and 164j of the state school aid act of 1979, 1979 PA 94, MCL 388.1611y,
388.1611aa, 388.1611bb, 388.1623g, 388.1625g, 388.1627k, 388.1635e, 388.1641,
388.1641b, 388.1655, 388.1661d, 388.1697k, 388.1699, 388.1699aa, 388.1699ee,
388.1699mm, 388.1707a, 388.1747g, and 388.1764j, are repealed.

Enacting section 3. (1) Sections 11, 22a,
22b, 26a, 26d, 27b, 31c, 51a, 51c, 51e, 56, 62, 104, 147a, 147c, 147e, and 201h
of the state school aid act of 1979, 1979 PA 94, MCL 388.1611, 388.1622a,
388.1622b, 388.1626a, 388.1626d, 388.1627b, 388.1631c, 388.1651a, 388.1651c,
388.1651e, 388.1656, 388.1662, 388.1704, 388.1747a, 388.1747c, 388.1747e, and
388.1801h, as amended by this amendatory act, if granted immediate effect
pursuant to section 27 of article IV of the state constitution of 1963, take
effect on enactment of this amendatory act.

(2) Except as otherwise provided for those
sections listed in subsection (1), the remaining sections of this amendatory
act take effect October 1, 2026.

This act is ordered to take immediate effect.

Clerk of the House of
Representatives

Secretary of the Senate

Approved___________________________________________

____________________________________________________

Governor