(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 2023-2024 for payments to strict discipline academies and qualified districts, as provided under this section.

    (2) In order 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 under that section for changes in enrollment as prescribed under that section.

    (3) The total amount allocated to a strict discipline academy or qualified district under this section must first be distributed as the lesser of the strict discipline academy’s or qualified district’s added cost or the department’s approved per-pupil allocation for the strict discipline academy or qualified district. Subject to subsection (7), any funds remaining after the first distribution must be distributed by prorating on an equal per-pupil membership basis, not to exceed a strict discipline academy’s or qualified district’s added cost. 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) If the funds allocated under this section are insufficient to fully fund the adjustments under subsection (3), the department shall prorate payments under this section on an equal per-pupil basis.

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

    (7) 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 (8)(c).

    (8) As used in this section:

    (a) “Added cost” means 100% of the added cost each fiscal year for educating all pupils enrolled and in regular daily attendance at a strict discipline academy or qualified district. Added cost must be computed by deducting all other revenue received under this article for pupils described in this subdivision from total costs, as approved by the department, in whole or in part, for educating those pupils in a strict discipline academy or qualified district. The department shall include all costs, including, but not limited to, educational costs, insurance, management fees, technology costs, legal fees, auditing fees, interest, pupil accounting costs, and any other administrative costs necessary to operate the program or to comply with statutory requirements. Costs reimbursed by federal funds are not included.

    (b) “Department’s approved per-pupil allocation” means, for a strict discipline academy or qualified district, an amount equal to the quotient of the total amount allocated under this section for a fiscal year and 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 strict discipline academy or qualified district.

    (c) “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.

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