(1) “District Pupils” of a school district shall designate all pupils enrolled in the public schools of the Commonwealth, and of adjacent states, who are residents of a given school district.

(2) “Teaching Units” consist of twenty-two (22) high school pupils or thirty (30) elementary school pupils. Fractions thereof shall be fractional teaching units. If a district's pupil-teacher ratio exceeds thirty-three (33) its district teaching unit shall be obtained by multiplying the total number of all teaching units, as defined above, by thirty-three (33), and dividing the product so obtained by the pupil-teacher ratio of the district. High school pupils are those pupils in a secondary school program classified as such by the Department of Public Instruction,¹ but in no case shall include any pupils below grade seven (7).

(3) “Average Daily Membership” shall be computed in accordance with rules of procedure as established by the Secretary of Education. For the purpose of calculating the basic education funding allocation for the 2007-2008 school year and each school year thereafter, the computation shall be adjusted for each level of instruction as follows:

A child on whose behalf payment is made under section 1514-D² shall not be included in this calculation.

(4) to (7) Repealed by 1966, Feb. 1, P.L. (1965) 1642, § 16, effective June 30, 1968.

(8) Deleted by 1968, June 12, P.L. 192, No. 96, § 3.

(9) “Real Property Valuation.” A school district's or municipality's real property valuation, to be used for purposes of computing the basic account standard reimbursement fraction, the subsidiary account reimbursement fraction, the aid ratio, the market value/income aid ratio and the equalized millage, shall be the valuation placed upon its taxable real property by the State Tax Equalization Board.

(9.1) “Personal Income Valuation.” A school district's personal income valuation for purposes of computing the market value/income aid ratio and for purposes of reimbursement to a school district under subsections (d), (e), and (f) of section 2502,³ section 2502.22, section 2502.25 and section 2592⁴ shall be the valuation of the total taxable income for the tax year preceding the immediate prior year, determined under Article III of the act of March 4, 1971 (P.L. 6, No. 2),⁵ known as the “Tax Reform Code of 1971,” for each school district each year by the Secretary of Revenue and certified to the Secretary of Education. For the 1988-1989 school year and each school year thereafter, the Secretary of Revenue shall additionally certify, for those districts in which residents claim credit against the State personal income tax for income earned outside this Commonwealth under section 314 of the “Tax Reform Code of 1971,”⁶ the total number of persons claiming such out-of-State tax credits and the total dollar amount of such tax credits claimed in the individual district.

(9.3) “Median Equalized Millage.” For the school year 1976-1977 and each year thereafter, the Secretary of Education shall annually calculate the equalized millage for which an equal number of districts are above and below for that year.

(9.4) “Municipal Equalized Millage.” A city of the first through third class tax effort to be used for reimbursement under subsections (d) and (e) of section 2502 and section 2502.11 shall be the amount of municipal taxes collected and reported to the Department of Community and Economic Development divided by the real property valuation of the municipality for the most recent year for which both municipality tax and real property valuation are available.

(9.5) “Municipal Median Equalized Millage.” For the school year 1988-1989 and each school year thereafter, the Secretary of Education shall annually calculate the equalized millage for which an equal number of cities of the first through third class are above and below for that year.

(10) “Number of District Teaching Units for Purposes of Determination of Basic Account Standard Reimbursement Fraction, and Subsidiary Account Reimbursement Fraction.” A school district's number of district teaching units for purposes of determination of the basic account standard reimbursement fraction and the subsidiary account reimbursement fraction shall be obtained as follows: (i) divide by twenty-two (22) the number of district pupils in average daily membership in a public high school and in high school grades of a laboratory school of a State-owned college during the preceding school term, (ii) divide by thirty (30) the number of district pupils in average daily membership in a public elementary school and laboratory school of a State-owned college during the preceding school term, and (iii) add the quotients obtained under (i) and (ii) above, except when the pupil-teacher ratio exceeds thirty-three (33), in which case, the sum obtained under (i) and (ii) above shall be multiplied by thirty-three (33) and the product so obtained shall be divided by the pupil-teacher ratio of the district. No school district shall be credited with less than one teaching unit. No school district shall be assigned a basic account standard reimbursement fraction lower in value than the minimum instruction subsidy divided by the maximum instruction subsidy. All one-room schools operated in accordance with the provisions of this act shall, if their operation is approved, be credited with at least one teaching unit. The State Board of Education shall withhold its approval of any one-room one-teacher school, unless (i) topography, distance or condition of roads are such as to make transportation of pupils impractical, or (ii) it is impossible to accommodate pupils in existing graded schools in the district or other districts, or (iii) the district is financially unable to construct a consolidated school.

(10.1) “Weighted Pupil” shall mean a value placed upon district pupils in average daily membership at various levels of instruction. Such values shall be as follows:

(10.2) “Weighted Average Daily Membership” (WADM). The average daily membership for all resident pupils in the various levels of instruction shall be multiplied by the weight for that level as indicated to obtain the weighted average daily membership. The sum of the products so obtained shall be the weighted average daily membership for the district. The weighted average daily membership used in computing the aid ratio shall include kindergarten, elementary and secondary pupils.

(11) “Actual Instruction Expense Per Elementary Teaching Unit, Actual Instruction Expense Per Elementary Teaching Unit in a Laboratory School of a State-owned College, Actual Instruction Expense Per Secondary Teaching Unit, Actual Instruction Expense Per Secondary Teaching Unit in a Laboratory School of a State-owned College, Actual Instruction Expense Per Joint Elementary Teaching Unit, Actual Instruction Expense Per Joint Secondary Teaching Unit, Actual Instruction Expense Per Area Technical School Teaching Unit.” In 1958 in the month of September and thereafter annually in the month of September, the Department of Education shall calculate for each school district for the immediately preceding school year the actual instruction expense per elementary teaching unit for elementary pupils educated in the district's public schools, the actual instruction expense per secondary teaching unit for secondary pupils educated in the district's public schools, the actual instruction expense per joint elementary teaching unit for elementary pupils educated in elementary schools of jointures of which the district is a member, the actual instruction expense per joint secondary teaching unit for secondary pupils educated in secondary schools of jointures of which the district is a member, the actual instruction expense per area technical school teaching unit for pupils educated in area technical schools in which the district participates, the actual instruction expense per elementary teaching unit for elementary pupils residing in the district and educated in the public schools of other districts within the Commonwealth, and the actual instruction expense per secondary teaching unit for secondary pupils residing in the district and educated in the public schools of other districts within the Commonwealth. In each case, actual instruction expense per teaching unit shall be the sum of (i) and (ii) below but in no case shall include expenses for debt service, capital outlay, rentals of capital facilities and equipment, salaries and expenses for school nurses, for medical and dental services, for driver education courses, for reimbursable transportation of pupils, for tuition paid to other school districts, for reimbursable board and lodging in lieu of transportation, for salaries of directors and supervisors of special education, public school psychologists, principals of special schools and assistants, teachers of approved special classes for children with physical or mental disabilities, clerks and assistants employed in programs for special education, for school district contributions to the retirement fund on behalf of directors and supervisors of special education, public school psychologists, principals of special schools and assistants, teachers of approved special classes for children with physical or mental disabilities, clerks and assistants employed in programs for special education, for the cost of textbooks and supplies of the second class used in special education classes or schools, for extension schools and classes, for extension recreation activities, for career and technical extension education, or for instruction of homebound children. (i) Expenses of general control per teaching unit. Expenses of general control shall include: salaries, supplies and other expenses of the secretary's office; commission or salary of treasurer, tax collector, auditors and legal service; expenses of census enumeration and other expenses of business administration; salaries of the superintendent of schools and clerks of the superintendent of schools; expenses of supplies and other expenses of the superintendent of schools' office; and other expenses of general control. In the case of computation of actual instruction expense per elementary teaching unit for district pupils educated in the schools of the district and for district pupils educated in the public schools of other districts within the Commonwealth and actual instruction expense per secondary teaching unit for district pupils educated in the schools of the district and for district pupils educated in the public schools of other districts within the Commonwealth, expenses of general control per teaching unit shall be calculated by dividing the foregoing listed expenses of general control of the school district by the number of teaching units based on the number of all pupils who are residents of the school district and are in average daily membership in the public schools of the Commonwealth. In the case of computation of actual instruction expense per joint elementary teaching unit and actual instruction expense per joint secondary teaching unit, expenses of general control per teaching unit shall be calculated by dividing the foregoing listed expenses of general control of the school district by the number of teaching units based on the number of all pupils who are residents of the school district and are in average daily membership in the public schools of the Commonwealth, and adding thereto the quotient obtained by dividing the foregoing listed expenses of general control of the joint school district by the number of joint teaching units based on the number of pupils who are residents of school districts that are members of the joint school district and are in average daily membership in the schools of the joint school district. In the case of computation of actual instruction expense per area technical school teaching unit, expenses of general control per teaching unit shall be computed by dividing the foregoing listed expenses of general control of the school district by the number of teaching units based on the total number of all pupils who are residents of the school district and are in average daily membership in the public schools of the Commonwealth, and adding thereto the quotient obtained by dividing the foregoing listed expenses of general control of the area technical school by the number of area technical school teaching units based on the number of pupils who are residents of districts participating in the area technical school and are in average daily membership in the area technical school. (ii) Expenses of the school district, joint school district, area technical school, or such other school district within the Commonwealth in which the districts' pupils are educated, as the case may be, on account of instruction, auxiliary agencies and coordinate activities, operation of school plant, maintenance of school plant, and fixed charges, and each separately for elementary and for secondary schools, per teaching unit, calculated by dividing the sums of (a), (b), (c), (d), and (e) below by the numbers of elementary, secondary, joint elementary, joint secondary, and area technical school teaching units, respectively, based on the number of all pupils on an equivalent full-time basis in average daily membership in the public schools of the district, or joint district, or the area technical school, or other school district within the Commonwealth in which pupils of the district are educated, as the case may be; (a) expenses of instruction, to include salaries of supervisors and other expenses of supervisors, salaries of principals and principals' clerks, supplies of the principals' offices, other expenses of supervision, teachers' and teacher-librarians, salaries, textbooks, library books, supplies used in instruction including library supplies, expenses of attending teachers' institutes, commencement exercise and exhibit expenses, and other expenses of instruction, (b) expenses of auxiliary agencies and coordinate activities, to include salaries, books, repairs, replacements, and other expenses of public libraries, and non-reimbursable transportation and board and lodging in lieu of transportation, and provisions for tubercular and undernourished children, community lectures, social centers and recreation, enforcement of attendance, and other expenses of auxiliary agencies and coordinate activities, (c) expenses of operation of school plant, to include wages of janitors and other employes, fuel, water, light, power, janitors' supplies, care of grounds, services other than personal, telephone rental, and other expenses of operation, (d) expenses of maintenance of school plant, to include upkeep of grounds, repair of buildings, repairs and replacements, heating, plumbing, lighting, apparatus used in instruction, furniture, and other equipment, (e) expenses of fixed charges, to include payments made to the retirement board, rent, all insurance, and other fixed charges: Provided, That the actual instruction expense for elementary teaching unit for district pupils educated in the elementary grades of a laboratory school of a State-owned college and the actual instruction expenses for secondary teaching unit for district pupils educated in the high school grades of a laboratory school of a State-owned college shall be computed by (i) dividing the total amount of money paid to the State-owned college by the resident district for the education of all resident elementary children enrolled in a laboratory school of a State-owned college by the number of such elementary teaching units based on the total number of such resident children in average daily membership in the laboratory school, (ii) dividing the total amount of money paid to the State-owned college by the resident district for the education of all resident secondary children enrolled in a laboratory school of a State-owned college by the number of such secondary teaching units based on the total number of such resident children in average daily membership in the laboratory school. The teaching units are computed on the basis of thirty (30) equivalent full time elementary children and twenty-two (22) equivalent full time secondary children.

(11.1) “Actual Instruction Expense per Weighted Average Daily Membership.” For the school year 1966-1967, and each school year thereafter, the Secretary of Education shall calculate for each school district the actual instruction expense per weighted average daily membership for each district pupil. The actual instruction expense shall include all General Fund expenses of the district except those for health services, transportation, debt service, capital outlay, home-bound instruction, and outgoing transfers to community colleges and technical institutes. From this cost shall be deducted the amount received from the State for driver's education; special class operation; career and technical curriculums; area career and technical schools; payments of tuition by district patrons, parents, the State and Federal government; and all moneys received from the State or Federal government under Public Laws 89-10 (Elementary and Secondary Education Act),⁸ 88-452 (Economic Opportunity Act),⁹ and 87-415 (Manpower Training and Development Act)¹⁰ and for projects under section 2508.3 of this act.¹¹ The actual instruction expense so determined, when divided by the weighted average daily membership for the district shall be the actual instruction expense per weighted average daily membership.

(12) to (13) Repealed by 1983, July 22, P.L. 104, No. 31, § 9, imd. effective.

(14) “Aid Ratio.” The aid ratio shall be determined in the following manner: (a) divide the market value per weighted average daily membership of the district by the market value per weighted average daily membership of the State; (b) determine the product of (a) multiplied by 0.50; (c) subtract the resultant product in (b) from one (1.0000) to determine the aid ratio.

(14.1) “Market Value/Income Aid Ratio.” For purposes of reimbursement to a school district under subsections (d), (e), and (f) of section 2502, section 2502.8, section 2502.22, section 2502.25, section 2502.26 and section 2592,¹² or to an intermediate unit or area career and technical school, shall be the Commonwealth's method of determining the combined market value and income wealth for each pupil, and shall be computed, for the school year for which reimbursement is being paid, as follows:

(14.2) “Market value.” For purposes of the calculations described in clauses (14) and (14.1), in the fiscal year beginning July 1, 2017, a school district's market value shall not exceed $47,000,000,000 and, in each subsequent fiscal year, the maximum market value shall be increased by the percentage increase in market value for all school districts.

(15) “Minimum Subsidy.” For the school years 1976-1977 and 1977-1978, in no case shall a district receive for each pupil in weighted average daily membership, an amount less than ten percent (10%) of the actual cost of instruction or ten percent (10%) of the base earned for reimbursement whichever is the lesser amount. For the 1978-1979 school year through the 1980-1981 school year, no school district shall receive for each pupil in weighted average daily membership an amount less than fifteen percent (15%) of the base earned for reimbursement or actual instructional expense per WADM, whichever is the lesser amount. For the 1976-1977 school year through the 1980-1981 school year, a district whose actual instruction expense per weighted average daily membership is more than two hundred dollars ($200) less than the median actual instruction expense per weighted average daily membership, and whose equalized millage is within fifteen percent (15%) of the median equalized millage, the reimbursement shall be two hundred dollars ($200) below the median actual instruction expense per weighted average daily membership times the district's aid ratio for each weighted average daily membership. For the 1982-1983 school year through the 1990-1991 school year, no school district shall receive for each pupil in weighted average daily membership an amount less than fifteen percent (15%) of the factor for educational expense.

(16), (17) Repealed by 1983, July 22, P.L. 104, No. 31, § 9, imd. effective.

(17.1) “Base Earned for Reimbursement.” For the school year 1982-1983 and every school year thereafter, for purposes of calculations under section 2502.8 of the act, base earned for reimbursement shall be the lesser of the actual instruction expense per weighted average daily membership of the district, or the amount earned as follows:

(18) “Equalized Subsidy for Basic Education.” For the school year 1982-1983 and each school year thereafter, each school district shall be paid by the Commonwealth an equalized subsidy for basic education, which shall consist of any or all of the following, as applicable:

(19) “Factor for Educational Expense.” For the school years 1982-1983 and 1983-1984, the factor for educational expense used to compute school district entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be one thousand six hundred fifty-six dollars ($1,656) unless later changed by statute. For the school year 1983-1984, the Factor for Educational Expense shall be one thousand seven hundred twenty-five dollars ($1,725), unless later changed by statute, for those school districts participating, during the 1984-1985 school year, in a Statewide program for testing and remediation which is designed to identify and provide remediation services to individual students pursuant to section 1511.1.¹⁷ For the 1984-1985 school year, notwithstanding any other provisions of this act to the contrary, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be one thousand eight hundred seventy-five dollars ($1,875). For the 1985-1986 school year, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be one thousand nine hundred seventy dollars ($1,970). For the 1986-1987 school year, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be two thousand one hundred twenty-five dollars ($2,125). For the school year 1987-1988, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be two thousand two hundred thirty dollars ($2,230). For the school year 1988-1989, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be two thousand three hundred thirty dollars ($2,330). For the school year 1989-1990, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be two thousand three hundred eighty dollars ($2,380), as provided for in section 212 of the act of July 1, 1990 (P.L. 1591, No. 7A), known as the “General Appropriation Act of 1990.” For the school year 1990-1991, the Factor for Educational Expense used to compute all school districts' entitlements to payments on account of instruction, as provided for in subsection (d) of section 2502, shall be two thousand five hundred fifty dollars ($2,550).

(20) “Total Expenditure per Average Daily Membership.” A school district's total expenditures shall include all General Fund expenditures and other financing uses for a school year, as designated in the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems. The total expenditures so determined, when divided by the average daily membership for the same school year for the district, shall be the total expenditure per average daily membership.

(21) “Children in Low-Income Families.” Children aged five (5) to seventeen (17) years, inclusive, in families receiving a grant in excess of two thousand dollars ($2,000) per year from the Commonwealth on account of dependent children pursuant to Title IV of the Social Security Act, as amended (42 U.S.C. § 601 et seq.).

(22) “Immediately Preceding School Year.” The school year one year prior to the current school year.

(23) “Next Preceding School Year.” The school year two years prior to the current school year.

(24) “Current Expenditure per Average Daily Membership.” An amount equal to a school district's current expenditures for a school year to include General Fund expenditures in the functional classifications of instruction, support services and operation of noninstructional services, as designated in the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, divided by the average daily membership of the school district for the same school year.

(25) “Adjusted Current Expenditure per Average Daily Membership.” An amount equal to a school district's current expenditures for a school year, as defined in clause (24), minus the revenue account tuition for patrons, as designated in the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, divided by the average daily membership of the school district for the same school year.

(26) “Actual Spending.” An amount equal to a school district's total expenditures to include General Fund expenditures in all functional classifications, as designated in the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, except for:

(27) “Funding Year.” The most recent school year for which all school districts were required by the department to submit an annual financial report prior to the date an executive budget was proposed.

(28) “Index.” As established by the department in each calendar year for the subsequent fiscal year, the average of:

(29) “Location Cost Metric.” An index of geographic cost differences for each county as published by the department on its publicly accessible Internet website on February 5, 2008. The index shall be published in the Pennsylvania Bulletin no later than thirty (30) days after the effective date of this clause.

(30) “Modified Average Daily Membership” or “Modified ADM.” The sum of the following products:

(31) “Actual Special Education Spending.” An amount equal to a school district's total annual expenditures for special education as established by the Department of Education and designated in the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems. The amount shall not include expenditures that are exclusively for gifted students who do not receive special education pursuant to an individualized education program.

(32) “Eligible Student.” A student who has been identified as a student with a disability who is in need of special education under Federal and State law.

(33) “Performance Indicators.” Measurable annual objectives established by the Department of Education pursuant to section 612(a)(15) of the Individuals with Disabilities Education Act (Public Law 91-230, 20 U.S.C. § 1412(a)(15)) to assess progress toward achieving State goals for the performance of eligible students.

(34) “Public Access.” Full and timely release of information and documents for public access at a minimum through publication by the Department of Education:

(35) “Regular Classroom.” A classroom in a regular school operated primarily for students who have not been identified as students with disabilities who are in need of special education.

(36) “Regular School.” A neighborhood school, magnet school or other public school operated for all students, not solely eligible students, in a school district.

(37) “Special Education Plan.” A comprehensive plan as well as revisions, updates and amendments for all special education personnel, programs, services and supports provided by each school district for eligible students, filed by each district with the Department of Education under this act and other applicable Federal and State law.

(38) “Base Year.” Fiscal year 2010-2011 or another year designated by statute.

(39) “Special Education Allocation.” The amount of special education funding received by a school district from the Commonwealth.