Committee probes who should determine 'small by necessity' and sparse-school support under Act 73

The House Education Committee on Feb. 4 examined how Act 73 addresses "sparse by necessity" and "small by necessity" designations that trigger support grants under a future foundation formula.

Legislative counsel summarized the statute: Section 8B requires the State Board of Education to submit proposed standards for those designations, and Section 37 would create a small-school/sparse-school support grant under the foundation formula, which is contingently effective on July 1, 2028. Counsel noted Act 73 requires the State Board to make an annual determination using standards "consistent with those submitted" under Section 8B, but Act 73 does not explicitly require rulemaking around the standards.

Why it matters: Committee members said lack of clarity about whether the State Board will adopt rules, the Agency of Education (AOE) will operationalize determinations, or the legislature will specify criteria could leave districts uncertain and prompt local decisions — including school closure considerations — based on tentative interpretations. One member said constituents were "freaking out" about potential school closures if criteria are not transparent.

Members discussed policy options: leave the statutory structure as written and let the State Board annually determine eligibility; ask the State Board to put the standards into rule; or direct AOE to administer determinations and documentation aligned to district budgeting timelines. The committee noted that the State Board is a monthly volunteer board and that AOE may be better positioned to perform operational reviews on an annual schedule.

Next steps: The committee asked to hear testimony from AOE and the State Board about operational timelines, documentation and data requirements, and whether the legislature should amend Act 73 to require rulemaking or assign operational responsibility to AOE. The committee did not adopt any legislative changes during the meeting.