The bill removes the insured value factor from the maximum allowable tuition rate charged to a school administrative unit by a private school for enrolling secondary school students in private schools.

The bill amends the funding formula components that determine the state and local share of operating costs and program cost allocations when the amount appropriated for the State's share of operating costs is less than 55% of total operating costs allocation and when the amount appropriated for the State's share of program costs is less than 60% of total program cost allocation.

The bill repeals the so-called "percentage rate" subsidy reduction method from the School Finance Act of 1985 and requires that reductions in state funds be made by applying a mill rate subsidy reduction to each school administrative unit rather than a percentage rate subsidy reduction to each school administrative unit.