Michigan Compiled Laws, Chapter 400. Social Services § 400.115o

(a) If 1 or more appropriate juvenile residential care providers located or doing business in this state have bed space available, the department shall use that space rather than a space available by a provider located or doing business in another state. This requirement does not apply if the provider located or doing business in another state offers a specialized program that is not available in this state.

(b) If an excess of bed spaces is available within a security level, the department shall use the bed spaces of private providers with whom it has contracted and allow state owned bed spaces to go unused first. However, in applying this subdivision, a bed space that is available because a facility refused to accept a juvenile does not count toward a surplus.