SB-0981, As Passed House, December 10, 2009

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 981

(As amended December 10, 2009)

[A bill to amend 1976 PA 451, entitled

"The revised school code,"

by amending sections 5, 6, 502, 503, 504, 507, 523, 1147, 1246,

1250, 1278a, 1278b, 1284b, 1311e, 1536, 1561, 1596, and 1701a (MCL

380.5, 380.6, 380.502, 380.503, 380.504, 380.507, 380.523,

380.1147, 380.1246, 380.1250, 380.1278a, 380.1278b, 380.1284b,

380.1311e, 380.1536, 380.1561, 380.1596, and 380.1701a), section 5

as amended by 2005 PA 61, sections 6, 504, and 1701a as amended by

2008 PA 1, sections 502 and 507 as amended and section 1250 as

added by 1995 PA 289, section 503 as amended by 2003 PA 299,

section 523 as added by 2003 PA 179, section 1246 as amended by

2004 PA 148, section 1278a as amended by 2008 PA 316, section 1278b

as amended by 2007 PA 141, section 1284b as amended by 2006 PA 235,

Senate Bill No. 981 (H-2) as amended December 10, 2009

section 1311e as added by 1999 PA 23, section 1536 as added by 2006

PA 335, and section 1561 as amended by 1996 PA 339, and by adding

sections 502a and 1249 and part 6e.]

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 5. (1) "Local act school district" or "special act school

district" means a district governed by a special or local act or

chapter of a local act. "Local school district" and "local school

district board" as used in article 3 include a local act school

district and a local act school district board.

(2) "Membership" means the number of full-time equivalent

pupils in a public school as determined by the number of pupils

registered for attendance plus pupils received by transfer and

minus pupils lost as defined by rules promulgated by the state

board.

(3) "Michigan election law" means the Michigan election law,

1954 PA 116, MCL 168.1 to 168.992.

(4) "Nonpublic school" means a private, denominational, or

parochial school.

(5) "Objectives" means measurable pupil academic skills and

knowledge.

(6) "Public school" means a public elementary or secondary

educational entity or agency that is established under this act,

has as its primary mission the teaching and learning of academic

and vocational-technical skills and knowledge, and is operated by a

school district, local act school district, special act school

district, intermediate school district, school of excellence,

public school academy corporation, strict discipline academy

corporation, urban high school academy corporation, or by the

department or state board. Public school also includes a laboratory

school or other elementary or secondary school that is controlled

and operated by a state public university described in section 4,

5, or 6 of article VIII of the state constitution of 1963.

(7) "Public school academy" means a public school academy

established under part 6a and, except as used in part 6a, also

includes an urban high school academy established under part 6c, a

school of excellence established under part 6e, and a strict

discipline academy established under sections 1311b to 1311l.

(8) "Pupil membership count day" of a school district means

that term as defined in section 6 of the state school aid act of

1979, MCL 388.1606.

(9) "Regular school election" or "regular election" means the

election held in a school district, local act school district, or

intermediate school district to elect a school board member in the

regular course of the terms of that office and held on the school

district's regular election date as determined under section 642 or

642a of the Michigan election law, MCL 168.642 and 168.642a.

(10) "Reorganized intermediate school district" means an

intermediate school district formed by consolidation or annexation

of 2 or more intermediate school districts under sections 701 and

702.

(11) "Rule" means a rule promulgated under the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Sec. 6. (1) "School district" or "local school district" means

a general powers school district organized under this act,

regardless of previous classification, or a school district of the

first class.

(2) "School district filing official" means the school

district election coordinator as defined in section 4 of the

Michigan election law, MCL 168.4, or an authorized agent of the

school district election coordinator.

(3) "School elector" means a person qualified as an elector

under section 492 of the Michigan election law, MCL 168.492, and

resident of the school district or intermediate school district on

or before the thirtieth day before the next ensuing regular or

special school election.

(4) "School month" means a 4-week period of 5 days each unless

otherwise specified in the teacher's contract.

(5) "School of excellence" means a school of excellence

established under part 6e.

(6) ~~(5)~~ "Special education building and equipment" means a

structure or portion of a structure or personal property accepted,

leased, purchased, or otherwise acquired, prepared, or used for

special education programs and services.

(7) ~~(6)~~ "Special education personnel" means persons engaged in

and having professional responsibility for students with a

disability in special education programs and services including,

but not limited to, teachers, aides, school social workers,

diagnostic personnel, physical therapists, occupational therapists,

audiologists, teachers of speech and language, instructional media-

curriculum specialists, mobility specialists, teacher consultants,

supervisors, and directors.

(8) ~~(7)~~ "Special education programs and services" means

educational and training services designed for students with a

disability and operated by local school districts, local act school

districts, intermediate school districts, the Michigan schools for

the deaf and blind, the department of community health, the

department of human services, or a combination of these, and

ancillary professional services for students with a disability

rendered by agencies approved by the state board. The programs

shall include vocational training, but need not include academic

programs of college or university level.

(9) ~~(8)~~ "Special school election" or "special election" means

a school district election to fill a vacancy on the school board or

submit a ballot question to the school electors that is held on a

regular election date established under section 641 of the Michigan

election law, MCL 168.641.

(10) ~~(9)~~ "State approved nonpublic school" means a nonpublic

school that complies with 1921 PA 302, MCL 388.551 to 388.558.

(11) ~~(10)~~ "State board" means the state board of education

unless clearly otherwise stated.

(12) ~~(11)~~ "Student with a disability" means that term as

defined in R 340.1702 of the Michigan administrative code.

(13) ~~(12)~~ "Department" means the department of education

created and operating under sections 300 to 305 of the executive

organization act of 1965, 1965 PA 380, MCL 16.400 to 16.405.

(14) ~~(13)~~ "State school aid" means allotments from the general

appropriating act for the purpose of aiding in the support of the

public schools of the state.

(15) ~~(14)~~ "The state school aid act of 1979" means the state

school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772.

Sec. 502. (1) A public school academy shall be organized and

administered under the direction of a board of directors in

accordance with this part and with bylaws adopted by the board of

directors. A public school academy corporation shall be organized

under the nonprofit corporation act, ~~Act No. 162 of the Public Acts~~

~~of 1982, being sections 450.2101 to 450.3192 of the~~ ~~Michigan~~

~~Compiled Laws~~ 1982 PA 162, MCL 450.2101 to 450.3192, except that a

public school academy corporation is not required to comply with

sections 170 to 177 of ~~Act No. 327 of the Public Acts of 1931,~~

~~being sections 450.170 to 450.177 of the Michigan Compiled Laws~~

1931 PA 327, MCL 450.170 to 450.177. To the extent disqualified

under the state or federal constitution, a public school academy

shall not be organized by a church or other religious organization

and shall not have any organizational or contractual affiliation

with or constitute a church or other religious organization.

(2) Any of the following may act as an authorizing body to

issue a contract to organize and operate 1 or more public school

academies under this part:

(a) The board of a school district that operates grades K to

12. However, the board of a school district shall not issue a

contract for a public school academy to operate outside the school

district's boundaries, and a public school academy authorized by

the board of a school district shall not operate outside that

school district's boundaries.

(b) An intermediate school board. However, the board of an

intermediate school district shall not issue a contract for a

public school academy to operate outside the intermediate school

district's boundaries, and a public school academy authorized by

the board of an intermediate school district shall not operate

outside that intermediate school district's boundaries.

otherwise provided in this subdivision, the board of a community

college shall not issue a contract for a public school academy to

operate in a school district organized as a school district of the

first class, a public school academy authorized by the board of a

community college shall not operate in a school district organized

as a school district of the first class, the board of a community

college shall not issue a contract for a public school academy to

operate outside the boundaries of the community college district,

and a public school academy authorized by the board of a community

college shall not operate outside the boundaries of the community

college district. The board of a community college also may issue a

contract for not more than 1 public school academy to operate on

the grounds of an active or closed federal military installation

located outside the boundaries of the community college district,

or may operate a public school academy itself on the grounds of

such a federal military installation, if the federal military

installation is not located within the boundaries of any community

college district and the community college has previously offered

courses on the grounds of the federal military installation for at

least 10 years.

(d) The governing board of a state public university. However,

the combined total number of contracts for public school academies

issued by all state public universities shall not exceed ~~85 through~~

~~1996, and, after the initial evaluation under section 501a, shall~~

~~not exceed 100 through 1997, 125 through 1998, or 150 thereafter~~

150. Further, the total number of contracts issued by any 1 state

public university shall not exceed ~~50 through 1996, and thereafter~~

~~shall not exceed~~ 50% of the maximum combined total number that may

be issued under this subdivision.

(3) To obtain a contract to organize and operate 1 or more

public school academies, 1 or more persons or an entity may apply

to an authorizing body described in subsection (2). The application

shall include at least all of the following:

(a) Identification of the applicant for the contract.

(b) Subject to the resolution adopted by the authorizing body

under section 503(4), a list of the proposed members of the board

of directors of the public school academy and a description of the

qualifications and method for appointment or election of members of

the board of directors.

include at least all of the following:

(i) The name of the proposed public school academy.

(ii) The purposes for the public school academy corporation.

This language shall provide that the public school academy is

incorporated pursuant to this part and that the public school

academy corporation is a governmental entity.

(iii) The name of the authorizing body.

(iv) The proposed time when the articles of incorporation will

be effective.

(v) Other matters considered expedient to be in the articles

of incorporation.

(d) A copy of the proposed bylaws of the public school

academy.

(e) Documentation meeting the application requirements of the

authorizing body, including at least all of the following:

(i) The governance structure of the public school academy.

(ii) A copy of the educational goals of the public school

academy and the curricula to be offered and methods of pupil

assessment to be used by the public school academy. To the extent

applicable, the progress of the pupils in the public school academy

shall be assessed using at least a Michigan education assessment

program (MEAP) test or ~~an assessment instrument developed under~~

~~section 1279 for a state-endorsed high school diploma~~ the Michigan

merit examination, as applicable.

(iii) The admission policy and criteria to be maintained by the

public school academy. The admission policy and criteria shall

comply with section 504. This part of the application also shall

include a description of how the applicant will provide to the

general public adequate notice that a public school academy is

being created and adequate information on the admission policy,

criteria, and process.

(iv) The school calendar and school day schedule.

(v) The age or grade range of pupils to be enrolled.

(f) Descriptions of staff responsibilities and of the public

school academy's governance structure.

(g) For an application to the board of a school district, an

intermediate school board, or board of a community college,

identification of the local and intermediate school districts in

which the public school academy will be located.

(h) An agreement that the public school academy will comply

with the provisions of this part and, subject to the provisions of

this part, with all other state law applicable to public bodies and

with federal law applicable to public bodies or school districts.

(i) For a public school academy authorized by a school

district, an assurance that employees of the public school academy

will be covered by the collective bargaining agreements that apply

to other employees of the school district employed in similar

classifications in schools that are not public school academies.

(j) A description of and address for the proposed physical

plant in which the public school academy will be located.

(4) An authorizing body shall oversee, or shall contract with

an intermediate school district, community college, or state public

university to oversee, each public school academy operating under a

contract issued by the authorizing body. The oversight shall be

sufficient to ensure that the authorizing body can certify that the

public school academy is in compliance with statute, rules, and the

terms of the contract.

(5) If the ~~state board~~ superintendent of a public instruction

finds that an authorizing body is not engaging in appropriate

continuing oversight of 1 or more public school academies operating

under a contract issued by the authorizing body, the ~~state board~~

superintendent of public instruction may suspend the power of the

authorizing body to issue new contracts to organize and operate

public school academies. A contract issued by the authorizing body

during the suspension is void. A contract issued by the authorizing

body before the suspension is not affected by the suspension.

(6) An authorizing body shall not charge a fee, or require

reimbursement of expenses, for considering an application for a

contract, for issuing a contract, or for providing oversight of a

contract for a public school academy in an amount that exceeds a

combined total of 3% of the total state school aid received by the

public school academy in the school year in which the fees or

expenses are charged. An authorizing body may provide other

services for a public school academy and charge a fee for those

services, but shall not require such an arrangement as a condition

to issuing the contract authorizing the public school academy.

(7) A public school academy shall be presumed to be legally

organized if it has exercised the franchises and privileges of a

public school academy for at least 2 years.

Sec. 502a. (1) If a public school academy operating under this

part meets the requirements of subsection (2), with the approval of

its authorizing body, the board of directors of the public school

academy may adopt a resolution choosing to convert the public

school academy to a school of excellence under part 6e. If a board

of directors of a public school academy that meets the requirements

of subsection (2) adopts such a resolution, all of the following

apply:

(a) The public school academy shall cease to operate as a

public school academy under this part and shall operate as a school

of excellence under part 6e beginning with the next school year

that begins after the date of the resolution.

(b) The public school academy shall be considered to be a

school of excellence for all purposes beginning with that next

school year, but shall retain its corporate identity.

the governing board of a state university, then all of the

following apply to issuance of a new contract for a public school

academy under this act after the conversion:

(i) That authorizing body is the only authorizing body that may

issue a new contract for a new public school academy to fill the

availability under section 502(d) that is created by the conversion

of the public school academy to a school of excellence.

(ii) In issuing a new contract, the authorizing body shall give

preference to the board of directors or educational management

organization that operated the public school academy under this

part if that board of directors or educational management

organization chooses to apply for the new contract.

(2) Subsection (1) applies to a public school academy that

meets all of the following, as applicable:

(a) If the public school academy operates only some or all of

grades K to 8, meets both of the following:

(i) On average over a 3-year period, at least 80% of the pupils

enrolled in the public school academy achieved a score of

proficient or better on the Michigan education assessment program

mathematics and English language arts tests.

(ii) On average over a 3-year period, at least 50% of the

pupils enrolled in the public school academy met the income

eligibility criteria for the federal free or reduced-price lunch

program, as determined under the Richard B. Russell national school

lunch act, 42 USC 1751 to 1769i, and reported to the department.

(b) If the public school academy operates grades 9 to 12, at

least 80% of the school's pupils graduate from high school or are

determined by the department to be on track to graduate from high

school, the school has at least 80% average attendance, and the

school's pupils have an average score of at least 17 on the college

entrance examination component of the Michigan merit examination.

Sec. 503. (1) An authorizing body is not required to issue a

contract to any person or entity. Public school academy contracts

shall be issued on a competitive basis taking into consideration

the resources available for the proposed public school academy, the

population to be served by the proposed public school academy, ~~and~~

the educational goals to be achieved by the proposed public school

academy, and the applicant's track record, if any, in operating

public school academies or other public schools. However, an

authorizing body may give priority to a public school academy that

is intended to replace a public school academy that has been closed

pursuant to section 507(2), that will operate all of the same grade

levels as the public school academy that has been closed, and that

will work toward operating all of grades 9 to 12 within 4 years

after it begins operations or consistent with grade expansion.

(2) If a person or entity applies to the board of a school

district for a contract to organize and operate 1 or more public

school academies within the boundaries of the school district and

the board does not issue the contract, the person or entity may

petition the board to place the question of issuing the contract on

the ballot to be decided by the school electors of the school

district. The petition shall contain all of the information

required to be in the contract application under section 502 and

shall be signed by a number of school electors of the school

district equal to at least 15% of the total number of school

electors of that school district. The petition shall be filed with

the school district filing official. If the board receives a

petition meeting the requirements of this subsection, the board

shall have the question of issuing the contract placed on the

ballot at its next regular school election held at least 60 days

after receiving the petition. If a majority of the school electors

of the school district voting on the question vote to issue the

contract, the board shall issue the contract.

(3) Within 10 days after issuing a contract for a public

school academy, the authorizing body shall submit to the

superintendent of public instruction a copy of the contract and of

the application under section 502.

(4) An authorizing body shall adopt a resolution establishing

the method of selection, length of term, and number of members of

the board of directors of each public school academy subject to its

jurisdiction.

(5) A contract issued to organize and administer a public

school academy shall contain at least all of the following:

(a) The educational goals the public school academy is to

achieve and the methods by which it will be held accountable. To

the extent applicable, the pupil performance of a public school

academy shall be assessed using at least a Michigan education

assessment program (MEAP) test or ~~an assessment instrument~~

~~developed under section 1279~~ the Michigan merit examination, as

applicable.

(b) A description of the method to be used to monitor the

public school academy's compliance with applicable law and its

performance in meeting its targeted educational objectives.

during the term of the contract.

(d) All of the matters set forth in the application for the

contract.

(e) For a public school academy authorized by a school

district, an agreement that employees of the public school academy

will be covered by the collective bargaining agreements that apply

to employees of the school district employed in similar

classifications in schools that are not public school academies.

(f) Procedures for revoking the contract and grounds for

revoking the contract, including at least the grounds listed in

section 507.

(g) A description of and address for the proposed physical

plant in which the public school academy will be located.

(h) Requirements and procedures for financial audits. The

financial audits shall be conducted at least annually by a

certified public accountant in accordance with generally accepted

governmental auditing principles.

(i) The term of the contract and a description of the process

and standards for renewal of the contract at the end of the term.

The standards for renewal shall include student growth as measured

by assessments and other objective criteria as a significant factor

in the decision of whether or not to renew the contract.

(6) A public school academy shall comply with all applicable

law, including all of the following:

(a) The open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

(b) The freedom of information act, 1976 PA 442, MCL 15.231 to

15.246.

(d) 1965 PA 166, MCL 408.551 to 408.558.

(e) Sections 1134, 1135, 1146, 1153, 1263(3), 1267, and 1274.

(7) A public school academy and its incorporators, board

members, officers, employees, and volunteers have governmental

immunity as provided in section 7 of 1964 PA 170, MCL 691.1407. An

authorizing body and its board members, officers, and employees are

immune from civil liability, both personally and professionally,

for an act or omission in authorizing a public school academy if

the authorizing body or the person acted or reasonably believed he

or she acted within the authorizing body's or the person's scope of

authority.

(8) A public school academy is exempt from all taxation on its

earnings and property. Instruments of conveyance to or from a

public school academy are exempt from all taxation including taxes

imposed by 1966 PA 134, MCL 207.501 to 207.513. A public school

academy may not levy ad valorem property taxes or another tax for

any purpose. However, operation of 1 or more public school

academies by a school district or intermediate school district does

not affect the ability of the school district or intermediate

school district to levy ad valorem property taxes or another tax.

(9) A public school academy may acquire by purchase, gift,

devise, lease, sublease, installment purchase agreement, land

contract, option, or by any other means, hold and own in its own

name buildings and other property for school purposes, and

interests therein, and other real and personal property, including,

but not limited to, interests in property subject to mortgages,

security interests, or other liens, necessary or convenient to

fulfill its purposes. For the purposes of condemnation, a public

school academy may proceed under the uniform condemnation

procedures act, 1980 PA 87, MCL 213.51 to 213.75, excluding

sections 6 to 9 of that act, MCL 213.56 to 213.59, or other

applicable statutes, but only with the express, written permission

of the authorizing body in each instance of condemnation and only

after just compensation has been determined and paid.

Sec. 504. (1) A public school academy may be located in all or

part of an existing public school building. A public school academy

shall not operate at a site other than the single site requested

for the configuration of grades that will use the site, as

specified in the application required under section 502 and in the

contract.

(2) A public school academy shall not charge tuition and shall

not discriminate in its pupil admissions policies or practices on

the basis of intellectual or athletic ability, measures of

achievement or aptitude, status as a student with a disability, or

any other basis that would be illegal if used by a school district.

However, a public school academy may limit admission to pupils who

are within a particular range of age or grade level or on any other

basis that would be legal if used by a school district.

(3) Except for a foreign exchange student who is not a United

States citizen, a public school academy shall not enroll a pupil

who is not a resident of this state. Enrollment in the public

school academy may be open to all individuals who reside in this

state who meet the admission policy and shall be open to all pupils

who reside within the geographic boundaries, if any, of the

authorizing body as described in section 502(2)(a) to (c) who meet

the admission policy, except that admission to a public school

academy authorized by the board of a community college to operate,

or operated by the board of a community college, on the grounds of

a federal military installation, as described in section 502(2)(c),

shall be open to all pupils who reside in the county in which the

federal military installation is located. For a public school

academy authorized by a state public university, enrollment shall

be open to all pupils who reside in this state who meet the

admission policy. If there are more applications to enroll in the

public school academy than there are spaces available, pupils shall

be selected to attend using a random selection process. However, a

public school academy may give enrollment priority to a sibling of

a pupil enrolled in the public school academy. A public school

academy shall allow any pupil who was enrolled in the public school

academy in the immediately preceding school year to enroll in the

public school academy in the appropriate grade unless the

appropriate grade is not offered at that public school academy.

(4) A Subject to subsection (5), a public school academy may

include any grade up to grade 12 or any configuration of those

grades, including kindergarten and early childhood education, as

specified in its contract. If specified in its contract, a public

school academy may also operate an adult basic education program,

adult high school completion program, or general education

development testing preparation program. The authorizing body may

approve amendment of a contract with respect to ages of pupils or

grades offered.

(5) A public school academy authorized after the effective

date of the amendatory act that added this subsection that is

intended to replace a public school academy that has been closed

pursuant to section 507(2) shall operate all of the same grade

levels as the public school academy that has been closed and shall

work toward operating all of grades 9 to 12 within 4 years after it

begins operations or consistent with grade expansion.

Sec. 507. (1) The authorizing body for a public school academy

is the fiscal agent for the public school academy. A state school

aid payment for a public school academy shall be paid to the

authorizing body that is the fiscal agent for that public school

academy, which shall then forward the payment to the public school

academy. An authorizing body has the responsibility to oversee a

public school academy's compliance with the contract and all

applicable law. A contract issued under this part may be revoked by

the authorizing body that issued the contract if the authorizing

body determines that 1 or more of the following has occurred:

(a) Failure of the public school academy to abide by and meet

the educational goals set forth in the contract.

(b) Failure of the public school academy to comply with all

applicable law.

accepted public sector accounting principles.

(d) The existence of 1 or more other grounds for revocation as

specified in the contract.

(2) Except for a public school academy that is an alternative

school serving a special student population, if the superintendent

of public instruction determines that a public school academy that

has been operating for at least 4 years is among the lowest

achieving 5% of all public schools in this state, as defined for

the purposes of the federal incentive grant program created under

sections 14005 and 14006 of title XIV of the American recovery and

reinvestment act of 2009, Public Law 111-5, the superintendent of

public instruction shall notify the public school academy's

authorizing body. If an authorizing body receives notice from the

superintendent of public instruction under this subsection, the

authorizing body shall revoke the public school academy's contract

and the public school academy shall be closed, effective at the end

of the current school year.

(3) ~~(2)~~ The decision of an authorizing body to revoke a

contract under this section is solely within the discretion of the

authorizing body, is final, and is not subject to review by a court

or any state agency.

(4) An authorizing body that revokes a contract under this

section is not liable for that action to the public school academy,

public school academy corporation, a pupil of the public school

academy, the parent or guardian of a pupil of the public school

academy, or any other person.

Sec. 523. (1) An authorizing body is not required to issue a

contract to any entity. Urban high school academy contracts shall

be issued on a competitive basis taking into consideration the

resources available for the proposed urban high school academy, the

population to be served by the proposed urban high school academy,

and the educational goals to be achieved by the proposed urban high

school academy. In evaluating if an applicant is qualified, the

authorizing body shall examine the proposed performance standards,

proposed academic program, financial viability of the applicant,

and the ability of the proposed board of directors to meet the

contract goals and objectives. An authorizing body shall give

priority to applicants that demonstrate all of the following:

(a) The proposed school will operate at least all of grades 9

through 12 within 3 years after beginning operation.

(b) The proposed school will occupy a building or buildings

that are newly constructed or renovated after January 1, 2003.

school graduation rates.

(d) The proposed school has received commitments for financial

and educational support from the entity applying for the contract.

(e) The entity that submits the application for a contract has

net assets of at least $50,000,000.00.

(2) A contract issued to organize and administer an urban high

school academy shall contain at least all of the following:

(a) The educational goals the urban high school academy is to

achieve and the methods by which it will be held accountable. To

the extent applicable, the pupil performance of an urban high

school academy shall be assessed using at least a Michigan

education assessment program (MEAP) test or ~~an assessment~~

~~instrument developed under section 1279~~ the Michigan merit

examination developed under section 1279g, as applicable.

(b) A description of the method to be used to monitor the

urban high school academy's compliance with applicable law and its

performance in meeting its targeted educational objectives.

during the term of the contract. An authorizing body may approve

amendment of the contract with respect to any provision contained

in the contract.

(d) A certification, signed by an authorized member of the

urban high school academy board of directors, that the urban high

school academy will comply with the contract and all applicable

law.

(e) Procedures for revoking the contract and grounds for

revoking the contract.

(f) A description of and address for the proposed building or

buildings in which the urban high school academy will be located.

(g) Requirements and procedures for financial audits. The

financial audits shall be conducted at least annually by an

independent certified public accountant in accordance with

generally accepted governmental auditing principles.

(h) A requirement that the board of directors shall ensure

compliance with the requirements of 1968 PA 317, MCL 15.321 to

15.330.

(i) A requirement that the board of directors shall prohibit

specifically identified family relationships between members of the

board of directors, individuals who have an ownership interest in

or who are officers or employees of an educational management

company involved in the operation of the urban high school academy,

and employees of the urban high school academy. The contract shall

identify the specific prohibited relationships consistent with

applicable law.

(j) A requirement that the board of directors of the urban

high school academy shall make information concerning its operation

and management available to the public and to the authorizing body

in the same manner as is required by state law for school

districts.

(k) A requirement that the board of directors of the urban

high school academy shall collect, maintain, and make available to

the public and the authorizing body, in accordance with applicable

law and the contract, at least all of the following information

concerning the operation and management of the urban high school

academy:

(i) A copy of the contract issued by the authorizing body for

the urban high school academy.

(ii) A list of currently serving members of the board of

directors of the urban high school academy, including name,

address, and term of office; copies of policies approved by the

board of directors; board meeting agendas and minutes; copy of the

budget approved by the board of directors and of any amendments to

the budget; and copies of bills paid for amounts of $10,000.00 or

more as they were submitted to the board of directors.

(iii) Quarterly financial reports submitted to the authorizing

body.

(iv) A current list of teachers working at the urban high

school academy that includes their individual salaries; copies of

the teaching certificates or permits of current teaching staff; and

evidence of compliance with the criminal background and records

checks and unprofessional conduct check required under sections

1230, 1230a, and 1230b for all teachers and administrators working

at the urban high school academy.

(v) Curriculum documents and materials given to the

authorizing body.

(vi) Proof of insurance as required by the contract.

(vii) Copies of facility leases or deeds, or both, and of any

equipment leases.

(viii) Copies of any management contracts or services contracts

approved by the board of directors.

(ix) All health and safety reports and certificates, including

those relating to fire safety, environmental matters, asbestos

inspection, boiler inspection, and food service.

(x) Any management letters issued as part of the annual

financial audit under subdivision (g).

(xi) Any other information specifically required under this

act.

(l) A requirement that the authorizing body must review and may

disapprove any agreement between the board of directors and an

educational management company before the agreement is final and

valid. An authorizing body may disapprove an agreement described in

this subdivision only if the agreement is contrary to the contract

or applicable law.

(m) A requirement that the board of directors shall

demonstrate all of the following to the satisfaction of the

authorizing body with regard to its pupil admission process:

(i) That the urban high school academy has made a reasonable

effort to advertise its enrollment openings in a newspaper of

general circulation in the intermediate school district in which

the urban high school academy is located.

(ii) That the urban high school academy has made the following

additional efforts to recruit pupils who are eligible for special

education programs and services to apply for admission:

(A) Reasonable efforts to advertise all enrollment openings to

organizations and media that regularly serve and advocate for

individuals with disabilities within the boundaries of the

intermediate school district in which the urban high school academy

is located.

(B) Inclusion in all pupil recruitment materials of a

statement that appropriate special education services will be made

available to pupils attending the school as required by law.

(iii) That the open enrollment period for the urban high school

academy is for a duration of at least 2 weeks and that the

enrollment times include some evening and weekend times.

(n) A requirement that the board of directors shall prohibit

any individual from being employed by the urban high school academy

in more than 1 full-time position and simultaneously being

compensated at a full-time rate for each of those positions.

(o) A requirement that, if requested, the board of directors

shall report to the authorizing body the total compensation for

each individual working at the urban high school academy.

(p) The term of the contract and a description of the process

and standards for renewal of the contract at the end of the term.

The standards for renewal shall include student growth as measured

by assessments and other objective criteria as a significant factor

in the decision of whether or not to renew the contract.

(3) An urban high school academy shall comply with all

applicable law, including all of the following:

(a) The open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

(b) The freedom of information act, 1976 PA 442, MCL 15.231 to

15.246.

(d) 1965 PA 166, MCL 408.551 to 408.558.

(e) 1978 PA 566, MCL 15.181 to 15.185.

(f) 1968 PA 317, MCL 15.321 to 15.330.

(g) The uniform budgeting and accounting act, 1968 PA 2, MCL

141.421 to 141.440a.

(h) The revised municipal finance act, 2001 PA 34, MCL

141.2101 to 141.2821.

(i) The federal no child left behind act of 2001, Public Law

107-110, 115 Stat. 1425.

(j) Sections 1134, 1135, 1146, 1153, 1263(3), 1267, 1274, and

1280.

(4) An urban high school academy and its incorporators, board

members, officers, employees, and volunteers have governmental

immunity as provided in section 7 of 1964 PA 170, MCL 691.1407. An

authorizing body and its board members, officers, and employees are

immune from civil liability, both personally and professionally,

for any acts or omissions in authorizing or oversight of an urban

high school academy if the authorizing body or the person acted or

reasonably believed he or she acted within the authorizing body's

or the person's scope of authority.

(5) An urban high school academy is exempt from all taxation

on its earnings and property. Instruments of conveyance to or from

an urban high school academy are exempt from all taxation,

including taxes imposed by 1966 PA 134, MCL 207.501 to 207.513. An

urban high school academy may not levy ad valorem property taxes or

any other tax for any purpose.

(6) An urban high school academy may acquire by purchase,

gift, devise, lease, sublease, installment purchase agreement, land

contract, option, or any other means, hold, and own in its own name

buildings and other property for school purposes, and interests

therein, and other real and personal property, including, but not

limited to, interests in property subject to mortgages, security

interests, or other liens, necessary or convenient to fulfill its

purposes. For the purposes of condemnation, an urban high school

academy may proceed under the uniform condemnation procedures act,

1980 PA 87, MCL 213.51 to 213.75, excluding sections 6 to 9 of that

act, MCL 213.56 to 213.59, or other applicable statutes, but only

with the express, written permission of the authorizing body in

each instance of condemnation and only after just compensation has

been determined and paid.

PART 6E

SCHOOLS OF EXCELLENCE

Sec. 551. (1) A school of excellence is a public school under

section 2 of article VIII of the state constitution of 1963, is a

school district for the purposes of section 11 of article IX of the

state constitution of 1963 and for the purposes of section 1225 and

section 1351a, and is subject to the leadership and general

supervision of the state board over all public education under

section 3 of article VIII of the state constitution of 1963. A

school of excellence is a body corporate and is a governmental

agency. The powers granted to a school of excellence under this

part constitute the performance of essential public purposes and

governmental functions of this state.

(2) As used in this part:

(a) "Authorizing body" means any of the following that issues

a contract as provided in this part:

(i) The board of a school district that operates grades K to

12.

(ii) An intermediate school board.

(iii) The board of a community college.

(iv) The governing board of a state public university.

(b) "Certificated teacher" means an individual who holds a

valid teaching certificate issued by the superintendent of public

instruction under section 1531.

under the community college act of 1966, 1966 PA 331, MCL 389.1 to

389.195, or a federal tribally controlled community college that is

recognized under the tribally controlled community college

assistance act of 1978, Public Law 95-471, and is determined by the

department to meet the requirements for accreditation by a

recognized regional accrediting body.

(d) "Contract" means the executive act taken by an authorizing

body that evidences the authorization of a school of excellence and

that establishes, subject to the constitutional powers of the state

board and applicable law, the written instrument executed by an

authorizing body conferring certain rights, franchises, privileges,

and obligations on a school of excellence, as provided by this

part, and confirming the status of a school of excellence as a

public school in this state.

(e) "Educational management organization" means an entity that

enters into an agreement with the governing board of a public

school to provide comprehensive educational, administrative,

management, or instructional services or staff to the public

school.

(f) "Entity" means a partnership, nonprofit or business

corporation, labor organization, or any other association,

corporation, trust, or other legal entity.

(g) "State public university" means a state university

described in section 4, 5, or 6 of article VIII of the state

constitution of 1963.

Senate Bill No. 981 (H-2) as amended December 10, 2009

Sec. 552. (1) An authorizing body shall not issue a contract

to organize and operate a school of excellence to a person or

entity unless the authorizing body has received an application from

a person or entity that is included on the list of approved persons

or entities published by the department under subsection (2).

Further, not more than 1 contract may be issued under this part for

each public school academy operated under part 6a that meets the

requirements under subsection (2)[, and that public school academy shall

be identified in the contract issued by the authorizing body].

(2) The department shall develop, publish, and maintain a list

of persons or entities that are approved to apply to an authorizing

body for the issuance of a contract to organize and operate a

school of excellence under this part. Subject to subsection (3),

for a person or entity to be included on the list, the department

must determine that the person or entity is under contract with the

board of directors of a public school academy to manage a public

school academy under part 6a that meets the following requirements:

(a) If the public school academy operates only some or all of

grades K to 8, meets both of the following:

(i) On average over a 3-year period, at least 80% of the pupils

enrolled in the public school academy achieved a score of

proficient or better on the Michigan education assessment program

mathematics and English language arts tests.

(ii) On average over a 3-year period, at least 50% of the

pupils enrolled in the public school academy met the income

eligibility criteria for the federal free or reduced-price lunch

program, as determined under the Richard B. Russell national school

lunch act, 42 USC 1751 to 1769i, and reported to the department.

Senate Bill No. 981 (H-2) as amended December 10, 2009

(b) If the public school academy operates grades 9 to 12, at

least 80% of the school's pupils graduate from high school or are

determined by the department to be on track to graduate from high

school, the school has at least 80% average attendance, and the

[school has at least an 80% postsecondary enrollment rate.

]

(3) The department may include a person or entity on the list

of persons or entities under subsection (2) if the department

determines that the person or entity is under contract to manage,

or operates, a public school in another state that meets criteria

the department determines to be equivalent to the requirements

under subsection (2).

(4) A school of excellence shall be organized and administered

under the direction of a board of directors in accordance with this

part and with bylaws adopted by the board of directors. A school of

excellence shall be organized under the nonprofit corporation act,

1982 PA 162, MCL 450.2101 to 450.3192, except that a school of

excellence is not required to comply with sections 170 to 177 of

1931 PA 327, MCL 450.170 to 450.177. To the extent disqualified

under the state or federal constitution, a school of excellence

shall not be organized by a church or other religious organization

and shall not have any organizational or contractual affiliation

with or constitute a church or other religious organization.

(5) Any of the following may act as an authorizing body to

issue a contract to organize and operate 1 or more schools of

excellence under this part:

(a) The board of a school district that operates grades K to

12. However, the board of a school district shall not issue a

contract for a school of excellence to operate outside the school

district's boundaries, and a school of excellence authorized by the

board of a school district shall not operate outside that school

district's boundaries.

(b) An intermediate school board. However, the board of an

intermediate school district shall not issue a contract for a

school of excellence to operate outside the intermediate school

district's boundaries, and a school of excellence authorized by the

board of an intermediate school district shall not operate outside

that intermediate school district's boundaries.

college shall not issue a contract for a school of excellence to

operate outside the boundaries of the community college district,

and a school of excellence authorized by the board of a community

college shall not operate outside the boundaries of the community

college district. The board of a community college also may issue a

contract for not more than 1 school of excellence to operate on the

grounds of an active or closed federal military installation

located outside the boundaries of the community college district,

or may operate a school of excellence itself on the grounds of such

a federal military installation, if the federal military

installation is not located within the boundaries of any community

college district and the community college has previously offered

courses on the grounds of the federal military installation for at

least 10 years.

(d) The governing board of a state public university.

(6) To obtain a contract to organize and operate 1 or more

schools of excellence, 1 or more persons or an entity may apply to

an authorizing body described in subsection (5). The application

shall include at least all of the following:

(a) Identification of the applicant for the contract.

(b) Subject to the resolution adopted by the authorizing body

under section 553(3), a list of the proposed members of the board

of directors of the school of excellence and a description of the

qualifications and method for appointment or election of members of

the board of directors.

include at least all of the following:

(i) The name of the proposed school of excellence.

(ii) The purposes for the school of excellence corporation.

This language shall provide that the school of excellence is

incorporated pursuant to this part and that the school of

excellence is a governmental entity.

(iii) The name of the authorizing body.

(iv) The proposed time when the articles of incorporation will

be effective.

(v) Other matters considered expedient to be in the articles

of incorporation.

(d) A copy of the proposed bylaws of the school of excellence.

(e) Documentation meeting the application requirements of the

authorizing body, including at least all of the following:

(i) The governance structure of the school of excellence.

(ii) A copy of the educational goals of the school of

excellence and the curricula to be offered and methods of pupil

assessment to be used by the school of excellence. To the extent

applicable, the progress of the pupils in the school of excellence

shall be assessed using at least a Michigan education assessment

program (MEAP) test or the Michigan merit examination under section

1279g.

(iii) The admission policy and criteria to be maintained by the

school of excellence. The admission policy and criteria shall

comply with section 556. This part of the application also shall

include a description of how the applicant will provide to the

general public adequate notice that a school of excellence is being

created and adequate information on the admission policy, criteria,

and process.

(iv) The school calendar and school day schedule.

(v) The age or grade range of pupils to be enrolled. The

school of excellence must operate, in addition to any other grade

levels it operates, all of grades 9 to 12 within 4 years after it

begins operations.

(f) Descriptions of staff responsibilities and of the school

of excellence governance structure.

(g) For an application to the board of a school district, an

intermediate school board, or board of a community college,

identification of the school district and intermediate school

district in which the school of excellence will be located. A

school of excellence shall not be located in a school district that

has a graduation rate of over 60%, on average, for the most recent

3 school years for which the data are available, as determined by

Senate Bill No. 981 (H-2) as amended December 10, 2009

the department.

(h) An agreement that the school of excellence will comply

with the provisions of this part and, subject to the provisions of

this part, with all other state law applicable to public bodies and

with federal law applicable to public bodies or school districts.

(i) For a school of excellence authorized by a school

district, an assurance that employees of the school of excellence

will be covered by the collective bargaining agreements that apply

to other employees of the school district employed in similar

classifications in schools that are not schools of excellence.

(j) A description of and address for the proposed physical

plant in which the school of excellence will be located. A school

of excellence shall not be located in a school district that has a

graduation rate of over 60%, on average, for the most recent 3

school years for which the data are available, as determined by the

department.

[(k) Identification of the public school academy operated under part 6a that meets the requirements of subsection (2) to which the school of excellence contract corresponds, as required under subsection (1).]

(7) An authorizing body shall oversee, or shall contract with

an intermediate school district, community college, or state public

university to oversee, each school of excellence operating under a

contract issued by the authorizing body. The oversight shall be

sufficient to ensure that the authorizing body can certify that the

school of excellence is in compliance with statute, rules, and the

terms of the contract.

(8) If the superintendent of public instruction finds that an

authorizing body is not engaging in appropriate continuing

oversight of 1 or more schools of excellence operating under a

contract issued by the authorizing body, the superintendent of

public instruction may suspend the power of the authorizing body to

issue new contracts to organize and operate schools of excellence.

A contract issued by the authorizing body during the suspension is

void. A contract issued by the authorizing body before the

suspension is not affected by the suspension.

(9) An authorizing body shall not charge a fee, or require

reimbursement of expenses, for considering an application for a

contract, for issuing a contract, or for providing oversight of a

contract for a school of excellence in an amount that exceeds a

combined total of 3% of the total state school aid received by the

school of excellence in the school year in which the fees or

expenses are charged. All of the following apply to this fee:

(a) The authorizing body may use this fee only for the

following purposes:

(i) Considering applications and issuing or administering

contracts.

(ii) Compliance monitoring and oversight of schools of

excellence.

(iii) Training for school of excellence applicants,

administrators, and boards of directors.

(iv) Technical assistance to schools of excellence.

(v) Academic support to schools of excellence or to pupils of

schools of excellence.

(vi) Evaluation of school of excellence performance.

(vii) Training of teachers.

(viii) Other purposes that assist the school of excellence or

traditional public schools in achieving improved academic

performance.

(b) The authorizing body may provide other services for a

school of excellence and charge a fee for those services, but shall

not require such an arrangement as a condition to issuing the

contract authorizing the school of excellence.

(10) A school of excellence shall be presumed to be legally

organized if it has exercised the franchises and privileges of a

public school academy for at least 2 years.

Sec. 553. (1) An authorizing body is not required to issue a

contract to any person or entity. Schools of excellence contracts

shall be issued on a competitive basis taking into consideration

the resources available for the proposed school of excellence, the

population to be served by the proposed school of excellence, the

educational goals to be achieved by the proposed school of

excellence, and the applicant's track record, if any, in operating

public school academies or other public schools.

(2) Within 10 days after issuing a contract for a school of

excellence, the authorizing body shall submit to the superintendent

of public instruction a copy of the contract and of the application

under section 552.

(3) An authorizing body shall adopt a resolution establishing

the method of selection, length of term, and number of members of

the board of directors of each school of excellence subject to its

jurisdiction.

(4) A contract issued to organize and administer a school of

excellence shall contain at least all of the following:

(a) The educational goals the school of excellence is to

achieve and the methods by which it will be held accountable. To

the extent applicable, the pupil performance of a school of

excellence shall be assessed using at least a Michigan education

assessment program (MEAP) test or the Michigan merit examination

under section 1279g.

(b) A description of the method to be used to monitor the

school of excellence's compliance with applicable law and its

performance in meeting its targeted educational objectives.

during the term of the contract.

(d) All of the matters set forth in the application for the

contract.

(e) For a school of excellence authorized by a school

district, an agreement that employees of the school of excellence

will be covered by the collective bargaining agreements that apply

to employees of the school district employed in similar

classifications in schools that are not schools of excellence.

(f) Procedures for revoking the contract and grounds for

revoking the contract, including at least the grounds listed in

section 561.

(g) A description of and address for the proposed physical

plant in which the school of excellence will be located. A school

of excellence shall not be located in a school district that has a

graduation rate of over 60% for the most recent school year for

which the data are available, as determined by the department.

(h) Requirements and procedures for financial audits. The

financial audits shall be conducted at least annually by a

certified public accountant in accordance with generally accepted

governmental auditing principles.

(i) A certification, signed by an authorized member of the

school of excellence board of directors, that the school of

excellence will comply with the contract and all applicable law.

(j) A requirement that the board of directors shall ensure

compliance with the requirements of 1968 PA 317, MCL 15.321 to

15.330.

(k) A requirement that the board of directors shall prohibit

specifically identified family relationships between members of the

board of directors, individuals who have an ownership interest in

or who are officers or employees of an educational management

organization involved in the operation of the school of excellence,

and employees of the school of excellence. The contract shall

identify the specific prohibited relationships consistent with

applicable law.

(l) A requirement that the board of directors of the school of

excellence shall make information concerning its operation and

management available to the public and to the authorizing body in

the same manner as is required by state law for school districts.

(m) A requirement that the board of directors of the school of

excellence shall collect, maintain, and make available to the

public and the authorizing body, in accordance with applicable law

and the contract, at least all of the following information

concerning the operation and management of the school of

excellence:

(i) A copy of the contract issued by the authorizing body for

Senate Bill No. 981 (H-2) as amended December 10, 2009

the school of excellence.

(ii) A list of currently serving members of the board of

directors of the school of excellence, including name, address, and

term of office; copies of policies approved by the board of

directors; board meeting agendas and minutes; copy of the budget

approved by the board of directors and of any amendments to the

budget; and copies of bills paid for amounts of $10,000.00 or more

as they were submitted to the board of directors.

(iii) Quarterly financial reports submitted to the authorizing

body.

(iv) A current list of teachers and school administrators

working at the school of excellence that includes their individual

salaries; copies of the teaching [or school administrator's] certificates

or permits of current

teaching [and administrative] staff; and evidence of compliance with the

criminal

background and records checks and unprofessional conduct check

required under sections 1230, 1230a, and 1230b for all teachers and

administrators working at the school of excellence.

(v) Curriculum documents and materials given to the

authorizing body.

(vi) Proof of insurance as required by the contract.

(vii) Copies of facility leases or deeds, or both, and of any

equipment leases.

(viii) Copies of any management contracts or services contracts

approved by the board of directors.

(ix) All health and safety reports and certificates, including

those relating to fire safety, environmental matters, asbestos

inspection, boiler inspection, and food service.

Senate Bill No. 981 (H-2) as amended December 10, 2009

(x) Any management letters issued as part of the annual

financial audit under subdivision (h).

(xi) Any other information specifically required under this

act.

(n) A requirement that the authorizing body must review and

may disapprove any agreement between the board of directors and an

educational management organization before the agreement is final

and valid. The authorizing body shall ensure that the agreement is

in compliance with [section 557 ].

(o) A requirement that the board of directors shall

demonstrate all of the following to the satisfaction of the

authorizing body with regard to its pupil admission process:

(i) That the school of excellence has made a reasonable effort

to advertise its enrollment openings.

(ii) That the school of excellence has made the following

additional efforts to recruit pupils who are eligible for special

education programs and services or English as a second language

services to apply for admission:

(A) Reasonable efforts to advertise all enrollment openings to

organizations and media that regularly serve and advocate for

individuals with disabilities or children with limited English-

speaking ability within the boundaries of the intermediate school

district in which the school of excellence is located.

(B) Inclusion in all pupil recruitment materials of a

statement that appropriate special education services and English

as a second language services will be made available to pupils

attending the school as required by law.

Senate Bill No. 981 (H-2) as amended December 10, 2009

(iii) That the open enrollment period for the school of

excellence is for a duration of at least 2 weeks and that the

enrollment times include some evening and weekend times.

(p) A requirement that the board of directors shall prohibit

any individual from being employed by the school of excellence in

more than 1 full-time position and simultaneously being compensated

at a full-time rate for each of those positions.

(q) A requirement that, if requested, the board of directors

shall report to the authorizing body the total compensation for

each individual working at the school of excellence.

[(r) Identification of the public school academy operated under part 6a that meets the requirements of section 552(2) to which the school of excellence corresponds, as required under section 552(1), and a requirement that the school of excellence shall serve a similar student population as is served by that public school academy.]

(5) A school of excellence shall comply with all applicable

law, including all of the following:

(a) The open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

(b) The freedom of information act, 1976 PA 442, MCL 15.231 to

15.246.

(d) 1965 PA 166, MCL 408.551 to 408.558.

(e) Sections 1134, 1135, 1146, 1153, 1263(3), 1267, and 1274.

(6) A school of excellence and its incorporators, board

members, officers, employees, and volunteers have governmental

immunity as provided in section 7 of 1964 PA 170, MCL 691.1407. An

authorizing body and its board members, officers, and employees are

immune from civil liability, both personally and professionally,

for an act or omission in authorizing a school of excellence if the

authorizing body or the person acted or reasonably believed he or

she acted within the authorizing body's or the person's scope of

authority.

(7) A school of excellence is exempt from all taxation on its

earnings and property. Instruments of conveyance to or from a

school of excellence are exempt from all taxation including taxes

imposed by 1966 PA 134, MCL 207.501 to 207.513. A school of

excellence may not levy ad valorem property taxes or another tax

for any purpose. However, operation of 1 or more schools of

excellence by a school district or intermediate school district

does not affect the ability of the school district or intermediate

school district to levy ad valorem property taxes or another tax.

(8) A school of excellence may acquire by purchase, gift,

devise, lease, sublease, installment purchase agreement, land

contract, option, or by any other means, hold, and own in its own

name buildings and other property for school purposes, and

interests therein, and other real and personal property, including,

but not limited to, interests in property subject to mortgages,

security interests, or other liens, necessary or convenient to

fulfill its purposes. For the purposes of condemnation, a school of

excellence may proceed under the uniform condemnation procedures

act, 1980 PA 87, MCL 213.51 to 213.75, excluding sections 6 to 9 of

that act, MCL 213.56 to 213.59, or other applicable statutes, but

only with the express, written permission of the authorizing body

in each instance of condemnation and only after just compensation

has been determined and paid.

Sec. 554. If a school district or intermediate school district

applies for and obtains a contract to operate 1 or more schools of

excellence under this part, the power of the school district or

intermediate school district to levy taxes for any purpose under

this act is not affected by the operation of a school of excellence

by the school district or intermediate school district. Revenue

from taxes levied by a school district or intermediate school

district under this act or bonds issued by a school district or

intermediate school district under this act may be used to support

the operation or facilities of a school of excellence operated by

the school district or intermediate school district in the same

manner as that revenue may be used under this act by the school

district or intermediate school district to support school district

or intermediate school district operations and facilities. This

section does not authorize a school district or intermediate school

district to levy taxes or to issue bonds for any purpose that is

not otherwise authorized under this act.

Sec. 555. (1) An agreement, mortgage, loan, or other

instrument of indebtedness entered into by a school of excellence

and a third party does not constitute an obligation, either

general, special, or moral, of this state or an authorizing body.

The full faith and credit or the taxing power of this state or any

agency of this state, or the full faith and credit of an

authorizing body, may not be pledged for the payment of any school

of excellence bond, note, agreement, mortgage, loan, or other

instrument of indebtedness.

(2) This part does not impose any liability on this state or

on an authorizing body for any debt incurred by a school of

excellence.

Sec. 556. (1) A school of excellence may be located in all or

part of an existing public school building. A school of excellence

shall not operate at a site other than the single site requested

for the configuration of grades that will use the site, as

specified in the application required under section 552 and in the

contract. A school of excellence shall not be located in a school

district that has a graduation rate of over 60%, on average, for

the most recent 3 school years for which the data are available, as

determined by the department.

(2) A school of excellence shall not charge tuition and shall

not discriminate in its pupil admissions policies or practices on

the basis of intellectual or athletic ability, measures of

achievement or aptitude, status as a student with a disability, or

any other basis that would be illegal if used by a school district.

However, a school of excellence may limit admission to pupils who

are within a particular range of age or grade level or on any other

basis that would be legal if used by a school district.

(3) Except for a foreign exchange student who is not a United

States citizen, a school of excellence shall not enroll a pupil who

is not a resident of this state. Enrollment in the school of

excellence may be open to all individuals who reside In this state

who meet the admission policy and shall be open to all pupils who

reside within the geographic boundaries, if any, of the authorizing

body as described in section 552(4)(a) to (c) who meet the

admission policy, except that admission to a school of excellence

authorized by the board of a community college to operate, or

operated by the board of a community college, on the grounds of a

federal military installation, as described in section 552(4)(c),

shall be open to all pupils who reside in the county in which the

federal military installation is located. For a school of

excellence authorized by a state public university, enrollment

shall be open to all pupils who reside in this state who meet the

admission policy. If there are more applications to enroll in the

school of excellence than there are spaces available, pupils shall

be selected to attend using a random selection process. However, a

school of excellence may give enrollment priority to a sibling of a

pupil enrolled in the school of excellence. A school of excellence

shall allow any pupil who was enrolled in the school of excellence

in the immediately preceding school year to enroll in the school of

excellence in the appropriate grade unless the appropriate grade is

not offered at that school of excellence.

(4) Subject to subsection (5), a school of excellence may

include any grade up to grade 12 or any configuration of those

grades, including kindergarten and early childhood education, as

specified in its contract. If specified in its contract, a school

of excellence may also operate an adult basic education program,

adult high school completion program, or general education

development testing preparation program. The authorizing body may

approve amendment of a contract with respect to ages of pupils or

grades offered.

(5) A school of excellence must operate, in addition to any

other grade levels it operates, all of grades 9 to 12 within 4

years after it begins operations.

Sec. 557. (1) In addition to other powers set forth in this

part, a school of excellence may take action to carry out the

purposes for which it was incorporated under this part, including,

but not limited to, all of the following:

(a) To sue and be sued in its name.

(b) Subject to section 555, to acquire, hold, and own in its

own name real and personal property, or interests in real or

personal property, for educational purposes by purchase, gift,

grant, devise, bequest, lease, sublease, installment purchase

agreement, land contract, option, or condemnation, and subject to

mortgages, security interests, or other liens; and to sell or

convey the property as the interests of the school of excellence

require.

purposes.

(d) Subject to subsection (2), to enter into binding legal

agreements with persons or entities as necessary for the operation,

management, financing, and maintenance of the school of excellence.

(e) To incur temporary debt in accordance with section 1225.

(f) To solicit and accept any grants or gifts for educational

purposes and to establish or permit to be established on its behalf

1 or more nonprofit corporations the purpose of which is to assist

the school of excellence in the furtherance of its public purposes.

(g) To borrow money and issue bonds in accordance with section

1351a and in accordance with part VI of the revised municipal

finance act, 2001 PA 34, MCL 141.2601 to 141.2613, except that the

borrowing of money and issuance of bonds by a school of excellence

is not subject to section 1351a(4) or section 1351(2) to (4). Bonds

issued under this section shall be full faith and credit

obligations of the school of excellence, pledging the general funds

or any other money available for such a purpose. Bonds issued under

this section are subject to the revised municipal finance act, 2001

PA 34, MCL 141.2101 to 141.2821.

(2) A school of excellence shall not enter into a contract

with an educational management organization to operate or manage

the school of excellence unless the educational management

organization has operated or managed at least 1 public school

academy established under part 6a that meets the requirements under

section 552(2) or has an equivalent track record of performance in

another state, as determined by the superintendent of public

instruction.

Sec. 558. If a school of excellence is operated by a school

district that is subject to a court desegregation order, pupil

selection at the school of excellence is subject to that order.

Sec. 559. (1) Except as otherwise provided by law, a school of

excellence shall use certificated teachers according to state board

rule.

(2) A school of excellence operated by a state public

university or community college may use noncertificated individuals

to teach as follows:

(a) If the school of excellence is operated by a state public

university, the school of excellence may use as a classroom teacher

in any grade a faculty member who is employed full-time by the

state public university and who has been granted institutional

tenure, or has been designated as being on tenure track, by the

state public university.

(b) For a school of excellence operated by a community

college, the school of excellence may use as a classroom teacher a

full-time member of the community college faculty who has at least

5 years' experience at that community college in teaching the

subject matter that he or she is teaching at the school of

excellence.

permitted under this act to use noncertificated teachers.

(3) A school of excellence may develop and implement new

teaching techniques or methods or significant revisions to known

teaching techniques or methods, and shall report those to the

authorizing body and state board to be made available to the

public. A school of excellence may use any instructional technique

or delivery method that may be used by a school district.

Sec. 560. Subject to any collective bargaining rights under

1947 PA 336, MCL 423.201 to 423.217, a school of excellence, with

the approval of the authorizing body, may employ or contract with

personnel as necessary for the operation of the school of

excellence, prescribe their duties, and fix their compensation. A

school of excellence may implement and maintain a method of

compensation for its employees that is based on job performance,

job accomplishments, and job assignment in a subject area or school

that is difficult to find employees to staff.

Sec. 560a. If the board of directors of a school of excellence

provides medical, optical, or dental benefits to employees and

their dependents, the board of directors shall provide those

benefits in accordance with the public employees health benefit

act, 2007 PA 106, MCL 124.71 to 124.85, and shall comply with that

act.

Sec. 561. (1) If an authorizing body issues a contract for a

school of excellence under this part, the authorizing body shall do

all of the following:

(a) Ensure that the contract and the application for the

contract comply with the requirements of this part.

(b) Within 10 days after issuing the contract, submit to the

department a copy of the contract.

number of members of the board of directors of each school of

excellence that it authorizes. The authorizing body shall ensure

that the board of directors includes representation from the local

community.

(d) Oversee the operations of each school of excellence

operating under a contract issued by the authorizing body. The

oversight shall be sufficient to ensure that the school of

excellence is in compliance with the terms of the contract and with

applicable law.

(e) Develop and implement a process for holding a school of

excellence board of directors accountable for meeting applicable

academic performance standards set forth in the contract and for

implementing corrective action for a school of excellence that does

not meet those standards.

(f) Take necessary measures to ensure that a school of

excellence board of directors operates independently of any

educational management organization involved in the operations of

the school of excellence.

(g) Oversee and ensure that the pupil admission process used

by the school of excellence is operated in a fair and open manner

and is in compliance with the contract and this part.

(h) Ensure that the board of directors of the school of

excellence maintains and releases information as necessary to

comply with applicable law.

(2) The authorizing body may enter into an agreement with 1 or

more authorizing bodies, as defined under part 6a, to carry out any

function of the authorizing body under subsection (1)(a) to (h).

(3) The authorizing body for a school of excellence is the

fiscal agent for the school of excellence. A state school aid

payment for a school of excellence shall be paid to the authorizing

body as the fiscal agent for that school of excellence, and the

authorizing body shall then forward the payment to the school of

excellence. Within 30 days after a contract is submitted to the

department by the authorizing body under subsection (1), the

department shall issue a district code to the school of excellence

for which the contract was issued. If the department does not issue

a district code within 30 days after a contract is filed, the state

treasurer shall assign a temporary district code in order for the

school of excellence to receive funding under the state school aid

act of 1979.

(4) A contract issued under this part may be revoked by the

authorizing body if the authorizing body determines that 1 or more

of the following have occurred:

(a) Failure of the school of excellence to abide by and meet

the educational goals set forth in the contract.

(b) Failure of the school of excellence to comply with all

applicable law.

accepted public sector accounting principles.

(d) The existence of 1 or more other grounds for revocation as

specified in the contract.

(5) If the superintendent of public instruction determines

that a school of excellence that has been operating for at least 4

years is among the lowest achieving 5% of all public schools in

this state, as defined for the purposes of the federal incentive

grant program created under sections 14005 and 14006 of title XIV

of the American recovery and reinvestment act of 2009, Public Law

111-5, the superintendent of public instruction shall notify the

authorizing body for the school of excellence. If an authorizing

body receives notice from the superintendent of public instruction

under this subsection, the authorizing body shall revoke the

contract of the school of excellence and the school of excellence

shall be closed.

(6) The decision of the authorizing body to issue, reissue, or

reconstitute a contract under this part, or to revoke a contract

under this section, is solely within the discretion of the

authorizing body, is final, and is not subject to review by a court

or any other state agency. If the authorizing body does not issue,

reissue, or reconstitute a contract under this part, or revokes a

contract under this section, the authorizing body is not liable for

that action to the school of excellence, the school of excellence

corporation, a pupil of the school of excellence, the parent or

Senate Bill No. 981 (H-2) as amended December 10, 2009

guardian of a pupil of the school of excellence, or any other

person.

(7) Except as otherwise provided in subsection (5), before the

authorizing body revokes a contract, the authorizing body [shall]

consider and take corrective measures to avoid revocation. The

authorizing body may reconstitute the school of excellence in a

final attempt to improve student educational performance or to

avoid interruption of the educational process. The authorizing body

[shall] include a reconstituting provision in the contract that

identifies these corrective measures, including, but not limited

to, [canceling a contract with an educational management organization, if

any],

withdrawing approval to contract under section 557, or appointing a

new board of directors or a trustee to take over operation of the

school of excellence.

(8) If the authorizing body revokes a contract, the

authorizing body shall work with a school district or another

public school, or with a combination of these entities, to ensure a

smooth transition for the affected pupils. If the revocation occurs

during the school year, the authorizing body, as the fiscal agent

for the school of excellence under this part, shall return any

school aid funds received by the authorizing body that are

attributable to the affected pupils to the state treasurer for

deposit into the state school aid fund. The state treasurer shall

distribute funds to the public school in which the pupils enroll

after the revocation pursuant to a methodology established by the

department and the center for educational performance and

information.

(9) Not more than 10 days after a school of excellence's

contract terminates or is revoked, the authorizing body shall

notify the superintendent of public instruction in writing of the

name of the school of excellence whose contract has terminated or

been revoked and the date of contract termination or revocation.

(10) If a school of excellence's contract terminates or is

revoked, title to all real and personal property, interest in real

or personal property, and other assets owned by the school of

excellence shall revert to the state. This property shall be

distributed in accordance with the following:

(a) Within 30 days following the termination or revocation,

the board of directors of a school of excellence shall hold a

public meeting to adopt a plan of distribution of assets and to

approve the dissolution of the school of excellence corporation,

all in accordance with chapter 8 of the nonprofit corporation act,

1982 PA 162, MCL 450.2801 to 450.2864.

(b) The school of excellence shall file a certificate of

dissolution with the department of energy, labor, and economic

growth within 10 business days following board approval.

dissolution under subdivision (b), the school of excellence board

of directors shall provide a copy of the board of directors' plan

of distribution of assets to the state treasurer for approval.

Within 30 days, the state treasurer, or his or her designee, shall

review and approve the board of directors' plan of distribution of

assets. If the proposed plan of distribution of assets is not

approved within 30 days, the state treasurer, or his or her

designee, shall provide the board of directors with an acceptable

plan of distribution of assets.

(d) The state treasurer, or his or her designee, shall monitor

the school of excellence's winding up of the dissolved corporation

in accordance with the plan of distribution of assets approved or

provided under subdivision (c).

(e) As part of the plan of distribution of assets, the school

of excellence board of directors shall designate the director of

the department of management and budget, or his or her designee, to

dispose of all real property of the school of excellence

corporation in accordance with the directives developed for

disposition of surplus land and facilities under section 251 of the

management and budget act, 1984 PA 431, MCL 18.1251.

(f) If the board of directors of a school of excellence fails

to take any necessary action under this section, the state

treasurer, or his or her designee, may suspend the school of

excellence board of directors and appoint a trustee to carry out

the board's plan of distribution of assets. Upon appointment, the

trustee shall have all the rights, powers, and privileges under law

that the school of excellence board of directors had before being

suspended.

(g) Following the sale of the real or personal property or

interests in the real or personal property, and after payment of

any school of excellence debt secured by the property or interest

in property, whether real or personal, the school of excellence

board of directors, or a trustee appointed under this section,

shall forward any remaining money to the state treasurer. Following

receipt, the state treasurer, or his or her designee, shall deposit

this remaining money in the state school aid fund.

Sec. 562. The authorizing body and school of excellence may

include provisions in the contract that permit the person or entity

that applied for the contract to do any of the following:

(a) Participate in the recruiting, interviewing, and

nominating process for members of the school of excellence board of

directors.

(b) Conduct an independent educational review, on a periodic

basis, to determine whether the school of excellence is successful

in implementing the educational goals set forth in the contract.

excellence board of directors and any educational management

organization contracted to operate or manage the school of

excellence.

(d) Make recommendations to the authorizing body and school of

excellence on how to improve the school of excellence's operation.

Sec. 1147. (1) A person ~~, resident of~~ who resides in a school

district ~~not maintaining a kindergarten and at least 5 years of age~~

~~on the first day of enrollment of the school year, shall have~~ has a

right to attend school in the school district . if the person meets

either of the following:

(a) Is at least 5 years of age on December 1 and less than 20

years of age on September 1 of the school year.

(b) If the person is a special education pupil who is enrolled

and receiving instruction in a special education program or service

approved by the department, is less than 26 years of age on

September 1 of the school year.

(2) ~~In a school district where provision is made for~~

~~kindergarten work, a child, resident of the district,~~ A school

district, or a public school academy that provides grade 1, shall

provide kindergarten. A child who resides in the school district is

entitled to enroll in the kindergarten if the child is at least 5

years of age on December 1 of the school year of enrollment. ~~In a~~

~~school district which has semiannual promotions, a child, resident~~

~~of the district, is entitled to enroll in kindergarten for the~~

~~second semester if the child is at least 5 years of age on March 1~~

~~of the year of enrollment.~~

Sec. 1246. (1) A school district, public school academy, or

intermediate school district shall not continue to employ a person

as a superintendent, principal, assistant principal, or other

person whose primary responsibility is administering instructional

programs or as a chief business official unless the person meets 1

or more of the following requirements, as applicable:

(a) For a superintendent, principal, assistant principal, or

other person whose primary responsibility is administering

instructional programs, or a chief business official, who was

employed as a school administrator in this state on or before the

effective date of the amendatory act that added this subdivision,

has completed the continuing education requirements prescribed by

rule under subsection (2).

(b) Subject to subsection (3), for a superintendent,

principal, assistant principal, or other person whose primary

responsibility is administering instructional programs and who is

initially employed as a school administrator in this state after

the effective date of the amendatory act that added this

subdivision, possesses a valid Michigan school administrator's

certificate issued under section 1536.

(2) The superintendent of public instruction shall promulgate

rules establishing continuing education requirements as a condition

for continued employment for persons ~~employed in positions~~

described in subsection ~~(1)~~ (1)(a). The rules shall prescribe a

minimum amount of continuing education that shall be completed

within 5 years after initial employment and shall be completed each

subsequent 5-year period to meet the requirements of subsection ~~(1)~~

(1)(a) for continued employment.

(3) A school district, public school academy, or intermediate

school district may employ as a superintendent, principal,

assistant principal, or other person whose primary responsibility

is administering instructional programs a person who is enrolled in

a program leading to certification as a school administrator under

section 1536 not later than 6 months after he or she begins the

employment. A person employed as a school administrator pursuant to

this subsection has 3 years to meet the certification requirements

of section 1536, or the school district, public school academy, or

intermediate school district shall not continue to employ the

person as a school administrator described in this subsection.

Sec. 1249. With the involvement of teachers and school

administrators, the board of a school district or intermediate

school district or board of directors of a public school academy

shall adopt and implement for all teachers and school

administrators a rigorous, transparent, and fair performance

evaluation system that does all of the following:

(a) Evaluates the teacher's or school administrator's job

performance at least annually while providing timely and

constructive feedback.

(b) Establishes clear approaches to measuring student growth

and provides teachers and school administrators with relevant data

on student growth.

performance, using multiple rating categories that take into

account data on student growth as a significant factor. For these

purposes, student growth shall be measured by national, state, or

local assessments and other objective criteria.

(d) Uses the evaluations, at a minimum, to do all of the

following:

(i) To determine the effectiveness of teachers and school

administrators while ensuring that they are given ample

opportunities for improvement.

(ii) To inform decisions regarding promotion, retention, and

development of teacher and school administrators, including

providing relevant coaching, instruction support, or professional

development.

Sec. 1250. (1) A school district, public school academy, or

intermediate school district ~~may~~ shall implement and maintain a

method of compensation for its ~~employees~~ teachers and school

administrators that ~~is based on~~ includes job performance and job

accomplishments as a significant factor in determining compensation

and additional compensation. The assessment of job performance

shall incorporate a rigorous, transparent, and fair evaluation

system that evaluates a teacher's or school administrator's

performance at least in part based upon data on student growth as

measured by assessments and other objective criteria.

(2) If a collective bargaining agreement is in effect for

teachers or school administrators of a school district, public

school academy, or intermediate school district as of the effective

date of the amendatory act that added this subsection, and if that

collective bargaining agreement prevents compliance with subsection

(1), then subsection (1) does not apply to that school district,

public school academy, or intermediate school district until after

the expiration of that collective bargaining agreement.

Sec. 1278a. (1) Except as otherwise provided in this section

or section 1278b, beginning with pupils entering grade 8 in 2006,

the board of a school district or board of directors of a public

school academy shall not award a high school diploma to a pupil

unless the pupil meets all of the following:

(a) Has successfully completed all of the following credit

requirements of the Michigan merit standard before graduating from

high school:

(i) At least 4 credits in mathematics that are aligned with

subject area content expectations developed by the department and

approved by the state board under section 1278b, including

completion of at least 1 credit in algebra I, 1 credit in geometry

earned in a geometry course or the integrated equivalent in a

career and technical education course, and ~~algebra II~~1 credit

earned in either a course in financial literacy as described in

section 1165 or an algebra II course or the integrated equivalent

in a career and technical education course, or an integrated

sequence of this course content that consists of 3 credits, and an

additional mathematics credit, such as trigonometry, statistics,

precalculus, calculus, applied math, accounting, business math, a

~~retake of~~ algebra II~~, a course in financial literacy as described~~

~~in section 1165~~or the integrated equivalent in a career and

technical education course, a retake of algebra II, a course in

financial literacy as described in section 1165, or a career and

technical education course with mathematics content approved by the

board of the school district or board of directors of the public

school academy. A pupil may complete algebra II over 2 years with a

credit awarded for each of those years for the purposes of this

section and section 1278b. Each pupil must successfully complete at

least 1 mathematics course during his or her final year of high

school enrollment. This subparagraph does not require completion of

mathematics courses in any particular sequence.

(ii) At least 3 credits in social science that are aligned with

subject area content expectations developed by the department and

approved by the state board under section 1278b, including

completion of at least 1 credit in United States history and

geography, 1 credit in world history and geography, 1/2 credit in

economics, and the civics course described in section 1166(2).

(iii) At least 1 credit in subject matter that includes both

health and physical education aligned with guidelines developed by

the department and approved by the state board under section 1278b.