SENATE BILL No. 620

 

 

September 7, 2011, Introduced by Senator ROBERTSON and referred to the Committee on Education.

 

 

 

     A bill to amend 1976 PA 451, entitled

 

"The revised school code,"

 

by amending sections 3 and 5 (MCL 380.3 and 380.5), section 3 as

 

amended by 2007 PA 45 and section 5 as amended by 2009 PA 205, and

 

by adding part 6d.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) "Area" as used in the phrase "area vocational-

 

technical education program" or "area career and technical

 

education program" means the geographical territory, within the

 

boundaries of a K to 12 school district, an intermediate school

 

district, or a community college district, that is designated by

 

the department as the service area for the operation of an area

 

vocational-technical education program.

 

     (2) "Area vocational-technical education program", "area

 

career and technical education program", or "career and technical


 

education program" means a program of organized, systematic

 

instruction designed to prepare the following persons for useful

 

employment in recognized occupations:

 

     (a) Persons participating in career and technical education

 

readiness activities that lead to enrollment in a career and

 

technical education program in high school.

 

     (b) Persons enrolled in high school in a school district,

 

intermediate school district, public school academy, or nonpublic

 

school.

 

     (c) Persons who have completed or left high school and who are

 

available for full-time study in preparation for entering the labor

 

market.

 

     (d) Persons who have entered the labor market and who need

 

training or retraining to achieve stability or advancement in

 

employment.

 

     (3) "Board" or "school board" means the governing body of a

 

local school district unless clearly otherwise stated.

 

     (4) "Boarding school" means a place accepting for board, care,

 

and instruction 5 or more children under 16 years of age.

 

     (5) "Constituent district" means a local school district the

 

territory of which is entirely within and is an integral part of an

 

intermediate school district.

 

     (6) "Conversion school" means a conversion school established

 

under part 6d.

 

     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, conversion

 

school 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

 

conversion school established under part 6d, 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.

 

PART 6D

 

CONVERSION SCHOOLS

 

     Sec. 531. (1) A conversion school 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

 

conversion school is a body corporate and is a governmental agency.

 

The powers granted to a conversion school 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.

 

     (ii) An intermediate school board.

 

     (iii) The board of a community college.

 

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

 

     (v) Two or more of the public agencies described in

 

subparagraphs (i) to (iv) exercising power, privilege, or authority

 

jointly pursuant to an interlocal agreement under the urban

 

cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to

 

124.512.

 

     (b) "Community college" means a community college organized

 

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, 92 Stat. 1325, and is

 

determined by the department to meet the requirements for

 

accreditation by a recognized regional accrediting body.

 

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

 

body that evidences the authorization of a conversion school 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 conversion school, as provided by this part,

 

and confirming the status of a conversion school as a public school

 

in this state.

 

     (d) "Conversion school" means a public school previously

 

operated by a school district that is converted to a conversion

 

school established and operated under this part.

 

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

 

enters into an agreement with the board of directors of a

 

conversion school to provide comprehensive educational,

 

administrative, management, or instructional services or staff to

 

the conversion 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.

 

     Sec. 533. (1) A conversion school 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 conversion school corporation shall be organized under

 

the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to

 

450.3192, except that a conversion school corporation 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 conversion school 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) Subject to subsection (3), any of the following may act as

 

an authorizing body to issue a contract to organize and operate a

 

conversion school under this part:

 

     (a) The board of a school district.

 

     (b) An intermediate school board.

 

     (c) The board of a community college.

 

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

 

     (e) Two or more of the public agencies described in

 

subdivisions (a) to (d) exercising power, privilege, or authority

 

jointly pursuant to an interlocal agreement under the urban

 

cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to

 

124.512.

 

     (3) To obtain a contract to convert a public school operated

 

by a school district to a conversion school that is organized and

 

operated under this part, 1 or more persons or an entity shall

 

apply to the school district of the school to be converted for a

 

contract to organize and operate the school as a conversion school.

 

The applicant shall submit all of the following to the board of the

 

school district of the school to be converted:

 

     (a) A petition requesting that the school be converted to a

 

conversion school signed by either or both of the following:

 

     (i) At least 51% of the teachers employed by the school


 

district at the school to be converted.

 

     (ii) At least 51% of the parents or legal guardians of the

 

pupils enrolled in the school to be converted.

 

     (b) An application for a contract that meets the requirements

 

for an application under this section.

 

     (4) If the board of a school district receives a petition

 

under subsection (3), the board shall consider the petition and act

 

to approve or deny the petition within 60 days after receiving the

 

petition. If the board acts to deny the petition, the board shall

 

issue a letter of denial to the applicant.

 

     (5) If the board of the school district does not approve the

 

application for the contract submitted under subsection (3) within

 

60 days after the application and the supporting petition have been

 

submitted to the board, the applicant may submit an application to

 

another authorizing body. Another authorizing body may issue a

 

contract to organize and operate a conversion school if all of the

 

following are submitted to that authorizing body:

 

     (a) An application for a contract that meets the requirements

 

for an application under this section.

 

     (b) A copy of the petition submitted to the board of the

 

school district under subsection (3).

 

     (c) A copy of the letter of denial under subsection (4) or

 

other information satisfactory to the authorizing body evidencing

 

that the applicant applied to the board of the school district for

 

a contract to organize and operate the school as a conversion

 

school as required under subdivision (b) and that the board of the

 

school district declined to grant the petition to issue the


 

contract within 60 days after the application and the supporting

 

petition have been submitted to the board.

 

     (6) The application for a contract to organize and operate a

 

conversion school 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 535(3), if any, a list of the proposed members of the

 

board of directors of the conversion school and a description of

 

the qualifications and method for appointment or election of

 

members of the board of directors.

 

     (c) The proposed articles of incorporation, which shall

 

include at least all of the following:

 

     (i) The name of the proposed conversion school.

 

     (ii) The purposes for the conversion school corporation. This

 

language shall provide that the conversion school is incorporated

 

pursuant to this part and that the conversion school 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 conversion school.

 

     (e) Documentation meeting the application requirements of the

 

authorizing body, if any, including at least all of the following:

 

     (i) The governance structure of the conversion school.

 

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


 

and the curricula to be offered and methods of pupil assessment to

 

be used by the conversion school. The educational goals shall

 

include demonstrated improved pupil academic achievement for all

 

groups of pupils and the specific goals required to be in the

 

contract under section 535(4)(a). To the extent applicable, the

 

progress of the pupils in the conversion school shall be assessed

 

using at least a Michigan education assessment program (MEAP) test

 

or the Michigan merit examination developed under section 1279g.

 

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

 

conversion school. 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 conversion school 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. A

 

conversion school shall include at least all of the grades that

 

were previously operated by the school that was converted.

 

     (f) Descriptions of staff responsibilities and of the

 

conversion school's governance structure.

 

     (g) The documentation required under subsection (3) or (5), as

 

applicable.

 

     (h) An agreement that the conversion school 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.


 

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

 

an intermediate school district, community college, or state public

 

university to oversee, the board of directors of each conversion

 

school operating under a contract issued by the authorizing body.

 

The authorizing body is responsible for overseeing compliance by

 

the board of directors with the contract and all applicable law.

 

This subsection does not relieve any other government entity of its

 

enforcement or supervisory responsibility.

 

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

 

authorizing body other than the school district that previously

 

operated the conversion school is not engaging in appropriate

 

continuing oversight of 1 or more boards of directors of conversion

 

schools 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

 

conversion schools. 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 conversion school in an amount that exceeds a

 

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

 

conversion school in the school year in which the fees or expenses

 

are charged. An authorizing body may provide other services for a

 

conversion school and charge a fee for those services, but shall

 

not require such an arrangement as a condition to issuing the


 

contract authorizing the conversion school.

 

     (10) A conversion school shall be presumed to be legally

 

organized if it has exercised the franchises and privileges of a

 

conversion school for at least 2 years.

 

     (11) An authorizing body may enter into an intergovernmental

 

agreement with another authorizing body to issue conversion school

 

contracts. At a minimum, the agreement shall further the purposes

 

set forth in section 531, describe which authorizing body shall

 

issue the contract, and set forth which authorizing body will be

 

responsible for monitoring compliance by the board of directors of

 

the conversion school with the contract and all applicable law.

 

     Sec. 535. (1) An authorizing body is not required to issue a

 

contract to any person or entity. Conversion school contracts shall

 

be issued on a competitive basis taking into consideration the

 

resources available for the proposed conversion school, the

 

population to be served by the proposed conversion school, and the

 

educational goals to be achieved by the proposed conversion school.

 

     (2) Within 10 days after issuing a contract for a conversion

 

school, the authorizing body shall submit to the superintendent of

 

public instruction a copy of the contract.

 

     (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 conversion school subject to its

 

jurisdiction.

 

     (4) A contract issued to organize and administer a conversion

 

school shall contain at least all of the following:

 

     (a) The educational goals the conversion school is to achieve


 

and the methods by which it will be held accountable. These goals

 

shall include demonstrated improved pupil academic achievement for

 

all groups of pupils and specific goals for improvement in pupil

 

performance that must be met by the conversion school and a

 

provision that, if these performance improvement goals are not met,

 

the contract will be revoked and management of the school will be

 

returned to the school district. These goals shall include that, by

 

the last year of the contract, at least 80% of the conversion

 

school's pupils will graduate from high school or be determined to

 

be on track to graduate from high school and the conversion school

 

will have at least 80% average attendance as determined by the

 

department. To the extent applicable, the pupil performance of a

 

conversion school shall be assessed using at least a Michigan

 

education assessment program (MEAP) test or the Michigan merit

 

examination developed under section 1279g.

 

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

 

compliance by the conversion school's board of directors with

 

applicable law and its performance in meeting its targeted

 

educational objectives.

 

     (c) A description of the process for amending the contract

 

during the term of the contract.

 

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

 

contract.

 

     (e) Procedures for revoking the contract and grounds for

 

revoking the contract, including at least the grounds listed in

 

section 543.

 

     (f) The address for the school that will be converted to the


 

conversion school.

 

     (g) 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.

 

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

 

and standards for renewing a contract at the end of the term. The

 

standards for renewing a contract shall include increases in pupil

 

academic achievement for all groups of pupils as measured by

 

assessments and other objective criteria as the most important

 

factor in the decision of whether or not to issue a new contract.

 

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

 

board of directors of the conversion school, that the conversion

 

school will comply with the contract and all applicable law.

 

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

 

conversion school shall ensure compliance with the requirements of

 

1968 PA 317, MCL 15.321 to 15.330.

 

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

 

conversion school 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 conversion school, and employees of the

 

conversion school. The contract shall identify the specific

 

prohibited relationships consistent with applicable law.

 

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

 

school 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

 

conversion school 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 conversion school:

 

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

 

the conversion school.

 

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

 

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

 

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

 

directors; board meeting agendas and minutes; a 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 conversion school that includes their individual

 

salaries as submitted to the registry of educational personnel;

 

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

 

conversion school.


 

     (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.

 

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

 

may disapprove any agreement between the board of directors of the

 

conversion school and an educational management organization 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.

 

     (o) A requirement that the board of directors of the

 

conversion school shall demonstrate all of the following to the

 

satisfaction of the authorizing body with regard to its pupil

 

admission process:

 

     (i) That the conversion school has made a reasonable effort to

 

advertise its enrollment openings.

 

     (ii) That the conversion school 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 conversion school 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.

 

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

 

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 of the

 

conversion school shall prohibit any individual from being employed

 

by the conversion school 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

 

of the conversion school shall report to the authorizing body the

 

total compensation for each individual working at the conversion

 

school.

 

     (5) A conversion school 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.

 

     (c) 1947 PA 336, MCL 423.201 to 423.217.

 

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

 

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

 

     (6) A conversion school 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 conversion school 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 conversion school is exempt from all taxation on its

 

earnings and property. Instruments of conveyance to or from a

 

conversion school are exempt from all taxation including taxes

 

imposed by 1966 PA 134, MCL 207.501 to 207.513. Property occupied

 

by a conversion school and used exclusively for educational

 

purposes is exempt from real and personal property taxes. A

 

conversion school may not levy ad valorem property taxes or another

 

tax for any purpose. However, operation of 1 or more conversion

 

schools 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) If a school district or intermediate school district

 

applies for and obtains a contract to operate 1 or more conversion

 

schools 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 conversion school 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 conversion school 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.

 

     (9) An agreement, mortgage, loan, or other instrument of

 

indebtedness entered into by a conversion school 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 conversion school bond, note,

 

agreement, mortgage, loan, or other instrument of indebtedness.

 

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

 

on an authorizing body for any debt incurred by a conversion

 

school.

 

     (11) A member of the board of directors of a conversion school

 

is a public officer and shall, before entering upon the duties of


 

the office, take the constitutional oath of office for public

 

officers under section 1 of article XI of the state constitution of

 

1963.

 

     Sec. 537. (1) If the conversion school is authorized by the

 

board of the school district, the conversion school shall be

 

located at the school that was converted; the board of the school

 

district shall continue to own the school building but shall allow

 

the educational management organization that is operating the

 

school to control the school building. The school district shall

 

not charge the conversion school rent for the facilities. However,

 

a conversion school shall assume the financial liability for all

 

utilities, maintenance, security, improvements, and other costs

 

necessary to maintain the facilities in at least the same condition

 

in which the conversion school originally acquired the facilities.

 

If the conversion school is authorized by another authorizing body,

 

the conversion school shall be located within the school district

 

that operated the school that was converted, and may be located at

 

the school that was converted pursuant to an agreement with the

 

school district. A conversion school and a school district may

 

enter into a contract or cooperative arrangement concerning general

 

liability insurance for the conversion school.

 

     (2) A conversion school 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 conversion school 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 conversion school shall not enroll a pupil who is

 

not a resident of this state. For a conversion school authorized by

 

a school district or intermediate school district, enrollment in

 

the conversion school 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 533(2)(a) and (b) who meet

 

the admission policy. For a conversion school authorized by a

 

community college or a state public university, enrollment shall be

 

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

 

policy. Subject to subsections (4) to (6), if there are more

 

applications to enroll in the conversion school than there are

 

spaces available, pupils shall be selected to attend using a random

 

selection process.

 

     (4) A conversion school shall give enrollment priority to a

 

pupil who was previously enrolled in the school that was converted

 

or who resides in the attendance area for that school as

 

established by the school district.

 

     (5) A conversion school may give enrollment priority to 1 or

 

more of the following:

 

     (a) A sibling of a pupil enrolled in the conversion school.

 

     (b) A pupil who transfers to the conversion school from

 

another public school pursuant to a matriculation agreement between

 

the conversion school and other public school that provides for


 

this enrollment priority, if all of the following requirements are

 

met:

 

     (i) Each public school that enters into the matriculation

 

agreement remains a separate and independent public school.

 

     (ii) The conversion school that gives the enrollment priority

 

selects at least 5% of its pupils for enrollment using a random

 

selection process.

 

     (iii) The matriculation agreement allows any pupil who was

 

enrolled at any time during elementary school in a public school

 

that is party to the matriculation agreement and who was not

 

expelled from the public school to enroll in the conversion school

 

giving enrollment priority under the matriculation agreement.

 

     (c) A child of a person who is employed by or at the

 

conversion school or who is on the board of directors of the

 

conversion school. As used in this subdivision, "child" includes an

 

adopted child or a legal ward.

 

     (6) A conversion school shall allow any pupil who was enrolled

 

in the conversion school in the immediately preceding school year

 

to enroll in the conversion school in the appropriate grade unless

 

the appropriate grade is not offered at that conversion school.

 

     (7) A conversion school 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. A

 

conversion school shall include all of the grades that were

 

previously operated by the school that was converted. If specified

 

in its contract, a conversion school 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.

 

     Sec. 539. In addition to other powers set forth in this part,

 

a conversion school 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 535, 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 conversion school

 

require.

 

     (c) To receive, disburse, and pledge funds for lawful

 

purposes.

 

     (d) To enter into binding legal agreements with persons or

 

entities as necessary for the operation, management, financing, and

 

maintenance of the conversion school.

 

     (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 conversion school 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 conversion school 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 conversion school, 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.

 

     Sec. 541. (1) If a conversion school is authorized by the

 

board of the school district that operated the school that was

 

converted, the school district is the employer of the employees

 

regularly working at the conversion school, but the conversion

 

school and employees of the conversion school are not subject to

 

collective bargaining agreements that apply to employees of the

 

school district employed in similar classifications in schools that

 

are not a conversion school. If the conversion school is authorized

 

by an authorizing body other than the board of the school district

 

that operated the school that was converted, then the school

 

district is not the employer of employees regularly working at that

 

conversion school and the school and those employees are not

 

subject to a collective bargaining agreement with the school

 

district.

 

     (2) Except as otherwise provided by law, a conversion school

 

shall use certificated teachers according to state board rule.

 

     (3) A conversion school authorized by a state public

 

university or community college may use noncertificated individuals


 

to teach as follows:

 

     (a) If the conversion school is authorized by a state public

 

university, the conversion school 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 conversion school authorized by a community college,

 

the conversion school 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 conversion school.

 

     (c) In any other situation in which a school district is

 

permitted under this act to use noncertificated teachers.

 

     (4) A conversion school 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

 

conversion school may use any instructional technique or delivery

 

method that may be used by a school district.

 

     (5) A conversion school, with the approval of the authorizing

 

body, may employ or contract with personnel as necessary for the

 

operation of the conversion school, prescribe their duties, and fix

 

their compensation.

 

     (6) If the board of directors of a conversion school 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 and shall

 

comply with that act.

 

     Sec. 543. (1) An authorizing body that issues a contract for a

 

conversion school under this part 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.

 

     (c) Establish the method of selection, length of term, and

 

number of members of the board of directors of each conversion

 

school that it authorizes. The authorizing body shall ensure that

 

the board of directors includes representation from the local

 

community.

 

     (d) Oversee the operations of the board of directors of each

 

conversion school operating under a contract issued by the

 

authorizing body. The oversight shall be sufficient to ensure that

 

the board of directors is in compliance with the terms of the

 

contract and with applicable law.

 

     (e) Develop and implement a process for holding the board of

 

directors of a conversion school accountable for meeting applicable

 

academic performance standards set forth in the contract and for

 

implementing corrective action for a conversion school that does

 

not meet those standards.

 

     (f) Take necessary measures to ensure that the board of

 

directors of a conversion school operates independently of any

 

educational management company involved in the operations of the

 

conversion school.


 

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

 

by the conversion school 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 conversion

 

school maintains and releases information as necessary to comply

 

with applicable law.

 

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

 

more other authorizing bodies to carry out any function of an

 

authorizing body under this act.

 

     (3) The authorizing body for a conversion school is the fiscal

 

agent for the conversion school. A state school aid payment for a

 

conversion school shall be paid to the authorizing body that is the

 

fiscal agent for that conversion school, and the authorizing body

 

shall then forward the payment to the conversion school. Within 30

 

days after a contract is submitted to the department by an

 

authorizing body under subsection (1), the department shall issue a

 

district code to the conversion school 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 conversion school 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 conversion school to demonstrate improved

 

pupil academic achievement for all groups of pupils or meet the

 

educational goals set forth in the contract.


 

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

 

applicable law.

 

     (c) Failure of the conversion school to meet generally

 

accepted public sector accounting principles and demonstrate sound

 

fiscal stewardship.

 

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

 

specified in the contract.

 

     (5) Except for a conversion school that is an alternative

 

school serving a special student population, if the superintendent

 

of public instruction determines that a conversion school site 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, is in year 2 of

 

restructuring sanctions under the no child left behind act of 2001,

 

Public Law 107-110, not to include the individualized education

 

plan subgroup, and is not currently undergoing reconstitution under

 

this section, the superintendent of public instruction shall notify

 

the conversion school's authorizing body. If an authorizing body

 

receives notice from the superintendent of public instruction under

 

this subsection, the authorizing body shall amend the conversion

 

school's contract to eliminate the conversion school's authority to

 

operate the existing age and grade levels at the site and the

 

conversion school shall cease operating the existing age and grade

 

levels at the site, effective at the end of the current school

 

year. If the conversion school operates at only 1 site, and the


 

authorizing body receives notice from the superintendent of public

 

instruction under this subsection, the authorizing body shall

 

revoke the conversion school's contract, effective at the end of

 

the current school year.

 

     (6) The decision of an authorizing body to issue, not issue,

 

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

 

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. An authorizing body that

 

issues, does not issue, or reconstitutes a contract under this

 

part, or that terminates or revokes a contract under this section,

 

is not liable for that action to the conversion school, the

 

conversion school corporation, a pupil of the conversion school,

 

the parent or guardian of a pupil of the conversion school, or any

 

other person.

 

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

 

authorizing body revokes a contract, the authorizing body may

 

consider and take corrective measures to avoid revocation. An

 

authorizing body may reconstitute the conversion school in a final

 

attempt to improve pupil educational performance or to avoid

 

interruption of the educational process. An 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 of a contract under section 506, or appointing

 

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

 

conversion school.


 

     (8) If an 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 public

 

school academy under this part, shall return any school aid funds

 

held 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 conversion school's contract

 

terminates or is revoked, the authorizing body shall notify the

 

superintendent of public instruction in writing of the name of the

 

conversion school whose contract has terminated or been revoked and

 

the date of contract termination or revocation.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 96th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 618.                                   

 

               

 

     (b) Senate Bill No. 619.                                    

 

            

 

     (c) Senate Bill No. 624.                                   

 

             

 

     (d) Senate Bill No. 621.