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<p><b>NEW DETROIT SCHOOL DISTRICT: </b></p>

<p><b>FINANCIAL REVIEW COMMISSON</b></p>



<p style='margin-right:-9.0pt'><b>Senate Bill 711 (H-2) as enrolled</b></p>

<p style='margin-right:-9.0pt'><b>Senate Bill 820 (H-2) as enrolled</b></p>

<p style='margin-right:-9.0pt'><b>Sponsor:  Sen. Goeff Hansen</b></p>

<p><b>House Committee:  Appropriations</b></p>

<p><b>Senate Committee:  Government Operations</b></p>

<p><b>Complete to 6-9-16</b></p>



<p style='text-align:justify'><b>SUMMARY: </b></p>



<p style='margin-left:.5in;text-align:justify'><a name="StartText"></a>Senate Bill 711 would amend the Michigan Financial Review
Commission Act, and Senate Bill 820 would amend Public Act 566 of 1978, which
prohibits a public officer from holding incompatible offices.  Both are part of
a package to restructure Detroit Public Schools (DPS), which would be replaced
by a new community district under House Bill 5384.  In general, the bills would
do the following:</p>



<p style='margin-left:1.0in;text-align:justify;
text-indent:-.25in'><span style='font-family:Symbol'>·<span style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span>Expand the role of the Detroit Financial Review Commission. </p>

<p style='margin-left:1.0in;text-align:justify;
text-indent:-.25in'><span style='font-family:Symbol'>·<span style='font:7.0pt "Times New Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></span>Expand exemptions under PA 566 related to school district
officials on the Financial Review Commission.</p>



<p style='margin-left:.5in;text-align:justify'>Senate Bill 820
is tie-barred to Senate Bill 711, and both are tie-barred to House Bill 5384. 
The bills are described in more detail below.</p>



<p style='margin-left:.5in;text-align:justify'><b>Financial
Review Commission </b></p>

<p style='margin-left:.5in;text-align:justify'><u>Senate Bill 711</u>
would amend the Michigan Financial Review Commission Act, to revise the
authority the financial review commission (FRC) was given in House Bill 5385
(PA 53 of 2016) over the existing Detroit school district as well as the
community district proposed under HB 5384.  </p>



<p style='margin-left:.5in;text-align:justify'>SB 711 would
amend the definition of &quot;qualified school district&quot; so that it would
apply to both the existing DPS district and the community district that would
replace it under HB 5384.  However, it would exclude the former DPS district
superintendent and school board chair from membership on the FRC once functions
and responsibilities have been transferred to the community district.</p>



<p style='margin-left:.5in;text-align:justify'>SB 711 would
prohibit a qualified school district from altering the terms or conditions of
an employment contract with, or the benefits of, its superintendent or
terminating its superintendent without the approval of the FRC (excluding the
superintendent and school board chair).  It would also allow the FRC to approve
all reimbursements to a qualified school district's board members, officials,
and employees for travel out-of-state travel.</p>



<p style='margin-left:.5in;text-align:justify'><u>Senate Bill
820</u> would provide an exemption for a superintendent or school board chair
serving both the district and on the FRC under PA 566 of 1978, which prohibits
a public officer from holding incompatible offices.  It would also exempt an
emergency manager who then serves as the transition manager for the community
district as provided under House Bill 5384.</p>



<p style='text-align:justify'><b>FISCAL IMPACT:</b> </p>



<p style='margin-left:.5in;text-align:justify'>Senate Bill 711
would limit cost revisions for the community district by preventing the
community district from revising contract or benefits of its superintendent
without FRC approval, and could limit district costs by allowing the FRC to
approve district out-of-state travel expenses.</p>



































































<p style='text-align:justify'><a name="Analyst"></a>                                                                                                Fiscal
Analyst:   Bethany Wicksall</p>

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<p style='text-align:justify'><span style='font-size:10.0pt;
font-family:"Arial","sans-serif"'>&#9632;</span><span style='font-size:10.0pt'>
This analysis was prepared by nonpartisan House Fiscal Agency staff for use by
House members in their deliberations, and does not constitute an official
statement of legislative intent.</span></p>

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