HOUSE BILL No. 4644

 

May 26, 2015, Introduced by Reps. Kelly, Bumstead and Canfield and referred to the Committee on Appropriations.

 

     A bill to amend 1976 PA 451, entitled

 

"The revised school code,"

 

by amending sections 12 and 1260 (MCL 380.12 and 380.1260), section

 

12 as amended by 2013 PA 96 and section 1260 as amended by 1995 PA

 

289.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 12. (1) A school district shall lose its organization and

 

shall be declared dissolved if any of the following conditions are

 

met:

 

     (a) There are not enough persons residing in the school

 

district and qualified under law to hold all of the offices of the

 

school district or who will accept the offices of the school

 


district.

 

     (b) After consultation with the intermediate school district

 

in which the school district is located, the superintendent of

 

public instruction and state treasurer jointly determine that all

 

of the following apply:

 

     (i) The school district was required to submit a deficit

 

elimination plan under the state school aid act of 1979 and the

 

school district either has failed to submit a plan or lacks the

 

capability to both implement a deficit elimination plan and meet

 

the school district's obligations to provide public educational

 

services to pupils and other residents of the school district in a

 

manner that complies with this act, the state school aid act of

 

1979, and rules promulgated by the department.

 

     (ii) The school district is not financially viable and is

 

unable to educate pupils in grades K-12 residing in the school

 

district by operating schools for a full school year and providing

 

the required number of instructional hours under this act and the

 

state school aid act of 1979. As used in this subparagraph,

 

"financially viable" means that a school district has the financial

 

resources to carry out at least the educational program required by

 

law and pay its existing debts as they become due taking into

 

consideration the projected enrollment, cash flow, revenues, and

 

borrowing capability of the school district.

 

     (iii) The school district has at least 300 and not more than

 

2,400 pupils in membership.

 

     (iv) The number of pupils in membership in the school district

 

for the most recently completed school year was at least 10% less


than the number of pupils in membership in the school district for

 

the school year immediately preceding the most recently completed

 

school year.

 

     (v) The school district began the school fiscal year ending in

 

the current state fiscal year with an operating fund deficit and is

 

projected to end the school fiscal year ending in the current state

 

fiscal year with a greater operating fund deficit or received a

 

loan approved by the local emergency financial assistance loan

 

board that had the effect of reducing the deficit for the school

 

year ending in the current state fiscal year.

 

     (vi) The school district has not consolidated with another

 

school district during the immediately preceding 12 calendar

 

months.

 

     (2) If a school district meets either or both of subsection

 

(1)(a) or (b), the intermediate school board of the intermediate

 

school district to which the school district is constituent, or the

 

superintendent of public instruction if that intermediate school

 

board requests the superintendent of public instruction to act in

 

its place, shall declare the school district dissolved and

 

immediately order attachment of the territory of the school

 

district, in whole or in part, to 1 or more other organized school

 

districts within the intermediate school district. In attaching the

 

territory of the dissolved school district to other school

 

districts, the intermediate school board or the superintendent of

 

public instruction shall take into account the number of pupils who

 

will become pupils of each of those other school districts relative

 

to the number of pupils already enrolled in the other school


district and the numbers of pupils who qualify for free and reduced

 

price lunch, special education services and at-risk funding among

 

the other school districts. For a school district that is declared

 

dissolved in 2013, within 21 days after the school district is

 

declared dissolved, and for a school district that is declared

 

dissolved after 2013, within Within 60 days after the school

 

district is declared dissolved, the dissolved school district shall

 

account to the intermediate school district for all records, funds,

 

and property of the school district and shall make an equitable

 

distribution of the records, funds, and property consistent with

 

the ordered attachment to each receiving school district. A Subject

 

to subsection (10), a school building or other real property owned

 

by and located in the dissolved school district shall become part

 

of and owned by the receiving school district in which it is

 

located.

 

     (3) If a dissolved school district has outstanding debt, the

 

dissolved school district shall retain a limited separate identity

 

and the territory of the dissolved school district shall continue

 

as a separate taxing unit for the limited purpose of the debt until

 

the debt is retired or refunded. The intermediate school board and

 

other officers of the intermediate school district in which the

 

geographic area of the dissolved school district is located shall

 

perform the functions and satisfy the responsibilities of the board

 

and other officers of the dissolved school district relating to the

 

debt, including, but not limited to, all of the following:

 

     (a) Certifying and levying taxes for satisfaction of the debt

 

in the name of the dissolved school district.


     (b) Holding debt retirement funds of the dissolved school

 

district separately from the funds of the receiving school

 

district.

 

     (c) Doing all other things relative to the outstanding debt of

 

the dissolved school district required by law and by the terms of

 

the debt, including, but not limited to, levying or renewing a

 

school operating tax under section 1211. The question of renewal of

 

a school operating tax pledged to the repayment of debt of the

 

dissolved school district shall be submitted only to school

 

electors residing within the geographic area of the dissolved

 

school district and does not require approval by electors of a

 

receiving school district not residing within the geographic area

 

of the dissolved school district.

 

     (4) Upon the attachment of a dissolved school district to

 

another school district, the intermediate school board shall audit

 

the assets and liabilities of the dissolved school district. If a

 

considerable discrepancy is found, the intermediate school board

 

shall order the dissolved school district to pay the discrepancy to

 

1 or more appropriate receiving school districts. After first

 

satisfying debt obligations, the dissolved school district shall

 

repay that amount to 1 or more appropriate receiving school

 

districts from money available to the dissolved school district

 

including voted millage within a time to be determined by the

 

intermediate school board.

 

     (5) If a tax is authorized within a receiving school district

 

at a rate greater than the rate authorized within the dissolved

 

school district at the time of the dissolution, the tax may not be


levied within the geographic area of the dissolved school district

 

until approved by the school electors residing within the

 

geographic area of the dissolved school district or by all school

 

electors within the receiving school district, including any

 

expanded geographic area of the receiving school district resulting

 

from attachment under this section.

 

     (6) If a dissolved school district was authorized to levy a

 

sinking fund tax under section 1212 at the time of dissolution, the

 

identity of the dissolving school district as a legal entity shall

 

not be lost and its territory shall remain as a taxing unit for the

 

limited purpose of levying a sinking fund tax under section 1212

 

until the authorization to levy a sinking fund tax within the

 

dissolved school district expires. For purposes of this subsection,

 

the intermediate school board and other officers of the

 

intermediate school district in which the geographic area of the

 

dissolved school district is located shall perform the functions

 

and responsibilities of the board and other officers of the

 

dissolved school district relating to levying the sinking fund tax

 

and shall distribute the proceeds of the levy to each receiving

 

school district that operates a school building previously operated

 

by the dissolved school district. The proceeds of a sinking fund

 

tax levy under this subsection may be used only within the

 

geographic area of the dissolved school district for purposes

 

authorized under section 1212. A receiving school district may not

 

renew or authorize a new sinking fund tax that is levied only

 

within the geographic area of the dissolved school district.

 

     (7) To the extent permitted under federal law and any


applicable waiver approved by the United States department of

 

education, Department of Education, the department shall not

 

include the test scores of pupils from the dissolved school

 

district for determining adequate yearly progress status or for

 

"top-to-bottom" rankings of the receiving school districts for the

 

first 3 school years after dissolution.

 

     (8) For the same number of school years for which test scores

 

of pupils from the dissolved school district are not used under

 

subsection (7), a receiving school district shall not use the test

 

scores of pupils from the dissolved school district as a factor in

 

any performance evaluation of an employee of the receiving school

 

district.

 

     (9) The pupils formerly enrolled in the dissolved school

 

district have all the legal and constitutional rights and

 

privileges of the other pupils enrolled in the receiving school

 

districts.

 

     (10) If a dissolved school district has outstanding debt and a

 

receiving school district sells a school building or other real

 

property received under subsection (2), the receiving school

 

district shall forward the proceeds of the sale to the intermediate

 

school district in which the geographic area of the dissolved

 

school district is located. The intermediate school district shall

 

use those proceeds as follows:

 

     (a) First, to repay this state for any funds received by the

 

intermediate school district under section 20g of the state school

 

aid act of 1979, MCL 388.1620g.

 

     (b) Second, to pay or reduce the outstanding debt of the


dissolved school district.

 

     (c) Third, if there is any balance left after repaying this

 

state under subdivision (a) and paying or reducing the outstanding

 

debt under subdivision (b), to remit that balance to the receiving

 

school district. If a receiving school district that receives money

 

under this subdivision has outstanding debt, the receiving school

 

district shall first use money received under this subdivision to

 

pay or reduce the outstanding debt of the receiving school district

 

and shall not use money received under this subdivision for any

 

other purpose as long as the receiving school district has

 

outstanding debt.

 

     (11) (10) As used in this section:

 

     (a) "Debt" means that term as defined in section 103 of the

 

revised municipal finance act, 2001 PA 34, MCL 141.2103, and any

 

unpaid amounts payable by a dissolved school district to the

 

Michigan public school employees' retirement board under the public

 

school employees retirement act of 1979, 1980 PA 300, MCL 38.1301

 

to 38.1437.

 

     (b) "Receiving school district" means a school district to

 

which all or part of the territory of a dissolved school district

 

is attached under this section.

 

     Sec. 1260. (1) Unless approved by the state board, a A school

 

board or intermediate school board shall not impose any deed

 

restriction prohibiting, or otherwise prohibit, property sold or

 

transferred by the school board or intermediate school board from

 

being used for any lawful public education purpose. Any deed

 

restriction or other prohibition in effect as of the effective date


of this subsection March 30, 1995 is void.

 

     (2) If a school board or intermediate school board offers

 

property of the school board or intermediate school board for sale,

 

lease, or rent, the school board or intermediate school board shall

 

not refuse to sell, lease, or rent the property to a person solely

 

because the person intends to use the property for an educational

 

purpose, if the intent of the person is to use the property for a

 

lawful educational purpose.

 

     (3) A school board or intermediate school board shall not

 

cause or allow a building owned by or under the control of the

 

school district or intermediate school district to be demolished

 

unless 1 or more of the following are met:

 

     (a) The school board or intermediate school board has an

 

approved site plan providing for the redevelopment of the site for

 

educational use within 12 months after the demolition.

 

     (b) The school board or intermediate school board has offered

 

the building for sale, lease, or rent for at least 12 months before

 

the demolition and has not received any fair market value offers

 

for the sale of the building.

 

     (4) If a school district or intermediate school district

 

refuses a fair market offer for the sale of a building that is

 

owned by or under the control of the school district or

 

intermediate school district as a result of the dissolution of a

 

school district under section 12, the school district or

 

intermediate school district shall not apply for or accept a grant

 

covering transition costs for demolition of the building under

 

section 20g of the state school aid act of 1979, MCL 388.1620g.


     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.