June 3, 2015, Introduced by Senator HORN and referred to the Committee on Appropriations.
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending sections 12, 1211, and 1260 (MCL 380.12, 380.1211, and
380.1260), section 12 as amended by 2013 PA 96, section 1211 as
amended by 2012 PA 285, 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 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 school
building or other real property owned by and located in the
dissolved 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. If a dissolved school district
is no longer authorized to levy a school operating tax under
section 1211, the receiving school district may levy school
operating taxes under section 1211 within the geographic area of
the dissolved school district that has been attached to the
receiving school district at a rate that does not exceed the rate
authorized by the school electors of the receiving district to be
levied under section 1211 within the receiving district or the rate
authorized to be levied under section 1211 within the dissolved
school district at the time of dissolution, whichever is less.
(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, 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 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) 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. 1211. (1) Except as otherwise provided in this section
and section 1211c, the board of a school district shall levy not
more than 18 mills for school operating purposes or the number of
mills levied in 1993 for school operating purposes, whichever is
less. A principal residence, qualified agricultural property,
qualified forest property, supportive housing property, property
occupied by a public school academy, and industrial personal
property are exempt from the mills levied under this subsection
except for the number of mills by which that exemption is reduced
under this subsection. Except as otherwise provided in subsection
(9), the board of a school district that had a foundation allowance
for the 1994-95 state fiscal year greater than $6,500.00 may reduce
the number of mills from which a principal residence, qualified
agricultural property, qualified forest property, supportive
housing property, property occupied by a public school academy, and
industrial personal property are exempted under this subsection by
up to the number of mills, as certified under section 1211a,
required to be levied on a principal residence, qualified
agricultural property, qualified forest property, supportive
housing property, property occupied by a public school academy, and
industrial personal property for the school district's combined
state and local revenue per membership pupil for the school fiscal
year ending in 1995 to be equal to the school district's foundation
allowance for the state fiscal year ending in 1995, and the board
also may levy in 1994 or a succeeding year that number of mills for
school operating purposes on a principal residence, qualified
agricultural property, qualified forest property, supportive
housing property, property occupied by a public school academy, and
industrial personal property.
(2) Subject to subsection (3), if the department of treasury
determines that the maximum number of mills allowed to be levied
under subsection (1) on all classes of property was not sufficient
for a school district's combined state and local revenue per
membership pupil for the school fiscal year ending in 1995 to be
equal to the school district's foundation allowance for that school
fiscal year, the board of the school district may levy in 1994 or a
succeeding year additional mills uniformly on all property up to
the number of mills required for the school district's combined
state and local revenue per membership pupil for the school fiscal
year ending in 1995 to be equal to the school district's foundation
allowance for the state fiscal year ending in 1995. However, the
board of a school district described in this subsection, by board
resolution, may elect to exempt each principal residence and all
qualified agricultural property, qualified forest property,
supportive housing property, property occupied by a public school
academy, and industrial personal property located in the school
district from some or all of the mills that the board is authorized
to levy under this subsection.
(3) After 1994, the number of mills a school district may levy
under this section on any class of property shall not exceed the
lesser of the number of mills the school district was certified by
the department of treasury under section 1211a to levy on that
class of property under this section in 1994 or the number of mills
required to be levied on that class of property under this section
to ensure that the increase from the immediately preceding state
fiscal year in the school district's combined state and local
revenue per membership pupil, calculated as if the school district
had levied the maximum number of mills the school district was
allowed to levy under this section regardless of the number of
mills the school district actually levied, does not exceed the
lesser of the dollar amount of the increase in the basic foundation
allowance under section 20 of the state school aid act of 1979, MCL
388.1620, from the immediately preceding state fiscal year or the
percentage increase in the general price level in the immediately
preceding calendar year. If the number of mills a school district
is allowed to levy under this section in a year after 1994 is less
than the number of mills the school district was allowed to levy
under this section in the immediately preceding year, any reduction
required by this subsection in the school district's millage rate
shall be calculated by first reducing the number of mills the
school district is allowed to levy under subsection (2) and then
increasing the number of mills from which a principal residence,
qualified agricultural property, qualified forest property,
supportive housing property, property occupied by a public school
academy, and industrial personal property are exempted under
subsection (1).
(4) Commercial personal property is exempt from 12 of the
mills levied under this section. However, if the number of mills
from which industrial personal property is exempted for a specific
school district is reduced under this section, then the number of
mills from which commercial personal property is exempted for that
school district shall be reduced by that same number of mills.
(5) Except as otherwise provided under this subsection,
millage levied under this section must be approved by the school
electors. For the purposes of this section, millage approved by the
school electors before January 1, 1994 for which the authorization
has not expired is considered to be approved by the school
electors. With the approval of the state treasurer, a school
district may pledge millage levied under this section for the
repayment of a loan under the emergency municipal loan act, 1980 PA
243, MCL 141.931 to 141.942, money borrowed by the school district
under section 1225, or the repayment of advances, overpayments, or
other obligations of the school district to this state under
section 15 of the state school aid act of 1979, MCL 388.1615. For
purposes of this section, if the school electors of a school
district that is a receiving school district under section 12 have
authorized the levy of a millage under this section, if territory
of a school district that is a dissolved school district under
section 12 has been attached to the receiving school district, and
if that dissolved school district is no longer authorized to levy
millage under this section, then the receiving school district may
levy millage under this section within the geographic area of the
dissolved school district that has been attached to the receiving
school district at a rate that does not exceed the rate authorized
by the school electors of the receiving school district to be
levied under this section within the receiving school district or
the rate authorized to be levied under this section within the
dissolved school district at the time of dissolution, whichever is
less.
(6) If a school district levies millage for school operating
purposes that is in excess of the limits of this section, the
amount of the resulting excess tax revenue shall be deducted from
the school district's next regular tax levy.
(7) If a school district levies millage for school operating
purposes that is less than the limits of this section, the board of
the school district may levy at the school district's next regular
tax levy an additional number of mills not to exceed the additional
millage needed to make up the shortfall.
(8) A school district shall not levy mills allocated under the
property tax limitation act, 1933 PA 62, MCL 211.201 to 211.217a,
other than mills allocated to a school district of the first class
or a school district that was previously a school district of the
first class, for payment to a public library commission under
section 11(4) of the property tax limitation act, 1933 PA 62, MCL
211.211, after 1993.
(9) Beginning with taxes levied for 2011, if a school district
had a foundation allowance for the 1994-95 state fiscal year
greater than $6,500.00 and if the school district's foundation
allowance for the 2009-2010 state fiscal year was less than the
basic foundation allowance prescribed for the 2009-2010 state
fiscal year under section 20 of the state school aid act of 1979,
MCL 388.1620, the school district may not reduce the number of
mills from which certain classes of property are exempted from the
levy of millage under subsection (1) and may not levy that number
of mills on those classes of property as would otherwise be allowed
under subsection (1).
(10) As used in this section:
(a) "Combined state and local revenue per membership pupil"
means that term as defined in section 20 of the state school aid
act of 1979, MCL 388.1620.
(b) "Commercial personal property" means property classified
as commercial personal property under section 34c of the general
property tax act, 1893 PA 206, MCL 211.34c.
(c) "Foundation allowance" means a school district's
foundation allowance as calculated under section 20 of the state
school aid act of 1979, MCL 388.1620.
(d) "General price level" means that term as defined in
section 33 of article IX of the state constitution of 1963.
(e) "Industrial personal property" means the following:
(i) Except as otherwise provided in subparagraph (ii),
property classified as industrial personal property under section
34c of the general property tax act, 1893 PA 206, MCL 211.34c.
(ii) Beginning December 31, 2011, industrial personal property
does not include a turbine powered by gas, steam, nuclear energy,
coal, or oil the primary purpose of which is the generation of
electricity for sale.
(f) "Membership" means that term as defined in section 6 of
the state school aid act of 1979, MCL 388.1606.
(g) "Owner", "person", "principal residence", and "qualified
agricultural property" mean those terms as defined in section 7dd
of the general property tax act, 1893 PA 206, MCL 211.7dd.
(h) "Property occupied by a public school academy" means
property occupied by a public school academy, urban high school
academy, or school of excellence that is used exclusively for
educational purposes.
(i) "Qualified forest property" means that term as defined in
section 7jj of the general property tax act, 1893 PA 206, MCL
211.7jj[1].
(j) "School operating purposes" includes expenditures for
furniture and equipment, for alterations necessary to maintain
school facilities in a safe and sanitary condition, for funding the
cost of energy conservation improvements in school facilities, for
deficiencies in operating expenses for the preceding year or
preceding years, including, but not limited to, repayment of an
emergency loan under the emergency municipal loan act, 1980 PA 243,
MCL 141.931 to 141.942, and for paying the operating allowance due
from the school district to a joint high school district in which
the school district is a participating school district under former
part 3a. Taxes levied for school operating purposes do not include
any of the following:
(i) Taxes levied by a school district for operating a
community college under part 25.
(ii) Taxes levied under section 1212.
(iii) Taxes levied under section 1356 for eliminating an
operating deficit.
(iv) Taxes levied for operation of a library under section
1451 or for operation of a library established pursuant to 1913 PA
261, MCL 397.261 to 397.262, that were not included in the
operating millage reported by the district to the department as of
April 1, 1993. However, a district may report to the department not
later than April 1, 1994 the number of mills it levied in 1993 for
a purpose described in this subparagraph that the school district
does not want considered as operating millage and then that number
of mills is excluded under this section from taxes levied for
school operating purposes.
(v) Taxes paid by a school district of the first class or a
school district that was previously a school district of the first
class to a public library commission pursuant to section 11(4) of
the property tax limitation act, 1933 PA 62, MCL 211.211.
(vi) Taxes levied under former section 1512 for operation of a
community swimming pool. In addition, if a school district included
the millage it levied in 1993 for operation of a community swimming
pool as part of its operating millage reported to the department
for 1993, the school district may report to the department not
later than June 17, 1994 the number of mills it levied in 1993 for
operation of a community swimming pool that the school district
does not want considered as operating millage and then that number
of mills is excluded under this section from taxes levied for
school operating purposes.
(k) "Supportive housing property" means real property
certified as supportive housing property under chapter 3B of the
state housing development authority act of 1966, 1966 PA 346, MCL
125.1459 to 125.1459a.
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 the school district or
intermediate school district to be demolished unless 1 of the
following is 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.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 173 of the 98th Legislature is enacted into
law.