HB-4813, As Passed House, June 20, 2013HB-4813, As Passed Senate, June 19, 2013
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 4813
(As amended June 19, 2013)
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending section 12 (MCL 380.12) and by adding section 12a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
12. (1) A school district shall lose its organization if
there
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 the law to hold district all of the
offices of the school district or who will accept the offices of
the
school district. Under
either condition,
(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
House Bill No. 4813 as amended June 19, 2013
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
House Bill No. 4813 as amended June 19, 2013
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
shall attach order
attachment of the territory of the
school district, in whole or in part, to 1 or more other organized
school
districts and 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 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 money,
property, and
other
material belonging to the district among the districts to
which
the territory is attached.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.
(2)
The property of the disorganized district is subject to
all
increases in the constitutional limitation on taxes which have
been
voted by the school electors of the district to which it is
attached.
The disorganized district shall receive a credit in the
amount
of a levy remaining to be paid on an outstanding debt in the
disorganized
district, which shall be paid until debt is retired.
The
disorganized district shall pay an amount equal to the amount
levied
for debt retirement by the district to which it is attached
not
to exceed 5 mills on the state equalized valuation in the
disorganized
district. All other taxes levied for the purposes of
the
combined school district, including taxes for the retirement of
bonded
indebtedness, shall be spread over the entire area of the
combined
district.
(3)
A disorganized district having a bonded indebtedness shall
be
attached in whole to another school district by the intermediate
school
board. The identity of the district is not lost because of
the
attachment, and its territory remains as separate assessing
unit
for the purpose of the bonded indebtedness until the
indebtedness
is retired or refunded. The board of the district to
which
the disorganized district is attached shall constitute the
board
of trustees for the disorganized district having the bonded
indebtedness.
Its officers shall be the officers for the
disorganized
district. The board of the district to which the
disorganized
district is attached shall certify the levy of taxes
for
bonded indebtedness in the name of the disorganized district,
shall
not commingle the debt retirement funds of the disorganized
district
with those of the district to which it is attached, and
shall
do all things relative to the bonded indebtedness required by
law
and by the terms under which the issuance and sale of the bonds
were
originally authorized. All other taxes levied for the purposes
of
the combined school district, including taxes levied for the
retirement
of bonded indebtedness, shall be spread over the entire
area
of the combined school district.
(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 disorganized dissolved school
district to another school district, the intermediate school board
shall
audit the assets and liabilities of the disorganized
dissolved school district. If a considerable discrepancy is found,
the
intermediate school board shall order the receiving dissolved
school district to pay the discrepancy to 1 or more appropriate
receiving
school districts. The disorganized After first satisfying
debt obligations, the dissolved school district shall repay that
amount to 1 or more appropriate receiving school districts from
moneys
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, 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. 12a. (1) As permitted under federal law, if a school
district is dissolved under section 12 or if the functions and
responsibilities of a school district for operating a public school
are transferred to another public entity, including, but not
limited to, a transfer to another public entity under section
1280c, the superintendent of public instruction shall grant each
receiving school district or other public entity assuming the
functions and responsibilities for the public school an allocation
of grants under 20 USC 6333, 6334, 6335, and 6337 and of other
federal funds that would otherwise be made available for grants to
or federal funding for the public school or make other adjustments
in the allocation of federal funds to implement the dissolution of
the school district or other transfer of functions and
responsibilities.
(2) As used in this section, "receiving school district" means
that term as defined in section 12.
Enacting section 1. This amendatory act does not take effect
unless House Bill No. 4815 of the 97th Legislature is enacted into
law.