June 6, 2013, Introduced by Reps. Rutledge and Rogers and referred to the Committee on Education.
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) The superintendent of public instruction and state
treasurer jointly determine that both 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 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.
(2) If 1 or more of the conditions under subsection (1) are
met for a school district, 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 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 In
attaching the territory of
the dissolved school district to other school districts, the
intermediate school board or the state superintendent should take
into account the number of pupils who are transferred into 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 among the other
school districts. Within 21 days after a 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.
(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 board and other officers of
the school district to which the largest share of the state
equalized value of the dissolved school district is attached 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. The
disorganized After
first satisfying debt obligations, the dissolved school district
shall
repay that amount 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 an amount greater than the amount 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 board and other officers of the receiving school district that
received the largest share of the state equalized valuation of the
dissolved school district 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 levy only within the geographic
area of the dissolved school district.
(7) It is the intent of the legislature to amend the state
school aid act of 1979 to ensure that it is consistent with this
subsection. In determining the foundation allowance for a receiving
school district under section 20 of the state school aid act of
1979, MCL 388.1620, the local school operating revenue of that
receiving school district shall not include revenue generated
within a dissolved school district by a school operating tax levied
under section 1211 on behalf of the dissolved school district for
the purpose of satisfying outstanding debt of the dissolved school
district under subsection (3). For the 4 state fiscal years
immediately after the dissolution of a school district, a receiving
school district may elect to receive either of the following
foundation allowances under the state school aid act of 1979 for
each pupil who was enrolled in the dissolved school district
immediately before the dissolution who is subsequently enrolled in
and counted in membership in the receiving school district:
(a) A foundation allowance equal to 1.1 times the foundation
allowance of the receiving school district.
(b) A foundation allowance equal to 1.1 times the foundation
allowance of the dissolved school district if the dissolved school
district had not been dissolved under this section and had
continued to educate its pupils directly on its own.
(8) Except as otherwise provided in this subsection, an
individual who was employed by a dissolved school district
immediately before the dissolution who remains employed by a
receiving school district is entitled to all the rights and
benefits to which the person would otherwise be entitled had the
person been employed by the receiving school district during the
time he or she was employed by the dissolved school district,
including, but not limited to, any rights under 1937 (Ex Sess) PA
4, MCL 38.71 to 38.191. An employment agreement in effect at the
time of the dissolution of a school district under this section
with the dissolving school district and each receiving school
district shall remain in full force and effect for the duration of
the agreement for employees covered by the agreement, until a
successor agreement with the receiving school district is
effective.
(9) 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.
(10) 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.
(11) For a period of 2 years following dissolution, all new
employees hired by a receiving school district, except for
administrators, shall be hired from among those who were first
interviewed and employed by the dissolved school district within
the last year before the dissolution.
(12) 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.
(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.