Bill Text: MI HB4148 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Education; reorganization; ability for receiving school district to decline ownership of buildings and property of dissolved school district and procedures if that happens; provide for. Amends sec. 12 of 1976 PA 451 (MCL 380.12).
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2015-02-10 - Printed Bill Filed 02/06/2015 [HB4148 Detail]
Download: Michigan-2015-HB4148-Introduced.html
HOUSE BILL No. 4148
February 5, 2015, Introduced by Reps. Geiss, Guerra, Irwin, Liberati, Santana, Sarah Roberts and Faris 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), as amended by 2013 PA 96.
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 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 Except
as provided in 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, 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) A receiving school district may decline to take ownership
of a school building or other real property owned by and located in
the dissolved school district by submitting a resolution declining
ownership of specified real property to the intermediate school
district and the superintendent of public instruction within 30
days after the dissolved school district is declared dissolved. If
a receiving school district declines to take ownership of real
property under this subsection, all of the following apply:
(a) The intermediate school district may assume ownership of
the real property. If the intermediate school district does not
assume ownership of the real property, the intermediate school
district shall offer the real property to the following, in the
following order:
(i) Other school districts that are contiguous to the receiving
school district.
(ii) The city, village, or township in which the real property
is located.
(iii) The county in which the real property is located.
(b) If ownership of the real property is not assumed by any
entity under subdivision (a), the intermediate school district
shall assume ownership of the real property. If there is a building
or buildings located on the real property, and if requested by the
intermediate school district, this state shall demolish the
building or buildings located on the real property.
(c) If the intermediate school district sells real property it
acquires under subdivision (b), the intermediate school district
shall remit the proceeds from the sale to the superintendent of
public instruction. The superintendent of public instruction shall
use the proceeds as follows:
(i) First, to repay outstanding debt to bondholders of the
dissolved school district.
(ii) Second, to repay other outstanding debt to other creditors
of the dissolved school district.
(iii) Third, to repay this state for demolition costs incurred
under subdivision (b).
(iv) Fourth, for deposit into the state school aid fund.
(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.
