Substitute For
HOUSE BILL NO. 5231
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending section 503 (MCL 380.503), as amended by 2023 PA 34.
the people of the state of michigan enact:
Sec. 503. (1) An authorizing body is not required to issue a contract to any person or entity. Subject to subsection (2), public school academy contracts must be issued on a competitive basis. In deciding whether to issue a contract for a proposed public school academy, an authorizing body shall consider all of the following:
(a) The resources available for the proposed public school academy.
(b) The population to be served by the proposed public school academy.
(c) The educational goals to be achieved by the proposed public school academy.
(d) The applicant's track record, if any, in organizing public school academies or other public schools.
(e) The graduation rate of a school district in which the proposed public school academy is proposed to be located.
(f) The population of a county in which the proposed public school academy is proposed to be located.
(g) The number of schools in the proximity of a proposed location of the proposed public school academy that are on the list under federal accountability requirements as provided under the every student succeeds act, Public Law 114-95, of the public schools in this state determined to be among the lowest achieving 5% of public schools in this state.
(h) The number of pupils on waiting lists of public school academies in the proximity of a proposed location of the proposed public school academy.
(2) An authorizing body may give priority to a proposed public school academy that is intended to replace a public school academy that has been closed pursuant to under section 507(5), that will operate all of the same grade levels as the public school academy that has been closed, and that will work toward operating all of grades 9 to 12 within 6 years after it begins operations unless a matriculation agreement has been entered into with another public school that provides grades 9 to 12.
(3) If a person or entity applies to the board of a school district for a contract to organize and operate 1 or more public school academies within the boundaries of the school district and the board does not issue the contract, the person or entity may petition the board to place the question of issuing the contract on the ballot to be decided by the school electors of the school district. The petition must contain all of the information required to be in the contract application under section 502 and must be signed by a number of school electors of the school district equal to at least 5% of the total number of school electors of that school district. The petition must be filed with the school district filing official. If the board receives a petition meeting the requirements of this subsection, the board shall have the question of issuing the contract placed on the ballot at its next regular school election held at least 60 days after receiving the petition. If a majority of the school electors of the school district voting on the question vote to issue the contract, the board shall issue the contract.
(4) Within 10 days after issuing a contract for a public school academy, the authorizing body shall submit to the superintendent of public instruction a copy of the contract.
(5) An authorizing body shall adopt a resolution establishing the method of selection, length of term, and number of members of the board of directors of each public school academy subject to its jurisdiction. The resolution must be written or amended as necessary to include a requirement that each member of the board of directors must be a citizen of the United States.
(6) A contract issued to organize and administer a public school academy must contain at least all of the following:
(a) The educational goals the public school academy is to achieve and the methods by which it will be held accountable. The educational goals must include demonstrated improved pupil academic achievement for all groups of pupils. To the extent applicable, the pupil performance of a public school academy must be assessed using at least the Michigan student test of educational progress (M-STEP) or the Michigan merit examination under section 1279g, as applicable.
(b) A description of the method to be used to monitor the public school academy's compliance with applicable law and its performance in meeting its targeted educational objectives.
(c) A description of the process for amending the contract during the term of the contract.
(d) All of the matters set forth in the application for the contract.
(e) Procedures for revoking the contract and grounds for revoking the contract, including at least the grounds listed in section 507.
(f) A description of and address for the proposed physical plant in which the public school academy will be located. An authorizing body may include a provision in the contract allowing the board of directors of the public school academy to operate the same configuration of age or grade levels at more than 1 site if each configuration of age or grade levels and each site identified in the contract are under the direction and control of the board of directors.
(g) Requirements and procedures for financial audits. The financial audits shall must be conducted at least annually by a certified public accountant in accordance with generally accepted governmental auditing principles.
(h) The term of the contract and a description of the process and standards for renewal of the contract at the end of the term. The standards for renewal must include increases in academic achievement for all groups of pupils as measured by assessments and other objective criteria as the most important factor in the decision of whether or not to renew the contract.
(i) A certification, signed by an authorized member of the board of directors of the public school academy, that the public school academy will comply with the contract and all applicable law.
(j) A requirement that the board of directors of the public school academy shall ensure compliance with the requirements of 1968 PA 317, MCL 15.321 to 15.330.
(k) A requirement that the board of directors of the public school academy shall prohibit specifically identified family relationships between members of the board of directors, individuals who have an ownership interest in or who are officers or employees of an educational management organization involved in the operation of the public school academy, and employees of the public school academy. The contract must identify the specific prohibited relationships consistent with applicable law.
(l) A requirement that the board of directors of the public school academy shall make information concerning its operation and management available to the public and to the authorizing body in the same manner as is required by state law for school districts.
(m) A requirement that the board of directors of the public school academy shall collect, maintain, and make available to the public and the authorizing body, in accordance with applicable law and the contract, at least all of the following information concerning the operation and management of the public school academy:
(i) A copy of the contract issued by the authorizing body for the public school academy.
(ii) A list of currently serving members of the board of directors of the public school academy, including name, address, and term of office; copies of policies approved by the board of directors; board meeting agendas and minutes; a copy of the budget approved by the board of directors and of any amendments to the budget; and copies of bills paid for amounts of $10,000.00 or more as they were submitted to the board of directors.
(iii) Quarterly financial reports submitted to the authorizing body.
(iv) A current list of teachers and school administrators working at the public school academy that includes their individual salaries as submitted to the registry of educational personnel; copies of the teaching or school administrator's certificates or permits of current teaching and administrative staff; and evidence of compliance with the criminal background and records checks and unprofessional conduct check required under sections 1230, 1230a, and 1230b for all teachers and administrators working at the public school academy.
(v) Curriculum documents and materials given to the authorizing body.
(vi) Proof of insurance as required by the contract.
(vii) Copies of facility leases or deeds, or both, and of any equipment leases.
(viii) Copies of any management contracts or services contracts approved by the board of directors.
(ix) All health and safety reports and certificates, including those relating to fire safety, environmental matters, asbestos inspection, boiler inspection, and food service.
(x) Any management letters issued as part of the annual financial audit under subdivision (g).
(xi) Any other information specifically required under this act.
(n) A requirement that the authorizing body must review and may disapprove any agreement between the board of directors of the public school academy and an educational management organization before the agreement is final and valid. An authorizing body may disapprove an agreement described in this subdivision only if the agreement is contrary to the contract or applicable law.
(o) A requirement that the board of directors of the public school academy shall demonstrate all of the following to the satisfaction of the authorizing body with regard to its pupil admission process:
(i) That the public school academy has made a reasonable effort to advertise its enrollment openings.
(ii) That the open enrollment period for the public school academy is for a duration of at least 2 weeks and that the enrollment times include some evening and weekend times.
(p) A requirement that the board of directors of the public school academy shall prohibit any individual from being employed by the public school academy in more than 1 full-time position and simultaneously being compensated at a full-time rate for each of those positions.
(q) For a contract that is entered into, extended, renewed, or modified on or after the effective date of the amendatory act that added this subdivision, a requirement that the names of the authorizing body and the primary educational management organization, if applicable, must appear and be verbally provided, as applicable, on all of the following:
(i) Unless prohibited by a local ordinance or local zoning authority, signage that is on the public school academy's property and is erected, repaired, or installed on or after the effective date of the amendatory act that added this subdivision.
(ii) Promotional material that is created, modified, or distributed on or after the effective date of the amendatory act that added this subdivision.
(iii) The footer of the public school academy's website pages.
(iv) The school application that a student must submit to enroll in the public school academy.
(7) A public school academy shall comply with all applicable law, including all of the following:
(a) The open meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(b) The freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(c) 1947 PA 336, MCL 423.201 to 423.217.
(d) Sections 1134, 1135, 1146, 1153, 1263(3), 1267, and 1274.
(e) Laws concerning participation in state assessments, data collection systems, state level student growth models, state accountability and accreditation systems, and other public comparative data collection required for public schools.
(8) A public school academy and its incorporators, board members, officers, employees, and volunteers have governmental immunity as provided in section 7 of 1964 PA 170, MCL 691.1407. An authorizing body and its board members, officers, and employees are immune from civil liability, both personally and professionally, for an act or omission in authorizing a public school academy if the authorizing body or the person acted or reasonably believed he or she the person acted within the authorizing body's or the person's scope of authority.
(9) A public school academy is exempt from all taxation on its earnings and property. Instruments of conveyance to or from a public school academy are exempt from all taxation including taxes imposed by 1966 PA 134, MCL 207.501 to 207.513. Unless the property is already fully exempt from real and personal property taxes under the general property tax act, 1893 PA 206, MCL 211.1 to 211.155, property occupied by a public school academy and used exclusively for educational purposes is exempt from real and personal property taxes levied for school operating purposes under section 1211, to the extent exempted under that section, and from real and personal property taxes levied under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906. A public school academy may not levy ad valorem property taxes or another tax for any purpose. However, operation of 1 or more public school academies by a school district or intermediate school district does not affect the ability of the school district or intermediate school district to levy ad valorem property taxes or another tax.
(10) A public school academy may acquire by purchase, gift, devise, lease, sublease, installment purchase agreement, land contract, option, or by any other means, hold and own in its own name buildings and other property for school purposes, and interests therein, and other real and personal property, including, but not limited to, interests in property subject to mortgages, security interests, or other liens, necessary or convenient to fulfill its purposes. For the purposes of condemnation, a public school academy may proceed under the uniform condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75, excluding sections 6 to 9 of that act, the uniform condemnation procedures act, 1980 PA 87, MCL 213.56 to 213.59, or other applicable statutes, but only with the express, written permission of the authorizing body in each instance of condemnation and only after just compensation has been determined and paid.
(11) A member of the board of directors of a public school academy is a public officer and shall, before entering upon the duties of the office, take the constitutional oath of office for public officers under section 1 of article XI of the state constitution of 1963.
(a) "Educational management organization" means that term as defined in section 503c.
(b) "Primary educational management organization" means an educational management organization that is responsible for both of the following:
(i) Administrative services or staff.
(ii) Educational and instructional services or staff.
(c) "Promotional material" means any of the following:
(i) Billboards.
(ii) Internet advertisements.
(iii) Television advertisements.
(iv) Radio advertisements.