June 20, 2013, Introduced by Reps. Oakes, Robinson, Singh, Zemke, Schor, Lipton, Dillon and Kivela and referred to the Committee on Education.
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending section 1211 (MCL 380.1211), as amended by 2012 PA 285,
and by adding section 12a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 12a. (1) If the superintendent of public instruction
determines that a school district meets all of the following, the
intermediate superintendent of the intermediate school district in
which the school district is a constituent school district shall
assume governance over the school district as provided under this
section:
(a) The number of pupils in membership in the school district
for the most recently completed school year is less than 75% of the
number of pupils in membership in the school district for the
school year that ended 4 years before the most recently completed
school year.
(b) The school district has operated with annual general fund
operating deficits for at least the immediately preceding period of
3 school years.
(c) The school district's general fund operating deficit
balance expressed as a percentage of general fund revenue is
projected to be greater than negative 25 percent.
(d) The school district has insufficient revenue to operate
and provide children with a public education.
(e) The superintendent of public instruction, state treasurer,
and intermediate school board jointly determine that the measures
under this section are necessary to restoring the fiscal solvency
of the school district.
(2) All of the following apply to a school district that meets
the criteria under subsection (1):
(a) The intermediate superintendent shall assume governance of
the school district for a period not to exceed 8 years, as
determined by the superintendent of public instruction. With
respect to the school district, the intermediate superintendent has
all of the powers and duties described in this section; except as
otherwise provided in this section, all of the provisions of this
act that would otherwise apply to the school board that previously
operated the school district apply to the intermediate
superintendent with respect to that school district; except as
otherwise provided in this section, the intermediate superintendent
may exercise all the powers and duties otherwise vested by law in
the school board and in its officers and may exercise all
additional powers and duties provided under this section; and,
except as otherwise provided in this section, the intermediate
superintendent accedes to all the rights, duties, and obligations
of the school board. These powers, rights, duties, and obligations
include, but are not limited to, all of the following:
(i) Authority over the expenditure of all funds attributable to
pupils in the school district.
(ii) Rights and obligations under collective bargaining
agreements and employment contracts entered into by the school
board for employees of the school district.
(iii) Rights to prosecute and defend litigation.
(iv) Rights and obligations under statute, rule, and common
law.
(v) Authority to delegate any of the intermediate
superintendent's powers and duties to 1 or more designees, with
proper supervision by the intermediate superintendent.
(vi) If the school district has outstanding debt or other
liabilities, the intermediate superintendent shall perform the
functions and satisfy the responsibilities of the board and other
officers of the school district relating to the debt and other
liabilities, including, but not limited to, all of the following:
(A) Certifying and levying taxes for satisfaction of the debt
in the name of the school district.
(B) Holding debt retirement funds of the school district
separately from the funds of the intermediate school district.
(C) Doing all other things relative to the outstanding debt of
the 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 school
district shall be submitted only to school electors residing within
the geographic area of the school district and does not require
approval by the intermediate school electors of the intermediate
school district.
(b) As permitted under federal law, the superintendent of
public instruction shall grant to the intermediate school district
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 school district or a school of
the school district, or make other adjustments in the allocation of
federal funds to implement transfer of functions and
responsibilities under this section.
(c) The school board of the school district shall continue to
serve as provided by law, except that the school board's powers and
duties are limited to serving in an advisory capacity. The school
board shall continue to hold regular school board meetings in the
manner provided by law for a school board. At each regular meeting
of the intermediate school board, the intermediate school board
shall provide the school district's school board with an
opportunity to provide input regarding the operation of the school
district.
(d) For a period of 5 years after the end of the period
described in subdivision (a), the intermediate superintendent shall
monitor the school district and may review all records, funds, and
assessed property of the school district. The intermediate
superintendent shall report any issues he or she identifies as a
result of its reviews to the superintendent of public instruction,
state treasurer, and other appropriate persons.
(3) As used in this section, "debt" means that term as defined
in section 103 of the revised municipal finance act, 2001 PA 34,
MCL 141.2103.
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.
(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) If a school district is under the governance of an
intermediate superintendent as provided in section 12a, then all of
the following apply to taxes levied for school operating purposes
under this section:
(a) Except as provided in subdivision (b), the intermediate
superintendent shall use the revenue from taxes levied under this
section for the satisfaction of debt of the school district until
the debt is retired or refunded. As used in this subdivision,
"debt" means that term as defined in section 12a.
(b) The intermediate superintendent may use the revenue from
not more than 3 mills of the taxes levied under this section for
short-term capital improvements in the school district that the
intermediate superintendent considers necessary to provide a safe
and healthy education environment for the pupils of the school
district and to compete for pupil enrollment.
(11) (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.