HOUSE BILL No. 4518 April 20, 1999, Introduced by Reps. Switalski, Bovin, Jacobs, Schauer, Schermesser, Woodward, Dennis, Lockwood, Scott, Brater, Hardman, Lemmons, DeHart, LaForge, Cherry, Hale, Bogardus, Rivet and Thomas and referred to the Committee on Education. A bill to amend 1976 PA 451, entitled "The revised school code," by amending sections 502, 503, and 504a (MCL 380.502, 380.503, and 380.504a), as amended by 1995 PA 289, and by adding sections 503b, 504d, and 1259. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 502. (1) A public school academy shall be organized 2 and administered under the direction of a board of directors in 3 accordance with this part and with bylaws adopted by the board of 4 directors. A public school academy corporation shall be orga- 5 nized under the nonprofit corporation act,Act No. 162 of the6Public Acts of 1982, being sections 450.2101 to 450.3192 of the7Michigan Compiled Laws1982 PA 162, MCL 450.2101 TO 450.3192, 8 except that a public school academy corporation is not required 9 to comply with sections 170 to 177 ofAct No. 327 of the Public01046'99 TAV 2 1Acts of 1931, being sections 450.170 to 450.177 of the Michigan2Compiled Laws1931 PA 327, MCL 450.170 TO 450.177. To the 3 extent disqualified under the state or federal constitution, a 4 public school academy shall not be organized by a church or other 5 religious organization and shall not have any organizational or 6 contractual affiliation with or constitute a church or other 7 religious organization. 8 (2) Any of the following may act as an authorizing body to 9 issue a contract to organize and operate 1 or more public school 10 academies under this part: 11 (a) The board of a school district that operates grades K to 12 12. However, the board of a school district shall not issue a 13 contract for a public school academy to operate outside the 14 school district's boundaries, and a public school academy autho- 15 rized by the board of a school district shall not operate outside 16 that school district's boundaries. 17 (b) An intermediate school board. However, the board of an 18 intermediate school district shall not issue a contract for a 19 public school academy to operate outside the intermediate school 20 district's boundaries, and a public school academy authorized by 21 the board of an intermediate school district shall not operate 22 outside that intermediate school district's boundaries. 23 (c) The board of a community college. However, except as 24 otherwise provided in this subdivision, the board of a community 25 college shall not issue a contract for a public school academy to 26 operate in a school district organized as a school district of 27 the first class, a public school academy authorized by the board 01046'99 3 1 of a community college shall not operate in a school district 2 organized as a school district of the first class, the board of a 3 community college shall not issue a contract for a public school 4 academy to operate outside the boundaries of the community col- 5 lege district, and a public school academy authorized by the 6 board of a community college shall not operate outside the bound- 7 aries of the community college district. The board of a commu- 8 nity college also may issue a contract for not more than 1 public 9 school academy to operate on the grounds of an active or closed 10 federal military installation located outside the boundaries of 11 the community college district, or may operate a public school 12 academy itself on the grounds of such a federal military instal- 13 lation, if the federal military installation is not located 14 within the boundaries of any community college district and the 15 community college has previously offered courses on the grounds 16 of the federal military installation for at least 10 years. 17 (d) The governing board of a state public university. 18 However, the combined total number of contracts for public school 19 academies issued by all state public universities shall not 20 exceed 85 through 1996, and, after the initial evaluation under 21 section 501a, shall not exceed 100 through 1997, 125 through 22 1998, or 150 thereafter. Further, the total number of contracts 23 issued by any 1 state public university shall not exceed 50 24 through 1996, and thereafter shall not exceed 50% of the maximum 25 combined total number that may be issued under this subdivision. 26 (3) To obtain a contract to organize and operate 1 or more 27 public school academies, 1 or more persons or an entity may apply 01046'99 4 1 to an authorizing body described in subsection (2). The 2 application shall include at least all of the following: 3 (a) Identification of the applicant for the contract. 4 (b) Subject to the resolution adopted by the authorizing 5 body under section 503(4), a list of the proposed members of the 6 board of directors of the public school academy and a description 7 of the qualifications and method for appointment or election of 8 members of the board of directors. 9 (c) The proposed articles of incorporation, which shall 10 include at least all of the following: 11 (i) The name of the proposed public school academy. 12 (ii) The purposes for the public school academy 13 corporation. This language shall provide that the public school 14 academy is incorporated pursuant to this part and that the public 15 school academy corporation is a governmental entity. 16 (iii) The name of the authorizing body. 17 (iv) The proposed time when the articles of incorporation 18 will be effective. 19 (v) Other matters considered expedient to be in the articles 20 of incorporation. 21 (d) A copy of the proposed bylaws of the public school 22 academy. 23 (e) Documentation meeting the application requirements of 24 the authorizing body, including at least all of the following: 25 (i) The governance structure of the public school academy. 26 (ii) A copy of the educational goals of the public school 27 academy and the curricula to be offered and methods of pupil 01046'99 5 1 assessment to be used by the public school academy. To the 2 extent applicable, the progress of the pupils in the public 3 school academy shall be assessed using at least a Michigan educa- 4 tion assessment program (MEAP) test or an assessment instrument 5 developed under section 1279 for a state-endorsed high school 6 diploma. 7 (iii) The admission policy and criteria to be maintained by 8 the public school academy. The admission policy and criteria 9 shall comply with section 504. This part of the application also 10 shall include a description of how the applicant will provide to 11 the general public adequate notice that a public school academy 12 is being created and adequate information on the admission 13 policy, criteria, and process. 14 (iv) The school calendar and school day schedule. 15 (v) The age or grade range of pupils to be enrolled. 16 (f) Descriptions of staff responsibilities and of the public 17 school academy's governance structure. 18 (g) For an application to the board of a school district, an 19 intermediate school board, or board of a community college, iden- 20 tification of the local and intermediate school districts in 21 which the public school academy will be located. 22 (h) An agreement that the public school academy will comply 23 with the provisions of this part and, subject to the provisions 24 of this part, with all other state law applicable to public 25 bodies and with federal law applicable to public bodies or school 26 districts. 01046'99 6 1 (i) For a public school academy authorized by a school 2 district, an assurance that employees of the public school 3 academy will be covered by the collective bargaining agreements 4 that apply to other employees of the school district employed in 5 similar classifications in schools that are not public school 6 academies. 7 (j) A description of and address for the proposed physical 8 plant in which the public school academy will be located. 9 (4) An authorizing body shall oversee, or shall contract 10 with an intermediate school district, community college, or state 11 public university to oversee, each public school academy operat- 12 ing under a contract issued by the authorizing body. The over- 13 sight shall be sufficient to ensure that the authorizing body can 14 certify that the public school academy is in compliance with 15 statute, rules, and the terms of the contract. AT LEAST ANNUAL- 16 LY, EACH AUTHORIZING BODY SHALL FILE AN OVERSIGHT REPORT WITH THE 17 STATE BOARD FOR EACH CONTRACT ISSUED BY THE AUTHORIZING BODY. 18 EACH OVERSIGHT REPORT SHALL BE ACCOMPANIED BY A WRITTEN CERTIFI- 19 CATION OF ITS ACCURACY SIGNED BY THE CHIEF ADMINISTRATOR OF THE 20 AUTHORIZING BODY AND BY THE PRESIDENT OF THE AUTHORIZING BODY'S 21 GOVERNING BOARD. AN OVERSIGHT REPORT SHALL CONTAIN AT LEAST ALL 22 OF THE FOLLOWING INFORMATION: 23 (A) NUMBER OF STAFF ASSIGNED TO OVERSIGHT ACTIVITIES, BOTH 24 GENERALLY AND FOR THE SPECIFIC CONTRACT, ON A FULL-TIME EQUATED 25 BASIS. 01046'99 7 1 (B) QUALIFICATIONS, INCLUDING ANY PROFESSIONAL 2 CERTIFICATION, OF STAFF ASSIGNED TO OVERSIGHT ACTIVITIES, BOTH 3 GENERALLY AND FOR THE SPECIFIC CONTRACT. 4 (C) OVERSIGHT ACTIVITIES CONDUCTED AT THE SITE OF THE PUBLIC 5 SCHOOL ACADEMY. 6 (D) ANY NONCOMPLIANCE WITH STATUTE, RULES, OR THE TERMS OF 7 THE CONTRACT FOUND IN THE COURSE OF THE OVERSIGHT AND ANY AREAS 8 OF PERFORMANCE FOUND TO BE IN NEED OF IMPROVEMENT. 9 (E) A DESCRIPTION OF THE SPECIFIC EVIDENCE THAT LED TO EACH 10 FINDING DESCRIBED IN SUBDIVISION (D). 11 (F) SPECIFIC PLANS FOR REMEDIATION OF EACH NONCOMPLIANCE 12 DESCRIBED IN SUBDIVISION (D). 13 (G) SPECIFIC SUGGESTIONS AND PLANS FOR IMPROVEMENT OF 14 PERFORMANCE. 15 (H) AN ASSURANCE THAT THE AUTHORIZING BODY HAS MADE APPRO- 16 PRIATE INQUIRY AND HAS DETERMINED THAT THE PUBLIC SCHOOL ACADEMY 17 IS IN COMPLIANCE WITH THE PROVISIONS OF SUBSECTION (1) CONCERNING 18 RELIGIOUS AFFILIATIONS. 19 (I) AN ASSURANCE THAT THE AUTHORIZING BODY HAS MADE APPRO- 20 PRIATE INQUIRY AND HAS DETERMINED THAT THE PUBLIC SCHOOL ACADEMY 21 IS IN COMPLIANCE WITH ALL APPLICABLE LAW, INCLUDING, BUT NOT 22 LIMITED TO, THOSE PROVISIONS OF LAW SPECIFIED IN SECTION 503(6). 23 (J) ASSURANCE THAT THE AUTHORIZING BODY HAS EXAMINED STAN- 24 DARDIZED TEST SCORES DESCRIBED IN SECTION 503(5) AND OTHER RELE- 25 VANT DATA TO DETERMINE THAT THE PUBLIC SCHOOL ACADEMY IS FULFILL- 26 ING THE ACADEMIC GOALS SPECIFIED IN THE CONTRACT. 01046'99 8 1 (K) ASSURANCE THAT THE AUTHORIZING BODY HAS EXAMINED THE 2 QUALIFICATIONS OF THE PUBLIC SCHOOL ACADEMY'S INSTRUCTIONAL STAFF 3 AND HAS DETERMINED THAT THE PUBLIC SCHOOL ACADEMY IS IN COMPLI- 4 ANCE WITH SECTION 505. 5 (5) If the state board finds that an authorizing body is not 6 engaging in appropriate continuing oversight of 1 or more public 7 school academies operating under a contract issued by the autho- 8 rizing body, the state board may suspend OR REVOKE the power of 9 the authorizing body to issue new contracts to organize and oper- 10 ate public school academies, AND MAY ORDER THE AUTHORIZING BODY 11 TO REPAY TO THIS STATE ANY FEE COLLECTED BY THE AUTHORIZING BODY 12 FOR ISSUING A CONTRACT OR FOR PROVIDING OVERSIGHT OF A CONTRACT. 13 A contract issued by the authorizing body during the suspension 14 OR AFTER THE REVOCATION is void.ATHE VALIDITY OF A contract 15 issued by the authorizing body before the suspension OR 16 REVOCATION is not affected by the suspension OR REVOCATION. WITH 17 THE APPROVAL OF THE STATE BOARD, A CONTRACT MAY BE RENEWED BY THE 18 AUTHORIZING BODY DURING A SUSPENSION. 19 (6) An authorizing body shall not charge a fee, or require 20 reimbursement of expenses, for considering an application for a 21 contract, for issuing a contract, or for providing oversight of a 22 contract for a public school academy in an amount that exceeds a 23 combined total of 3% of the total state school aid received by 24 the public school academy in the school year in which the fees or 25 expenses are charged. An authorizing body may provide other 26 services for a public school academy and charge a fee for those 27 services, but shall not require such an arrangement as a 01046'99 9 1 condition to issuing the contract authorizing the public school 2 academy. 3 (7) A public school academy shall be presumed to be legally 4 organized if it has exercised the franchises and privileges of a 5 public school academy for at least 2 years. 6 Sec. 503. (1) An authorizing body is not required to issue 7 a contract to any person or entity. Public school academy con- 8 tracts shall be issued on a competitive basis taking into consid- 9 eration the resources available for the proposed public school 10 academy, the population to be served by the proposed public 11 school academy, and the educational goals to be achieved by the 12 proposed public school academy. 13 (2) If a person or entity applies to the board of a school 14 district for a contract to organize and operate 1 or more public 15 school academies within the boundaries of the school district and 16 the board does not issue the contract, the person or entity may 17 petition the board to place the question of issuing the contract 18 on the ballot to be decided by the school electors of the school 19 district. The petition shall contain all of the information 20 required to be in the contract application under section 502(3) 21 and shall be signed by a number of school electors of the school 22 district equal to at least 15% of the total number of school 23 electors of that school district. The petition shall be filed 24 with the secretary of the board. If the board receives a peti- 25 tion meeting the requirements of this subsection, the board shall 26 place the question of issuing the contract on the ballot at its 27 next annual school election held at least 60 days after receiving 01046'99 10 1 the petition. If a majority of the school electors of the school 2 district voting on the question vote to issue the contract, the 3 board shall issue the contract. 4 (3) Within 10 days after issuing a contract for a public 5 school academy, the board of the authorizing body shall submit to 6 the state board a copy of the contract and of the application 7 under section 502. 8 (4) An authorizing body shall adopt a resolution establish- 9 ing the method of selection, length of term, and number of mem- 10 bers of the board of directors of each public school academy 11 subject to its jurisdiction. 12 (5) A contract issued to organize and administer a public 13 school academy shall contain at least all of the following: 14 (a) The educational goals the public school academy is to 15 achieve and the methods by which it will be held accountable. To 16 the extent applicable, the pupil performance of a public school 17 academy shall be assessed using at least a Michigan education 18 assessment program (MEAP) test or an assessment instrument devel- 19 oped under section 1279 for a state-endorsed high school 20 diploma. 21 (b) A description of the method to be used to monitor the 22 public school academy's compliance with applicable law and its 23 performance in meeting its targeted educational objectives. 24 (c) A description of the process for amending the contract 25 during the term of the contract. 26 (d) All of the matters set forth in the application for the 27 contract. 01046'99 11 1 (e) For a public school academy authorized by a school 2 district, an agreement that employees of the public school acad- 3 emy will be covered by the collective bargaining agreements that 4 apply to employees of the school district employed in similar 5 classifications in schools that are not public school academies. 6 (f) Procedures for revoking the contract and grounds for 7 revoking the contract, including at least the grounds listed in 8 section 507. 9 (g) A description of and address for the proposed physical 10 plant in which the public school academy will be located. 11 (h) Requirements and procedures for financial audits. The 12 financial audits shall be conducted at least annually by a certi- 13 fied public accountant in accordance with generally accepted gov- 14 ernmental auditing principles. 15 (6) A public school academy shall comply with all applicable 16 law, including all of the following: 17 (a) The open meetings act,Act No. 267 of the Public Acts18of 1976, being sections 15.261 to 15.275 of the Michigan Compiled19Laws1976 PA 267, MCL 15.261 TO 15.275. 20 (b) The freedom of information act,Act No. 442 of the21Public Acts of 1976, being sections 15.231 to 15.246 of the22Michigan Compiled Laws1976 PA 442, MCL 15.231 TO 15.246. 23 (c)Act No. 336 of the Public Acts of 1947, being24sections 423.201 to 423.217 of the Michigan Compiled Laws1947 25 PA 336, MCL 423.201 TO 423.217. 01046'99 12 1 (d)Act No. 166 of the Public Acts of 1965, being2sections 408.551 to 408.558 of the Michigan Compiled Laws1965 3 PA 166, MCL 408.551 TO 408.558. 4 (e) Sections 1134, 1135, 1146, 1153, 1263(3), 1267, and 5 1274. 6 (7) A public school academy and its incorporators, board 7 members, officers, employees, and volunteers have governmental 8 immunity as provided in section 7 ofAct No. 170 of the Public9Acts of 1964, being section 691.1407 of the Michigan Compiled10Laws1964 PA 170, MCL 691.1407. An authorizing body and its 11 board members, officers, and employees are immune from civil 12 liability, both personally and professionally, for any acts or 13 omissions in authorizing a public school academy if the authoriz- 14 ing body or the person acted or reasonably believed he or she 15 acted within the authorizing body's or the person's scope of 16 authority. 17 (8) A public school academy is exempt from all taxation on 18 its earnings and property. Instruments of conveyance to or from 19 a public school academy are exempt from all taxation including 20 taxes imposed byAct No. 134 of the Public Acts of 1966, being21sections 207.501 to 207.513 of the Michigan Compiled Laws1966 22 PA 134, MCL 207.501 TO 207.513. A public school academy may not 23 levy ad valorem property taxes or any other tax for any purpose. 24 However, operation of 1 or more public school academies by a 25 school district or intermediate school district does not affect 26 the ability of the school district or intermediate school 27 district to levy ad valorem property taxes or any other tax. 01046'99 13 1 (9)ASUBJECT TO SECTION 503B, A public school academy may 2 acquire by purchase, gift, devise, lease, sublease, installment 3 purchase agreement, land contract, option, or by any other means, 4 hold and own in its own name buildings and other property for 5 school purposes, and interests therein, and other real and per- 6 sonal property, including, but not limited to, interests in prop- 7 erty subject to mortgages, security interests, or other liens, 8 necessary or convenient to fulfill its purposes. For the pur- 9 poses of condemnation, a public school academy may proceed under 10 the uniform condemnation procedures act,Act No. 87 of the11Public Acts of 1980, being sections 213.51 to 213.77 of the12Michigan Compiled Laws1980 PA 87, MCL 213.51 TO 213.75, exclud- 13 ing sections 6 to 9 of that act,being sections 213.56 to 213.5914of the Michigan Compiled LawsMCL 213.56 TO 213.59, or other 15 applicable statutes, but only with the express, written permis- 16 sion of the authorizing body in each instance of condemnation and 17 only after just compensation has been determined and paid. 18 SEC. 503B. (1) ALL PROPERTY OWNED BY A PUBLIC SCHOOL ACAD- 19 EMY IS STATE PROPERTY. IF A PUBLIC SCHOOL ACADEMY CEASES TO 20 OPERATE, TITLE TO ALL REAL AND PERSONAL PROPERTY, INTERESTS IN 21 REAL OR PERSONAL PROPERTY, AND OTHER ASSETS OF A PUBLIC SCHOOL 22 ACADEMY SHALL REVERT TO THIS STATE. ANY MONEY INCLUDED IN THOSE 23 ASSETS AND THE NET PROCEEDS FROM THE SALE OF THE PROPERTY OR 24 INTERESTS IN PROPERTY, AFTER PAYMENT OF ANY DEBT SECURED BY THE 25 PROPERTY OR INTEREST IN PROPERTY, SHALL BE DEPOSITED IN THE STATE 26 SCHOOL AID FUND. 01046'99 14 1 (2) THIS SECTION DOES NOT IMPOSE ANY LIABILITY ON THIS STATE 2 FOR ANY DEBT INCURRED BY A PUBLIC SCHOOL ACADEMY. 3 Sec. 504a. In addition to other powers set forth in this 4 part, a public school academy may take action to carry out the 5 purposes for which it was incorporated under this part, includ- 6 ing, but not limited to, all of the following: 7 (a) To sue and be sued in its name. 8 (b)ToSUBJECT TO SECTION 503B, TO acquire, hold, and own 9 in its own name real and personal property, or interests in real 10 or personal property, for educational purposes by purchase, gift, 11 grant, devise, bequest, lease, sublease, installment purchase 12 agreement, land contract, option, or condemnation, and subject to 13 mortgages, security interests, or other liens; and to sell or 14 convey the property as the interests of the public school academy 15 require. 16 (c) To receive and disburse funds for lawful purposes. 17 (d) To enter into binding legal agreements with persons or 18 entities as necessary for the operation, management, and mainte- 19 nance of the public school academy. 20 (e) To incur temporary debt in accordance with 21 section 1225. 22 (f) To solicit and accept any grants or gifts for educa- 23 tional purposes and to establish or permit to be established on 24 its behalf 1 or more nonprofit corporations the purpose of which 25 is to assist the public school academy in the furtherance of its 26 public purposes. 01046'99 15 1 SEC. 504D. A PUBLIC SCHOOL ACADEMY SHALL NOTIFY THE PARENT 2 OR LEGAL GUARDIAN OF EACH APPLICANT FOR ENROLLMENT THAT THE 3 PUBLIC SCHOOL ACADEMY IS REQUIRED BY LAW TO PROVIDE SPECIAL EDU- 4 CATION PROGRAMS AND SERVICES DESIGNED TO DEVELOP THE MAXIMUM 5 POTENTIAL OF EACH PUPIL ENROLLED IN THE SCHOOL WHO IS ELIGIBLE 6 FOR SPECIAL EDUCATION. 7 SEC. 1259. AT LEAST ANNUALLY, EACH SCHOOL DISTRICT, INTER- 8 MEDIATE SCHOOL DISTRICT, AND PUBLIC SCHOOL ACADEMY SHALL SUBMIT 9 TO THE DEPARTMENT A LIST OF SCHOOL BUILDINGS OWNED BY THE SCHOOL 10 DISTRICT, INTERMEDIATE SCHOOL DISTRICT, OR PUBLIC SCHOOL ACADEMY 11 THAT ARE NOT BEING USED. IN ADDITION, AT LEAST ANNUALLY, THE 12 DIRECTOR OF THE DEPARTMENT OF MANAGEMENT AND BUDGET SHALL SUBMIT 13 TO THE DEPARTMENT A LIST OF BUILDINGS OWNED BY THIS STATE THAT 14 ARE NOT BEING USED. THE DEPARTMENT SHALL COMPILE THIS INFORMA- 15 TION, SORTED BY COUNTY, AND SHALL MAKE THIS INFORMATION AVAILABLE 16 TO ANY INTERESTED PERSON UPON REQUEST. 01046'99 Final page. TAV