Bill Text: MI SB0952 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Education; school districts; deficit elimination plan; provide for enhancement. Amends 1976 PA 451 (MCL 380.1 - 380.1852) by adding sec. 1220. TIE BAR WITH: SB 0951'14, SB 0954'14, SB 0957'14
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2014-12-17 - Postponed Temporarily [SB0952 Detail]
Download: Michigan-2013-SB0952-Engrossed.html
SB-0952, As Passed Senate, December 3, 2014
SUBSTITUTE FOR
SENATE BILL NO. 952
A bill to amend 1976 PA 451, entitled
"The revised school code,"
(MCL 380.1 to 380.1852) by adding section 1220.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1220. (1) A school district, intermediate school
district, or public school academy shall not adopt or operate under
a deficit budget, and a school district, intermediate school
district, or public school academy shall not incur an operating
deficit in a fund during a school fiscal year. If a school
district, intermediate school district, or public school academy
has an existing deficit fund balance, incurs a deficit fund balance
in the most recently completed school fiscal year, or adopts a
current year budget that projects a deficit fund balance, all of
the following apply:
(a) The school district, intermediate school district, or
public school academy shall notify the superintendent of public
instruction and the state treasurer immediately upon the occurrence
of the circumstance. A school district shall provide a copy of the
notice under this subdivision to the intermediate superintendent of
the intermediate school district in which the school district is
located. A public school academy shall provide a copy of the notice
under this subdivision to the authorizing body of the public school
academy.
(b) Within 30 days after making notification under subdivision
(a), the school district, intermediate school district, or public
school academy shall submit to the superintendent of public
instruction and the state treasurer a preplan financial report in
the form and manner prescribed by the department of treasury.
Before submission to the state treasurer, a school district shall
transmit a copy of a report under this subdivision to the members
of the board of the school district and to the intermediate
superintendent of the intermediate school district in which the
school district is located, an intermediate school district shall
transmit a copy of a report under this subdivision to the members
of the board of the intermediate school district, and a public
school academy shall transmit a copy of a report under this
subdivision to the members of the board of the public school
academy and its authorizing body.
(c) Within 90 days after notifying the department, the school
district, intermediate school district, or public school academy
shall submit to the superintendent of public instruction in the
form and manner prescribed by the department an amended budget for
the current school fiscal year and a deficit elimination plan
approved by the board of the school district, intermediate school
district, or public school academy, with a copy to the state
treasurer. A school district shall transmit a copy of the amended
budget and the deficit elimination plan to the intermediate
superintendent of the intermediate school district in which the
school district is located. A public school academy shall transmit
a copy of the amended budget and the deficit elimination plan to
its authorizing body.
(d) The department may withhold and release some or all of the
money payable to the school district, intermediate school district,
or public school academy as provided under section 102 of the state
school aid act of 1979, MCL 388.1702.
(e) The superintendent of public instruction may require a
deficit elimination plan to include an academic plan for the school
district, intermediate school district, or public school academy.
(f) After the superintendent of public instruction approves a
school district's, intermediate school district's, or public school
academy's deficit elimination plan, the school district,
intermediate school district, or public school academy shall post
the deficit elimination plan on the school district's, intermediate
school district's, or public school academy's website.
(2) To assure greater coordination and effective partnerships
in the development and implementation of a deficit elimination plan
under subsection (1), when administering subsections (1), (4), and
(5), the department shall consult with all of the following:
(a) The department of treasury.
(b) The school district, intermediate school district, or
public school academy required to submit a deficit elimination plan
under subsection (1).
(c) For a school district required to submit a deficit
elimination plan under subsection (1), the intermediate
superintendent of the intermediate school district in which the
school district is located.
(d) For a public school academy required to submit a deficit
elimination plan under subsection (1), the authorizing body of the
public school academy.
(3) Not later than March 1 of each year, the department shall
prepare a report of deficits incurred or projected by school
districts, intermediate school districts, and public school
academies in the immediately preceding fiscal year and the progress
made in reducing those deficits and submit the report to the
standing committees of the legislature responsible for K-12
education legislation, the appropriations subcommittees of the
legislature responsible for K-12 school aid appropriations, the
house and senate fiscal agencies, the state treasurer, and the
state budget director. The department also shall submit quarterly
interim reports concerning the progress made by school districts,
intermediate school districts, and public school academies in
reducing those deficits to the standing committees of the
legislature responsible for K-12 education legislation, the
appropriations subcommittees of the legislature responsible for K-
12 school aid appropriations, the house and senate fiscal agencies,
the state treasurer, and the state budget director. On a quarterly
basis, the superintendent of public instruction shall publicly
present those reports to the appropriations subcommittees of the
legislature responsible for K-12 school aid appropriations.
(4) A school district, intermediate school district, or public
school academy required to submit a deficit elimination plan under
this section shall submit to the superintendent of public
instruction and the state treasurer a monthly monitoring report on
revenue and expenditures in a form and manner prescribed by the
department and shall post these reports on its website. A school
district shall transmit a copy of each report under this subsection
to the intermediate superintendent of the intermediate school
district in which the school district is located. A public school
academy shall transmit a copy of each report under this section to
the authorizing body of the public school academy. A school
district may contract with its intermediate school district or
another entity to provide the monthly monitoring report.
(5) If a school district, intermediate school district, or
public school academy is required to submit a deficit elimination
plan under this section, and the deficit elimination plan is
approved by the department, the superintendent of public
instruction may continue allotment and payment of funds as provided
under section 102 of the state school aid act of 1979, MCL
388.1702. When approving a deficit elimination plan, the
superintendent of public instruction shall establish the period of
time within which a school district, intermediate school district,
or public school academy must eliminate its deficit and may set
special conditions that the school district, intermediate school
district, or public school academy must meet while the deficit
elimination plan is in effect. After the department approves a
school district's, intermediate school district's, or public school
academy's deficit elimination plan under this subsection, the
school district, intermediate school district, or public school
academy shall post the deficit elimination plan on the school
district's, intermediate school district's, or public school
academy's website. The requirements of this section relating to a
deficit elimination plan do not apply to a school district,
intermediate school district, or public school academy if the
school district, intermediate school district, or public school
academy is required to submit an enhanced deficit elimination plan
under subsection (6).
(6) If, based upon information included in a periodic
financial status report required under section 1219, a preplan
financial report required under this section, a deficit elimination
plan required under this section, or a request by the
superintendent of public instruction, the state treasurer
determines that a school district, intermediate school district, or
public school academy is subject to rapidly deteriorating financial
circumstances, persistently declining enrollment, or other
indicators of financial stress likely to result in recurring
operating deficits or recurring financial stress within the school
district, intermediate school district, or public school academy,
the state treasurer may require the school district, intermediate
school district, or public school academy to submit an enhanced
deficit elimination plan in the form and manner determined by the
department of treasury. If a deficit for a school district,
intermediate school district, or public school academy has not been
completely eliminated within 5 years after it submitted its initial
deficit elimination plan, the state treasurer shall require the
school district, intermediate school district, or public school
academy to submit an enhanced deficit elimination plan under this
subsection. An enhanced deficit elimination plan shall provide for
the resolution of the deteriorating financial circumstances,
persistently declining enrollment, or other indicators of recurring
operating deficits or recurring financial stress and is subject to
approval by the state treasurer. As a condition of approving the
enhanced deficit elimination plan, the state treasurer may require
a school district, intermediate school district, or public school
academy required to submit an enhanced deficit elimination plan
under this section to enter into a financial recovery agreement
with the state treasurer. A financial recovery agreement may
provide for, but is not limited to, all of the following:
(a) Assistance and guidance from the department of treasury
and other state departments and agencies.
(b) A financial and operating plan for the school district,
intermediate school district, or public school academy.
(c) The appointment of a local auditor or inspector, or both.
(d) Remedial measures or other action under this act necessary
to address the financial circumstances of the school district,
intermediate school district, or public school academy.
(e) The required retention by the school district,
intermediate school district, or public school academy of a
consultant or 1 or more other experts for the purpose of assisting
the school district, intermediate school district, or public school
academy to achieve the goals and objectives of the financial
recovery agreement.
(7) Before a school district, intermediate school district, or
public school academy submits an enhanced deficit elimination plan
to the state treasurer under subsection (6), the board of the
school district or intermediate school district or board of
directors of the public school academy shall approve the plan. If a
school district, intermediate school district, or public school
academy is required to submit an enhanced deficit elimination plan
under subsection (6), some or all of the money payable to the
school district, intermediate school district, or public school
academy under the state school aid act of 1979 may be withheld and
released as provided under section 102 of the state school aid act
of 1979, MCL 388.1702. When approving an enhanced deficit
elimination plan, the state treasurer may establish the period of
time within which a school district, intermediate school district,
or public school academy must eliminate its deficit and may set
special conditions that the school district, intermediate school
district, or public school academy must meet while the deficit
elimination plan is in effect.
(8) To assure greater coordination and effective partnerships
in the development and implementation of an enhanced deficit
elimination plan under subsection (6), when administering
subsections (6), (7), and (10), the department of treasury shall
consult with all of the following:
(a) The department.
(b) The school district, intermediate school district, or
public school academy required to submit an enhanced deficit
elimination plan under subsection (6).
(c) For a school district required to submit an enhanced
deficit elimination plan under subsection (6), the intermediate
superintendent of the intermediate school district in which the
school district is located.
(d) For a public school academy required to submit an enhanced
deficit elimination plan under subsection (6), the authorizing body
of the public school academy.
(9) After the state treasurer approves an enhanced deficit
elimination plan for a school district, intermediate school
district, or public school academy, the school district,
intermediate school district, or public school academy shall post
the enhanced deficit elimination plan on the school district's,
intermediate school district's, or public school academy's website.
(10) If a school district, intermediate school district, or
public school academy is required to submit an enhanced deficit
elimination plan under subsection (6), the school district,
intermediate school district, or public school academy shall submit
to the superintendent of public instruction and the state treasurer
an enhanced monthly monitoring report on revenue, expenditures,
cash flow, debt, other liabilities, assets, budget amendments,
pupil membership, and other data relating to the finances of the
school district, intermediate school district, or public school
academy in a form and manner prescribed by the department of
treasury and shall post these reports on its website.
(11) As used in this section:
(a) "Authorizing body" means an authorizing body for a public
school academy under this act.
(b) "Deficit elimination plan" means a plan required under
this section for the elimination of a deficit that sets forth
actions to be taken to eliminate the deficit within the time period
prescribed by the department.
(c) "Deficit fund balance" means that term as defined in the
Michigan public school accounting manual published by the
department.
(d) "Enhanced deficit elimination plan" means measures
required by the state treasurer under this section to address the
financial conditions within a school district, intermediate school
district, or public school academy and resolve any deficit within
the time period prescribed by the state treasurer.
(e) "Preplan financial report" means a report on the financial
conditions within a school district, intermediate school district,
or public school academy required under this section and submitted
in a form and manner prescribed by the state treasurer, which may
include, but is not limited to, financial data and other
information on liabilities, payments, enrollment, borrowing, and
other criteria relating to the financial conditions within a school
district, intermediate school district, or public school academy.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No. 951.
(b) Senate Bill No. 954.
(c) Senate Bill No. 957.
