HOUSE BILL No. 4325

 

March 11, 2015, Introduced by Rep. Poleski and referred to the Committee on Financial Liability Reform.

 

     A bill to amend 1976 PA 451, entitled

 

"The revised school code,"

 

(MCL 380.1 to 380.1852) by adding section 1219.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1219. (1) Before July 7 of each school fiscal year, each

 

school district and public school academy shall transmit to CEPI

 

the budgetary assumptions used in the preparation of its annual

 

budget pursuant to the uniform budgeting and accounting act, 1968

 

PA 2, MCL 141.421 to 141.440a. The submission of the budgetary

 

assumptions under this subsection shall be in the form prescribed

 

by CEPI and shall include at least all of the following

 

information:

 

     (a) The projected foundation allowance for the school district

 

or public school academy used by its governing body when adopting


 

the budget for the school district or public school academy for the

 

current school fiscal year.

 

     (b) An indication of whether the projected foundation

 

allowance under subdivision (a) increased, decreased, or remained

 

unchanged from the foundation allowance of the school district or

 

public school academy for the immediately preceding school fiscal

 

year.

 

     (c) The projected membership of the school district or public

 

school academy used when adopting the budget of the school district

 

or public school academy for the current school fiscal year.

 

     (d) An indication of whether the projected membership under

 

subdivision (c) increased, decreased, or remained unchanged from

 

the membership reported by the department for the school district

 

or public school academy in the most recent state aid financial

 

status report for the month of May.

 

     (e) The expenditures per pupil for the school district or

 

public school academy for the immediately preceding school fiscal

 

year, calculated by dividing total general fund operating

 

expenditures for the school district or public school academy

 

during that school fiscal year by the membership for the school

 

district or public school academy reported by the department in the

 

most recent state aid financial status report for the month of May.

 

     (f) The projected expenditures per pupil for the school

 

district or public school academy for the current school fiscal

 

year, calculated by dividing the total general fund operating

 

expenditures authorized by the governing body of the school

 

district or the public school academy when adopting the budget for


 

the current school fiscal year by the projected membership of the

 

school district or public school academy used when adopting the

 

budget of the school district or public school academy for the

 

current school fiscal year.

 

     (2) By July 21 of each school fiscal year, using the budgetary

 

assumptions received under subsection (1), CEPI shall complete a

 

summary of the budgetary assumptions for each intermediate school

 

district and authorizing body in this state. A summary of the

 

budgetary assumptions for an intermediate school district shall

 

include budgetary assumption information for each school district

 

located within the intermediate school district. A summary of the

 

budgetary assumptions for an authorizing body shall include

 

budgetary assumption information for each public school academy

 

authorized by the authorizing body. By July 21 of each school

 

fiscal year, CEPI shall transmit the summary of the budgetary

 

assumptions for each intermediate school district to the

 

intermediate superintendent of the intermediate school district,

 

the superintendent of public instruction, and the state treasurer.

 

By July 21 of each school fiscal year, CEPI shall transmit the

 

summary of the budgetary assumptions for each authorizing body to

 

the authorizing body, the superintendent of public instruction, and

 

the state treasurer. A summary of the budgetary assumptions shall

 

include at least all of the following information:

 

     (a) For an intermediate school district, all of the following

 

for each school district located within the intermediate school

 

district:

 

     (i) The name of each school district.


 

     (ii) The projected foundation allowance reported under

 

subsection (1)(a) and the indication provided under subsection

 

(1)(b).

 

     (iii) The projected membership reported under subsection (1)(c)

 

and the indication provided under subsection (1)(d).

 

     (iv) The expenditures per pupil amounts for the school district

 

provided under subsection (1)(e) and (f).

 

     (b) For an authorizing body, all of the following for each

 

public school academy authorized by the authorizing body:

 

     (i) The name of each public school academy.

 

     (ii) The projected foundation allowance reported under

 

subsection (1)(a) and the indication provided under subsection

 

(1)(b).

 

     (iii) The projected membership reported under subsection (1)(c)

 

and the indication provided under subsection (1)(d).

 

     (iv) The expenditures per pupil amounts for the public school

 

academy provided under subsection (1)(e) and (f).

 

     (3) By July 28 of each school fiscal year, the intermediate

 

superintendent of each intermediate school district receiving a

 

summary of budgetary assumptions under subsection (2) shall review

 

the budgetary assumptions included in the summary of budgetary

 

assumptions for each school district in the intermediate school

 

district and notify CEPI, on a form prescribed by CEPI, whether the

 

intermediate superintendent concurs with the budgetary assumptions

 

for each school district included in the summary of budgetary

 

assumptions. By July 28 of each school fiscal year, each

 

authorizing body receiving a summary of budgetary assumptions under


 

subsection (2) shall review the budgetary assumptions included in

 

the summary of budgetary assumptions for each public school academy

 

and notify CEPI, on a form prescribed by CEPI, whether the

 

authorizing body concurs with the budgetary assumptions for each

 

public school academy included in the summary of budgetary

 

assumptions. In determining whether to concur with budgetary

 

assumptions under this subsection, an intermediate superintendent

 

or an authorizing body shall consider all of the following factors

 

for each school district or public school academy:

 

     (a) The school district's or public school academy's

 

foundation allowance and membership for prior fiscal years.

 

     (b) For a school district, projections used by other school

 

districts within the intermediate school district for the same

 

fiscal year.

 

     (c) For a public school academy, projections used by other

 

public school academies authorized by the authorizing body for the

 

same fiscal year.

 

     (d) Projections released by 1 or more of the department of

 

treasury, the house fiscal agency, the senate fiscal agency, or a

 

revenue estimating conference conducted under section 367b of the

 

management and budget act, 1984 PA 431, MCL 18.1367b.

 

     (e) Projections based on pending or enacted legislation.

 

     (4) By August 10 of each school fiscal year, CEPI shall

 

prepare and transmit to the superintendent of public instruction

 

and the state treasurer a final summary of budgetary assumptions

 

for each intermediate school district and authorizing body in this

 

state. The final summary of budgetary assumptions shall include at


 

least all of the information detailed in subsection (2)(a) and (b),

 

and any changes submitted to CEPI by an intermediate school

 

district or authorizing body in budgetary assumptions under

 

subsection (2) or in intermediate superintendent or authorizing

 

body concurrence under subsection (3) and confirmed by CEPI before

 

that August 10. When transmitting the final summary of budgetary

 

assumptions to the superintendent of public instruction and the

 

state treasurer under this subsection, CEPI also shall transmit a

 

copy of the final summary of budgetary assumptions for an

 

intermediate school district to the intermediate superintendent of

 

the intermediate school district and a copy of the final summary of

 

budgetary assumptions for an authorizing body to the authorizing

 

body. By August 20 of each school fiscal year, the state treasurer

 

shall review each final summary of budgetary assumptions prepared

 

under this subsection. If the state treasurer concurs with a

 

determination by an intermediate superintendent or authorizing body

 

that a budgetary assumption used by the governing body of a school

 

district or public school academy is unreasonable or if the state

 

treasurer does not concur with a determination by an intermediate

 

superintendent or authorizing body that a budgetary assumption used

 

by the governing body of a school district or public school academy

 

is reasonable, then by that August 20 the state treasurer shall

 

notify the school district or public school academy and provide a

 

copy of the notice to the superintendent of public instruction. For

 

a school district, the state treasurer shall also provide a copy of

 

the notice to the intermediate superintendent of the intermediate

 

school district in which the school district is located and to each


 

member of the school board of the school district. For a public

 

school academy, the state treasurer shall also provide a copy of

 

the notice to the authorizing body of the public school academy and

 

to each member of the board of directors of the public school

 

academy. If the state treasurer notifies a school district or

 

public school academy of concurrence or nonconcurrence under this

 

subsection, within 5 days after that notification the school

 

district or public school academy shall post a notice on the main

 

page of the school district's or public school academy's website

 

indicating that the school district or public school academy has

 

adopted a budget that relies upon unreasonable budgetary

 

assumptions. The notice shall remain on the main page of the school

 

district's or public school academy's website until the earlier of

 

the following:

 

     (a) The next June 30.

 

     (b) The adoption by the school district or public school

 

academy of an amended budget for the school fiscal year based upon

 

budgetary assumptions that the intermediate school district or

 

authorizing body, with the concurrence of the state treasurer,

 

determines are reasonable.

 

     (5) If a school district, intermediate school district, or

 

public school academy, or the authorizing body of a public school

 

academy, determines that conditions of fiscal stress, a deficit, or

 

conditions indicating a potential financial emergency have arisen

 

or may arise for the school district, intermediate school district,

 

or public school academy, that school district, intermediate school

 

district, public school academy, or authorizing body shall notify


 

the superintendent of public instruction and request technical

 

assistance from this state in addressing the fiscal stress,

 

deficit, or potential financial emergency. The superintendent of

 

public instruction shall notify the state treasurer of any request

 

for technical assistance under this subsection.

 

     (6) A school district that requests assistance under

 

subsection (5) shall provide a copy of the notice and request to

 

the superintendent of the intermediate school district in which the

 

school district is located. A public school academy that requests

 

assistance under subsection (5) shall provide a copy of the notice

 

and request to its authorizing body.

 

     (7) Within 45 days after receiving a request for assistance

 

under subsection (5), the department shall consult with the

 

department of treasury regarding the provision of technical

 

assistance to the school district, intermediate school district, or

 

public school academy. Subject to available resources, the

 

department and the department of treasury shall review the

 

financial condition and the budget of the school district,

 

intermediate school district, or public school academy, and, after

 

consultation with the school district, intermediate school

 

district, or public school academy, provide technical assistance,

 

including, but not limited to, data analysis tools, with the

 

objective of assisting the school district, intermediate school

 

district, or public school academy in avoiding conditions of fiscal

 

stress, a deficit, or a potential financial emergency before

 

further state intervention. To assure greater coordination and

 

effective partnerships, when administering this subsection for a


 

school district, the department and the department of treasury

 

shall consult with the superintendent of the school district and

 

the intermediate superintendent of the intermediate school district

 

in which the school district is located, and the intermediate

 

school district may provide assistance that complements and

 

supports the state assistance provided under this section. To

 

assure greater coordination and effective partnerships, when

 

administering this subsection for a public school academy, the

 

department and the department of treasury shall consult with the

 

authorizing body of the public school academy, and the authorizing

 

body may provide assistance that complements and supports the state

 

assistance provided under this section.

 

     (8) The superintendent of public instruction or the state

 

treasurer may require a school district, intermediate school

 

district, or public school academy to submit periodic financial

 

status reports under subsection (9) if either the superintendent of

 

public instruction or the state treasurer determines that potential

 

financial stress may exist within the school district, intermediate

 

school district, or public school academy, that a deficit is

 

projected to arise within the school district, intermediate school

 

district, or public school academy during the current school fiscal

 

year or the following 2 school fiscal years, or that the school

 

district, intermediate school district, or public school academy

 

may be unable to meet its financial obligations while also

 

satisfying the school district's, intermediate school district's,

 

or public school academy's obligations or abilities to provide

 

public educational services in a manner that complies with this


 

act, the state school aid act of 1979, and applicable rules, based

 

upon 1 or more of the following:

 

     (a) Financial data or other information submitted by the

 

school district, intermediate school district, or public school

 

academy to a state department or agency.

 

     (b) Financial data or other information included within an

 

audited financial statement of the school district, intermediate

 

school district, or public school academy.

 

     (c) Financial data or other information provided to a state

 

department, agency, or authority in connection with a request to

 

issue bonds, notes, or other debt obligations, including, but not

 

limited to, information relating to a request for a loan under the

 

emergency municipal loan act, 1980 PA 243, MCL 141.931 to 141.942.

 

     (d) Financial data or other information included within a

 

recommended budget, budget, or general appropriations act of the

 

school district, intermediate school district, or public school

 

academy.

 

     (e) Financial data or other information provided to a state

 

department, agency, or authority by an officer, employee,

 

contractor, or agent of the school district, intermediate school

 

district, or public school academy.

 

     (f) For a school district, data relating to pupil enrollment,

 

including, but not limited to, residents of other school districts

 

enrolled in the school district and residents of the school

 

district enrolled in another school district or in a public school

 

not operated by the school district.

 

     (g) For a school district, financial data or other information


 

provided to the department or department of treasury by the

 

intermediate school district in which the school district is

 

located.

 

     (h) For a public school academy, financial data or other

 

information provided to the department or department of treasury by

 

the authorizing body of the public school academy.

 

     (i) For a school district, the intermediate school district in

 

which the school district is located did not concur under

 

subsection (3) with the budgetary assumptions submitted by the

 

school district under subsection (1).

 

     (j) For a public school academy, the public school academy's

 

authorizing body did not concur under subsection (3) with the

 

budgetary assumptions submitted by the public school academy under

 

subsection (1).

 

     (9) For a school district, not less than 14 days before

 

determining under subsection (8) that potential financial stress

 

may exist for the school district, the superintendent of public

 

instruction or the state treasurer shall notify the school district

 

and the intermediate school district in which the school is located

 

of a potential determination under subsection (8). For an

 

intermediate school district, not less than 14 days before

 

determining under subsection (8) that potential financial stress

 

may exist for the intermediate school district, the superintendent

 

of public instruction or the state treasurer shall notify the

 

intermediate school district of a potential determination under

 

subsection (8). For a public school academy, not less than 14 days

 

before determining under subsection (8) that potential financial


 

stress may exist for the public school academy, the superintendent

 

of public instruction or the state treasurer shall notify the

 

public school academy and the authorizing body of the public school

 

academy of a potential determination under subsection (8). If the

 

superintendent of public instruction or the state treasurer

 

determines under subsection (8) that potential financial stress may

 

exist for a school district, intermediate school district, or

 

public school academy, after making the notification required under

 

this subsection, either the superintendent of public instruction or

 

the state treasurer may require the school district, intermediate

 

school district, or public school academy to submit to that officer

 

a periodic financial status report on a periodic basis determined

 

by the superintendent of public instruction or the state treasurer

 

under subsection (10) if 1 or more of the following are applicable:

 

     (a) The school district, intermediate school district, or

 

public school academy failed to make a required payment to the

 

Michigan public school employees' retirement system under the

 

public school employees retirement act of 1979, 1980 PA 300, MCL

 

38.1301 to 38.1437.

 

     (b) The school district, intermediate school district, or

 

public school academy failed to make a required payment to the

 

Michigan unemployment insurance agency.

 

     (c) The school district, intermediate school district, or

 

public school academy failed to timely transmit to the department

 

of treasury a required payment of tax withheld from payments to

 

employees of the school district, intermediate school district, or

 

public school academy.


 

     (d) Information submitted by a vendor of the school district,

 

intermediate school district, or public school academy indicates

 

that the school district, intermediate school district, or public

 

school academy is more than 90 days in arrears on a payment owed to

 

the vendor as required under a contract between the vendor and the

 

school district, intermediate school district, or public school

 

academy.

 

     (e) The school district or intermediate school district has

 

expended tax revenue for an unauthorized purpose or the school

 

district or intermediate school district has transferred or

 

deposited tax revenue in an unauthorized manner.

 

     (f) The school district or intermediate school district has

 

failed to distribute tax revenue as required by law or to make

 

timely refunds of tax revenues as required by law.

 

     (g) The school district, intermediate school district, or

 

public school academy has failed to pay employees of the school

 

district, intermediate school district, or public school academy

 

within the time period required by law.

 

     (h) The school district, intermediate school district, or

 

public school academy has failed to comply with a material

 

requirement in the uniform budgeting and accounting act, 1968 PA 2,

 

MCL 141.421 to 141.440a, and the material violation was noted in an

 

audit or audited financial statement of the school district,

 

intermediate school district, or public school academy.

 

     (i) The general fund balance of the school district,

 

intermediate school district, or public school academy, expressed

 

as a percentage of current operating expenditures, has declined by


 

5 percentage points or more each year over 3 consecutive school

 

fiscal years.

 

     (j) The expenditures per pupil of the school district,

 

intermediate school district, or public school academy have

 

increased by 5% or more in the most recent school fiscal year, as

 

compared to the immediately preceding school fiscal year. As used

 

in this subdivision, "expenditures per pupil" means the quotient of

 

dividing the total general fund operating expenditures for a school

 

fiscal year by the final audited number of pupils in membership for

 

the state fiscal year in which that school year ended.

 

     (k) For a school district or public school academy, pupil

 

enrollment in the school district or public school academy has

 

declined by 5% or more in a single school fiscal year or by 15% or

 

more over a period of 3 consecutive school fiscal years and the

 

school district or public school academy failed to reduce

 

expenditures in a manner that addresses the decline in enrollment.

 

     (l) For a school district, a request for a determination under

 

this subsection is submitted to the superintendent of public

 

instruction or the state treasurer by the board of the school

 

district or the superintendent of the intermediate school district.

 

     (m) For a public school academy, a request for a determination

 

under this subsection is submitted to the superintendent of public

 

instruction or the state treasurer by the board of the public

 

school academy or the authorizing body of the public school

 

academy.

 

     (n) For a school district, based upon the factors described in

 

this subsection and subsection (8) or information provided by an


 

intermediate school district, the superintendent of public

 

instruction or the state treasurer determines that a deficit is

 

likely to arise for the school district in the current or next

 

school fiscal year and the school district has not taken action

 

necessary to prevent the deficit from arising.

 

     (o) For a public school academy, based upon the factors

 

described in this subsection and subsection (8) or information

 

provided by the authorizing body of the public school academy, the

 

superintendent of public instruction or the state treasurer

 

determines that a deficit is likely to arise for the public school

 

academy in the current or next fiscal year and the public school

 

academy has not taken action necessary to prevent the deficit from

 

arising.

 

     (p) For a school district, the school district has applied for

 

a loan under the emergency municipal loan act, 1980 PA 243, MCL

 

141.931 to 141.942.

 

     (q) For a school district, the intermediate school district in

 

which the school district is located did not concur under

 

subsection (3) with the budgetary assumptions submitted by the

 

school district under subsection (1).

 

     (r) For a public school academy, the public school academy's

 

authorizing body did not concur under subsection (3) with the

 

budgetary assumptions submitted by the public school academy under

 

subsection (1).

 

     (10) If a school district, intermediate school district, or

 

public school academy is required to submit periodic financial

 

status reports under subsection (9), the school district,


 

intermediate school district, or public school academy shall submit

 

a periodic financial status report in the form and manner and on

 

the periodic basis prescribed by the department of treasury, after

 

consultation with the department and CEPI. The report shall include

 

financial data and other information that the department of

 

treasury, after consultation with the department, organizations

 

representing public school administrators and business officials,

 

and CEPI, determines can assist the state in developing an early

 

warning system of financial stress or deficits in school districts,

 

intermediate school districts, and public school academies.

 

     (11) For a school district required to submit periodic

 

financial status reports under subsection (10), the school district

 

shall transmit a copy of the periodic financial status report to

 

the members of the board of the school district and the

 

superintendent of the intermediate school district in which the

 

school district is located before transmitting the periodic

 

financial status report to the state treasurer. For a public school

 

academy required to submit periodic financial status reports under

 

subsection (10), the public school academy shall transmit a copy of

 

the periodic financial status report to the members of the board of

 

the public school academy and to the authorizing body of the public

 

school academy before transmitting the periodic financial status

 

report to the state treasurer. For an intermediate school district

 

required to submit periodic financial status reports under

 

subsection (10), the intermediate school district shall transmit a

 

copy of the periodic financial status report to the members of the

 

board of the intermediate school district before transmitting the


 

periodic financial status report to the state treasurer.

 

     (12) A school district, intermediate school district, or

 

public school academy required to submit periodic financial status

 

reports under this section shall do all of the following:

 

     (a) Provide the department of treasury or the department with

 

other financial data or information relating to the financial

 

condition of the school district, intermediate school district, or

 

public school academy as requested by the department of treasury or

 

the department.

 

     (b) Allow the department of treasury or the department to

 

examine all financial records and books of account of the school

 

district, intermediate school district, or public school academy.

 

     (c) Promptly and fully provide the assistance and information

 

necessary and properly requested by the department of treasury or

 

the department in the effectuation of the department of treasury's

 

or the department's duties under this section.

 

     (13) If a school district, intermediate school district, or

 

public school academy fails to submit a periodic financial status

 

report required under this section, or if the state treasurer

 

determines or is notified by the superintendent of public

 

instruction or other public school official that information

 

included on a periodic financial status report indicates that

 

financial stress exists within the school district, intermediate

 

school district, or public school academy, that a deficit has

 

occurred, or that a deficit is projected to occur within the school

 

district, intermediate school district, or public school academy

 

within the current school fiscal year or the next school fiscal


 

year that the school district, intermediate school district, or

 

public school academy lacks the capacity to address without state

 

assistance, the state treasurer may require the school district,

 

intermediate school district, or public school academy to submit an

 

enhanced deficit elimination plan under section 1220. Before

 

requiring a school district to submit an enhanced deficit

 

elimination plan under section 1220, the state treasurer shall

 

first notify the superintendent of public instruction, the board of

 

the school district, and the superintendent of the intermediate

 

school district in which the school district is located. Before

 

requiring a public school academy to submit an enhanced deficit

 

elimination plan under section 1220, the state treasurer shall

 

first notify the superintendent of public instruction, the board of

 

the public school academy, and the authorizing body of the public

 

school academy. Before requiring an intermediate school district to

 

submit an enhanced deficit elimination plan under section 1220, the

 

state treasurer shall first notify the superintendent of public

 

instruction and the board of the intermediate school district. The

 

failure of an officer of a school district, intermediate school

 

district, or public school academy to prepare and submit a periodic

 

financial status report as provided under this section constitutes

 

malfeasance and is grounds for removal of the officer from office.

 

     (14) A school district, intermediate school district, or

 

public school academy is not required to submit periodic financial

 

status reports under this section if the school district,

 

intermediate school district, or public school academy is required

 

to submit a deficit elimination plan or an enhanced deficit


 

elimination plan under section 1220 or, for a school district or

 

intermediate school district, if a financial emergency has been

 

declared for the school district or intermediate school district

 

under the local financial stability and choice act, 2012 PA 436,

 

MCL 141.1541 to 141.1575, or a successor statute. If a school

 

district is required to submit periodic financial status reports

 

under this section and a loan is issued to the school district

 

under the emergency loan act, 1980 PA 243, MCL 141.931 to 141.942,

 

the state treasurer shall require the school district to submit

 

periodic financial reports under this section for at least 4 years

 

after the date of issuance of the loan.

 

     (15) A school district, intermediate school district, or

 

public school academy is no longer required to submit periodic

 

financial status reports under this section if the state treasurer,

 

after consultation with the superintendent of public instruction,

 

determines that the periodic financial status reports submitted by

 

a school district, intermediate school district, or public school

 

academy indicate that potential financial stress does not exist

 

within the school district, intermediate school district, or public

 

school academy; that a deficit is not projected to arise within the

 

school district, intermediate school district, or public school

 

academy within the current school fiscal year or the following 2

 

school fiscal years; and that the school district, intermediate

 

school district, or public school academy will be able to meet its

 

financial obligations while also satisfying the school district's,

 

intermediate school district's, or public school academy's

 

obligations or abilities to provide public educational services in


 

a manner that complies with this act, the state school aid act of

 

1979, and applicable rules promulgated by the department.

 

     (16) If the state treasurer makes a determination under

 

subsection (15) that the conditions under that subsection apply to

 

a school district, intermediate school district, or public school

 

academy, the state treasurer shall notify the school district,

 

intermediate school district, or public school academy. The

 

superintendent of public instruction may notify the state treasurer

 

that the superintendent of public instruction has determined that

 

conditions under subsection (15) apply to a school district,

 

intermediate school district, or public school academy.

 

     (17) For a school district, the intermediate school district

 

in which the school district is located may advise the state

 

treasurer regarding the development and implementation of periodic

 

financial reports for the school district under this section. For a

 

public school academy, the authorizing body of the public school

 

academy may advise the state treasurer regarding the development

 

and implementation of periodic financial reports for the public

 

school academy under this section.

 

     (18) Within 60 days after the effective date of this section,

 

the superintendent of public instruction and the state treasurer

 

shall convene a joint workgroup to assist the department and

 

department of treasury in developing recommendations for the

 

creation of an information system or processes that will provide

 

earlier access to financial information and other data that will

 

allow school districts, intermediate school districts, and public

 

school academies to address budgetary and other financial


 

difficulties earlier. The recommendations for the creation of an

 

information system or processes should address all of the

 

following:

 

     (a) Creating an information system or processes that use or

 

otherwise expand upon existing data collection processes and

 

requirements and provide more timely access and analysis of data at

 

the state level while also facilitating local and regional

 

collaboration.

 

     (b) Allowing the uploading of school budget and current year-

 

to-date financial information on a periodic basis using the

 

financial information database maintained by CEPI.

 

     (c) Permitting the upload of year-to-date expenditure data on

 

at least a quarterly basis.

 

     (d) Providing the department and the department of treasury

 

with access to data available through the information system or

 

processes.

 

     (e) Reducing or consolidating, or both, reporting requirements

 

under current law and regulations.

 

     (f) Estimating the cost of the information system or

 

processes.

 

     (19) The workgroup convened by the superintendent of public

 

instruction and the state treasurer under subsection (18) shall

 

include representatives of the department, the department of

 

treasury, the department of technology, management, and budget,

 

CEPI, school districts, intermediate school districts, public

 

school academies, authorizing bodies, school business officials,

 

and certified public accountants. The workgroup shall complete its


 

work by September 30, 2015. The superintendent of public

 

instruction and state treasurer shall submit joint recommendations

 

under this subsection and subsection (20) by December 31, 2015 to

 

the governor, the senate and house standing committees on

 

education, and the senate and house appropriations subcommittees on

 

school aid.

 

     (20) In addition to the recommendations under subsection (18),

 

the workgroup convened by the superintendent of public instruction

 

and the state treasurer under subsection (18) shall make

 

recommendations on changes in state law relating to periodic

 

financial status reports under this section and deficit elimination

 

reports and enhanced deficit elimination plans under section 1220,

 

including, but not limited to, new data analysis tools, and

 

recommendations on changes to warning signs, data needs, and proper

 

timing of reporting in a manner that reduces administrative

 

bureaucracy.

 

     (21) As used in this section:

 

     (a) "Authorizing body" means an authorizing body for a public

 

school academy under this act.

 

     (b) "CEPI" means the center for educational performance and

 

information created in section 94a of the state school aid act of

 

1979, MCL 388.1694a.

 

     (c) "Deficit" means a condition prohibited under section 15(2)

 

of the uniform budgeting and accounting act, 1968 PA 2, MCL

 

141.435, or under section 102(1) of the state school aid act of

 

1979, MCL 388.1702. Deficit also includes 1 or both of the

 

following circumstances for a school district, intermediate school


 

district, or public school academy:

 

     (i) The total general fund balance of the school district,

 

intermediate school district, or public school academy is negative

 

or is projected to be negative at the end of the current school

 

fiscal year.

 

     (ii) One or more of the funds of the school district,

 

intermediate school district, or public school academy other than

 

the general fund have a negative balance or projected negative

 

balance that is greater than the total general fund balance.

 

     (d) "Financial emergency" means that 1 or more of the

 

conditions described in section 5(3)(a) to (m) of the local

 

financial stability and choice act, 2012 PA 436, MCL 141.1545,

 

exist or are likely to occur within a school district, intermediate

 

school district, or public school academy in the current or next

 

school fiscal year and threaten the ability of the school district,

 

intermediate school district, or public school academy to provide

 

necessary governmental services essential to public health, safety,

 

and welfare.

 

     (e) "Fiscal stress" means 1 or both of the following:

 

     (i) That a school district, intermediate school district, or

 

public school academy is unable to meet its short-term or long-term

 

financial obligations as those obligations arise.

 

     (ii) That 1 or more of the conditions described in section

 

4(1)(a) to (s) of the local financial stability and choice act,

 

2012 PA 436, MCL 141.1544, exist or are likely to occur within a

 

school district, intermediate school district, or public school

 

academy.


 

     (f) "Foundation allowance" means, for a school district, the

 

foundation allowance for the school district as calculated under

 

section 20 of the state school aid act of 1979, MCL 388.1620, and,

 

for a public school academy, the per-pupil allocation for the

 

public school academy as calculated under section 20(6) of the

 

state school aid act of 1979, MCL 388.1620.

 

     (g) "Governing body" means, for a school district, the school

 

board of the school district and, for a public school academy, the

 

board of directors of the public school academy.

 

     (h) "Membership" means that term as defined in section 6 of

 

the state school aid act of 1979, MCL 388.1606.

 

     (i) "Pupil" means that term as defined in section 6 of the

 

state school aid act of 1979, MCL 388.1606.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) Senate Bill No.____ or House Bill No. 4327 (request no.

 

00280'15).

 

     (b) Senate Bill No.____ or House Bill No. 4328 (request no.

 

00282'15).

 

     (c) Senate Bill No.____ or House Bill No. 4330 (request no.

 

00415'15).