SENATE BILL NO. 947

A bill to amend 1976 PA 451, entitled

"The revised school code,"

by amending sections 504a, 525, 557, and 1311h (MCL 380.504a, 380.525, 380.557, and 380.1311h), section 504a as amended and section 525 as added by 2003 PA 179, section 557 as added by 2009 PA 205, and section 1311h as amended by 2012 PA 620.

the people of the state of michigan enact:

Sec. 504a. (1) In addition to other powers set forth in this part, a public school academy may take action to carry out the purposes for which it was incorporated under this part, including, but not limited to, all of the following:

(a) To sue and be sued in its name.

(b) Subject to subsection (2) and section 503b, to acquire, hold, and own in its own name real and personal property, or interests in real or personal property, for educational purposes by purchase, gift, grant, devise, bequest, lease, sublease, installment purchase agreement, land contract, option, or condemnation, and subject to mortgages, security interests, or other liens; and to sell or convey the property as the interests of the public school academy require.

(c) To receive, disburse, and pledge funds for lawful purposes.

(d) To enter into binding legal agreements with persons or entities as necessary for the operation, management, financing, and maintenance of the public school academy.

(e) To incur temporary debt in accordance with section 1225.

(f) To solicit and accept any grants or gifts for educational purposes and to establish or permit to be established on its behalf 1 or more nonprofit corporations the purpose of which is to assist the public school academy in the furtherance of its public purposes.

(g) To borrow money and issue bonds in accordance with section 1351a and in accordance with part VI of the revised municipal finance act, 2001 PA 34, MCL 141.2601 to 141.2613, except that the borrowing of money and issuance of bonds by a public school academy is not subject to section 1351a(4) or section 1351(2) to (4). Bonds issued under this section shall be are full faith and credit obligations of the public school academy, pledging the general funds or any other money available for such a purpose. Bonds issued under this section are subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(2) If a public school academy leases or purchases real property, all of the following apply to the lease or purchase transaction:

(a) The board of directors of the public school academy shall not lease or purchase real property from an educational management organization with which the public school academy has a management agreement, from a real estate holding company that is affiliated with such an educational management organization, or from any person affiliated with a real estate holding company that is affiliated with such an educational management organization. As used in this subdivision, "educational management organization" and "management agreement" mean those terms as defined in section 503c.

(b) The board of directors of the public school academy shall approve the terms of the lease or purchase agreement for real property and shall ensure that the terms of the lease or purchase agreement for real property reflect the market conditions that exist at the time of the lease or purchase transaction, as determined by an appraisal conducted by a licensed independent real estate appraiser.

(c) The board of directors of the public school academy shall not enter into a lease or purchase agreement for real property unless the agreement is reviewed by the public school academy's authorizing body. The authorizing body shall notify the superintendent of public instruction and state board if it has reason to suspect either of the following:

(i) The lease or purchase agreement for real property is between the public school academy and a person or entity prohibited under subdivision (a) from participating in the lease or purchase.

(ii) The lease or purchase agreement for real property does not reflect market conditions as required under subdivision (b).

Sec. 525. (1) In addition to other powers set forth in this part, an urban high school academy may take action to carry out the purposes for which it was incorporated under this part, including, but not limited to, all of the following:

(a) To sue and be sued in its name.

(b) Subject to subsection (2) and section 523a, to acquire, hold, and own in its own name real and personal property, or interests in real or personal property, for educational purposes by purchase, gift, grant, devise, bequest, lease, sublease, installment purchase agreement, land contract, option, or condemnation, and subject to mortgages, security interests, or other liens; and to sell or convey the property as the interests of the urban high school academy require.

(c) To receive, disburse, and pledge funds for lawful purposes.

(d) To enter into binding legal agreements with persons or entities as necessary for the operation, management, financing, and maintenance of the urban high school academy.

(e) To incur temporary debt in accordance with section 1225.

(f) To solicit and accept any grants or gifts for educational purposes and to establish or permit to be established on its behalf 1 or more nonprofit corporations the purpose of which is to assist the urban high school academy in the furtherance of its public purposes.

(g) To borrow money and issue bonds in accordance with section 1351a and in accordance with part VI of the revised municipal finance act, 2001 PA 34, MCL 141.2601 to 141.2613, except that the borrowing of money and issuance of bonds by an urban high school academy are not subject to section 1351a(4) or section 1351(2) to (4). Bonds issued under this section shall be are full faith and credit obligations of the urban high school academy, pledging the general funds or any other money available for such a purpose. Bonds issued under this section are subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(2) If an urban high school academy leases or purchases real property, all of the following apply to the lease or purchase transaction:

(a) The board of directors of the urban high school academy shall not lease or purchase real property from an educational management organization with which the urban high school academy has a management agreement, from a real estate holding company that is affiliated with such an educational management organization, or from any person affiliated with a real estate holding company that is affiliated with such an educational management organization. As used in this subdivision, "educational management organization" and "management agreement" mean those terms as defined in section 523c.

(b) The board of directors of the urban high school academy shall approve the terms of the lease or purchase agreement for real property and shall ensure that the terms of the lease or purchase agreement for real property reflect the market conditions that exist at the time of the lease or purchase transaction, as determined by an appraisal conducted by a licensed independent real estate appraiser.

(c) The board of directors of the urban high school academy shall not enter into a lease or purchase agreement for real property unless the agreement is reviewed by the urban high school academy's authorizing body. The authorizing body shall notify the superintendent of public instruction and state board if it has reason to suspect either of the following:

(i) The lease or purchase agreement for real property is between the urban high school academy and a person or entity prohibited under subdivision (a) from participating in the lease or purchase.

(ii) The lease or purchase agreement for real property does not reflect market conditions as required under subdivision (b).

Sec. 557. (1) In addition to other powers set forth in this part, a school of excellence may take action to carry out the purposes for which it was incorporated under this part, including, but not limited to, all of the following:

(a) To sue and be sued in its name.

(b) Subject to subsection (2) and section 555, to acquire, hold, and own in its own name real and personal property, or interests in real or personal property, for educational purposes by purchase, gift, grant, devise, bequest, lease, sublease, installment purchase agreement, land contract, option, or condemnation, and subject to mortgages, security interests, or other liens; and to sell or convey the property as the interests of the school of excellence require.

(c) To receive, disburse, and pledge funds for lawful purposes.

(d) To enter into binding legal agreements with persons or entities as necessary for the operation, management, financing, and maintenance of the school of excellence.

(e) To incur temporary debt in accordance with section 1225.

(f) To solicit and accept any grants or gifts for educational purposes and to establish or permit to be established on its behalf 1 or more nonprofit corporations the purpose of which is to assist the school of excellence in the furtherance of its public purposes.

(g) To borrow money and issue bonds in accordance with section 1351a and in accordance with part VI of the revised municipal finance act, 2001 PA 34, MCL 141.2601 to 141.2613, except that the borrowing of money and issuance of bonds by a school of excellence is not subject to section 1351a(4) or section 1351(2) to (4). Bonds issued under this section shall be are full faith and credit obligations of the school of excellence, pledging the general funds or any other money available for such a purpose. Bonds issued under this section are subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(2) If a school of excellence leases or purchases real property, all of the following apply to the lease or purchase transaction:

(a) The board of directors of the school of excellence shall not lease or purchase real property from an educational management organization with which the school of excellence has a management agreement, from a real estate holding company that is affiliated with such an educational management organization, or from any person affiliated with a real estate holding company that is affiliated with such an educational management organization. As used in this subdivision, "educational management organization" and "management agreement" mean those terms as defined in section 553c.

(b) The board of directors of the school of excellence shall approve the terms of the lease or purchase agreement for real property and shall ensure that the terms of the lease or purchase agreement for real property reflect the market conditions that exist at the time of the lease or purchase transaction, as determined by an appraisal conducted by a licensed independent real estate appraiser.

(c) The board of directors of the school of excellence shall not enter into a lease or purchase agreement for real property unless the agreement is reviewed by the school of excellence's authorizing body. The authorizing body shall notify the superintendent of public instruction and state board if it has reason to suspect either of the following:

(i) The lease or purchase agreement for real property is between the school of excellence and a person or entity prohibited under subdivision (a) from participating in the lease or purchase.

(ii) The lease or purchase agreement for real property does not reflect market conditions as required under subdivision (b).

Sec. 1311h. (1) In addition to other powers set forth in sections 1311b to 1311l, 1311m, a strict discipline academy may take action to carry out the purposes for which it was incorporated under sections 1311b to 1311l, 1311m, including, but not limited to, all of the following:

(a) To sue and be sued in its name.

(b) To Subject to subsection (2), to acquire, hold, and own in its own name real and personal property, or interests in real or personal property, for educational purposes by purchase, gift, grant, devise, bequest, lease, sublease, installment purchase agreement, land contract, option, or condemnation, and subject to mortgages, security interests, or other liens; and to sell or convey the property as the interests of the strict discipline academy require.

(c) To receive and disburse funds for lawful purposes.

(d) To enter into binding legal agreements with persons or entities as necessary for the operation, management, financing, and maintenance of the strict discipline academy.

(e) To incur temporary debt in accordance with section 1225.

(f) To solicit and accept any grants or gifts for educational purposes and to establish or permit to be established on its behalf 1 or more nonprofit corporations the purpose of which is to assist the strict discipline academy in the furtherance of its public purposes.

(g) To borrow money and issue bonds in accordance with section 1351a and in accordance with part VI of the revised municipal finance act, 2001 PA 34, MCL 141.2601 to 141.2613, except that the borrowing of money and issuance of bonds by a strict discipline academy is not subject to section 1351a(4) or section 1351(2) to (4). Bonds issued under this section shall be are full faith and credit obligations of the strict discipline academy, pledging the general funds or any other money available for such a purpose. Bonds issued under this section are subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(2) If a strict discipline academy leases or purchases real property, all of the following apply to the lease or purchase transaction:

(a) The board of directors of the strict discipline academy shall not lease or purchase real property from an educational management organization with which the strict discipline academy has a management agreement, from a real estate holding company that is affiliated with such an educational management organization, or from any person affiliated with a real estate holding company that is affiliated with such an educational management organization. As used in this subdivision, "educational management organization" and "management agreement" mean those terms as defined in section 503c.

(b) The board of directors of the strict discipline academy shall approve the terms of the lease or purchase agreement for real property and shall ensure that the terms of the lease or purchase agreement for real property reflect the market conditions that exist at the time of the lease or purchase transaction, as determined by an appraisal conducted by a licensed independent real estate appraiser.

(c) The board of directors of the strict discipline academy shall not enter into a lease or purchase agreement for real property unless the agreement is reviewed by the strict discipline academy's authorizing body. The authorizing body shall notify the superintendent of public instruction and state board if it has reason to suspect either of the following:

(i) The lease or purchase agreement for real property is between the strict discipline academy and a person or entity prohibited under subdivision (a) from participating in the lease or purchase.

(ii) The lease or purchase agreement for real property does not reflect market conditions as required under subdivision (b).