You have asked whether, if a community college submits a contract to the Michigan Department of Education (Department) in which the college's governing board has authorized a public school academy to operate within the boundaries of the Detroit Public Schools, the Department must assign the academy a "district code," enabling it to receive state school aid.

As background, your request indicates that the Detroit Public Schools has operated as a first class school district in the State, and that the current law does not allow the board of a community college to authorize a contract for a public school academy to operate within the boundaries of a first class school district. You further advise that the pupil membership count in the Detroit Public Schools has recently fallen below the 100,000 threshold required by law to qualify as a first class school district. In anticipation of receiving a contract for a public school academy to operate within the boundaries of the Detroit Public Schools given these changed circumstances, you ask whether you must assign a district code to the public school academy.

Both the Revised School Code (Revised School Code or Code), 1976 PA 451, MCL 380.1 et seq, and the State School Aid Act (School Aid Act), 1979 PA 94, MCL 388.1601 et seq, are relevant in analyzing your question.

The Revised School Code provides for the organization, regulation, and maintenance of schools, school districts, public school academies, and intermediate school districts. In 1993 PA 362, the Legislature enacted Part 6A of the Revised School Code, MCL 380.501 – 380.507, governing the creation and operation of public school academies, commonly known as charter schools.

Section 501(1) of the Revised School Code, MCL 380.501(1), defines a public school academy as a "public school" and a "school district" for purposes of state school aid. In order to organize and operate a public school academy, section 502(3) of the Code, MCL 380.502(3), requires a person or entity to obtain a contract from an authorizing body. Section 501(2)(d) of the Code defines "contract" to mean "the executive act taken by an authorizing body that evidences the authorization of a public school academy" and that "confirm[s] the status of a public school academy as a public school in this state." This contract is often referred to as a "charter."¹

An "authorizing body" is defined to include any of the following boards that issue a contract as provided in Part 6A: (1) the board of a school district that operates grades K to 12; (2) the board of an intermediate school district; (3) the board of a community college; and (4) the governing board of a state public university. MCL 380.501(2). But the board of a community college may not issue a contract for a public school academy to operate in a school district organized as a school district of the first class under MCL 380.502(2)(c), which states in pertinent part:

          [E]xcept as otherwise provided in this subdivision, the board of a community college shall not issue a contract for a public school academy to operate in a school
          district organized as a school district of the first class, a public school academy authorized by the board of a community college shall not operate in a school district
          organized as a school district of the first class, the board of a community college shall not issue a contract for a public school academy to operate outside the boundaries
          of the community college district, and a public school academy authorized by the board of a community college shall not operate outside the boundaries of the community
          college district. [Emphasis added.]^[2]

The School Aid Act governs the appropriation, allocation, and distribution of state funds to local school districts and public school academies. Section 3(6) of the School Aid Act, MCL 388.1603(6), includes public school academies in the definition of "district." State school aid payments are made on the basis of the number of pupils in membership in the district or public school academy as defined in section 6(4) of the State School Aid Act. MCL 388.1606(4). Districts and public school academies receive funds based on a per pupil membership "foundation allowance" calculated as provided in section 20 of the State School Aid Act, MCL 388.1620. In order to receive the foundation allowance, the Department assigns a district code to each school district.

Section 8b(1) of the School Aid Act, MCL 388.1608b(1), addresses the assignment of district codes to public school academies by the Department for funding purposes: 

               The department shall assign a district code to each public school academy that is authorized under the revised school code and is eligible to receive funding under
          this act within 30 days after a contract is submitted to the department by the authorizing body of a public school academy. [MCL 388.1608b(1); emphasis added.]

Use of the word "shall" in this context denotes a mandatory provision. Roberts v Mecosta County General Hosp, 466 Mich 57, 65; 642 NW2d 663 (2002).

Before returning to your question, it is also helpful to review the provisions of the Revised School Code that relate to school districts of the first class. As amended by 1995 PA 289, section 11 of the Code, MCL 380.11, provides that "[e]ach school district, except a school district of the first class, shall be organized and conducted as a general powers school district."³  Part 6 of the Code, MCL 380.401–380.485, provides for the organization and operation of first class school districts. Section 402 of the Code, MCL 380.402, defines a first class school district based on pupil enrollment on "count day":

               A school district that has a pupil membership of at least 100,000 enrolled on the most recent pupil membership count day is a first class school district governed
          by this part. [Emphasis added.]

The Detroit Public Schools has been the only district operating as a first class school district in Michigan.⁴

In contrast, the School Aid Act provides a different definition of first class school district. But that definition only applies for school aid purposes. Section 6(11) of the School Aid Act, MCL 388.1606(11), defines "school district of the first class," "first class school district," and "district of the first class" as "a district that had at least 60,000 pupils in membership for the immediately preceding fiscal year." (Emphasis added.) The threshold 60,000 pupil count and use of the past tense "had" in the School Aid Act's definition of first class school district applies solely for purposes of determining the school aid that a first class district is entitled to receive and related matters under that act and has no bearing on the question whether a school district qualifies as a first class school district for the purposes addressed in the School Code. The School Aid Act contains several provisions relating to grants, funding, and use of school aid funds specific to first class school districts.⁵ Declining enrollment in a first class school district will not have School Aid Act implications unless enrollment falls below 60,000 pupils in membership.

Generally, the Code grants first class school districts all the powers of general powers school districts. MCL 380.401a. But the Code contains several provisions that distinguish first class school districts from general powers school districts. For instance, the Detroit Public Schools are governed by an 11-member board. The board is composed of four members elected at large plus seven members elected from voting districts. MCL 380.403a; MCL 380.410; MCL 380.411a; and MCL 380.412a.⁶ In a general powers school district, the number of board members "shall remain the same as for that school district before July 1, 1996 [the effective date of 1995 PA 289]," unless changed by the school electors of the district at a regular or special school election. MCL 380.11a(7). The practice was, and has remained, to elect those members at large.

The Code imposes several restrictions on first class school districts that are not imposed on general powers school districts. First class school district board member compensation is set at $30.00 per diem. MCL 380.417a(2). The Code expressly prohibits a first class school district board member from direct or indirect interest in a contract with the board. MCL 380.417a(1).⁷ At least seven of a first class school district's regular board meetings must be held in different voting districts of the first class school district each year. MCL 380.418a(1). The first class school district's board must also have a complete annual audit of its financial transactions conducted. MCL 380.418a(3).

The Code also grants first class school districts specific powers not granted to general powers school districts. A first class school district may, with the consent of the legislative body of the city, authorize the financial officers of the district to borrow for not more than one year, on the best terms obtainable, sums necessary to pay awards in condemnation proceedings. MCL 380.441. A first class school district may use proceeds from the sale of first class school district bonds for the remodeling of existing buildings of the school district if the board determines the remodeling will contribute positively to the health, security, or welfare of the pupils of the school district and if the uses are approved by the superintendent of public instruction. MCL 380.443(1). First class school districts are exempt from property insurance requirements imposed on general powers school districts and public school academies. MCL 380.1269.

The Code defines a first class school district in terms of enrollment on the most recent "pupil membership count day." MCL 380.402. Section 5(8) of the Code, MCL 380.5(8), defines "pupil membership count day" as that term is defined in section 6 of the School Aid Act, MCL 388.1606(7). The pupil membership count day is the fourth Wednesday after Labor Day each school year. MCL 388.1606(7). September 24, 2008, was the pupil membership count day for the 2008-2009 school year.

Section 5(2) of the Code, MCL 380.5(2) defines membership:

               "Membership" means the number of full-time equivalent pupils in a public school as determined by the number of pupils registered for attendance plus pupils
          received by transfer and minus pupils lost as defined by rules promulgated by the state board.

The administrative rules on school district pupil accounting for distribution of state aid govern the procedures for counting and reporting pupil membership. Rule 7(1), 2008 AACS, R 304.7(1), requires that computation of full-time equivalency must comply with certain provisions of the School Aid Act, including section 6(4). Section 6(4) sets forth criteria and provides that all pupil counts are as determined by the Department and as corrected by a subsequent department audit. MCL 388.1606(4).

The School Aid Act provides detailed procedures for the application of those provisions to the establishment of pupil membership. Section 101(1) of the School Aid Act, MCL 388.1701(1), requires each school district to file a certified and sworn copy of the number of pupils enrolled as of the pupil membership count day for the current school year with the intermediate school district superintendent not later than the fifth Wednesday after the pupil membership count day. For the 2008-2009 school year, the deadline was October 29, 2008. Not later than the seventh Wednesday after the pupil membership count day, the intermediate school district is required to forward the unaudited counts to the Center for Educational Performance and Information (CEPI). MCL 388.1701(1).⁸ For the 2008-2009 school year, the deadline was November 12, 2008.

Each district's financial and pupil accounting records must be audited annually, typically by the intermediate district superintendent. MCL 388.1618(3).⁹ The audit and pupil accounting reports are subject to requirements established in the Department's auditing and accounting manuals.¹⁰  The intermediate school district must forward the audited enrollment and attendance number for the pupils of its constituent districts to the CEPI no later than the twenty-fourth Wednesday after the pupil membership count day. MCL 388.1701(2). For the 2008-2009 school year, this date was March 11, 2009.

Information supplied with your request indicates that, as of September 24, 2008 (the pupil membership count day for the 2008-2009 school year), both the pupil membership
submitted by the Detroit Public Schools and the audited pupil membership from the most recent pupil membership count day were below 100,000.¹¹

With this background, your question can now be analyzed. Relevant to your question, the Code precludes the board of a community college from authorizing a contract for a public school academy to operate within the geographical boundary of a first class school district. MCL 380.502(2)(c). In contrast, community colleges with geographic boundaries located within a general powers school district's boundaries and federal tribally controlled community colleges may authorize charter schools and compete for students in that general powers school district.

While MCL 380.502(2)(c) prohibits a community college from issuing a contract for a public school academy to operate in a district "organized" as a first class district, the Code does not specify how districts are organized other than by classification. A review of statutory changes adopted over the years, however, provides insight into the meaning of this term.

Historically, school districts were organized by classification based on population. For instance, Chapter 1 of the school code enacted in 1927 was titled "[c]lassification" and contained only one subsection titled "[o]rganization of school districts." 1927 PA 319. This section required that school districts "shall be organized and conducted" within one of seven classifications. 1929 CL 7094. At that time, township boards were authorized to organize each township into school districts. 1929 CL 7095. However, each city was considered a school district where district classifications were based on general population within that city. Each school district with a population of more than 500,000 constituted a first class school district. 1929 CL 7266. If population changed, the school district classification and governance also changed. 1929 CL 7358. And the school district's board of education was required to take action to effectuate the change, including electing a proper board of education, at the next annual meeting or election. 1929 CL 7358.

In the School Code of 1955, 1955 PA 269, the Legislature adopted a slightly different structure. Schools were classified based on enrollment as determined by a "school census." Districts retained the classification they held at the time 1955 PA 269 was enacted. For instance, each school district organized as a first class school district when the School Code of 1955 first took effect continued to be a first class school district. 1970 CL 340.181.

But the provisions for district reclassification changed. If the school census increased to a requisite number, the board of that school district could submit the question of reclassifying a district to the district electors. 1970 CL 340.142. If approved, the School Code of 1955 provided the board of education the power to operate the school district until the next general election and provided for the reduction or increase in board membership based on the reclassification. 1970 CL 340.332 – 340.334.

However, in contrast to the prior version of the school code where school district classification and organization changed if the population decreased, in the School Code of 1955, the Legislature specifically provided that once a district attained a classification, the classification did not change if the school census decreased. 1970 CL 340.144. The School Code of 1955 provided that "[e]ach city which hereafter attains a school census of 120,000 or more" became a first class school district. 1970 CL 340.182 (emphasis added). Thus, the Legislature's emphasis in 1955 was on attaining a certain classification. Once attained, the school district's classification did not revert if enrollment declined.

As originally enacted, the School Code of 1976 retained this general system of classification. School electors could choose to reclassify districts as pupil membership increased. 1979 CL 380.303. But there was no provision for reclassifying school districts as pupil membership decreased. Moreover, the Legislature continued to provide that a district became a first class district when it "attains a pupil membership of 120,000 enrolled on the latest pupil membership count day." 1979 CL 380.402 (emphasis added). The Legislature did not provide for a change in classification if the pupil membership fell below the statutory threshold.

In 1995 PA 289, the Legislature repealed the previous classification system in favor of a system where all school districts, except first class school districts, are general powers school districts:

               Each school district, except a school district of the first class, shall be organized and conducted as a general powers school district regardless of previous
          classification. [MCL 380.11.]^[12]

In 1999 PA 10, the Legislature added Part 5A, MCL 380.371–380.376, to the Code effectively transferring control over the only existing first class school district, the Detroit Public Schools, from the district's board of education to a school reform board. The Legislature also amended the definition of a first class district in section 402 of the Code. MCL 380.402. This amendment was introduced in 1999 SB 297. The bill amended the definition of first class district as follows:

               A school district which attains THAT HAS a pupil membership of  120,000 AT LEAST 100,000 enrolled on the latest MOST RECENT pupil membership
          day shall become IS a single FIRST CLASS school district governed by this part.^[13]

Thus, in addition to reducing the pupil membership requirement from 120,000 to at least 100,000, the Legislature changed the definition of a first class district from a district that "attains" a specified pupil membership to a district that "has" the requisite pupil membership and changed "shall become" to "is."¹⁴ Both changes demonstrate that the Legislature intended to consider pupil enrollment on the most recent pupil membership day in determining whether a school district possesses first class school district classification, regardless of whether it had previously attained that status.

"It is axiomatic that when the Legislature effects a change in the provisions of a statute, a presumption arises that the Legislature intends a substantive change in the law." People v Wright, 432 Mich 84, 92; 437 NW2d 603 (1989) (citations omitted). Amendments of a statute must be construed harmoniously with other provisions of the statute and a change in the statutory language is presumed to reflect a change in meaning. Michigan Millers Mut Ins Co v W Detroit Bldg Co, 196 Mich App 367, 373; 494 NW2d 1 (1992) (citations omitted). "The chosen wording is presumed intentional." People v Perkins, 473 Mich 626, 650; 703 NW2d 448 (2005). The statutory language must be read and understood in its grammatical context, unless it is clear that something different was intended. Herman v Berrien County, 481 Mich 352, 366; 750 NW2d 570 (2008).

The foremost rule of statutory construction requires courts to give effect to the intent of the Legislature. Wickens v Oakwood Healthcare System, 465 Mich 53, 60; 631 NW2d 686 (2001). Where language used by the Legislature in a statutory provision is plain and unambiguous, it must be assumed that the Legislature intended its plain meaning and the provision must be enforced as written. Lash v Traverse City, 479 Mich 180, 187; 735 NW2d 628 (2007). As a necessary corollary to this principle, nothing may be read into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself. Roberts, 466 Mich at 63; Omne Financial, Inc v Shacks, Inc, 460 Mich 305, 311; 596 NW2d 591 (1999).

In contrast to previous versions, the plain language of the definition of first class school district in the current Code requires that a school district presently possess the requisite pupil membership on the most recent pupil membership day in order to be properly so classified. The Code emphasizes the current requirements that a district must possess to be presently considered a first class school district rather than conditions a district must achieve to become a first class school district.

Moreover, section 11 of the Code provides, "[e]ach school district, except a school district of the first class, shall be organized and conducted as a general powers school district regardless of previous classification." MCL 380.11. Thus, by operation of law, a school district that fails to have the requisite pupil membership on the most recent pupil membership count day is a general powers school district. Nothing in the current School Code evidences a legislative intent to perpetuate the organizational status of a school district that had previously attained status as a first class school district where the district is reclassified due to declining enrollment. To the contrary, the plain language of MCL 380.11 demonstrates that school districts that do not qualify as first class school districts on the most recent pupil membership count day shall be organized and conducted as general powers school districts.

This conclusion is supported by the fact that while Part 5A of the Code contains specific procedures governing the structure and operation of school districts that qualify as first class school districts due to increasing enrollment, the Legislature did not provide a mechanism for restructuring a school district that no longer has the required pupil membership of a first class district. Instead, MCL 380.11 controls and, by operation of law, the school district is "organized and conducted as a general powers school district regardless of previous classification" and prospectively may only exercise those powers granted to a general powers school district. Therefore, a school district that no longer has a pupil membership of at least 100,000 enrolled on the most recent pupil membership count day is no longer organized as a first class district governed by Part 6 of the Code and must be operated as a general powers school district.

Based on the information supplied with your request, the Detroit Public Schools' pupil membership on the most recent pupil membership count day was 93,457.02 full time equivalent pupils. It did not, therefore, have the threshold count sufficient to qualify as a first class school district under the plain language of section 402 of the Code (only a school district "that has a pupil membership of at least 100,000 enrolled on the most recent pupil membership count day" is a first class school district). MCL 380.402. Rather, this membership count caused the Detroit Public Schools to become a general powers school district under the similarly plain language of MCL 380.11 ("[e]ach school district, except a school district of the first class, shall be organized and conducted as a general powers school district.") The language used by the Legislature in these operative provisions specifies two – and only two – qualifying factors to ascertain first class school district status for purposes of the Revised School Code: 1) a numerical factor (enrolled pupil membership of at least 100,000); and 2) a temporal factor (on the most recent count day). No other qualifying factor may be read into the statute that the Legislature did not itself include.¹⁵

Accordingly, it must be concluded that the Detroit Public Schools does not currently qualify as a first class school district for purposes of the Revised School Code.¹⁶ As a result, the limitation in MCL 380.502(2)(c), stating that a community college "shall not issue a contract for a public school academy to operate in a school district organized as a school district of the first class," does not apply to the Detroit Public Schools. Section 8b(1) of the School Aid Act, MCL 388.1608b(1), directs that the Department "shall assign a district code to each public school academy that is authorized under the revised school code and is eligible to receive funding under this act." Thus, the statute requires the Department to assign a district code under the circumstances described in your request, provided that the public school academy is otherwise properly authorized under the Code and otherwise eligible to receive funding under the School Aid Act.

It is my opinion, therefore, that, if a community college with geographic boundaries located within the boundaries of the Detroit Public Schools, or a federal tribally controlled community college, submits a contract to the Michigan Department of Education in which the college's governing board has authorized a public school academy to operate within the boundaries of the Detroit Public Schools, the Department must assign the academy a "district code," enabling it to receive state school aid. While section 502(2)(c) of the Revised School Code, MCL 380.502(2)(c), precludes a community college's governing board from authorizing public school academies in a first class school district, community colleges with geographic boundaries located within a general powers school district's boundaries and federal tribally controlled community colleges may authorize public school academies and compete for students in a general powers school district. Because the Detroit Public Schools' pupil membership on the most recent pupil membership count day did not reach the threshold required of a first class school district under section 402 of the Revised School Code, MCL 380.402, the Detroit Public Schools does not qualify as a first class school district under the Code and is, therefore, a general powers school district.

MIKE COX
Attorney General

¹ MCL 380.502(6) provides: 

               An authorizing body shall not charge a fee, or require reimbursement of expenses, for considering an application for a contract, for issuing a contract, or for 
          providing oversight of a contract for a public school academy in an amount that exceeds a combined total of 3% of the total state school aid received by the public
          school academy in the school year in which the fees or expenses are charged.  An authorizing body may provide other services for a public school academy and
          charge a fee for those services, but shall not require such an arrangement as a condition to issuing the contract authorizing the public school academy.

² Community colleges are limited to chartering schools within their jurisdiction.  A public school academy authorized by a federal tribally controlled community college is subject to the geographical limitations contained in section 502(2)(c) of the Revised School Code and must therefore be located within the boundaries of the tribal community college district in Michigan.  OAG, 2001-2002, No 7090, p 51 (September 18, 2001).  In the case of Bay Mills Community College, a federal tribally controlled community college, the boundary is the entire State.

³ 1995 PA 289 revised the School Code, 1976 PA 451, to consolidate and clarify the laws relating to elementary and secondary education, effective July 1, 1996.  It rewrote section 11, which formerly provided that each school district, except those governed by a local act or chapter of a local act, shall be organized and conducted as a primary school district, or a school district of the fourth, third, second, or first classes.  1995 PA 289 repealed Parts 2 through 5 of the School Code of 1976, which related to primary school districts and school districts of the second, third, and fourth class.

⁴ The next largest school district is Utica with 29,000 students.  House Legislative Analysis, HB 4047 (H-1), March 23, 2009.  As passed by the House, HB 4047 would amend the Revised School Code to specify that a school district having a first class school district designation as of September 1, 2008, would continue to have that designation until July 1, 2010, regardless of its pupil membership.  HB 4047 (H-1) was referred to the Senate committee on education.

⁵ For instance, a first class school district can use up to 15% of its additional funding for at risk pupils to pay for school security.  MCL 388.1631a(7).

⁶ Part 6 of the Code contains a requirement that the residents of the first class district vote whether to have a nine-member school board elected by voting district or an 11-member school board with seven members elected by district and four at large members.  MCL 380.410(2).  In November 2004, the electors of the Detroit Public Schools voted in favor of an 11-member board.

⁷ Other laws and legal principles may restrict or prohibit such contracts for board members of general powers school districts.  See, e.g., 1968 PA 317, MCL 15.321 et seq.

⁸ The Center for Educational Performance and Information is within the Office of the State Budget Director in the Michigan Department of Management and Budget.  The center coordinates the collection of all data required by state and federal law from all entities receiving school aid funds.  MCL 388.1694a.

⁹ A first class school district's audit may also be prepared by the auditor general of the city.  MCL 388.1618(3).

¹⁰ "The pupil accounting records and reports, audits, and management letters are subject to requirements established in the auditing and accounting manuals approved and published by the department."  MCL 388.1618(3).

¹¹ The unaudited full time equivalent (FTE) pupil membership Detroit Public Schools submitted and the [FTE] pupil membership as audited were as follows:

Unaudited                                Audited

 FTEs                                             FTEs

(DS4061)         Findings           (DS4120)        

   General Education                             85,689.49                -591.08          85,098.41       

   Special Education                               8,364.21                    -5.60          8,358.61

   Total                                                  94,053.7                                          93,457.02                    

(State Aid Membership Audit Report, 2008-09 Fall Count, Detroit City School District, 82-010, March 12, 2009.)

¹²  Prior to the amendment the section provided:

Each school district except a district governed by a local act or chapter of a local act, shall be organized and conducted as:

                (a)  A primary school district.

                (b)  A school district of the fourth class.

                (c)  A school district of the third class.

                (d)  A school district of the second class.

                (e)  A school district of the first class.

¹³  New language is indicated in uppercase and removed language is stricken.  In 2000 PA 230, the Legislature removed the word "single" from the definition.

¹⁴ "Attain" means to reach or succeed in reaching (a goal).  Webster's New World Dictionary, 4^th Edition.  "Has," on the other hand, is the third person singular, present indicative, verb tense of "have."  Webster's New World Dictionary, 4^th Edition.  (Emphasis added.)

¹⁵ The Code does not specifically address restructuring the board of education, continuation of powers, or election of members when a school district loses its classification as a first class school district due to declining enrollment.  These issues, and any other issues of administration and transition, should be clarified and may only be addressed by the Legislature.  In the meantime, the current members of the board of education of the Detroit Public Schools act as de facto officers pending appointment or election of successor board members.  See Greyhound Corp v Public Service Comm'n, 360 Mich 578; 104 NW2d 395 (1960); Cantwell v City of Southfield, 95 Mich App 375; 290 NW2d 151 (1980); OAG, 1979-1980, No 5812, p 1067 (November 6, 1980).  Under these circumstances, the current board of education should only exercise those rights, powers, and duties properly exercised by a general powers school district.

¹⁶ To reiterate, for purposes of school aid, the School Aid Act defines a first class school district as a district that had at least 60,000 pupils in membership for the immediately preceding year.  MCL 388.1606(11).  Thus, for purposes of the School Aid Act, the Detroit Public Schools continues to fall within the definition of a first class school district.