Bill
HB 6255
HB 6255 adds School Loan Revolving Fund loans to the definition of operating obligations, delaying DPSCD dissolution and keeping the 18-mill levy redirected to repay those loans.
Status
- Introduced: Dec. 5, 2024 (Rep. Regina Weiss)
- Passed House (with Substitute H‑1): Dec. 13, 2024 (56–0), given immediate effect; transmitted to the Senate; referred to Committee on Government Operations (subsequently listed 1/23/2025 as referred to a joint committee on Environment).
- Current statutory reference amended: MCL 380.12b (Section 12b of the Revised School Code).
Purpose / intent
- To expand the statutory definition of “operating obligation” for a qualifying school district to expressly include loans issued from the School Loan Revolving Fund (SLRF). This change delays dissolution of a qualifying district (the “old” Detroit Public Schools) until SLRF loans are repaid and certified by the State Treasurer.
Key provisions
- Amends section 12b of the Revised School Code to make SLRF loans part of the definition of “operating obligation.”
- Maintains existing mechanics under section 12b: a qualifying district retains a limited legal identity and taxing status for the narrow purposes of repaying retained operating obligations until those obligations are retired (and for satisfying pre-transfer liabilities and protecting credit).
- Leaves intact transition‑manager duties and other transfer provisions; primarily modifies what counts as debt that must be satisfied before dissolution.
Who or what is affected
- Primarily affects the former Detroit Public Schools (DPS) legal entity and the Detroit Public Schools Community District (DPSCD). DPS is presently the only entity that meets the “qualifying school district” criteria.
- Local taxpayers in the former DPS taxing unit (18‑mill nonhomestead levy) and state school aid funding streams (School Aid Fund / general fund transfers) are directly implicated.
Fiscal impact / practical effects
- Under current law the 18‑mill nonhomestead property tax revenue is redirected to repay “operating obligations” and the state backfills DPSCD’s local portion of the foundation allowance in the School Aid budget. If operating obligations excluded SLRF loans, redirection was expected to end (debt paid off by March 2024 under earlier projections).
- HB 6255 would continue redirecting the 18‑mill levy to pay SLRF loans until those loans are repaid, and the state would continue funding DPSCD’s local foundation allowance via School Aid reimbursements (general fund transfers once earlier CDTF tobacco settlement dollars are exhausted).
- Estimated FY 2024‑25 impact: about $111.2 million in 18‑mill revenue for the taxing unit (≈ $2,460 per pupil), representing at least that much annual cost to the state and corresponding savings to DPSCD until SLRF debt is retired.
- Per DPS audit (6/30/2024), SLRF debt outstanding ≈ $348.5 million. Continued redirection could also reduce interest costs if repayment accelerates.
Procedural / timeline notes
- House substituted and passed the H‑1 version on Dec. 13, 2024 with immediate effect. The bill was transmitted to the Senate and assigned to committee(s) for further consideration (Committee on Government Operations; later noted referral to a joint committee).
- If enacted by the Legislature and signed, the statutory change takes effect per the law’s effective date language (House gave immediate effect on passage; Senate action and gubernatorial signature would complete enactment process).
Support / testimony
- DPSCD representatives testified in support. HFA listing of organizations indicating support includes labor, community and education groups (e.g., AFT‑Michigan, 482Forward, Wayne RESA, community nonprofits).
Bottom line
- HB 6255 narrows the condition under which a qualifying district can be dissolved by adding SLRF loans to required “operating obligations.” Practically, it prolongs the redirection of a dedicated local millage to debt repayment, shifts continued local foundation backfilling costs onto the state (general fund/School Aid Fund), produces savings for DPSCD until SLRF debt is retired, and may accelerate debt repayment (reducing interest).
Compiled from official sources — confirm details with the bill’s official record.
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