February 12, 2014, Introduced by Reps. Knezek and Abed and referred to the Committee on Michigan Competitiveness.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
(MCL 388.1601 to 388.1896) by adding section 260.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 260. (1) In addition to the amounts appropriated under
section 236, $2,000,000.00 is appropriated from state general
fund/general purpose money for the fiscal year ending September 30,
2015, for the pilot program described in this section.
(2) It is the intent of the legislature that the pilot program
continue for at least 5 years. The department shall seek funding
for the pilot program from private and public sources. The
legislature shall appropriate money from these sources, and from
state general fund/general purpose money, in each state fiscal year
that the pilot program continues, in an amount sufficient to
operate the pilot program. However, money from the state school aid
fund shall not be appropriated for the pilot program.
(3) The department shall create and implement a tuition grant
pilot program, to be known as the smarter Michigan and retaining
talent (SMART) tuition program, that pays certain tuition costs of
participating community college and public university students in
exchange for those students' agreement to pay the state a certain
percentage of their future income. All of the following apply to
this pilot program:
(a) The department shall select 100 students who are enrolled
in a public university and 100 students who are enrolled in a
community college to participate in the pilot program.
(b) A student enrolled in a community college or public
university may submit an application to the department to
participate in the pilot program if he or she is a resident of this
state, as determined by the community college or public university.
The department shall select the participants in the pilot program
from among those applicants. If there are more than 100 applicants
to participate in the pilot program as community college students
or more than 100 applicants to participate in the pilot program as
public university students, the department shall select the
participants from among the applicants using a random selection
process.
(c) A student is not eligible to participate in the pilot
program if the adjusted gross income of the student and his or her
immediate family is $250,000.00 or more.
(d) Each participant shall enter into a written agreement that
provides that, in exchange for payment on his or her behalf of an
amount equal to the weighted average tuition cost to the public
university or community college in which he or she is enrolled, he
or she agrees to pay the department a percentage of his or her
future earnings. The participant's payment obligation under this
subdivision shall meet the requirements of subsection (4).
(e) For an academic year, the amount of a grant to a
participant shall not exceed the weighted average tuition cost of
community colleges if the participant is enrolled in a community
college, or the weighted average tuition cost of public
universities if the participant is enrolled in a public university.
(f) The department shall not award a grant in more than 3
consecutive academic years if the participant is enrolled in a
community college or 5 consecutive academic years if the
participant is enrolled in a public university.
(g) After completion of the first full academic year in which
he or she participates in the pilot program, a participant is
ineligible to receive additional grants if he or she fails to
maintain a cumulative grade point average of at least 2.5 at the
community college or public university in which he or she is
enrolled and that failure continues for more than 1 term or
semester.
(h) It is the intent of the legislature that the department's
administrative costs in connection with the pilot program shall not
exceed 1%.
(4) In each calendar year for which a participant in the pilot
program has a payment obligation described in subsection (3)(d),
the participant shall pay the department an amount equal to 2% of
his or her adjusted gross income for that year if he or she
attended a community college or 4% of his or her adjusted gross
income for that year if he or she attended a public university. The
participant's payment obligation begins in the first calendar year
in which he or she obtains employment after he or she graduated
from or stopped attending the community college or public
university in which he or she was enrolled and his or her adjusted
gross income from that employment in that year exceeds the federal
poverty level. The payment obligation continues for the following
consecutive number of years, as applicable:
(a) If tuition payments were made on behalf of the participant
by the department for 1 academic year at the community college or
public university, 5 years of payments.
(b) If tuition payments were made on behalf of the participant
by the department for 2 academic years at the community college or
public university, 10 years of payments.
(c) If tuition payments were made on behalf of the participant
by the department for 3 academic years at the community college or
public university, 15 years of payments.
(d) If tuition payments were made on behalf of the participant
by the department for 4 academic years at the public university, 20
years of payments.
(e) If tuition payments were made on behalf of the participant
by the department for 5 academic years at the public university, 25
years of payments.
(5) By June 1 of each year, the department shall submit to the
state budget director, the financial aid restructuring commission
created in subsection (6), the house and senate appropriations
subcommittees on higher education, the house and senate
appropriations subcommittees on community colleges, and the house
and senate fiscal agencies a report concerning the creation and
implementation of the pilot program in the preceding state fiscal
year. The report shall include all of the following for the
preceding state fiscal year:
(a) The number of participants who were enrolled in community
colleges and, for those participants, the number that continued in
the pilot program; the number that dropped out of the pilot
program; the number that dropped out of a community college; and
the number that graduated from a community college.
(b) The number of participants who were enrolled in public
universities and, for those participants, the number that continued
in the pilot program; the number that dropped out of the pilot
program; the number that dropped out of a public university; and
the number that graduated from a public university.
(c) An analysis of the payments described in subsection (3)(d)
that the department had received from participants, including, but
not limited to, how many payments were made on time, how many
payments were late, how much each recipient had received from the
department under this section, and how much each participant had
repaid to the department.
(d) The number of participants who had found employment.
(e) The number of students who were then unemployed.
(f) A general summary of the pilot program, including, but not
limited to, how much the department had paid on behalf of
participants, the total amount repaid to the department by
participants, and a projection of future payments the department
estimated it would receive from participants.
(6) The financial aid restructuring commission is established
in the department. All of the following apply to the commission:
(a) The commission shall consist of 6 members, as follows:
(i) Five voting members who are residents of this state and are
appointed by the governor, as follows:
(A) One individual representing state universities.
(B) One individual representing community colleges.
(C) One individual selected from 1 or more individuals
nominated by the senate majority leader.
(D) One individual selected from 1 or more individuals
nominated by the speaker of the house of representatives.
(E) One individual representing the public.
(ii) The state treasurer, or his or her designee, who is a
nonvoting member of the commission and shall serve as chair of the
commission.
(b) The term of office of the appointed members is 2 years and
until a successor is appointed and qualified. A member may be
removed in the manner provided for by law for removal of public
officers. A vacancy shall be filled for the unexpired term in the
same manner and for the same class as the original appointment.
(c) The commission shall conduct its activities in compliance
with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. The
commission shall give public notice of the time, date, and place of
meetings of the commission in the manner required by the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(d) The commission shall make any writing prepared, owned,
used, in the possession of, or retained by the commission in the
performance of an official function available to the public in
compliance with the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(e) The commission shall analyze the report described in
subsection (5) and, within 6 months of receiving the report, shall
make recommendations to the governor and legislature concerning the
long-term viability of a financial aid program similar in structure
to the pilot program.
(7) As used in this section:
(a) "Adjusted gross income" means that term as defined in
section 62 of the internal revenue code of 1986, 26 USC 62.
(b) "Community college" means a community college that
receives an appropriation in section 201.
(c) "Department" means the department of treasury.
(d) "Participant" means a student selected by the department
to participate in the pilot program.
(e) "Pilot program" means the smarter Michigan and retaining
talent (SMART) tuition program created in this section.
(f) "Public university" means a public university that
receives an appropriation in section 236.
(g) "Tuition" means the quarter or semester charges imposed to
attend a community college or public university and all mandatory
fees required as a condition of enrollment, as determined by the
department.
(h) "Weighted average tuition cost of community colleges"
means the tuition cost arrived at by adding the products of the
annual tuition cost at each community college and its total number
of fiscal year equated students, then dividing the gross total of
this cumulation by the total number of fiscal year equated students
attending community colleges.
(i) "Weighted average tuition cost of public universities"
means the weighted average tuition cost of state institutions of
higher education as defined in section 4 of the Michigan education
trust act, 1986 PA 316, MCL 390.1424.
Enacting section 1. This amendatory act takes effect October
1, 2014.