SENATE BILL No. 784

 

 

February 12, 2014, Introduced by Senator ANANICH and referred to the Committee on Appropriations.

 

 

 

     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.