July 18, 2013, Introduced by Rep. Barnett and referred to the Committee on Tax Policy.
A joint resolution proposing an amendment to the state
constitution of 1963, by adding section 10 to article VIII and by
amending section 8 of article IX, to establish the postsecondary
education fund, to increase the sales tax rate, to increase the use
tax rate, and to dedicate that revenue to the postsecondary
education fund.
Resolved by the Senate and House of Representatives of the
state of Michigan, That the following amendment to the state
constitution of 1963, to establish the postsecondary education
fund, to increase the sales tax rate, to increase the use tax rate,
and to dedicate that revenue to the postsecondary education fund,
is proposed, agreed to, and submitted to the people of the state:
ARTICLE VIII
Sec. 10. (1) There shall be established a postsecondary
education fund which shall be used exclusively to provide grants to
high school graduates for the costs of undergraduate tuition and
vocational training at an eligible institution, as provided by law.
(2) One hundred percent of the proceeds of the sales and use
taxes imposed at the additional rate of 1% provided for in section
8 of article IX, and other tax revenues as provided by law, shall
be dedicated to this fund.
(3) Beginning in the 2015-2016 academic year, the authority
shall award a grant under this section to an individual if the
authority determines that the individual meets all of the following
eligibility criteria:
(a) Continuously resided in this state for at least 48 months.
(b) Received a high school diploma from a school district,
nonpublic school, or home school located in this state or
successfully completed the general education development test.
(c) No more than 10 years have passed since the individual
became a high school graduate.
(d) Provides proof satisfactory to the authority that the
individual has done all of the following:
(i) Submitted a FAFSA to the United States department of
education to determine the individual's eligibility for federal
grants or scholarships.
(ii) Applied for a Pell grant.
(iii) Applied for any grants or scholarships offered by this
state for which the individual is eligible.
(e) If the individual received a postsecondary education grant
in the preceding academic year, the individual meets all of the
following criteria:
(i) Earned a cumulative grade point average of at least 2.0 in
any undergraduate classes the individual completed at any eligible
institution in that previous academic year.
(ii) Made satisfactory progress toward attainment of a degree,
as defined by the eligible institution in which the individual is
enrolled, since receiving the previous postsecondary education
grant.
(iii) No more than 18 months have passed since the individual
earned a credit required to complete a qualified program.
(f) The number of credits completed by the individual are no
more than the average number of credits required by public
universities for the awarding of a baccalaureate degree.
(4) All of the following apply to the award of a postsecondary
education grant:
(a) Not later than November 1 of each year, each Michigan
public university shall report to the authority the highest cost of
tuition for a full-time first year student enrolled at that
university in the immediately preceding academic year.
(b) In each academic year, the base amount of the grant is an
amount equal to the average of the amount reported to the authority
under subdivision (a).
(c) The authority shall determine the amount of an
individual's grant for an academic year by subtracting the amount
of any other state or federal grants or scholarships the individual
is eligible to receive in that academic year from the base amount
determined under subdivision (b).
(d) The authority shall disburse an individual's grant money
to the eligible institution in which he or she is enrolled on the
individual's behalf, according to a payment procedure established
by the authority. The grant shall not exceed the cost of tuition at
the eligible institution in which the student is enrolled.
(e) If there is not enough money in the fund to provide each
individual with a grant in the amount to which the individuals are
eligible in an academic year, the authority shall establish a
maximum grant level for the academic year. The maximum grant level
amount established by the authority shall reflect a pro rata
distribution of money in the fund in that fiscal year to eligible
students.
(5) The postsecondary education fund shall not replace money
appropriated to support community colleges and public universities.
For each state fiscal year, the legislature shall appropriate not
less than 15% of the general fund to support community colleges and
public universities.
(6) As used in this section:
(a) "Academic year" means the period from September 1 of a
calendar year to August 31 of the next calendar year.
(b) "Authority" means the authority the legislature shall
establish to administer the postsecondary education grant program.
(c) "Eligible institution" means a degree or certificate
granting public or independent nonprofit college or university,
junior college, or community college headquartered in this state.
(d) "FAFSA" means the free application for federal student aid
developed under 20 USC 1082.
(e) "Fiscal year" means the fiscal year of this state.
(f) "Full-time student" means a student enrolled in 12 credit
hours in an academic semester or its equivalent number of credit
hours in a term or quarter, as determined by the authority.
(g) "High school graduate" means an individual who has
received a high school diploma from a high school or passed the
general education development diploma test or any other high school
graduate equivalency examination approved by the state board of
education.
(h) "K-12 school" means a public, private, or home school in
this state, grades kindergarten through grade 12.
(i) "Pell grant" means the postsecondary education federal
grant developed under 20 USC 1070a.
(j) "Postsecondary education grant" means a grant awarded by
the authority under this section.
(k) "Qualified program" means a bachelor degree, associate
degree, or postsecondary vocational training at an eligible
institution.
(l) "Undergraduate class" means a class or course that provides
a student with academic credit applicable toward a bachelor or
associate degree from an eligible institution.
ARTICLE IX
Sec. 8. Except as provided in this section, the Legislature
shall not impose a sales tax on retailers at a rate of more than 4%
of their gross taxable sales of tangible personal property.
Beginning May 1, 1994, the sales tax shall be imposed on
retailers at an additional rate of 2% of their gross taxable sales
of tangible personal property not exempt by law and the use tax at
an additional rate of 2%. The proceeds of the sales and use taxes
imposed at the additional rate of 2% shall be deposited in the
state school aid fund established in section 11 of this article.
The allocation of sales tax revenue required or authorized by
sections 9 and 10 of this article does not apply to the revenue
from the sales tax imposed at the additional rate of 2%.
Beginning January 1, 2015, the sales tax shall be imposed on
retailers at an additional rate of 1% of their gross taxable sales
of tangible personal property not exempt by law and the use tax at
an additional rate of 1%. The proceeds of the sales and use taxes
imposed at the additional rate of 1% shall be deposited in the
postsecondary education fund established in section 10 of article
VIII. The allocation of sales tax revenue required or authorized by
sections 9 and 10 of this article does not apply to the revenue
from the sales tax imposed at the additional rate of 1%.
No sales tax or use tax shall be charged or collected from and
after January 1, 1975 on the sale or use of prescription drugs for
human use, or on the sale or use of food for human consumption
except in the case of prepared food intended for immediate
consumption as defined by law. This provision shall not apply to
alcoholic beverages.
Resolved further, That the foregoing amendment shall be
submitted to the people of the state at the next general election
in the manner provided by law.