Bill Text: MI SB0539 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Higher education; financial aid; promise zones; modify administration. Amends title & secs. 5, 7, 9, 11, 17 & 19 of 2008 PA 549 (MCL 390.1665 et seq.); adds secs. 4 & 4a & repeals 2008 PA 550 (MCL 390.1641 - 390.1649).
Spectrum: Bipartisan Bill
Status: (Passed) 2016-02-17 - Assigned Pa 0009'16 With Immediate Effect [SB0539 Detail]
Download: Michigan-2015-SB0539-Engrossed.html
SB-0539, As Passed House, January 27, 2016
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 539
A bill to amend 2008 PA 549, entitled
"Michigan promise zone authority act,"
by amending the title and sections 5, 7, 9, 11, 17, and 19 (MCL
390.1665, 390.1667, 390.1669, 390.1671, 390.1677, and 390.1679),
sections 5, 7, 11, and 17 as amended by 2013 PA 210, and by adding
sections 4 and 4a; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to authorize the creation of promise zones; to
authorize the creation of promise zone authorities and the
implementation of promise zone development plans; to prescribe the
powers and duties of promise zone authorities; to provide for the
capture and disbursement of certain tax revenue; and to prescribe
powers and duties of certain state and local officials.
Sec. 4. (1) If a governing body determines that it is
necessary for the best interests of the public to promote access to
postsecondary education, the governing body may, by resolution,
declare its intention to establish a promise zone.
(2) A governing body shall set a date for a public hearing on
the adoption of a proposed resolution establishing a promise zone.
Notice of the public hearing shall be published twice in a
newspaper of general circulation in the eligible entity, at least
20 and not more than 40 days before the date of the hearing. Notice
of the hearing shall be posted in at least 20 conspicuous and
public places in the eligible entity at least 20 days before the
hearing. The notice shall state the date, time, and place of the
hearing and shall describe the proposed promise zone, the details
of the promise of financial assistance, and the criteria for
eligibility to receive that financial assistance.
(3) Not less than 30 days after the public hearing, if the
governing body of an eligible entity intends to proceed with the
establishment of a promise zone, it shall submit an application to
the department of treasury seeking approval to establish the
promise zone.
(4) The department of treasury shall review an application
submitted under subsection (3) and shall determine if the governing
body of the eligible entity that submitted the application is
eligible to establish a promise zone under this act. If so, the
department of treasury shall certify the eligibility of that
governing body to establish a promise zone. The department of
treasury shall review the applications submitted under subsection
(3) on a first-come, first-served basis and shall not certify more
than 10 governing bodies of eligible entities as eligible to
establish a promise zone under this act.
(5) If the department of treasury certifies that the governing
body of the eligible entity is eligible to create a promise zone,
the governing body shall, by resolution, establish a promise zone.
(6) Within 90 days after a governing body approves a
resolution to establish a promise zone, a local school district may
by resolution elect not to participate in the establishment of a
promise zone by the governing body of the eligible entity in which
the local school district is located. The resolution shall include
a provision that the local school district will establish a
separate promise zone under this act. If the local school district
does not establish a promise zone within a reasonable period of
time, the department of treasury may include that local school
district in the promise zone established by the eligible entity in
which the local school district is located.
(7) If a governing body of an eligible entity by resolution
dissolves a promise zone established under subsection (5), the
department of treasury's certification authorizing that promise
zone under subsection (4) is terminated and does not count toward
the limit of 10 certifications under subsection (4).
Sec. 4a. (1) A city, township, county, local school district,
or intermediate school district that is not an eligible entity may
create a promise zone under this act but shall not capture revenue
from the state education tax under this act. The governing body of
a city, township, county, local school district, or intermediate
school district that is not an eligible entity shall not be
considered under section 4 in determining the number of governing
bodies of eligible entities eligible to establish a promise zone
under this act.
(2) This section shall not prevent an eligible entity located
within a city, township, county, local school district, or
intermediate school district that is not an eligible entity from
creating a promise zone under this act and capturing revenue from
the state education tax under this act.
Sec.
5. (1) If the department of treasury certifies the
eligibility
of a governing body to establish a promise zone and the
a governing body, by resolution, establishes a promise zone under
the
Michigan promise zone act, 2008 PA 550, MCL 390.1641 to
390.1649,
section 4(5), the governing body shall, by resolution,
create a promise zone authority.
(2) An authority is a public body corporate that may sue and
be sued in any court of this state. An authority possesses all the
powers necessary to carry out its purpose. The enumeration of a
power in this act shall not be construed as a limitation on the
general powers of an authority.
(3) An authority shall be under the supervision and control of
a board. All of the following apply to the board of an authority:
(a) The board shall consist of 11 members, as follows:
(i) Nine locally appointed members. The chief executive
officer of the eligible entity, with the advice and consent of the
governing body, shall appoint the 9 initial locally appointed
members of the board described in this subparagraph. If a vacancy
occurs in an office of a locally appointed member appointed under
this subparagraph, the board shall appoint a new member to fill
that vacancy. As used in this subparagraph, for a local school
district or an intermediate school district, "chief executive
officer" means the superintendent of that local school district or
intermediate school district.
(ii) One member appointed by the senate majority leader.
(iii) One member appointed by the speaker of the house of
representatives.
(b) Not more than 3 members of the board shall be government
officials.
(c) One member of the board shall be a representative of the
public school community.
(d) The term of office of a member of the board is 4 years.
However, of the members first appointed, an equal number of the
members, as near as is practicable, shall be appointed for 1 year,
2 years, 3 years, and 4 years.
(e) A member of the board shall hold office until the member's
successor is appointed.
(f) Members of the board shall serve without compensation, but
may be reimbursed for actual and necessary expenses.
(g) The chairperson of the board shall be elected by the
board.
(4) Before assuming the duties of office, a member shall
qualify by taking and subscribing to the constitutional oath of
office.
(5) The proceedings and rules of the board are subject to the
open meetings act, 1976 PA 267, MCL 15.261 to 15.275. The board
shall adopt rules governing its procedure and the holding of
regular meetings, subject to the approval of the governing body.
Special meetings may be held if called in the manner provided in
the rules of the board.
(6) After having been given notice and an opportunity to be
heard, a member of the board may be removed for cause by the
governing body.
(7) A writing prepared, owned, used, in the possession of, or
retained by the board in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
Sec. 7. (1) A promise zone authority created under section 5
shall prepare a promise zone development plan.
(2) A promise zone development plan shall include, but is not
limited to, all of the following:
(a) A complete description of the proposed promise of
financial assistance. The proposed promise of financial assistance
shall include, but is not limited to, a promise of financial
assistance to all eligible students residing within the promise
zone and who graduate from a public high school or nonpublic high
school located within that promise zone, in an amount established
by the board to reflect the amount available for disbursement to
eligible students and included in the annual budget under section
15. The amount of proposed promise of financial assistance shall,
at a minimum, equal or exceed the amount the board determines is
sufficient to pay for the qualified educational expenses for an
eligible student to obtain an associate degree at a community or
junior college in this state, and shall not exceed the amount the
board determines is sufficient to pay for the qualified educational
expenses for an eligible student to obtain a bachelor's degree or
its equivalent at a public postsecondary institution in this state
or combination of public postsecondary institutions in this state,
subject to any limitations authorized under this section. The
proposed promise of financial assistance may also, at most, provide
funding for an eligible student to attend a private college in this
state in an amount that does not exceed the average amount of
qualified educational expenses to obtain a bachelor's degree at all
public universities in this state. The proposed promise of
financial assistance may also authorize the expenditure of funds
for educational improvement activities designed to increase
readiness for postsecondary education at public schools located in
the promise zone.
(b) A complete description of any limitation on the promise of
financial assistance, including, but not limited to, any of the
following:
(i) If the promise of financial assistance will be prorated
based on the number of years the student has resided within the
promise zone.
(ii) If the promise of financial assistance will be restricted
to students who have resided within or attended a public high
school or nonpublic high school within the promise zone for a
minimum number of years.
(iii) If the promise of financial assistance is predicated on
the student maintaining a minimum college grade point average and
carrying a minimum college credit hour classload.
(iv) If the promise of financial assistance is restricted to
attendance at 1 or more public or private postsecondary
institutions in this state.
(v) If the promise of financial assistance is limited to
students whose cumulative high school grade point average exceeds a
specified minimum. However, a board may revise, establish, or
eliminate a high school grade point average requirement for
students after it submits a promise zone development plan to the
department of treasury and is not required to amend the plan or
obtain approval from the department of treasury for that change.
(vi) If the promise of financial assistance is limited to
students who comply with requirements established by the board in
order to improve student progress toward degree completion.
(vii) If the promise of financial assistance in a promise zone
that encompasses more than 2 school districts is limited to
students who reside in and graduate from high schools located
within the boundaries of fewer than all of its constituent school
districts.
(c) A requirement that graduates of a public high school or
nonpublic high school exhaust all other known and available
restricted grants for qualified educational expenses for
postsecondary education provided by a federal, state, or local
governmental entity, as determined by the board.
(d) How the funds necessary to accomplish the promise of
financial assistance will be raised. Any amount received under the
state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1896,
shall not be included as a method of raising the necessary funds.
The promise zone development plan shall be financed from 1 or more
of the following sources:
(i) Donations.
(ii) Revenues.
(iii) Money obtained from other sources approved by the
governing body or otherwise authorized by law.
(e) An actuarial model of how much the proposed plan is
estimated to cost, based on actuarial formulas developed by the
department of treasury.
(f) A complete description of the criteria and procedures by
which the performance of students receiving financial assistance
pursuant to the proposed plan will be assessed and reported. This
assessment and reporting methodology shall include, but is not
limited to, the submission of a written report by no later than
October 31 of each year to the department of treasury. This annual
report shall include the following information, which may be
obtained, in whole or in part, from any reliable source that
complies with applicable laws regarding student privacy:
(i) The number of students who received financial assistance
pursuant to the authority's approved promise zone development plan
during the prior academic year.
(ii) Of those students accounted for under subparagraph (i),
the number who successfully completed the following:
(A) A certificate or associate program.
(B) A bachelor's program.
(iii) Of those students accounted for under subparagraph (i),
the number who withdrew from classes during the prior academic
year.
(iv) Of those students accounted for under subparagraph (i)
who initially reached successful completion of more than the
equivalent of 23 semester credits during the prior academic year,
the average time to successfully complete the equivalent of 24
semester credits.
(v) The 6-year graduation rate for recipients of financial
assistance pursuant to the authority's approved promise zone
development plan.
(3) The proposed promise of financial assistance under
subsection (2) shall not include funding for attendance at a public
or private postsecondary institution not located in this state.
(4) The board shall submit the promise zone development plan
to
the department of treasury promptly after its adoption. within 5
years after the eligibility to establish the promise zone was
certified by the department of treasury under section 4(4). If a
promise zone development plan is not submitted within this time
frame, the department of treasury may dissolve the promise zone.
The promise zone development plan shall be published on the website
of the eligible entity that established the promise zone.
(5) The department of treasury shall review the promise zone
development plan submitted under subsection (4). Not more than 60
days after receipt of a promise zone development plan submitted
under subsection (4), the department of treasury shall either
approve the promise zone development plan or provide a written
notice of deficiencies. If the department of treasury does not
approve a promise zone development plan submitted under subsection
(4) or provide a written notice of deficiencies within 60 days, the
promise zone development plan shall be considered approved. If a
promise zone development plan is approved, the department of
treasury shall certify that the promise zone development plan meets
all requirements under this act and is sustainable.
(6) The department of treasury shall review any proposed
amendments to a promise zone development plan. Not more than 60
days after receipt of proposed amendments to a promise zone
development plan, the department of treasury shall either approve
the proposed amendments or provide a written notice of
deficiencies. If the department of treasury does not approve
proposed amendments or provide a written notice of deficiencies
within 60 days, the proposed amendments shall be considered
approved. If proposed amendments are approved, the department of
treasury shall certify that the amendments meet all requirements
under this act.
(7) A promise zone development plan approved under this act
before the effective date of the amendatory act that added this
subsection shall be amended as necessary to meet the assessment and
reporting requirements described in subsection (2)(f). That
amendment shall include a first annual reporting deadline not later
than October 31, 2017. That amendment shall be submitted by the
board to the department of treasury within 60 days after the
effective date of the amendatory act that added this subsection and
is subject to the review process set forth in subsection (6).
Sec. 9. (1) The establishment of a promise zone does not
create a cause of action in law or in equity against this state, an
eligible entity, or a promise zone authority.
(2) The establishment of a promise zone development plan does
not create a cause of action in law or in equity against this
state, an eligible entity, or a promise zone authority, if the
proposed promise of financial assistance set forth in the promise
zone development plan is not paid to an eligible student.
Sec. 11. (1) The board may employ a director. All of the
following apply to a director employed by a board under this
subsection:
(a) The board shall establish the director's compensation.
(b) The director serves at the pleasure of the board.
(c) A member of the board is not eligible to hold the position
of director.
(d) Before beginning his or her duties, the director shall
take and subscribe to the constitutional oath and furnish a bond in
an amount determined in the resolution establishing the authority,
payable to the authority for use and benefit of the authority,
approved by the board, and filed with the clerk of the eligible
entity. The premium on the bond shall be considered an operating
expense of the authority, payable from money available to the
authority for expenses of operation.
(e) The director is the chief executive officer of the
authority.
(2) Subject to the approval of the board, the director shall
supervise and is responsible for implementing the promise zone
development plan and the performance of the functions of the
authority in the manner authorized under this act. The director
shall attend the meetings of the board and shall provide to the
board, the governing body, and the chief executive officer of the
eligible entity a regular report covering the activities and
financial condition of the authority. If the director is absent or
disabled, the board may designate a qualified person as acting
director to perform the duties of the office. Before beginning his
or her duties, the acting director shall take and subscribe to the
oath, and furnish a bond, as required of the director under
subsection (1)(d). The director shall furnish the board with any
information or reports governing the operation of the authority
that the board requires.
(3) The board may employ and fix the compensation of a
treasurer, who shall keep the financial records of the authority
and who, together with the director, shall approve all vouchers for
the expenditure of money of the authority. The treasurer shall
perform all duties delegated to him or her by the board and shall
furnish a bond in an amount prescribed by the board.
(4) The board may employ and fix the compensation of a
secretary, who shall maintain custody of the official seal and of
records, books, documents, or other papers the treasurer is not
required to maintain. The secretary shall attend meetings of the
board and keep a record of its proceedings and shall perform other
duties delegated by the board.
(5) The board may retain legal counsel to advise the board in
the proper performance of its duties.
(6) The board may employ any other personnel that the board
considers necessary.
(7) The authority shall immediately deposit any money it
receives to the credit of the authority, subject to disbursement
under this act.
(8) Beginning in the first fiscal year in which it receives
revenue from the state from the capture of state education tax
revenue under section 17, the authority may use not more than 15%
of the amount of that revenue to pay for administrative costs.
(9) Within 120 days after the end of each fiscal year, the
board shall submit audited financial statements of the authority
for that fiscal year to the department of education. The board
shall include with the financial statements a certification by the
board that the board and authority are in compliance with this act
,
with the requirements of the Michigan promise zone act, 2008 PA
550,
MCL 390.1641 to 390.1649, and with
the authority's approved
promise zone development plan.
Sec. 17. (1) The authority shall determine the base year for
calculating the amount of incremental growth for the capture of the
state education tax as provided in this section. The base year is
the amount of revenue received from the collection of the state
education tax in the promise zone in the year immediately preceding
the year in which an authority makes its initial payment of
qualified educational expenses in accordance with the promise of
financial assistance or the amount of revenue received from the
collection of the state education tax in the promise zone in any 1
of the 5 immediately succeeding years, whichever is less.
(2) If the authority continues to make annual payments in
accordance with the promise of financial assistance, in the year
immediately succeeding the base year determined in subsection (1)
and each year thereafter, this state shall capture 1/2 of the
increase in revenue, if any, from the collection of the state
education tax. This state shall not capture any revenue from the
collection of the state education tax under this act if that
revenue is subject to capture under any other law of this state.
Proceeds from the capture of the state education tax under this
section shall be deposited in the state treasury and credited to a
restricted fund to be used solely for the purposes of this act.
(3) If the authority continues to make annual payments of
qualified educational expenses in accordance with the promise of
financial assistance, 2 years after the authority's initial payment
of financial assistance and each year thereafter, this state shall
pay to the authority the state education tax captured under
subsection (2). If the boundaries of 2 or more promise zones
created under this act overlap, payments under this section shall
only be made to the first authority eligible for payment under this
subsection. If the boundaries of a promise zone are changed by
merger or otherwise, the department of treasury may adjust the
calculation of the tax revenue capture under this section to
reflect that change.
(4) If at any time the authority does not make annual payments
of qualified educational expenses in accordance with the promise
for financial assistance, any amount captured from that promise
zone in the restricted fund created under subsection (2) shall be
paid into the school aid fund established in section 11 of article
IX of the state constitution of 1963.
(5) For purposes of this section, payments under this section
shall not be included in determining payments for financial
assistance in the immediately preceding year.
Sec. 19. (1) The department of treasury shall oversee the
operations of any promise zone authority or board created under
this act. If the department of treasury determines that the actions
of a promise zone authority or board are not in accordance with the
promise zone development plan, the department of treasury may
assume operational control of that promise zone authority or board.
If a promise zone authority does not begin making annual payments
of qualified educational expenses in accordance with the promise of
financial assistance within 2 years of obtaining approval of its
promise zone development plan under section 7, the department may
dissolve the promise zone.
(2) An authority that has completed the purposes for which it
was organized shall be dissolved by resolution of the governing
body. The property and assets of the authority remaining after the
satisfaction of the obligations of the authority belong to the
eligible entity and shall be used solely for purposes of promoting
access to postsecondary education pursuant to resolution of the
governing body of the eligible entity.
Enacting section 1. The Michigan promise zone act, 2008 PA
550, MCL 390.1641 to 390.1649, is repealed.
