SENATE BILL NO. 911 EXECUTIVE BUDGET BILL February 24, 1998, Introduced by Senators SCHWARZ, GOUGEON, STEIL and MC MANUS and referred to the Committee on Appropriations. A bill to make appropriations for the state institutions of higher education and certain state purposes related to education for the fiscal year ending September 30, 1999; to provide for the expenditures of those appropriations; and to prescribe the powers and duties of certain state departments, institutions, agencies, and officers. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: Sec. 101. There is appropriated for the state institutions of higher education and certain state purposes related to education, and subject to the conditions set forth in this bill, for the fiscal year ending September 30, 1999, the following respective amounts: HIGHER EDUCATION APPROPRIATIONS SUMMARY: GROSS APPROPRIATION. . . . . . . . $ 1,581,313,273 Interdepartmental grant revenues: Total interdepartmental grants and intradepartmental transfers. . . . . 0 ADJUSTED GROSS APPROPRIATION . . . . . . $ 1,581,313,273 Federal revenues: Total federal revenues . . . . . 3,600,000 Special revenue funds: Total local revenues . . . . . . 0 Total private revenues . . . . . 0 Total other state restricted revenues. . . . . . 0 State general fund/general purpose . . . . $ 1,577,713,273 OPERATIONS Central Michigan University. . . . . . $ 72,735,062 Eastern Michigan University. . . . . . 77,278,273 Ferris State University. . . . . 49,297,799 Grand Valley State University. . . . . 47,031,334 Lake Superior State University . . . . . . 12,655,100 Michigan State University. . . . . . . 283,100,348 Michigan Technological University. . . . . 48,379,062 Northern Michigan University . . . . . 46,630,350 Oakland University . . . . . 42,820,678 Saginaw Valley State University. . . . . . 22,651,329 University of Michigan-Ann Arbor . . . . . 319,257,372 University of Michigan-Dearborn. . . . . . 23,419,678 University of Michigan-Flint. . . . . 20,105,601 Wayne State University . . . . . 226,674,472 Western Michigan University. . . . . . 109,552,639 GROSS APPROPRIATION . . . . . . $ 1,401,589,097 Appropriated from: State general fund/general purpose . . . . $ 1,401,589,097 STATE AND REGIONAL PROGRAMS Agricultural experiment station. . . . . . $ 29,872,744 Cooperative extension service. . . . . 25,693,244 Michigan molecular institute . . . . . 125,000 Japan center for Michigan universities . . . . . 355,250 Higher education database modernization and conversion . . . . . 150,000 Midwestern higher education compact. . . . . . . 58,000 GROSS APPROPRIATION. . . . . $ 56,254,238 Appropriated from: State general fund/general purpose . . . . $ 56,254,238 MARTIN LUTHER KING, JR.-CESAR CHAVEZ-ROSA PARKS PROGRAM Select student supportive services . . . . $ 1,948,975 Michigan college/university partnership program. . . . . . 584,693 Visiting professors program. . . . . . 164,249 GROSS APPROPRIATION. . . . . $ 2,697,917 Appropriated from: State general fund/general purpose . . . . $ 2,697,917 GRANTS AND FINANCIAL AID State competitive scholarships . . . . . . $ 32,169,620 Tuition grants. . . . . . . 58,658,734 Michigan work-study program. . . . . . 7,243,381 Part-time independent student program. . . . . . 2,623,277 Grant for Michigan resident dental graduates . . . . 4,565,416 Grant for general degree graduates . . . . 5,246,078 Grant for allied health graduates. . . . . 844,958 Michigan education opportunity grants. . . . . . 2,060,557 Robert C. Byrd honors scholarship program. . . . . . 1,300,000 Tuition incentive program/high school completion . . . . . . 2,000,000 Center for advanced technologies-engineering tuition reimbursement. . . . . . 4,060,000 GROSS APPROPRIATION . . . . . . $120,772,021 Appropriated from: Federal revenues: DED-OPSE, grants to state for state student incentives. . . . . 2,300,000 DED-OPSE, Byrd honors scholarships. . . . . . . 1,300,000 State general fund/general purpose. . . . . . . $ 117,172,021 GENERAL SECTIONS Sec. 201. (1) Pursuant to section 30 of article IX of the state constitution of 1963, total state spending from state sources for fiscal year 1998-99 is estimated at $1,577,713,273.00 in this bill and state spending from state sources paid to local units of government for fiscal year 1998-99 is estimated at $4,667,700.00. The itemized statement below identifies appropriations from which spending to units of local government will occur: GRANTS AND FINANCIAL AID Part-time independent student program . . . . . $ 1,493,000 Michigan education opportunity grants . . . . . 999,600 Michigan work-study program . . . . . 2,175,100 Total . . . . . $ 4,667,700 (2) If it appears to the principal executive officer of a department or branch that state spending to local units of government will be less than the amount that was projected to be expended under subsection (1), the principal executive officer shall immediately give notice of the approximate shortfall to the state budget director. Sec. 202. (1) The funds appropriated in section 101 to state institutions of higher education shall be paid by the state treasurer to the respective institutions in 11 equal monthly installments on the sixteenth of each month, or the next succeeding business day, beginning with October 16, 1998. Except for Wayne State University, each institution shall accrue its July and August 1999 payments to its institutional fiscal year ending June 30, 1999. (2) The amount distributed to an institution shall not exceed the net appropriations plus additional distributions specifically authorized by this bill. (3) All universities shall submit higher education institutional data inventory (HEIDI) data and associated financial and program information requested by and in a manner prescribed by the state budget director. For universities with fiscal years ending June 30, 1998, these data shall be submitted by October 15, 1998. Universities with a fiscal year ending September 30, 1998, shall submit preliminary HEIDI data by November 15, 1998, and final data by December 15, 1998. (4) A detailed description of procedures utilized to arrive at the amounts appropriated in section 101 shall be submitted to each institution by the senate and house fiscal agencies. Sec. 203. Money received by the state from the federal government or private sources for the use of a college or university is appropriated for the purpose for which it was provided. The acceptance and use of federal or private funds does not place an obligation upon the legislature to continue the purposes for which the funds are made available. Sec. 204. The expenditures and funding sources authorized under this bill are subject to the management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594. Sec. 205. All universities shall furnish all program and financial information that is required by and in a manner prescribed by the state budget director or the house or senate appropriations committee. Sec. 206. As used in this appropriation bill, "DED-OPSE" means the United States department of education office of postsecondary education. GRANTS AND FINANCIAL AID Sec. 301. (1) Payments of the amounts included in section 101 for the state competitive scholarship program shall be distributed pursuant to 1964 PA 208, MCL 390.971 to 390.981. (2) The Michigan higher education assistance authority shall implement a proportional competitive scholarship maximum award level for recipients enrolled less than full-time in a given semester or term. (3) If a student who receives an award under this section has his or her tuition and fees paid under the Michigan educational trust program, pursuant to the Michigan education trust act, 1986 PA 316, MCL 390.1421 to 390.1444, and still has financial need, the funds awarded under this section may be used for educational expenses other than tuition and fees. (4) If the Michigan higher education assistance authority increases the maximum award per eligible student from that provided in the previous fiscal year, it shall not have the effect of reducing the number of eligible students receiving awards in relation to the total number of eligible applicants. Any increase in the maximum grant shall be proportional for all eligible students receiving awards. Sec. 302. (1) The amounts appropriated in section 101 for the state tuition grant program shall be distributed pursuant to 1966 PA 313, MCL 390.991 to 390.997a. (2) Tuition grant awards shall be made to all eligible Michigan residents who apply before September 1, 1998, and who are qualified. Tuition grant awards shall not be made to students newly enrolled in a juris doctor law degree program after the 1995-96 academic year. (3) The Michigan higher education assistance authority shall determine an actual maximum tuition grant award per student that ensures that the aggregate payments for the tuition grant program do not exceed the appropriation contained in section 101 for the state tuition grant program. By October 15, 1998, and again by December 15, 1998, the authority shall analyze the status of award commitments, shall make any necessary adjustments, and shall confirm that those award commitments will not exceed the appropriation contained in section 101 for the tuition grant program. The determination and actions shall be reported to the state budget director and the house and senate fiscal agencies no later than December 15, 1998. If award adjustments are necessary, the students shall be notified of the adjustment by the third Monday in January. (4) Any unexpended and unencumbered funds remaining on September 30, 1999, from the amounts appropriated in section 101 for the tuition grant program shall not lapse on September 30, 1999, but shall continue to be available for expenditure for tuition grants provided in the 1999-2000 fiscal year. The use of these unexpended fiscal year 1998-99 funds shall terminate at the end of the 1999-2000 fiscal year. (5) The Michigan higher education assistance authority shall con- tinue a proportional tuition grant maximum award level for recipients enrolled less than full-time in a given semester or term. (6) If the Michigan higher education assistance authority increases the maximum award per eligible student from that provided in the previous fiscal year, it shall not have the effect of reducing the number of eligible students receiving awards in relation to the total number of eligible applicants. Any increase in the maximum grant shall be proportional for all eligible students receiving awards. Sec. 303. (1) Included in the appropriation in section 101 is funding for the Michigan work-study program established under 1986 PA 288, MCL 390.1371 to 390.1382, and 1986 PA 303, MCL 390.1321 to 390.1332. An effort should be made by each institution participating in the Michigan work-study program to assure that not less than 10% of those undergraduate, graduate, and professional students eligible to participate in the program are placed with for-profit employers no later than December 31 of each year for which funding is provided under this bill. (2) The Michigan higher education assistance authority shall allocate funds to institutions eligible for work-study money based upon each institution's specific Pell grant index and each institution's utilization rate of work-study funds for the 3 most recent years for which statistics are available. (3) The Michigan higher education assistance authority shall set aside not more than 5% of the total work-study appropriation to process requests from participating institutions for allocation adjustments. Allocation adjustments shall be based on criteria set by the authority prior to making the allocations under subsection (2). Sec. 304. (1) Payments of the amounts included in section 101 for the general degree reimbursement program established under 1974 PA 75, MCL 390.1021 to 390.1027, shall be made for all degrees identified in section 1(1) of 1974 PA 75, MCL 390.1021, except doctor of dental sur- gery, doctor of dental medicine, juris doctor law, and allied health degrees. (2) The reimbursement rate per eligible degree shall be the equally prorated amount permitted by the appropriation, except that the amount of the reimbursement for each associate degree shall be « of the rate of reimbursement for the other degrees eligible under subsection (1) for the general degree reimbursement program. (3) From the general degree reimbursement program, $135,300.00 shall be provided to Spring Arbor College for the southern Michigan state prison program. (4) From the general degree reimbursement program, $200,500.00 shall be provided to the University of Detroit-Mercy for graduate research aid. (5) From the general degree reimbursement program, $30,100.00 shall be provided to Marygrove College for learning clinics. (6) From the general degree reimbursement program, $50,000.00 shall be provided to Suomi College for career education programs. Sec. 305. The reimbursement rate per eligible degree under the allied health degree reimbursement program established under 1974 PA 75, MCL 390.1021 to 390.1027, shall be the equally prorated amount permitted by the appropriation included in section 101. Sec. 306. Funds disbursed through the degree reimbursement programs shall not be used by any recipient institution for theology or divinity programs. Sec. 307. The auditor general shall audit selected enrollments, degrees, and awards at selected independent colleges and universities receiving awards administered by the department of treasury. The audits shall be based upon definitions and requirements established by the state budget director and the senate and house fiscal agencies. The auditor general shall submit a report of findings to the senate and house appropriations committees and the state budget director not later than May 1, 1999. Sec. 308. The sums appropriated in section 101 for the student financial aid and degree reimbursement programs shall be paid out of the state treasury and shall be distributed to the respective institutions in accordance with a quarterly payment system as follows: (a) For the state competitive scholarship, tuition incentive, and tuition grant programs, 40% shall be paid at the beginning of the state's first fiscal quarter, 40% at the beginning of the state's second fiscal quarter, l0% at the beginning of the state's third fiscal quarter, and l0% at the beginning of the state's fourth fiscal quarter. (b) For the work-study program, payments shall be made in 11 monthly installments from October 1 to August 31 of any year. (c) For the part-time independent student program and Michigan education opportunity grant program, 50% shall be paid at the beginning of the state's first fiscal quarter, 25% at the beginning of the state's second fiscal quarter, and 25% at the beginning of the state's third fiscal quarter. (d) For the general degree reimbursement program, allied health degree reimbursement program, Michigan resident dental grant program, and Robert C. Byrd honors scholarship program, 50% shall be paid at the beginning of the state's first fiscal quarter and 50% at the beginning of the state's second fiscal quarter after the number of earned degrees conferred and total amounts to be paid are certified. Sec. 309. The Michigan higher education assistance authority shall determine the needs analysis criteria for students to qualify for the competitive scholarship program and tuition grant program. To be consistent with federal requirements, student wages may be taken into consideration when determining the amount of the award. Sec. 310. (1) The funds appropriated in section 101 for the tuition incentive program/high school completion program shall be distributed as provided in this section and pursuant to the administrative procedures for the tuition incentive program/high school completion program of the family independence agency. (2) As used in this section: (a) "Phase I" means the first part of the tuition incentive assistance program defined as the academic period of 80 semester or 120 term credits, or less, leading to an associate degree or certificate. (b) "Phase II" means the second part of the tuition incentive assistance program which provides assistance in the third and fourth year of 4-year degree programs. (c) "Department" means the family independence agency. (3) A person shall meet the following basic criteria and financial thresholds to be eligible for tuition incentive benefits: (a) To be eligible for phase I, a person shall meet all of the following criteria: (i) Apply for certification to the department before graduating from high school or completing the general education development (GED) certificate. (ii) Be less than 20 years of age at the time of high school graduation or GED completion. (iii) Be a United States citizen and a resident of Michigan according to institutional criteria. (iv) Be at least a half-time student, earning less than 80 semester or 120 term credits at a participating educational institution within 4 years of high school graduation or GED certificate completion. (b) To be eligible for phase II, a person shall meet either of the following criteria in addition to the criteria in subdivision (a): (i) Complete at least 56 transferable semester or 84 transferable term credits. (ii) Obtain an associate degree or certificate at a participating institution. (c) To be eligible for phase I or phase II, a person must be financially eligible as determined by the department. A person is financially eligible for the tuition incentive program if that person was medicaid eligible for 24 months within the 36 months before application. Certification of eligibility may begin in the sixth grade and continue until the time of enrollment in a participating institution. (4) For phase I, the department shall provide payment on behalf of a person eligible under subsection (3). The department shall reject billings that are excessive or outside the guidelines for the type of educational institution. (5) For phase I, all of the following apply: (a) Payments for associate degree or certificate programs shall not be made for more than 80 semester or 120 term credits for any individual student at any participating institution. (b) For persons enrolled at a Michigan community college, the department shall pay the current in-district tuition and mandatory fees. For persons residing in an area that is not included in any community college district, the out-of-district tuition rate may be authorized. (c) For persons enrolled at a Michigan public university, the department shall pay lower level resident tuition and mandatory fees for the current year. (d) For persons enrolled at a Michigan independent, nonprofit degree granting college or university or a Michigan federal tribally controlled community college, the department shall pay mandatory fees for the current year and a per credit payment that does not exceed the average community college in-district per credit tuition rate as reported on August 1, for the immediately preceding academic year. (6) A person participating in phase II may be eligible for additional funds not to exceed $500.00 per semester or $400.00 per term up to a maximum of $2,000.00 subject to the following conditions: (a) Credits are earned in a 4-year program at a Michigan degree granting 4-year college or university. (b) The tuition reimbursement is for coursework completed within 30 months of completion of the phase I requirements. (7) Program payments shall not be used by any recipient for theology or divinity courses. (8) The department shall work closely with participating institutions to develop an application and eligibility determination process that will provide the highest level of participation and ensure that all requirements of the program are met. (9) Applications for the tuition incentive program may be approved at any time after the student begins the sixth grade. If a determination of financial eligibility is made, that determination is valid as long as the student meets all other program requirements and conditions. (10) Each institution shall ensure that all known available restricted grants for tuition and fees are used prior to billing the tuition incentive program for any portion of a student's tuition and fees. (11) The department shall ensure that the tuition incentive program is well publicized and that potentially eligible medicaid clients are provided information on the program. The department shall provide the necessary funding and staff to fully operate the program. (12) When statutory provisions are enacted to provide for a tuition incentive program/high school completion program, the provisions of this section are superseded. (13) Any unexpended and unencumbered funds remaining on September 30, 1999 from the amounts appropriated in section 101 for the tuition incentive program shall not lapse on September 30, 1999, but shall continue to be available for expenditure for the tuition incentive program in the fiscal year ending September 30, 2000. Sec. 311. To enable the legislature to evaluate the appropriation needs of higher education, each independent college and university shall make available to the legislature upon request, data regarding grants for the preceding, current, and ensuing fiscal years. Sec. 312. The funds appropriated in section 101 for the center for advanced technologies-engineering program provided in conjunction with the coalition for new manufacturing education are designated to focus:hope to reimburse the costs of the manufacturing based education. STATE UNIVERSITIES Sec. 401. (1) Included in section 101 is $5,700,387.00 to Wayne State University for the Joseph F. Young, Sr. psychiatric research and training program. Wayne State University shall use these funds for psychiatric laboratory and clinical research, training, and treatment services. Within the available appropriation, services shall not be denied to any patient who meets established research guidelines for treatment on the basis of personal financial circumstances, age, geographic residence, or projected/actual length of treatment as medically warranted. (2) Wayne State University shall report the following information to the department of community health by November 1, 1999: (a) The number and type of psychiatric research projects funded by the appropriation described in subsection (1). (b) The number and type of students trained and the location of training funded by the appropriation. (c) Demographic data regarding the number and profile of patients to receive psychiatric services funded by the appropriation and a profile of the services provided. (d) A summary budget outlining major expenditure categories and any first- and third-party reimbursements. (3) Copies of these reports shall also be provided to the house and senate fiscal agencies and the state budget director. Sec. 402. (1) There is created the higher education institutional data inventory advisory committee. The committee shall be appointed by the state budget director and shall consist of the following members: (a) One representative from the house fiscal agency. (b) One representative from the senate fiscal agency. (c) One representative from the state budget director's office. (d) Three representatives of the presidents council of state universities. The presidents council shall appoint 1 representative each from a masters, a doctoral, and a research university. (2) The committee shall provide for the general scope and direction for implementing the conversion and modernization of the state's higher education databases, for which funding is provided in section 101. (3) The committee shall prepare a plan for the conversion and modernization effort. The plan shall include, but is not limited to, all of the following: (a) The development of a data dictionary. (b) The integration of appropriate federal and state databases. (c) The assurance of the accuracy of the data. Sec. 403. From the funds appropriated in section 101, each state university shall establish a system to track students that graduate from the university. The system shall minimally provide information on the students' field of study and year of graduation, whether they are employed or continuing their education, the field in which they are employed or their subsequent field of academic study, their job title, their salary, and their city, town, or other place of residence. MARTIN LUTHER KING, JR. - CESAR CHAVEZ, ROSA PARKS PROGRAMS Sec. 501. (1) Included in the appropriation for each public university in section 101 is funding for the Martin Luther King, Jr. - Cesar Chavez, Rosa Parks future faculty program, that is intended to increase the pool of minority candidates pursuing full-time faculty teaching careers in postsecondary education in this state. (2) The program shall be administered by each university in a manner prescribed by the Michigan department of education. Sec. 502. (1) Included in the appropriation for each public university in section 101 is funding for the Martin Luther King, Jr. - Cesar Chavez, Rosa Parks college day program that is intended to introduce school children underrepresented in postsecondary education to the potential of a college education. (2) Individual program plans of each university shall include a budget of equal contributions from this program, the participating public university, the participating school district, and the participating independent degree granting college. College day funds shall not be expended to cover indirect costs. Not more than 20% of the university match shall be attributable to indirect costs. (3) The program shall be administered by each university in a manner prescribed by the Michigan department of education. Sec. 503. (1) Included in section 101 is funding for the Martin Luther King, Jr. - Cesar Chavez, Rosa Parks select student support services program for developing academically and economically disadvantaged student retention programs for 4-year public and independent educational institutions in this state. (2) An award made under this program to any 1 institution shall not be greater than $150,000.00, and the amount awarded shall be matched on a 70% state, 30% college or university basis. (3) The program shall be administered by the Michigan department of education. Sec. 504. (1) Included in section 101 is funding for the Martin Luther King, Jr. - Cesar Chavez, Rosa Parks linkage program between 4-year universities and public community colleges, which is intended to increase the number of underrepresented minority students who transfer from community colleges into baccalaureate programs. (2) The grants shall be made under this program to Michigan public universities. An award to any 1 institution shall not be greater than $150,000.00, and the amount awarded shall be matched on a 70% state, 30% university basis. (3) The program shall be administered by the the Michigan department of education. Sec. 505. (1) Included in the appropriation in section 101 is funding for the Martin Luther King, Jr. - Cesar Chavez, Rosa Parks visiting professors program which is intended to increase the number of minority instructors in the classroom and provide role models for underrepresented minority students. (2) The program shall be administered by the Michigan department of education. UNIVERSITY SERVICE TO K-12 EDUCATION Sec. 601. (1) From the amount appropriated in section 101 for state universities, the state universities shall systematically inform Michigan high schools regarding the academic status of students from each high school in a manner prescribed by the presidents council, state universities of Michigan in cooperation with the Michigan association of secondary school principals. (2) The Michigan high schools shall systematically inform the state universities about the use of information received under this section in a manner prescribed by the Michigan association of secondary school principals in cooperation with the presidents council, state universities of Michigan. GENERAL REPORTS AND AUDITS Sec. 701. (1) The auditor general shall audit enrollments at 5 randomly selected public universities. The audits shall be based upon the definitions and requirements established by the state budget director and the senate and house fiscal agencies. The audits shall be based on uniform reporting categories and shall include higher education institutional data inventory (HEIDI) data. The auditor general shall submit a report of findings to the house and senate appropriations committees and the state budget director no later than March 1, 1999. (2) Student credit hours reports shall not include the following: (a) Student credit hours generated through correspondence courses, credit by examination, or inmate prison programs regardless of teaching location. (b) Student credit hours generated in new degree programs after January 1, 1975, that have not been specifically authorized for funding by the legislature, except spin-off programs converted from existing core programs that do all of the following: (i) Represent new options, fields, or concentrations within existing programs. (ii) Are consistent with the current institutional role and mission. (iii) Are accommodated within the continuing funding base of the institution. (iv) Do not require a new degree level beyond that which the institution is currently authorized to grant within that discipline or field. (v) Do not require funding from the state other than that provided by the student credit hours generated within the program, either before program initiation or within the first 3 years of program operation. Sec. 702. The principal executive officer of each institution of higher education receiving an appropriation under this act shall expend a portion of the funds appropriated to that institution to make a report to the auditor general, the house and senate fiscal agencies, and the state budget director within 60 days after the auditor general issues his or her annual report on the operation of the institution. The institution's report shall specify all of the following: (a) The recommendations of the auditor general implemented by the institution, including projected dates and resources required, if any, to achieve compliance. (b) The recommendations of the auditor general not implemented by the institution or implemented by the institution as modified. (c) The rationale for not implementing a recommendation of the auditor general or of implementing a recommendation as modified. Sec. 703. (1) Each state university shall annually submit a report to the state budget director and house and senate fiscal agencies on efforts to ensure the English language oral proficiency of teaching faculty. (2) The next reporting date for the report under subsection (1) is November 1, 1998. Sec. 704. (1) Each state university shall report the following information for the 1997-98 academic year to the house and senate fiscal agencies and the state budget director: (a) Separately, the number of ranked faculty, unranked faculty, and graduate assistants who taught an undergraduate class section. (b) The total number of undergraduate credit hours and section credits taught by each of the following: (i) Ranked faculty. (ii) Unranked faculty. (iii) Graduate assistants. (2) For the purposes of this section, "ranked faculty", "unranked faculty", and "graduate assistants" mean those terms as defined in the higher education institutional data inventory (HEIDI). (3) This information shall be provided on or before October 31, 1998. Sec. 705. The auditor general shall conduct not less than 3 performance audits of the state universities during the fiscal year ending September 30, 1999. final page