HOUSE BILL No. 4253

February 15, 2001, Introduced by Reps. Stamas, Godchaux, Mead, Shackleton, Stewart, Jelinek, Vander Roest, Kooiman, Jansen, Mortimer, Pappageorge, Cameron Brown and Shulman and referred to the Committee on Appropriations.

EXECUTIVE BUDGET BILL

A bill to make appropriations for community colleges and certain state purposes related to education for the fiscal year ending September 30, 2002; to provide for the expenditure of those appropriations; to establish or continue certain funds, programs, and categories; and to prescribe the powers and duties of certain state departments, institutions, agencies, employees, and officers.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1

LINE ITEM APPROPRIATIONS

Sec. 101. Subject to the conditions set forth in this bill, the amounts listed in this part are appropriated for community colleges and certain other state purposes relating to education for the fiscal year ending September 30, 2002, from the funds indicated in this part. The following is a summary of the appropriations in this part:

COMMUNITY COLLEGES

APPROPRIATION SUMMARY:

GROSS APPROPRIATION $ 331,196,319

Interdepartmental grants:

Total interdepartmental grants and

intradepartmental transfers 0

ADJUSTED GROSS APPROPRIATION $ 331,196,319

Federal revenues:

Total federal revenues 0

Special revenue funds:

Total local revenues 0

Total private revenues 0

Total other state restricted revenues 10,000,000

State general fund/general purpose $ 321,196,319

Sec. 102. OPERATIONS

Alpena Community College $ 5,341,642

Bay de Noc Community College 5,177,657

Delta College 14,877,462

Glen Oaks Community College 2,513,841

Gogebic Community College 4,371,328

Grand Rapids Community College 18,633,380

Henry Ford Community College 22,863,124

Jackson Community College 12,559,094

Kalamazoo Valley Community College 13,054,081

Kellogg Community College 10,176,902

Kirtland Community College 3,062,888

Lake Michigan College 5,474,861

Lansing Community College 32,453,297

Macomb Community College 34,440,559

Mid Michigan Community College 4,627,904

Monroe County Community College 4,504,295

Montcalm Community College 3,234,506

C.S. Mott Community College 16,373,988

Muskegon Community College 9,309,644

North Central Michigan College 3,150,286

Northwestern Michigan College 9,524,786

Oakland Community College 21,687,988

St. Clair County Community College 7,282,036

Schoolcraft College 12,781,091

Southwestern Michigan College 6,896,360

Washtenaw Community College 13,112,716

Wayne County Community College 17,223,721

West Shore Community College 2,394,779

GROSS APPROPRIATION $ 317,104,216

Appropriated from:

State general fund/general purpose $ 317,104,216

Sec. 103. GRANTS

At-risk student success program $ 3,692,103

Renaissance zone tax reimbursement funding 400,000 GROSS APPROPRIATION $ 4,092,103

Appropriated from:

State general fund/general purpose $ 4,092,103

Sec. 104. FINANCIAL AID

Post secondary access student scholarship program $ 10,000,000

GROSS APPROPRIATION $ 10,000,000

Appropriated from:

Special revenue funds:

Michigan merit award trust fund 10,000,000

State general fund/general purpose $ 0

PART 2

PROVISIONS CONCERNING APPROPRIATIONS

GENERAL SECTIONS

Sec. 201. Pursuant to section 30 of article IX of the state constitution of 1963, total state spending from state resources under part 1 for fiscal year 2001-2002 is $331,196,319.00 and state spending from state resources to be paid to local units of government for fiscal year 2001-2002 is $321,196,319.00. The itemized statement below identifies appropriations from which spending to units of local government will occur:

OPERATIONS

Alpena Community College $ 5,341,642

Bay de Noc Community College 5,177,657

Delta College 14,877,462

Glen Oaks Community College 2,513,841

Gogebic Community College 4,371,328

Grand Rapids Community College 18,633,380

Henry Ford Community College 22,863,124

Jackson Community College 12,559,094

Kalamazoo Valley Community College 13,054,081

Kellogg Community College 10,176,902

Kirtland Community College 3,062,888

Lake Michigan College 5,474,861

Lansing Community College 32,453,297

Macomb Community College 34,440,559

Mid Michigan Community College 4,627,904

Monroe County Community College 4,504,295

Montcalm Community College 3,234,506

C.S. Mott Community College 16,373,988

Muskegon Community College 9,309,644

North Central Michigan College 3,150,286

Northwestern Michigan College 9,524,786

Oakland Community College 21,687,988

St. Clair County Community College 7,282,036

Schoolcraft College 12,781,091

Southwestern Michigan College 6,896,360

Washtenaw Community College 13,112,716

Wayne County Community College 17,223,721

West Shore Community College 2,394,779

GRANTS

At risk student success program 3,692,103

Renaissance zone tax reimbursement funding 400,000

TOTAL $ 321,196,319

Sec. 202. The appropriations authorized under this bill are subject to the management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594.

Sec. 203. Unless otherwise specified, the department shall use the Internet to fulfill the reporting requirements of this bill. This may include transmission of reports via electronic mail to the recipients identified for each reporting requirement, or it may include placement of reports on an Internet or Intranet site. Quarterly, the department shall provide to the appropriations subcommittee members, state budget office, and the fiscal agencies an electronic and paper copy listing of the reports submitted during the most recent 3-month period along with the Internet or Intranet site of each report, if any.

Sec. 204. (1) The money appropriated in this bill is appropriated for community colleges with fiscal years ending June 30, 2002, and shall be paid out of the state treasury and distributed by the state treasurer to the respective community colleges in 11 monthly installments on the sixteenth of each month, or the next succeeding business day, beginning with October 16, 2001. Each community college shall accrue its July and August 2002 payments to its institutional fiscal year ending June 30, 2002. However, if a community college fails to submit all verified Michigan community colleges activities classification structure data for school year 2000-2001 to the department of career development by November 1, 2001, the monthly installments shall be withheld from that community college until those data are submitted. The department of career development shall publish the activities classification structure data book for Michigan community colleges on or before March 1, 2002, for use by the legislature during budget development for the fiscal year ending September 30, 2003. The amount from the money appropriated in part 1 that is allocated under section 103 to address the special needs of at-risk students shall be paid in full by the state treasurer by November 1, 2001. The amount distributed to a community college or department shall not exceed the net state allocation authorized by this bill.

(2) Except as otherwise provided by law, each of the amounts appropriated shall be used solely for the respective purposes stated in this bill. The money appropriated by this bill may be used to match the cost of any available programs under the Carl D. Perkins vocational and applied technology education act, Public Law 88-210, 98 Stat. 2435, including local administration.

Sec. 205. (1) The auditor general or an independent public accounting firm appointed by the auditor general shall audit data for the fiscal year ending on June 30, 2001, as submitted to the department of career development by 7 randomly selected community colleges. A community college shall maintain and provide those records necessary for the auditor general or certified public accountant appointed by the auditor general to determine the accuracy of the reported data. The audits shall be based upon the definitions and requirements contained in the Manual for Uniform Financial Reporting, Michigan Public Community Colleges, published by the Michigan state board of education in 1981, and the Activities Classification Structure Manual for Michigan Community Colleges, 1996 revision of the final report of the activities classification structure task force (July 1981), published by the department of education. Before the submission of a final audit report, a community college may appeal the findings of the preliminary report under an appeal process to be established by the auditor general. The auditor general shall submit a report of the findings to the house and senate appropriations committees, the department of career development, and the state budget director before June 1, 2002.

(2) The auditor general or a certified public accountant appointed by the auditor general shall conduct not less than 3 performance audits of community colleges but may conduct more if the auditor general considers it necessary.

(3) Not more than 60 days after an audit report is released by the office of the auditor general, the principal executive officer of the community college that was audited shall submit to the house and senate appropriations committees, the house and senate fiscal agencies, the department of career development, the auditor general, and the state budget director a plan to comply with audit recommendations. The plan shall contain projected dates and resources required, if any, to achieve compliance with the audit recommendations, or a documented explanation of the college's noncompliance with the audit recommendations concerning the matters on which the audited community college and office of the auditor general disagree.

(4) A community college whose audited activities classification structure data is significantly different than the data used to determine state aid under this act shall return any overappropriated money as provided in this section. The department of career development shall compare formula computations for the audited colleges using pre- and post-audit data. If the state allocation is 2% or more than the post-audit allocation amount, the college shall return the excess money. The returned money shall be redistributed to all 28 community colleges, prorated on the base appropriations contained in part 1.

Sec. 206. The department of career development shall review the taxonomy of the 7 community colleges selected for the audit under section 205 that is based on the Activities Classification Structure Manual for Michigan Community Colleges, 1996 revision of the final report of the activities classification structure task force (July 1981), published by the department of education.

Sec. 207. (1) A community college shall retain certified class summaries, class lists, registration documents, and student transcripts that are consistent with the taxonomy of courses. For each enrollment period during the fiscal year, these certified documents shall identify clearly by course the number of in-district and out-of-district student credit and contact hours. The class summaries and class lists shall be consistent with each other and shall include the course prefix and numbers, course title, course credit and contact hours, credit and contact hours generated by each student, and activity classifications consistent with the taxonomy. An auditable process shall be used by the community college to determine the unduplicated head count for in-district students, out-of-district students, and prisoners for each enrollment period during the fiscal year.

(2) Contracts between the community college and agencies that reimburse the community college for the costs of instruction shall be retained for audit purposes.

Sec. 208. Each community college shall have an annual audit of all income and expenditures performed by an independent auditor and shall furnish the independent auditor's management letter and an annual audited accounting of all general and current funds income and expenditures including audits of college foundations to the legislature, the senate and house fiscal agencies, the auditor general, the department of career development, and the state budget director before November 15, 2001. If a community college fails to furnish the audit materials, the monthly state aid installments shall be withheld from that college until the information is submitted. All reporting shall conform to the requirements set forth in the Manual for Uniform Financial Reporting, Michigan Public Community Colleges, published by the Michigan state board of education in 1981.

Sec. 209. (1) A community college shall pay the employer's contributions to the Michigan public school employees' retirement system created by the public school employees retirement act of 1979, 1980 PA 300, MCL 38.1301 to 38.1408, as a condition of receiving money appropriated under this bill.

(2) A community college shall not pay an employer's contribution to more than 1 retirement fund providing benefits for an employee.

Sec. 210. An appropriation contained in this bill shall not be used for the construction of buildings for, or operations of, a community college not expressly authorized in part 1. Money appropriated in part 1 shall not be used to pay for the construction or maintenance of a self-liquidating project.

Sec. 211. (1) Each community college shall report the following to the department of career development, no later than November 1, 2001:

(a) The number of North American Indian students enrolled each term for the previous fiscal year, using guidelines and procedures developed by the department of career development and the Michigan commission on Indian affairs.

(b) The number of Indian tuition waivers granted each term, and the monetary value of the waivers for the previous fiscal year.

(2) Colleges shall use the criteria cited in 1976 PA 174, MCL 390.1251 to 390.1253, to determine eligibility for tuition waivers, and shall grant those waivers to individuals who meet the criteria and request tuition waivers.

(3) The department of career development shall compile the information received under subsection (1) and shall submit this compilation to the house and senate appropriations subcommittees on community colleges, the senate and house fiscal agencies, and the state budget director by January 7, 2002.

Sec. 212. From the general fund/general purpose appropriation in part 1 there is allocated $400,000.00 to make reimbursement to community colleges, as provided by section 12 of the Michigan renaissance zone act, 1996 PA 376, MCL 125.2692, for property taxes levied in 2001. Reimbursements shall be made in amounts to each eligible recipient no later than 60 days after the department of treasury certifies to the state budget director that it has received all necessary information to properly determine the amounts due each eligible recipient under section 12 of the Michigan renaissance zone act, 1996 PA 376, MCL 125.2692. Excess allocations shall lapse to the general fund.

Sec. 213. (1) Upon request, a community college shall inform interested Michigan high schools of the aggregate academic status of its students for the fiscal year beginning October 1, 2001, in a manner prescribed by the Michigan community college association and in cooperation with the Michigan association of secondary school principals.

(2) Each community college shall report by December 1, 2001, to the department of career development, a summary of the information provided under subsection 1 for the prior academic year.

(3) The department of career development shall compile the information received under subsection 2 and shall submit this compilation to the house and senate appropriations subcommittees on community colleges, the house and senate fiscal agencies, and the state budget director by February 1, 2002.

Sec. 214. (1) Recognizing the critical importance of education in strengthening Michigan's workforce, the legislature encourages the state's public community colleges to explore ways of increasing collaboration and cooperation with 4-year universities, particularly in the areas related to training, instruction, and program articulation.

(2) Community colleges shall report by December 1, 2001 to the department of career development on steps they have taken to increase collaboration and cooperation with 4-year universities under subsection (1).

(3) The department of career development shall compile the information received under subsection (2) and shall submit this compilation to the house and senate appropriations subcommittees on community colleges, the senate and house fiscal agencies, and state budget office by January 7, 2002.

Sec. 215. (1) Each community college shall report to the department of career development the numbers and type of associate degrees and other certificates awarded during the previous fiscal year. The report shall be made not later than November 15, 2001.

(2) The department of career development shall compile the information received under subsection (1) and shall submit this compilation to the house and senate appropriations subcommittees on community colleges, the senate and house fiscal agencies, and the state budget director by January 7, 2002.

Sec. 216. A community college receiving funding under this bill and also subject to the student right-to-know and campus security act, Public Law 101-542, 104 Stat. 2381, shall make a copy of all material prepared in accordance with the public information reporting requirements under the crime awareness and campus security act of 1990, title II of the student right-to-know and campus security act, Public Law 101-542, 104 Stat. 2384, available in hard copy and electronic format accessible through the Internet for school districts, parents, and students.

STATE AID-OPERATIONS

Sec. 301. Unless otherwise stated, all data items used in determining state aid in this bill are as defined in the Manual for Uniform Financial Reporting, Michigan Public Community Colleges, published by the Michigan state board of education in 1981, which shall be the basis for reporting data, and the Activities Classification Structure Manual for Michigan Community Colleges, 1996 revision of the final report of the activities classification structure task force (July 1981), published by the department of education, which shall be used to document financial needs of the community colleges.

Sec. 302. A community college shall not include in the enrollment report any student credit hours or student contact hours for a student incarcerated in a Michigan penal institution. Exclusion of these students is intended to avoid the payment of state aid under this act for the same individuals for whom reimbursement is provided by the state correctional system.

GRANTS

Sec. 401. (1) The community college at-risk student success program is continued. The funding shall be prorated among community colleges based on the number of student contact hours for developmental and preparatory instruction reported by each community college to the department of career development for use in the Activities Classification Structure Manual for Michigan Community Colleges, 1996 revision of the final report of the activities classification structure task force (July 1981), published by the department of education. Of the amount appropriated in part 1 for the at-risk student success program, $1,120,000.00 is allocated for base grants of $40,000.00 each, to address the special needs of at-risk students at community colleges or the acquisition or upgrade of technology related equipment and software.

(2) Of the amount appropriated in part 1 for the at-risk student success program, the balance of the appropriated money shall be distributed on a proration utilizing the sum of the most recent 3 years developmental/preparatory contact hours divided by the sum of the 3-year total contact hours at each college. Each community college's percentage shall be divided by the sum of all the percentages systemwide to obtain each community college's prorated grant amount.

(3) For the fiscal year ending September 30, 2002, the at-risk student success program money is allocated as follows:

Alpena Community College $ 104,004

Bay de Noc Community College 98,650

Delta College 110,240

Glen Oaks Community College 135,832

Gogebic Community College 78,902

Grand Rapids Community College 74,179

Henry Ford Community College 164,807

Jackson Community College 113,768

Kalamazoo Valley Community College 113,499

Kellogg Community College 158,343

Kirtland Community College 158,732

Lake Michigan College 192,554

Lansing Community College 157,864

Macomb Community College 91,038

Mid Michigan Community College 129,419

Monroe Community College 99,275

Montcalm Community College 71,694

C.S. Mott Community College 109,157

Muskegon Community College 213,016

North Central Michigan College 178,336

Northwestern Michigan College 120,677

Oakland Community College 159,354

St. Clair Community College 80,413

Schoolcraft College 150,164

Southwestern Michigan College 180,632

Washtenaw Community College 161,709

Wayne County Community College 149,384

West Shore Community College 136,461

(4) As used in this bill, "at-risk students" means students who meet 1 or more of the following criteria:

(a) Are initially placed in 1 or more developmental courses as a result of standardized testing or as a result of failure to make satisfactory academic progress.

(b) Are diagnosed as learning disabled.

(5) Grant funding under this section shall be utilized to address the special needs of at-risk students or for equipment or upgrade of information technology hardware or software. Activities related to services provided to at-risk students include, but are not limited to, pretesting for academic ability, counseling contacts, and special programs. Equipment or information technology hardware or software purchased under this section need not be associated with the operation of a program designed to address the needs of at-risk students.

(6) Grant funding under this section shall not be used for indirect costs including, but not limited to, rent, utilities, or, except as provided in this section, college administration.

(7) Each community college shall report to the department of career development a summary of all accomplishments under, expenditures for, and compliance with the intent of this program, including the number of at-risk students served. The report is subject to audit as provided for in section 205(1). The report shall be submitted not later than 90 days after the end of the state's fiscal year. The department of career development shall compile the information received under this subsection and shall submit this compilation to the house and senate appropriations subcommittees on community colleges, the senate and house fiscal agencies, and the state budget director by 120 days after the end of the state's fiscal year.

Sec. 402. (1) The Michigan postsecondary access student scholarship (PASS) program is established to provide a PASS award as calculated under this section for a student who is eligible under subsections (2), (3), or (4). The Michigan higher education assistance authority (MHEAA) shall administer the PASS program, for which there is $10,000,000.00 appropriated in part 1, and the PASS program shall comply with the requirements of this section.

(2) A student is eligible for a PASS award for the equivalent of 2 years of full-time college enrollment if the student meets all of the following:

(a) The student must be a Michigan resident enrolled in a program leading to an associate degree that was in existence as of January 1, 2000, at a Michigan public community college, Michigan public university, or Michigan independent nonprofit, degree-granting college or university.

(b) The student must be enrolled at least half-time.

(d) The student must have scored at level 1 or level 2 on the high school Michigan education assessment program (MEAP) tests in reading, writing, mathematics, and science.

(e) The student must be eligible for a federal Pell grant.

(f) Other requirements established by the MHEAA.

(3) A student who meets all the requirements of subsection (2), other than subsection (2)(d), but has taken the high school MEAP tests in reading, writing, mathematics, and science while in high school shall receive a PASS award for 1 year of college enrollment. If the student maintains satisfactory academic progress in that first year of college enrollment, the student shall receive a PASS award for a second year of college enrollment.

(4) A student who is 22 years old or older who meets all the requirements of subsection (2), other than subsection (2)(c) and (d), shall receive a maximum $500.00 PASS award, not to exceed tuition and fees, for the second year of college enrollment. A student may qualify under this section whether or not the student took any of the high school MEAP tests.

(5) PASS award eligibility is limited to 2 semesters or 3 terms in any academic year.

(6) A PASS award for a student eligible under subsections (2), (3), or (4) shall be calculated by the MHEAA as the amount remaining after subtracting from the value of the student's allowable tuition and fees, as prescribed in subsection (8), all of the following state and federal financial educational assistance for which that student is eligible:

(a) Michigan competitive scholarship.

(b) Michigan tuition grant.

(d) Federal hope scholarship tax credit.

(7) The department of treasury shall prepare, and MHEAA shall utilize, a tax credit table that imputes an amount to be subtracted under subsection (6) for the federal hope scholarship tax credit.

(8) The value of a student's allowable tuition and fees is as follows:

(a) For a student enrolled at a Michigan community college, the value of allowable tuition and fees is the in-district tuition and fees. For a student who does not reside within a community college district, the value of allowable tuition and fees is the out-of-district tuition and fees for the community college that the student is attending.

(b) For a student enrolled at a Michigan public university, the value of allowable tuition and fees is the lower-level resident tuition and fees for that public university.

(c) For a student enrolled at a Michigan independent, nonprofit, degree-granting college or university, the value of allowable tuition and fees is the average, lower-level resident tuition and fees for all Michigan public universities for the immediately preceding academic year as reported before August 1 after that academic year.

(9) The MHEAA shall remit an eligible student's PASS award to a higher education institution in accordance with procedures established by the MHEAA.

(10) The PASS award may be utilized by the student to pay costs of attendance as determined by the MHEAA.

(11) The PASS program shall not be applied for a student's theology or divinity courses.

(12) The MHEAA shall develop an application and eligibility determination process that ensures that all of the requirements prescribed by this section are met.

(13) Students who are expected to receive a tuition incentive program scholarship are not eligible for the PASS program.