April 28, 2005, Introduced by Senators SWITALSKI, SCOTT, PRUSI, CLARK-COLEMAN, BASHAM, THOMAS, JACOBS, CLARKE, CHERRY, OLSHOVE, BERNERO, LELAND and SCHAUER and referred to the Committee on Appropriations.
A bill to create the new Michigan merit scholarship trust
fund; to provide for the administration of the new Michigan merit
scholarship program; to provide for the powers and duties of
certain state officers and entities; and to repeal acts and parts
of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "new
Michigan merit scholarship act".
Sec. 3. As used in this act:
(a) "Academic year" means the period from August 1 of a
calendar year to July 31 of the next calendar year.
(b) "Approved postsecondary educational institution" means any
of the following:
(i) A public or private college or university, junior college,
or community college that grants degrees or certificates, is
located in this state, and is determined by the department to be
eligible to participate in the Pell grant program.
(ii) A postsecondary educational institution, other than an
educational institution described in subparagraph (i), that is
located in this state and is determined by the department to be
eligible to participate in the Pell grant program.
(iii) A service academy.
(c) "Clock hour" means a time period consisting of any of the
following:
(i) Fifty to 60 minutes of class, lecture, or recitation in a
60-minute period.
(ii) Fifty to 60 minutes of faculty-supervised laboratory work,
shop training, or internship in a 60-minute period.
(iii) Sixty minutes of preparation in a correspondence course.
(d) "Department" means the department of treasury.
(e) "FAFSA" means the free application for federal student aid
developed under 20 USC 1082(m)(1)(C).
(f) "Fiscal year" means a fiscal year of this state. A fiscal
year begins on October 1 of a calendar year and ends on September
30 of the next calendar year.
(g) "High school graduate" means an individual who has
received a high school diploma from a high school in this state or
passed the general educational development (GED) diploma test or
any other high school graduate equivalency examination approved by
the state board of education.
(h) "New Michigan merit scholarship" means a scholarship
awarded by the department under this act.
(i) "Pell grant program" means the grant program described in
20 USC 1070a.
(j) "Service academy" means the United States military
academy, United States naval academy, United States air force
academy, United States coast guard academy, or United States
merchant marine academy.
(k) "State assessment test" means the Michigan merit
examination described in section 1279g of the revised school code,
1976 PA 451, MCL 380.1279g, and section 104b of the state school
aid act of 1979, 1979 PA 94, MCL 388.1704b, or any other test
administered by the department of education to students in grades 9
to 12 to assure state compliance with the federal no child left
behind act of 2001, Public Law 107-110.
(l) "Tobacco settlement revenue" means money received by this
state that is attributable to the master settlement agreement
incorporated into a consent decree and final judgment entered on
December 7, 1998 in Kelley ex rel. Michigan v Philip Morris
Incorporated, et al., Ingham county circuit court, docket no.
96-84281CZ.
(m) "Trust fund" means the new Michigan merit scholarship
trust fund established in section 5.
(n) "Volunteer community service" means an activity that
provides service or assistance that benefits a governmental entity,
a nonprofit organization, or an individual other than the pupil
performing the activity or his or her family, for which the pupil
does not receive monetary compensation. Volunteer community service
does not include school-sponsored extracurricular activities such
as athletics, academic or debate teams, band, or choir, but does
include tutoring or mentoring services performed by a pupil,
including school-sponsored tutoring or mentoring.
Sec. 5. (1) The new Michigan merit scholarship trust fund is
established in the state treasury. The trust fund shall consist of
interest and earnings from trust fund investments, donations of
money made to the trust fund from any source, other money or assets
received from any source for deposit into the trust fund, and 75%
of tobacco settlement revenue received in fiscal year 2006-2007 and
in subsequent fiscal years.
(2) The state treasurer shall direct the investment of the
trust fund and has the same authority to invest the assets of the
trust fund that is granted to an investment fiduciary under the
public employee retirement system investment act, 1965 PA 314, MCL
38.1132 to 38.1140m.
(3) The state treasurer shall credit to the trust fund
interest and earnings from trust fund investments.
(4) Money in the trust fund at the close of a fiscal year
shall remain in the trust fund and shall not lapse to the general
fund.
Sec. 7. Upon appropriation by the legislature, the department
shall authorize disbursement of money from the trust fund for 1 or
more of the following purposes:
(a) New Michigan merit scholarships under this act.
(b) Michigan merit award scholarships under the Michigan merit
award scholarship act, 1999 PA 94, MCL 390.1451 to 390.1459.
(c) Expenses properly incurred by the department in carrying
out its powers and duties under this act or under the Michigan
merit award scholarship act, 1999 PA 94, MCL 390.1451 to 390.1459.
(d) Costs associated with developing, preparing, distributing,
and scoring the state assessment test and disseminating the results
of the state assessment test.
(e) Funding of the tuition incentive program as described in
section 310 of 2004 PA 352, or a successor to that program.
(f) Funding of the Michigan nursing scholarship program as
described in the Michigan nursing scholarship act, 2002 PA 591, MCL
390.1181 to 390.1189, or a successor to that program.
(g) Other expenditures as provided by law.
Sec. 9. By April 1 of each year, the department shall submit a
report on its activities under this act to the governor and to the
standing committees of the senate and house of representatives with
primary jurisdiction over higher education issues. The report shall
contain all of the following information:
(a) The number of new Michigan merit scholarships awarded and
the amount of new Michigan merit scholarship money paid by the
department in the immediately preceding fiscal year.
(b) A list of the number of new Michigan merit scholarships
awarded and the amount of new Michigan merit scholarship money paid
in the immediately preceding fiscal year at each approved
postsecondary educational institution.
Sec. 11. (1) The new Michigan merit scholarship program is
established. The department shall administer the new Michigan merit
scholarship program.
(2) Subject to subsection (3), each student who becomes a high
school graduate in or after the 2006-2007 academic year is eligible
for the award of a new Michigan merit scholarship in an amount
determined under section 13.
(3) In addition to the requirements set forth in subsection
(2), the department must find that a student meets all of the
following eligibility requirements to award the student a new
Michigan merit scholarship under this act:
(a) The department has received a completed application for
payment as described in section 17(1), including the certification
described in section 17(2), on or before the deadline established
by the department.
(b) The student is a high school graduate and a resident of
this state.
(c) At an approved postsecondary educational institution, the
student earned an associate’s degree, earned a 2-year certificate
of completion in a vocational education program, completed a
comparable vocational training program approved by the department,
or completed 50% or more of the academic requirements for the award
of a bachelor's degree.
(d) The student completed at least 40 hours of volunteer
community service before June 30 of the year he or she received a
high school diploma or at any time before he or she passed the
general educational development (GED) diploma test or other high
school graduate equivalency examination and the department has
received the verification described in section 15.
(e) The student completed and filed a FAFSA with the United
States department of education before or during his or her first
year of enrollment in an approved postsecondary educational
institution.
(f) The student took the state assessment test.
(g) The student enrolled in an approved postsecondary
educational institution within 2 years after he or she became a
high school graduate. The department may extend the 2-year period
if the student becomes a member of the United States armed forces
or peace corps during the 2-year period and serves for 4 years or
less.
(h) The student completed the requirements for eligibility for
a new Michigan merit scholarship under this section within 4 years
after he or she enrolled in an approved postsecondary educational
institution in accordance with subdivision (g).
(i) The student did not previously receive scholarship money
under this act or the Michigan merit award scholarship act, 1999 PA
94, MCL 390.1451 to 390.1459.
(j) The student meets any additional eligibility requirements
established by the department.
Sec. 13. (1) Subject to adjustment under this section, a
student who meets the eligibility requirements under section 11
shall receive a new Michigan merit scholarship in 1 of the
following amounts:
(a) Unless subdivision (b) applies, an amount equal to
$4,000.00 minus the amount of any money previously received by or
for the student under the Pell grant program, or $2,500.00,
whichever is greater.
(b) If a student satisfies the eligibility requirement
contained in section 11(3)(c) by completing a vocational training
program that as determined by the department generally requires
less than 2 years or fewer than 1,800 clock hours, as applicable,
to complete, 1 of the following:
(i) For a program generally completed in more than 1 year or
900 clock hours, as applicable, an amount equal to $3,000.00 minus
the amount of any money previously received by or for the student
under the Pell grant program, or $1,875.00, whichever is greater.
(ii) For a program generally completed in 1 year or 900 clock
hours, as applicable, an amount equal to $2,000.00 minus the amount
of any money previously received by or for the student under the
Pell grant program, or $1,250.00, whichever is greater.
(iii) For a program generally completed in more than 6 months
and less than 1 year or more than 450 and fewer than 900 clock
hours, as applicable, an amount equal to $1,000.00 minus the amount
of any money previously received by or for the student under the
Pell grant program, or $625.00, whichever is greater.
(2) If in any fiscal year the department determines that the
amount appropriated by the legislature for the payment of new
Michigan merit scholarships is not sufficient to pay each eligible
student the new Michigan merit scholarship amount required under
this section for an academic year, the department shall prorate the
amount of new Michigan merit scholarships paid under this section
as necessary to reflect the available resources and amounts
appropriated in that fiscal year.
Sec. 15. Before awarding a new Michigan merit scholarship to a
student, the department must receive 1 of the following:
(a) Verification from the student's school district, public
school academy, or nonpublic school, as those terms are defined in
the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, in a
form and manner approved by the department, that the student
performed the volunteer community service described in section
11(3)(d).
(b) If a student's school district, public school academy, or
nonpublic school, as those terms are defined in the revised school
code, 1976 PA 451, MCL 380.1 to 380.1852, is unable to verify
completion of a student’s volunteer community service, a
certification of compliance by an organization or person unrelated
to the student who supervised the student’s performance of his or
her volunteer community service, in a form and manner approved by
the department.
Sec. 17. (1) The department shall determine the manner and
form of application to receive a new Michigan merit scholarship and
the procedure for payment to a student or an approved postsecondary
educational institution on the student’s behalf.
(2) A student shall include in his or her application to
receive a new Michigan merit scholarship a written certification to
the department that contains both of the following:
(a) His or her certification that he or she has earned an
associate’s degree, earned a 2-year certificate of completion in a
vocational education program, completed a comparable vocational
training program approved by the department, or completed 50% or
more of the academic requirements in a bachelor's degree program at
an approved postsecondary educational institution.
(b) The name of the approved postsecondary educational
institution at which the student earned the associate’s degree,
earned the 2-year certificate of completion in a vocational
education program, completed the comparable vocational training
program approved by the department, or completed 50% or more of the
academic requirements in a bachelor's degree program.
(3) An approved postsecondary educational institution shall
not consider a new Michigan merit scholarship in determining a
student’s eligibility for a financial aid program administered by
this state. It is the intent of the legislature that an approved
postsecondary educational institution does not reduce other
institutionally funded student aid for which a student is eligible
because of the student's receipt of or eligibility for a new
Michigan merit scholarship, unless required by federal law.
(4) The department shall pay a new Michigan merit scholarship
to or on behalf of an eligible student within 6 months after
receiving the student's completed application.
Sec. 19. The department may promulgate rules pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, to implement and administer this act, including, but not
limited to, 1 or more of the following:
(a) Rules establishing the department’s administrative
procedures for the new Michigan merit scholarship program.
(b) Rules governing the qualification requirements for or the
award of new Michigan merit scholarships under this act.
(c) Rules establishing an appeals process from a determination
of ineligibility for a new Michigan merit scholarship.
(d) Rules establishing what information or reports a student
or an approved postsecondary educational institution must provide
to establish eligibility and when that information or those reports
must be provided.
(e) Rules prescribing the reports to be made by a student
awarded a new Michigan merit scholarship and by an approved
postsecondary educational institution to which a new Michigan merit
scholarship is paid.
Enacting section 1. Section 3 of the Michigan merit award
scholarship act, 1999 PA 94, MCL 390.1453, is repealed effective
September 30, 2006.
Enacting section 2. The Michigan merit award scholarship act,
1999 PA 94, MCL 390.1451 to 390.1459, is repealed effective
September 30, 2016.