HOUSE BILL No. 6594

 

November 9, 2006, Introduced by Reps. Dillon, Sheltrown, Jones and Tobocman and referred to the Committee on Appropriations.

 

     A bill to amend 1999 PA 94, entitled

 

"Michigan merit award scholarship act,"

 

by amending the title and sections 1, 2, 4, 6, 7, 7a, 7b, 8, and 9

 

(MCL 390.1451, 390.1452, 390.1454, 390.1456, 390.1457, 390.1457a,

 

390.1457b, 390.1458, and 390.1459), sections 2, 6, 8, and 9 as

 

amended and sections 7a and 7b as added by 2004 PA 595 and section

 

7 as amended by 2006 PA 241, and by adding sections 7c, 7d, 7e, and

 

7f.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to  create the Michigan merit award scholarship trust

 

fund; to create the Michigan merit award scholarship board and

 

prescribe the powers and duties of the board; and to  provide for

 


the  Michigan  merit award scholarship program, a merit award loan

 

program, and a merit award loan forgiveness grant program; and to

 

provide for the powers and duties of certain state governmental

 

officers and entities.

 

     Sec. 1. This act shall be known and may be cited as the

 

"Michigan  "merit award  scholarship  act".

 

     Sec. 2. As used in this act:

 

     (a) "Approved postsecondary educational institution" means any

 

of the following:

 

     (i) A degree or certificate granting public or private college

 

or university, junior college, or community college.

 

     (ii) A service academy.

 

     (iii) An educational institution, other than an educational

 

institution described in subparagraph (i) or (ii), granting degrees,

 

certificates, or other recognized credentials and designated by the

 

board as an approved postsecondary educational institution.

 

     (iv) A program of an educational institution, other than an

 

educational institution described in subparagraph (i) or (ii),

 

granting degrees, certificates, or other recognized credentials and

 

designated by the board as an approved postsecondary educational

 

institution.

 

     (b) "Assessment test" means the middle school assessment test,

 

the high school assessment test, or the  Michigan  merit

 

examination.

 

     (c) "Board" means the  Michigan  merit award board established

 

in this act.

 

     (d) "Department of career development" means the department of

 


career development created in Executive Order No. 1999-1.

 

     (e) "Eligible costs" means tuition and fees charged by an

 

approved postsecondary educational institution; related costs for

 

room, board, books, supplies, transportation, or day care; and

 

other costs determined by the board.

 

     (f) "Eligible debt" means the total unpaid amount of all of an

 

individual's unpaid merit award loans, calculated at the time the

 

individual first applies for a grant under section 7f.

 

     (g)  (f)  "Fiscal year" means the fiscal year of this state.

 

     (h)  (g)  "High school assessment test" means the state

 

assessments described in section 1279 of the revised school code,

 

1976 PA 451, MCL 380.1279, and section 104a of the state school aid

 

act, 1979 PA 94, MCL 388.1704a.

 

     (i)  (h) "Michigan merit  "Merit award scholarship" means a

 

scholarship awarded by the board under section 7 or 7a.

 

     (j) "Merit award loan" means a loan made by the board under

 

section 7c or 7d.

 

     (k)  (i) "Michigan merit  "Merit examination" 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.

 

     (l)  (j)  "Middle school assessment test" means the Michigan

 

education assessment program (MEAP) subject area assessments given

 

in grades 7 and 8 or any successor assessment test designated by

 

the board.

 

     (m) "Proof of residency" means a filed Michigan individual

 

income tax return that includes the taxpayer's certification that

 


he or she is a resident, a signed affidavit of Michigan residency,

 

or other proof of residency acceptable to the board.

 

     (n)  (k)  "Qualifying results" means assessment test results,

 

scores, or ranges of scores determined by the board that qualify a

 

pupil for a  Michigan  merit award scholarship under section 7 or

 

7a or a merit award loan under section 7c or 7d.

 

     (o)  (l)  "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.

 

     (p)  (m)  "State board" means the state board of education.

 

     (q)  (n)  "Superintendent" means the superintendent of public

 

instruction.

 

     (o) "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.

 

     (r)  (p)  "Trust fund" means the Michigan merit award trust

 

fund established in section  3  9 of the Michigan trust fund act,

 

2000 PA 489, MCL 12.259.

 

     Sec. 4. (1) The  Michigan  merit award board is established

 

within the department of treasury. The goal of the board is to

 

increase access to postsecondary education and reward Michigan high

 

school graduates who have demonstrated academic achievement.

 

     (2) The board shall exercise its authority, powers, duties,

 


and responsibilities independent of the state treasurer. However,

 

all administrative functions, including budgeting, procurement, and

 

personnel functions, shall be performed under the direction and

 

supervision of the state treasurer.

 

     (3) The board shall consist of 7 members. The members shall

 

include the state treasurer or his or her designee, the

 

superintendent or his or her designee, the director of the

 

department of career development or his or her designee, and 4

 

members appointed by the governor with the advice and consent of

 

the senate. The state treasurer or his or her designee shall serve

 

as the chairperson of the board.

 

     (4) The term of a member appointed by the governor shall be 4

 

years. Of the members first appointed by the governor, 2 shall be

 

appointed for 2-year terms and 2 shall be appointed for 4-year

 

terms.

 

     (5) A member appointed by the governor may be removed by the

 

governor for neglect of duty or malfeasance in office.

 

     (6) A vacancy on the board shall be filled for the balance of

 

the unexpired term in the same manner as the original appointment.

 

     (7) The board may incur expenses necessary to carry out its

 

powers and duties under this act and shall compensate its members

 

for reasonable expenses incurred in carrying out their official

 

duties.

 

     (8) The board shall establish a statewide toll-free telephone

 

line and internet access to receive questions, comments, and

 

complaints concerning the assessment test, including, but not

 

limited to, complaints of student cheating on the assessment test,

 


complaints or comments about specific assessment test questions or

 

testing conditions, or other questions, comments, or complaints

 

relating to the development, preparation, distribution, scoring, or

 

dissemination of results of the assessment test.

 

     Sec. 6. (1) The board shall conduct business in compliance

 

with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. The

 

board shall give public notice of the time, date, and place of

 

meetings of the board in the manner required by the open meetings

 

act, 1976 PA 267, MCL 15.261 to 15.275.

 

     (2) The board shall meet not less than annually and shall keep

 

a record of its proceedings. The board shall make any writing

 

prepared, owned, used, in the possession of, or retained by the

 

board in the performance of an official function available to the

 

public in compliance with the freedom of information act, 1976 PA

 

442, MCL 15.231 to 15.246.

 

     (3) Except as provided in subsection (4), the board shall

 

obtain and make available to the public all of the qualifying

 

questions and answers, along with the corresponding answer key, to

 

a high school assessment test or a middle school assessment test

 

administered at least 3 and not more than 5 years earlier. The

 

board shall obtain and make available to the public preparatory

 

materials for the  Michigan  merit examination that contain sample

 

test questions and correct answers.

 

     (4) If any question is designated by the state board of

 

education for use in a future high school assessment test or middle

 

school assessment test for validity purposes, the board may elect

 

not to make that question and the answer available to the public

 


under subsection (3) for a period of up to 2 years from the date

 

the assessment test that first includes the question is

 

administered.

 

     (5) By December 1 of each year, the board shall submit a

 

report on its activities to the governor and to the legislature.

 

The report shall contain all of the following information:

 

     (a) A list of approved postsecondary educational institutions

 

for the current and immediately preceding fiscal years.

 

     (b) The number of Michigan merit award scholarships awarded

 

and the total amount of Michigan merit award scholarship money paid

 

in the immediately preceding fiscal year.

 

     (c) The number of merit award loans made and the total amount

 

of merit award loan money paid in the immediately preceding fiscal

 

year.

 

     (d)  (c)  A projection of revenues and expenditures from the

 

trust fund for the current fiscal year and the next 10 fiscal

 

years.

 

     (e)  (d)  The dollar amount of the  Michigan  merit award

 

scholarships available under sections 7 and 7a in the current

 

fiscal year, the amount of any adjustments to the dollar amount

 

under sections 7(4) and 7a(2) from the beginning of the immediately

 

preceding fiscal year, and any adjustments to the dollar amount

 

projected for the remainder of the current fiscal year or for the

 

next fiscal year.

 

     (f) The dollar amount of the merit award loans available under

 

sections 7c and 7d in the current fiscal year, the amount of any

 

adjustments to the dollar amount of the loans under those sections

 


from the beginning of the immediately preceding fiscal year, and

 

any adjustments to the dollar amount of the loans projected for the

 

remainder of the current fiscal year or for the next fiscal year.

 

     (g)  (e)  All of the following results, scores, or ranges of

 

scores:

 

     (i) Used as qualifying results in the immediately preceding

 

fiscal year.

 

     (ii) Determined by the board as qualifying results in the

 

current fiscal year.

 

     (iii) Projected by the board as qualifying results for the next

 

fiscal year.

 

     (h)  (f)  For the immediately preceding fiscal year, the

 

number of pupils who took the assessment tests, the number of

 

pupils by subject area who received qualifying results, the number

 

of graduating high school seniors who met the requirements for a

 

Michigan merit award scholarship, and the total number of pupils

 

who met the requirements for a Michigan merit award scholarship.

 

     (i) For the immediately preceding fiscal year, the number of

 

pupils who took the assessment tests, the number of pupils by

 

subject area who received qualifying results, the number of

 

graduating high school seniors who met the requirements for a merit

 

award loan, and the total number of pupils who met the requirements

 

for a merit award loan.

 

     (j) The number of merit award loans forgiven and the total

 

amount forgiven under section 8b in the immediately preceding

 

fiscal year.

 

     (k)  (g)  The number of persons participating in and the

 


amount awarded in the immediately preceding fiscal year under the

 

tuition incentive program described in section 310 of 2003 PA 144

 

or a successor to that program.

 

     (6) At least 60 days before changing the results, scores, or

 

ranges of scores used as qualifying results, the board shall

 

provide written notice of its intent to change the results, scores,

 

or ranges of scores used as qualifying results, and a report

 

explaining the board's decision to change the results, scores, or

 

ranges of scores used as qualifying results, to the standing

 

committees of the senate and the house of representatives that have

 

primary jurisdiction over legislation pertaining to education. The

 

standing committees shall review the board's report and may hold

 

hearings on the board's decision.

 

     Sec. 7. (1) The  Michigan  merit award scholarship program is

 

established. The board shall administer the  Michigan  merit award

 

scholarship program.

 

     (2) Subject to subsection (6) and section 7b(2) and (5), and

 

to adjustment under subsection (4), each student enrolled in grade

 

11 in or after the 1998-1999 school year and before the 2006-2007

 

school year who meets the eligibility requirements of this

 

subsection and section 7b(1) is eligible for the award of a

 

$2,500.00  Michigan  merit award scholarship if the student is

 

enrolled in an approved postsecondary educational institution in

 

this state or in a service academy. Subject to subsection (6) and

 

section 7b(2) and (5), and to adjustment under subsection (4), each

 

student enrolled in grade 11 in or after the 1998-1999 school year

 

who graduated from high school before the 2006-2007 school year and

 


who meets the eligibility requirements of this subsection and

 

section 7b(1) is eligible for the award of a $1,000.00  Michigan  

 

merit award scholarship if the student is enrolled in an approved

 

postsecondary educational institution outside this state other than

 

a service academy. A student is eligible under this subsection if

 

the board finds that the student while in high school had taken the

 

high school assessment test in the subject areas of reading,

 

writing, mathematics, and science and met 1 of the following:

 

     (a) Received qualifying results in each of the subject areas

 

of reading, writing, mathematics, and science.

 

     (b) Did not receive qualifying results in 1 or 2 of the

 

subject areas of reading, writing, mathematics, and science, but

 

received an overall score in the top 25% of a nationally recognized

 

college admission examination.

 

     (c) Did not receive qualifying results in 1 or 2 of the

 

subject areas of reading, writing, mathematics, and science, but

 

received a qualifying score or scores as determined by the board on

 

a nationally recognized job skills assessment test designated by

 

the board.

 

     (3) Subject to subsection (6) and section 7b(5) and to

 

adjustment under subsection (4), each student enrolled in grade 11

 

in or after the 2006-2007 school year and before the 2008-2009

 

school year who meets the requirements of section 7b(1) is eligible

 

for the award of a $2,500.00  Michigan  merit award scholarship if

 

the student is enrolled in an approved postsecondary educational

 

institution in this state or in a service academy, if the board

 

finds that the student while in high school had taken the  Michigan  

 


merit examination and met 1 of the following:

 

     (a) Received qualifying results in each of the subject area

 

components of the  Michigan  merit examination.

 

     (b) Did not receive qualifying results in each of the subject

 

area components of the  Michigan  merit examination, but received

 

an overall score in the top 25% of a nationally recognized college

 

admission examination.

 

     (c) Did not receive qualifying results in each of the subject

 

area components of the  Michigan  merit examination, but received a

 

qualifying score or scores as determined by the board on a

 

nationally recognized job skills assessment test designated by the

 

board.

 

     (4) In any fiscal year, the board may adjust the amount of a

 

Michigan  merit award scholarship available to students eligible

 

under 1 or more of subsections (2), (3), and (5), based upon its

 

determination of available resources and amounts appropriated, but

 

the board shall not increase an amount by more than 5% in any

 

fiscal year. The board shall notify the governor, the speaker of

 

the house of representatives, and the majority leader of the senate

 

in writing at least 30 days before an adjustment under this

 

subsection.

 

     (5) If a student who has previously received a $1,000.00

 

Michigan  merit award scholarship under this section as a student

 

enrolled in an approved postsecondary educational institution

 

outside of this state other than a service academy enrolls in an

 

approved postsecondary educational institution in this state and

 

meets the requirements of section 7b(1), and subject to adjustment

 


under subsection (4), the student is eligible for the award of an

 

additional $1,500.00  Michigan  merit award scholarship.

 

     (6) If the United States department of education has not

 

approved the use of the  Michigan  merit examination for the

 

purposes of the federal no child left behind act of 2001, Public

 

Law 107-110, by December 31, 2006, all of the following apply:

 

     (a) Eligibility for a  Michigan  merit award scholarship under

 

this section shall be determined under subsection (2) until the

 

next calendar year that begins after that approval occurs.

 

     (b) Eligibility for a  Michigan  merit award scholarship under

 

this section shall be determined under subsection (3) beginning in

 

the next calendar year that begins after that approval occurs.

 

     Sec. 7a. (1) Subject to section 7b(2) and to adjustment under

 

subsection (2), a student who was enrolled in grade 7 in or after

 

the 1999-2000 school year and before the 2005-2006 school year, who

 

meets the requirements of section 7b(1), and who the board finds

 

has taken the middle school assessment test in each of the subject

 

areas while in grades 7 and 8 is eligible for 1 of the following

 

Michigan  merit award scholarships:

 

     (a) If the board finds that the student while in grades 7 and

 

8 received qualifying results in 2 of the subject areas of reading,

 

writing, mathematics, and science, a  Michigan  merit award

 

scholarship of $250.00.

 

     (b) If the board finds that the student while in grades 7 and

 

8 received qualifying results in 3 of the subject areas of reading,

 

writing, mathematics, and science, a  Michigan  merit award

 

scholarship of $375.00.

 


     (c) If the board finds that the student while in grades 7 and

 

8 received qualifying results in all of the subject areas of

 

reading, writing, mathematics, and science, a  Michigan  merit

 

award scholarship of $500.00.

 

     (2) In any fiscal year, the board may adjust the amount of a

 

Michigan  merit award scholarship available to students eligible

 

under subsection (1) based upon its determination of available

 

resources and amounts appropriated, but the board shall not

 

increase an amount by more than 5% in any fiscal year. The board

 

shall notify the governor, the speaker of the house of

 

representatives, and the majority leader of the senate in writing

 

at least 30 days before an adjustment under this subsection.

 

     Sec. 7b. (1) In addition to the requirements set forth in

 

section 7(2) or (3),  or  section 7a(1), section 7c(2), or section

 

7d(1), to be eligible for the award of a  Michigan  merit award

 

scholarship or merit award loan under this act, the board must find

 

that a student satisfies all of the following:

 

     (a) The student has graduated from high school or passed the

 

general educational development (GED) test or other graduate

 

equivalency examination approved by the state board.

 

     (b) The student graduated from high school or passed the

 

general educational development (GED) test or other graduate

 

equivalency examination approved by the state board within 1 of the

 

following time periods:

 

     (i) If the student graduated from high school or passed the

 

test or examination before March 1, 2002, within the 7-year period

 

preceding the student's application to receive his or her  Michigan

 


merit award scholarship money.

 

     (ii) If the student graduated on or after March 1, 2002, within

 

the 4-year period preceding the date of the student's application

 

to receive his or her  Michigan  merit award scholarship money or

 

merit award loan money, or if the student becomes a member of the

 

United States armed forces or peace corps during this 4-year period

 

and serves for 4 years or less, the 4-year period is extended by a

 

period equal to the number of days the student served as a member

 

of the United States armed forces or peace corps. The board may

 

also extend the 4-year period if the board determines that an

 

extension is warranted because of an illness or disability of the

 

student or in the student's immediate family or another family

 

emergency.

 

     (c) The student is enrolled in an approved postsecondary

 

educational institution. For students who qualify under section

 

7(2)(c) or 7c(2)(c), the student is enrolled in a vocational or

 

technical education program at an approved postsecondary

 

educational institution.

 

     (d) The student has not been convicted of a felony involving

 

an assault, physical injury, or death.

 

     (e) The student satisfies any additional eligibility

 

requirements established by the board.

 

     (2) For a middle school assessment test or high school

 

assessment test administered after January 1, 2000, the board shall

 

not use that assessment test to determine eligibility for a

 

Michigan  merit award scholarship or merit award loan under this

 

section for a particular year unless the board has reviewed and

 


approved that assessment test before it was administered for that

 

year.

 

     (3) The board shall provide each pupil written notice of

 

whether or not the pupil is eligible for the award of 1 or more

 

Michigan  merit award scholarships or merit award loans described

 

in this act. If the pupil is eligible, the written notice shall

 

also contain the  Michigan  merit award scholarship or merit award

 

loan amount for which the pupil is eligible, how the pupil applies

 

for payment of  Michigan  the merit award scholarship or merit

 

award loan, and any other information the board considers necessary

 

regarding qualification requirements or conditions relating to the

 

use of the  Michigan  merit award scholarship or merit award loan.

 

     (4) It is the intent of the legislature that the level of

 

pupil performance required to achieve qualifying results in a

 

subject area of an assessment test remains approximately the same,

 

and that the board not reduce the required level of pupil

 

performance as a means of increasing the number of  Michigan  merit

 

award scholarships or merit award loans awarded.

 

     (5) A pupil who does not initially receive qualifying results

 

shall be extended an opportunity to achieve the requisite

 

qualifying results by taking a subsequent assessment test. A pupil

 

described in this subsection who is enrolled in grade 12 in the

 

2006-2007 school year, or enrolled in grade 12 in the first

 

calendar year after the approval described in section 7(6) occurs

 

if that subsection applies, may elect either of the following:

 

     (a) To take the high school assessment test for the purpose of

 

qualifying for a  Michigan  merit award scholarship under section

 


7(2).

 

     (b) To take the  Michigan  merit examination for the purpose

 

of qualifying for a  Michigan  merit award scholarship under

 

section 7(3).

 

     (6) A nonpublic school pupil or home school pupil may take,

 

and the board shall administer if requested, an assessment test at

 

a site designated by the board.

 

     Sec. 7c. (1) The merit award loan program is established. The

 

board shall administer the merit award loan program.

 

     (2) Subject to section 7b(5) and to adjustment under

 

subsection (3), each student enrolled in grade 11 in or after the

 

2008-2009 school year who meets the requirements of section 7e is

 

eligible for a $2,500.00 merit award loan if the student is

 

enrolled in an approved postsecondary educational institution in

 

this state or in a service academy, if the board finds that the

 

student while in high school has taken the merit examination and

 

meets 1 of the following:

 

     (a) Has received qualifying results in each of the subject

 

area components of the merit examination.

 

     (b) Did not receive qualifying results in each of the subject

 

area components of the merit examination, but received an overall

 

score in the top 25% of a nationally recognized college admission

 

examination.

 

     (c) Did not receive qualifying results in each of the subject

 

area components of the merit examination, but received a qualifying

 

score or scores as determined by the board on a nationally

 

recognized job skills assessment test designated by the board.

 


     (3) In any fiscal year, the board may adjust the amount of a

 

merit award loan available to students eligible under subsection

 

(2), based upon its determination of available resources and

 

amounts appropriated, but the board shall not increase an amount by

 

more than 5% in any fiscal year. The board shall notify the

 

governor, the speaker of the house of representatives, and the

 

majority leader of the senate in writing at least 30 days before an

 

adjustment under this subsection.

 

     Sec. 7d. (1) Subject to section 7b(2) and to adjustment under

 

subsection (2), a student who was enrolled in grade 7 in or after

 

the 2005-2006 school year, who meets the requirements of section

 

7b(1), and who the board finds has taken the middle school

 

assessment test in each of the subject areas while in grades 7 and

 

8 is eligible for 1 of the following merit award loans:

 

     (a) If the board finds that the student while in grades 7 and

 

8 received qualifying results in 2 of the subject areas of reading,

 

writing, mathematics, and science, a merit award loan of $250.00.

 

     (b) If the board finds that the student while in grades 7 and

 

8 received qualifying results in 3 of the subject areas of reading,

 

writing, mathematics, and science, a merit award loan of $375.00.

 

     (c) If the board finds that the student while in grades 7 and

 

8 received qualifying results in all of the subject areas of

 

reading, writing, mathematics, and science, a merit award loan of

 

$500.00.

 

     (2) In any fiscal year, the board may adjust the amount of a

 

merit award loan available to students eligible under subsection

 

(1) based upon its determination of available resources and amounts

 


appropriated, but the board shall not increase an amount by more

 

than 5% in any fiscal year. The board shall notify the governor,

 

the speaker of the house of representatives, and the majority

 

leader of the senate in writing at least 30 days before an

 

adjustment under this subsection.

 

     Sec. 7e. A merit award loan made under section 7c or 7d is

 

repayable according to the same terms as other student loans made

 

or guaranteed by this state at the time the loan is awarded, except

 

as follows:

 

     (a) The loan is subject to section 7f.

 

     (b) The loan recipient shall repay the loan in 2 equal annual

 

installments of principal and interest, with the first installment

 

due 1 year after the earliest to occur of the following:

 

     (i) The loan recipient's graduation from an approved

 

postsecondary educational institution.

 

     (ii) The sixth anniversary of the receipt by the board of the

 

loan recipient's initial loan application. The board may extend

 

this date for up to 1 year if the loan recipient provides proof

 

acceptable to the board that he or she is progressing toward

 

graduation.

 

     (c) The interest on the loan is the prime rate plus 2

 

percentage points, as determined by the board, beginning 1 year

 

after the first merit award loan under this act.

 

     Sec. 7f. (1) The board may award a grant under subsection (2)

 

to an individual determined by the board to meet all of the

 

following eligibility criteria at the time of application:

 

     (a) Has eligible debt.

 


     (b) Is a legal resident of this state and has been a legal

 

resident of this state continuously since he or she last attended

 

an approved postsecondary institution.

 

     (c) Has not previously defaulted and is not currently in

 

default on a merit award loan.

 

     (d) Has submitted a grant application to the board. The grant

 

application shall include proof of residency and a certification

 

that the applicant meets the eligibility criteria described in this

 

section.

 

     (e) Has met any other requirements established by the board.

 

     (2) The board shall award an individual eligible under

 

subsection (1) a grant under this subsection. Subject to subsection

 

(3) and to adjustment under subsection (4), the maximum aggregate

 

amount of the grant is an amount equal to the individual's eligible

 

debt. Before each consecutive calendar year of continuous residency

 

in this state, for up to 2 consecutive calendar years, the board

 

shall award a partial grant in an amount equal to 50% of the amount

 

of the individual's eligible debt. The board shall apply a partial

 

grant under this section to the individual's eligible debt as a

 

prepayment in that amount.

 

     (3) The board shall reduce a grant under subsection (2) by an

 

amount equal to any amount the individual is entitled to receive

 

from any state or federal loan repayment program applicable to

 

merit award loans.

 

     (4) In any state fiscal year, the board may adjust the amount

 

of each partial grant under subsection (2) on a pro rata basis,

 

based upon its determination of money available from the trust fund

 


and from appropriations in that fiscal year. If it makes an

 

adjustment under this subsection, the board shall notify each grant

 

recipient of his or her obligation to continue to make payments of

 

principal and interest on his or her eligible debt in the manner

 

described in his or her merit award loan documents.

 

     Sec. 8. (1)  Michigan  A recipient shall only use merit award

 

scholarship money  shall be used only  or merit award loan money to

 

pay for eligible costs.

 

     (2) The board shall determine the manner and form of

 

application for payment of a  Michigan  merit award scholarship or

 

merit award loan by a student eligible under this act and the

 

procedure for payment to the student or to an approved

 

postsecondary educational institution on the student's behalf,

 

subject to 1 of the following, as applicable:

 

     (a) As determined by the board, upon the request of a student

 

or parent or legal guardian of a minor student, the board may pay a

 

Michigan  merit award scholarship in 2 consecutive annual

 

installments rather than 1 lump sum for a student who graduates

 

from high school or passes the general educational development

 

(GED) test or approved graduate equivalency examination before

 

March 1, 2003.

 

     (b) For each student who graduates from high school or passes

 

the general educational development (GED) test or approved graduate

 

equivalency examination on or after March 1, 2003 and before March

 

1, 2004, the board shall pay a  Michigan  merit award scholarship

 

in 2 consecutive annual installments, beginning in the state fiscal

 

year for which the student is otherwise eligible.  The first

 


installment shall not exceed 50% of the award amount, and the

 

second installment shall consist of the remaining award amount.

 

Verification that the student has met the enrollment criteria under

 

section  7b(1)(c) is required  before payment of the second

 

installment.

 

     (c) For each student who graduates from high school or passes

 

the general educational development (GED) test or approved graduate

 

equivalency examination on or after March 1, 2004, the board shall

 

pay a  Michigan  merit award scholarship or a merit award loan in 2

 

consecutive annual installments, beginning in the state fiscal year

 

that begins after the beginning of the academic year for which the

 

student is otherwise eligible. The first installment shall not

 

exceed 50% of the award amount, and the second installment shall

 

consist of the remaining award amount. Verification that the

 

student has met the enrollment criteria under section 7b(1)(c) or

 

7e(1)(c), as applicable, is required before payment of the second

 

installment.

 

     (3) An approved postsecondary educational institution shall

 

not consider a  Michigan  merit award scholarship or a merit award

 

loan 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

 

not reduce institutionally-funded student aid because of the

 

Michigan  merit award scholarship program or the merit award loan

 

program.

 

     (4) Before payment of a  Michigan  merit award scholarship or

 

a merit award loan to a student or an approved postsecondary

 


educational institution, the student shall certify or affirm in

 

writing to the board each of the following:

 

     (a) That the student is enrolled at an approved postsecondary

 

educational institution.

 

     (b) The name of the approved postsecondary educational

 

institution in which the student is enrolled.

 

     (c) That the student agrees to use the  Michigan  merit award

 

scholarship or merit award loan only for eligible costs.

 

     (d) That the student has not been convicted of a felony

 

involving an assault, physical injury, or death.

 

     (e) That the student graduated from high school or passed the

 

general educational development (GED) test or approved graduate

 

equivalency examination within 1 of the following time periods:

 

     (i) If the student graduated from high school or passed the

 

test or examination before March 1, 2002, within the 7-year period

 

preceding the date of the student's application to receive his or

 

her  Michigan  merit award scholarship.

 

     (ii) If the student graduated on or after March 1, 2002, within

 

the 4-year period preceding the date of the student's application

 

to receive his or her  Michigan  merit award scholarship or merit

 

award loan, or within a period equal to 4 years plus the number of

 

days the student served as a member of the United States armed

 

forces or peace corps if the student became a member of the United

 

States armed forces or peace corps during this 4-year period and

 

served for 4 years or less. The board may also extend the 4-year

 

period if the board determines that an extension is warranted

 

because of an illness or disability of the student or in the

 


student's immediate family or another family emergency.

 

     (5) The board shall not begin disbursing funds for a  Michigan  

 

merit award scholarship or merit award loan to a student or an

 

approved postsecondary educational institution on behalf of the

 

student unless it receives the request or application for payment,

 

including the written certification or affirmation described in

 

this section, from the student on or before 1 of the following

 

dates, for disbursement in that academic year:

 

     (a) In the 2002-2003 academic year, January 15.

 

     (b) In the 2003-2004 academic year, September 15 if the

 

student received notification of eligibility prior to August 1.

 

     (c) In the 2003-2004 academic year, November 15 if the student

 

received notification of eligibility on or after August 1.

 

     (d) In the 2004-2005 academic year, December 15.

 

     (e) In any other academic year, November 15.

 

     Sec. 9. The board 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 board's administrative procedures.

 

     (b) Rules governing the qualification requirements for or the

 

award of  Michigan  merit award scholarships or merit award loans

 

under this act.

 

     (c) Rules establishing an appeals process from a determination

 

of ineligibility for a  Michigan  merit award scholarship or a

 

merit award loan.

 

     (d) Rules establishing what information or reports a student

 


or 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 1 or more  Michigan  merit award scholarships or merit

 

award loans and by a postsecondary educational institution to which

 

the  Michigan  merit award scholarship or merit award loan is paid.