October 29, 2007, Introduced by Senators VAN WOERKOM, JELINEK, RICHARDVILLE, BIRKHOLZ, WHITMER, GLEASON, CHERRY, THOMAS and BARCIA and referred to the Committee on Education.
A bill to authorize the creation of promise zones and
implementation of promise zone development plans; to provide for
the creation of promise zone authorities; to prescribe the powers
and duties of promise zone authorities; to provide for the capture
and disbursement of certain tax revenue; and to prescribe powers
and duties of certain state and local officials.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan promise zone act".
Sec. 3. As used in this act:
(a) "Authority" means a promise zone authority created under
this act.
(b) "Board" means the governing body of an authority.
(c) "Eligible entity" means a city, township, county, local
school district, or intermediate school district, in which the
percentage of children under age 18 that are living at or below the
federal poverty level is greater than the state average of children
under age 18 living at or below the federal poverty level, as
determined by the department of treasury.
(d) "Federal poverty level" means the poverty guidelines
published annually in the federal register by the United States
department of health and human services under its authority to
revise the poverty line under section 673(2) of subtitle B of title
VI of the omnibus budget reconciliation act of 1981, Public Law 97-
35, 42 USC 9902.
(e) "Governing body" means the elected body of an eligible
entity having legislative powers.
(f) "Promise of financial assistance" means a commitment by an
eligible entity to provide financial resources for postsecondary
education to eligible students living in a promise zone who have
graduated from a public high school.
(g) "Promise zone" means that area created by a governing body
under this act.
(h) "Promise zone development plan" means that plan developed
by a governing body under this act that will ensure that the
financial resources are available to adequately fund the promise of
financial assistance.
(i) "Public high school" means a high school operated by a
school district.
(j) "Public school" means a school operated by a school
district.
(k) "School district" means that term as defined in the
revised school code, 1976 PA 451, MCL 380.1 to 380.1852.
(l) "State education tax" means the tax levied under the state
education tax act, 1993 PA 331, MCL 211.901 to 211.906.
Sec. 5. (1) If a governing body determines that it is
necessary for the best interests of the public to promote access to
postsecondary education, the governing body may, by resolution,
declare its intention to establish a promise zone.
(2) The governing body shall set a date for a public hearing
on the adoption of a proposed resolution establishing the promise
zone. Notice of the public hearing shall be published twice in a
newspaper of general circulation in the eligible entity, not less
than 20 or more than 40 days before the date of the hearing. Notice
of the hearing shall be posted in at least 20 conspicuous and
public places in the eligible entity not less than 20 days before
the hearing. The notice shall state the date, time, and place of
the hearing and shall describe the proposed promise zone, the
details of the promise of financial assistance, and the criteria
for eligibility to receive that financial assistance.
(3) Not less than 30 days after the public hearing, if the
governing body of the eligible entity intends to proceed with the
establishment of the promise zone, it shall establish by resolution
a promise zone and a promise zone development plan.
(4) The promise zone development plan shall include, but is
not limited to, all of the following:
(a) A complete description of the proposed promise of
financial assistance. The proposed promise of financial assistance
shall include, but is not limited to, a promise of financial
assistance to all students residing within the promise zone who
graduate from a public high school. The proposed promise of
financial assistance shall, at a minimum, provide funding
sufficient to provide an eligible student the tuition necessary to
obtain a bachelor's degree or its equivalent at a public
postsecondary institution in this state or combination of public
postsecondary institutions in this state, subject to any
limitations authorized under this section. The proposed promise of
financial assistance may also authorize the expenditure of funds
for educational improvement activities designed to increase
readiness for postsecondary education at public schools located in
the promise zone.
(b) A complete description of any limitation on the promise of
financial assistance if the promise of financial assistance will be
prorated based on the number of years the student has resided
within the promise zone; if the promise of financial assistance
will be restricted to students who have resided within or attended
a public high school within the promise zone for a minimum number
of years; if the promise of financial assistance is predicated on
the student maintaining a minimum college grade point average and
carrying a minimum college credit hour classload; or if the promise
of financial assistance is restricted to attendance at 1 or more
institutions of postsecondary education.
(c) Whether graduates of a public high school will be required
to exhaust all other available publicly funded scholarships before
receiving financial assistance under this act. As used in this
subdivision, "other available publicly funded scholarships"
includes any institutional aid from a postsecondary institution in
this state and grants for postsecondary education provided by a
federal, state, or local governmental entity, but does not include
loans.
(d) How the funds necessary to accomplish the promise of
financial assistance will be raised. Any amount received under the
state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772,
shall not be included as a method of raising the necessary funds.
The promise zone development plan shall be financed from 1 or more
of the following sources:
(i) Donations.
(ii) Revenues.
(iii) Money obtained from other sources approved by the
governing body or otherwise authorized by law.
(e) An actuarial model of how much the proposed plan is
estimated to cost, based on actuarial formulas developed by the
department of treasury.
(5) The clerk for the governing body of the eligible entity
shall file the resolution adopted under subsection (3) with the
department of treasury promptly after its adoption. The resolution
shall be published at least once in a newspaper of general
circulation in the eligible entity.
(6) The department of treasury shall review the resolution
submitted under subsection (3) establishing a promise zone and a
promise zone development plan and shall certify that the proposed
promise zone development plan meets all requirements under this
act.
(7) The department of treasury shall review any proposed
amendments to a promise zone or promise zone development plan and
certify that any proposed amendments meet all requirements under
this act.
(8) The establishment of a promise zone or a promise zone
development plan does not create a cause of action in law or in
equity against this state, an eligible entity, or a promise zone
authority created under section 7, if the proposed promise of
financial assistance set forth in the promise zone development plan
is not paid to an eligible student.
Sec. 7. (1) If the department of treasury certifies the
establishment of a promise zone and a promise zone development plan
submitted under section 5, the governing body shall, by resolution,
create a promise zone authority.
(2) An authority is a public body corporate that may sue and
be sued in any court of this state. An authority possesses all the
powers necessary to carry out its purpose. The enumeration of a
power in this act shall not be construed as a limitation upon the
general powers of an authority.
(3) An authority shall be under the supervision and control of
a board consisting of 11 members appointed by the chief executive
officer of the eligible entity with the advice and consent of the
governing body. Not more than 5 members shall be government
officials. Of the members first appointed, an equal number of the
members, as near as is practicable, shall be appointed for 1 year,
2 years, 3 years, and 4 years. A member shall hold office until the
member's successor is appointed. After the initial appointment,
each member shall serve for a term of 4 years. An appointment to
fill a vacancy shall be made by the chief executive officer of the
eligible entity for the unexpired term only. Members of the board
shall serve without compensation, but may be reimbursed for actual
and necessary expenses. The chairperson of the board shall be
elected by the board. As used in this subsection, for a local
school district or an intermediate school district, "chief
executive officer" means the superintendent of the local school
district or intermediate school district.
(4) Before assuming the duties of office, a member shall
qualify by taking and subscribing to the constitutional oath of
office.
(5) The proceedings and rules of the board are subject to the
open meetings act, 1976 PA 267, MCL 15.261 to 15.275. The board
shall adopt rules governing its procedure and the holding of
regular meetings, subject to the approval of the governing body.
Special meetings may be held if called in the manner provided in
the rules of the board.
(6) After having been given notice and an opportunity to be
heard, a member of the board may be removed for cause by the
governing body.
(7) A writing prepared, owned, used, in the possession of, or
retained by the board in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
Sec. 9. (1) The board may employ and fix the compensation of a
director. The director shall serve at the pleasure of the board. A
member of the board is not eligible to hold the position of
director. Before beginning his or her duties, the director shall
take and subscribe to the constitutional oath and furnish bond by
posting a bond in the sum determined in the resolution establishing
the authority payable to the authority for use and benefit of the
authority, approved by the board, and filed with the clerk of the
eligible entity. The premium on the bond shall be considered an
operating expense of the authority, payable from funds available to
the authority for expenses of operation. The director shall be the
chief executive officer of the authority.
(2) Subject to the approval of the board, the director shall
supervise and be responsible for implementing the promise zone
development plan and the performance of the functions of the
authority in the manner authorized by this act. The director shall
attend the meetings of the board and shall provide to the board,
the governing body, and the chief executive officer of the eligible
entity a regular report covering the activities and financial
condition of the authority. If the director is absent or disabled,
the board may designate a qualified person as acting director to
perform the duties of the office. Before beginning his or her
duties, the acting director shall take and subscribe to the oath,
and furnish bond, as required of the director. The director shall
furnish the board with information or reports governing the
operation of the authority as the board requires.
(3) The board may employ and fix the compensation of a
treasurer, who shall keep the financial records of the authority
and who, together with the director, shall approve all vouchers for
the expenditure of funds of the authority. The treasurer shall
perform all duties delegated to him or her by the board and shall
furnish a bond in an amount prescribed by the board.
(4) The board may employ and fix the compensation of a
secretary, who shall maintain custody of the official seal and of
records, books, documents, or other papers not required to be
maintained by the treasurer. The secretary shall attend meetings of
the board and keep a record of its proceedings and shall perform
other duties delegated by the board.
(5) The board may retain legal counsel to advise the board in
the proper performance of its duties.
(6) The board may employ other personnel considered necessary
by the board.
(7) Money received by the authority shall immediately be
deposited to the credit of the authority, subject to disbursement
under this act.
Sec. 11. The board may do any of the following:
(a) Prepare an analysis of the postsecondary educational
opportunities for the residents of the promise zone.
(b) Study and analyze the need for financial resources to
provide postsecondary educational opportunities for residents of
the promise zone.
(c) Acquire by purchase or otherwise, on terms and conditions
and in a manner the authority considers proper, or own, convey, or
otherwise dispose of, or lease as lessor or lessee, land and other
property, real or personal, or rights or interests in the property,
that the authority determines is reasonably necessary to achieve
the purposes of this act, and grant or acquire licenses, easements,
and options.
(d) Fix, charge, and collect fees, rents, and charges for the
use of any facility, building, or property under its control or any
part of the facility, building, or property.
(e) Lease, in whole or in part, any facility, building, or
property under its control.
(f) Solicit and accept grants and donations of money,
property, labor, or other things of value from a public or private
source.
Sec. 13. The director of the authority shall submit a budget
to the board for the operation of the authority for each fiscal
year before the beginning of the fiscal year. The budget shall be
prepared in the manner and contain the information required of
municipal departments. After review by the board, the budget shall
be submitted to the governing body. The governing body must approve
the budget before the board may adopt the budget. Unless authorized
by the governing body, funds of the eligible entity shall not be
included in the budget of the authority.
Sec. 15. (1) The year immediately preceding the year in which
an authority makes its initial tuition payment in accordance with
the promise of financial assistance is the base year for
determining the amount of incremental growth for the capture of the
state education tax as provided in this section. The base year is
the amount of revenue received from the collection of the state
education tax in the promise zone.
(2) If the authority continues to make annual payments in
accordance with the promise of financial assistance, in the year
immediately succeeding the base year determined in subsection (1)
and each year thereafter, this state shall capture 1/2 of the
increase in revenue, if any, from the collection of the state
education tax. This state shall not capture any revenue from the
collection of the state education tax under this act if that
revenue is subject to capture under any other law of this state.
Proceeds from the capture of the state education tax under this
section shall be deposited in the state treasury and credited to a
restricted fund to be used solely for the purposes of this act.
(3) If the authority continues to make annual tuition payments
in accordance with the promise of financial assistance, 2 years
after the authority's initial payment of financial assistance and
each year thereafter, this state shall pay to the authority the
state education tax captured under subsection (2). If the
boundaries of 2 or more promise zones created under this act
overlap, payments under this section shall only be made to the
first authority eligible for payment under this subsection.
(4) If at any time the authority does not make annual tuition
payments in accordance with the promise for financial assistance,
any amount captured from that promise zone in the restricted fund
created under subsection (2) shall be paid into the school aid fund
established in section 11 of article IX of the state constitution
of 1963.
(5) For purposes of this section, payments under this section
shall not be included in determining payments for financial
assistance in the immediately preceding year.
Sec. 17. (1) The department of treasury shall oversee the
operations of any promise zone authority or board created under
this act. If the department of treasury determines that the actions
of a promise zone authority or board are not in accordance with the
promise zone development plan, the department of treasury may
assume operational control of that promise zone authority or board.
(2) An authority that has completed the purposes for which it
was organized shall be dissolved by resolution of the governing
body. The property and assets of the authority remaining after the
satisfaction of the obligations of the authority belong to the
eligible entity.