HOUSE BILL No. 5471

 

March 13, 2012, Introduced by Reps. Hovey-Wright, Ananich, Lindberg, Bauer, Townsend, Womack, Cavanagh, Slavens, Dillon, Hobbs, Geiss and Meadows and referred to the Committee on Government Operations.

 

     A bill to establish an educational grant program for eligible

 

resident students who attend public community colleges and

 

universities in this state; to provide for the administration of

 

the program; to create the Michigan higher education grant trust

 

fund; and to provide for the powers and duties of certain state

 

governmental officers and entities.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

"Michigan higher education grant act".

 

     Sec. 3. As used in this act:

 

     (a) "Academic year" means the period from September 1 of a

 

calendar year to August 31 of the next calendar year.

 

     (b) "Authority" means the Michigan higher education assistance

 


authority created by 1960 PA 77, MCL 390.951 to 390.961.

 

     (c) "Community college" means a community college organized

 

under the community college act of 1966, 1966 PA 331, MCL 389.1 to

 

389.195, or a federal tribally controlled community college that is

 

recognized under the tribally controlled colleges and universities

 

assistance act of 1978, 25 USC 1801 to 1864, and is determined by

 

the department of education to meet the requirements for

 

accreditation by a recognized regional accrediting body.

 

     (d) "Eligible expenses" means all of the following:

 

     (i) Tuition and fees charged by a state educational

 

institution.

 

     (ii) A student's cost of attendance, expenses for books,

 

supplies, transportation, and miscellaneous personal expenses,

 

including a reasonable allowance for the documented rental or

 

purchase of a personal computer, as described in 20 USC 1087ll(2),

 

as determined by the authority.

 

     (e) "FAFSA" means the free application for federal student aid

 

developed under 20 USC 1082.

 

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

 

     (g) "Michigan higher education grant" means a grant awarded by

 

the authority under section 7.

 

     (h) "Public university" means a university described in

 

section 4, 5, or 6 of article VIII of the state constitution of

 

1963.

 

     (i) "Qualified program" means a bachelor's degree, associate's

 

degree, or postsecondary vocational training program at a state

 

educational institution.

 


     (j) "State educational institution" means a degree- or

 

certificate-granting public university or community college in this

 

state.

 

     (k) "Trust fund" means the Michigan higher education grant

 

trust fund established in section 11.

 

     Sec. 5. (1) The Michigan higher education grant program is

 

established. The authority shall administer the Michigan higher

 

education grant program.

 

     (2) The authority shall do all of the following:

 

     (a) Award grants to eligible students under this act.

 

     (b) Develop a grant agreement to be entered into by a grant

 

recipient and the authority that contains the terms of a grant made

 

under this act and the rights and obligations of the grant

 

recipient and the authority.

 

     (c) Conduct periodic audits of grant recipients to ensure

 

compliance with the terms of the grant agreement and take necessary

 

steps to enforce the terms of the grant agreement.

 

     (d) Promulgate any rules that it determines are necessary to

 

implement and administer this act under the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

 

     Sec. 7. Beginning in the 2012-2013 academic year, the

 

authority shall award a grant under this act to an individual if

 

the authority determines that he or she meets all of the following

 

eligibility criteria:

 

     (a) Continuously resided in this state for the 12 months

 

immediately preceding the date of his or her application and is not

 

a resident of any other state.

 


     (b) Received a high school diploma from a school district,

 

nonpublic school, or home school located in this state or

 

successfully completed the general educational development (GED)

 

test and received a GED certificate from this state.

 

     (c) Received the diploma or GED certificate described in

 

subdivision (b) in the 2-year period preceding the date of the

 

student's application to receive Michigan higher education grant

 

money. If the student became a member of the United States armed

 

forces or peace corps during this 2-year period and served for 4

 

years or less, the authority shall extend the 2-year period 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 authority may

 

also extend the 2-year period if the authority determines that an

 

extension is warranted because of an illness, disability, or other

 

family emergency of the student or in the student's immediate

 

family.

 

     (d) Is enrolled or has been accepted into a qualified program.

 

     (e) Signs a written grant agreement with the authority.

 

     (f) Provides proof satisfactory to the authority that he or

 

she has done both of the following:

 

     (i) Submitted a FAFSA to the United States department of

 

education to determine his or her eligibility for federal grants or

 

scholarships.

 

     (ii) Applied for any grants or scholarships offered by this

 

state for which he or she is eligible.

 

     (g) If the student received a Michigan higher education grant

 

in the preceding academic year, the student made satisfactory

 


academic progress, as defined by the state educational institution

 

in which the student is enrolled, since receiving the previous

 

Michigan higher education grant.

 

     (h) Is in compliance with this act and the rules promulgated

 

under this act.

 

     (i) Meets any other eligibility criteria established in rules

 

promulgated by the authority under section 5.

 

     Sec. 9. All of the following apply to the award of a Michigan

 

higher education grant under this act:

 

     (a) In the 2012-2013 academic year, the base amount of the

 

grant is an amount equal to the median cost of tuition for a full-

 

time student enrolled at a public university in the 2011-2012

 

academic year, as determined by the department. For each subsequent

 

academic year, the authority shall adjust the base amount of the

 

grant to reflect the cumulative annual percentage change in the

 

Detroit consumer price index in the preceding 1-year period, as

 

determined by the state treasurer. As used in this subdivision,

 

"Detroit consumer price index" means the most comprehensive index

 

of consumer prices available for the Detroit area by the bureau of

 

labor statistics of the United States department of labor.

 

     (b) The authority shall determine the amount of a student's

 

grant for an academic year by subtracting the amount of any other

 

state or federal grants or scholarships he or she is eligible to

 

receive in that academic year from the base amount established

 

under subdivision (a).

 

     (c) A student shall use the grant money he or she receives in

 

an academic year to pay for his or her tuition and fees at the

 


state educational institution. If the amount of his or her grant

 

exceeds the amount of his or her tuition and fees, the student may

 

use the grant money to pay other eligible expenses related to that

 

academic year. If the amount of his or her grant exceeds the amount

 

of his or her fees and other eligible expenses in an academic year,

 

the student shall return the remaining balance to the authority.

 

     (d) A student attending a state educational institution as a

 

full-time student may not receive a grant in more than 5 academic

 

years. If a student is attending a state educational institution as

 

at least a half-time student but is not a full-time student, the

 

authority shall determine the number of academic years for which

 

the student may receive a grant. A student attending an state

 

educational institution less than half-time shall not receive a

 

grant.

 

     (e) The authority shall disburse a student's grant money to

 

the state educational institution in which he or she is enrolled on

 

the student's behalf, according to a payment procedure established

 

by the authority by rule.

 

     (f) The annual cost of the total number of grants paid in a

 

fiscal year shall not exceed the amount appropriated by the

 

legislature for Michigan higher education grants in that fiscal

 

year. If there are not sufficient funds appropriated by the

 

legislature to provide each student with a grant in the amount to

 

which those students are eligible in an academic year, the

 

authority shall establish a maximum grant level for that academic

 

year. In any fiscal year, the authority may adjust the amount of a

 

Michigan higher education grant available to eligible students,

 


based upon its determination of available resources and amounts

 

appropriated.

 

     Sec. 11. (1) The Michigan higher education grant trust fund is

 

established in the department of treasury. The trust fund shall

 

consist of the following:

 

     (a) Money allocated to the trust fund as provided by law.

 

     (b) Money appropriated to the trust fund.

 

     (c) Donations of money made to the trust fund from any source.

 

     (d) Interest and earnings from trust fund investments.

 

     (2) Money in the trust fund at the close of a fiscal year

 

shall remain in the trust fund and shall not revert to the general

 

fund.

 

     (3) The state treasurer shall direct the investment of the

 

trust fund.

 

     (4) The department of treasury is the administrator of the

 

trust fund for auditing purposes.

 

     Sec. 13. The department of treasury shall establish and

 

administer a restricted account in the general fund for the

 

Michigan higher education grant program. All of the following apply

 

to the account:

 

     (a) The department of treasury shall credit to the account

 

money appropriated from the trust fund or received from any other

 

source, including, but not limited to, interest and earnings from

 

account investments and any money returned to the authority under

 

section 9(c).

 

     (b) The department of treasury shall use the money in the

 

account only to provide money to the authority for grants awarded

 


under this act.

 

     (c) Money in the account at the end of a fiscal year shall not

 

revert to the general fund but shall be carried over in the account

 

to the next fiscal year.

 

     (d) The state treasurer shall direct the investment of the

 

account.

 

     (e) The department of treasury is the administrator of the

 

account for auditing purposes.

 

     Sec. 15. By November 1 of each year, the authority shall

 

submit a report on its activities under this act to the senate and

 

house fiscal agencies and the state budget director. The report

 

shall contain at least the number of Michigan higher education

 

grants awarded, the maximum amount of a Michigan higher education

 

grant paid, and the total amount paid out for Michigan higher

 

education grants in the immediately preceding fiscal year.

 

     Enacting section 1. It is the intent of the legislature that

 

the first $1,800,000,000.00 savings realized from the elimination

 

of tax expenditures identified by the legislative tax expenditure

 

review commission described in chapter 7C of the legislative

 

council act, 1986 PA 268, MCL 4.1771 to 4.1772, shall be used to

 

fund the Michigan higher education grant trust fund created in

 

section 11 of this act.

 

     Enacting section 2. This act does not take effect unless all

 

of the following bills of the 96th Legislature are enacted into

 

law:

 

     (a) Senate Bill No. ____ or House Bill No. ____ (request no.

 

01581'11).

 


     (b) Senate Bill No.____ or House Bill No.____ (request no.

 

03891'11).