HOUSE BILL No. 4575

 

April 17, 2013, Introduced by Rep. Bumstead and referred to the Committee on Education.

 

     A bill to amend 2008 PA 549, entitled

 

"Michigan promise zone authority act,"

 

by amending sections 3, 5, 7, 11, 15, and 17 (MCL 390.1663,

 

390.1665, 390.1667, 390.1671, 390.1675, and 390.1677).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 families with children under age 18 that are living

 

at or below the federal poverty level is greater than or equal to

 

the state average of families with 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 that has legislative powers.

 

     (f) "Nonpublic high school" means a high school operated by a

 

nonpublic school that includes grades 9 to 12 or 10 to 12 and that

 

awards a high school diploma. Nonpublic high school also includes a

 

general education development test.

 

     (g) "Nonpublic school" means that term as defined in section 5

 

of the revised school code, 1976 PA 451, MCL 380.5.

 

     (h) "Promise of financial assistance" means a commitment by an

 

eligible entity to provide financial resources for public or

 

private postsecondary education, including a vocational program, to

 

eligible students living in a promise zone and who have graduated

 

from a public high school or nonpublic high school located within

 

that promise zone.

 

     (i) "Promise zone" means that area created by a governing body

 

under this act.

 

     (j) "Promise zone development plan" means that plan developed

 

by an authority under this act that will ensure that the financial

 

resources are available to adequately fund the promise of financial

 

assistance.


 

     (k) "Public high school" means a public school that includes

 

grades 9 to 12 or 10 to 12 and that awards a high school diploma.

 

     (l) "Public school" means that term as defined in section 5 of

 

the revised school code, 1976 PA 451, MCL 380.5.

 

     (m) "School district" means that term as defined in the

 

revised school code, 1976 PA 451, MCL 380.1 to 380.1852.

 

     (n) "State education tax" means the tax levied under the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906.

 

     (o) "Vocational program" means an education or training

 

program intended to teach a trade, occupation, or vocation and

 

offered by a public or private postsecondary institution in this

 

state.

 

     Sec. 5. (1) If the department of treasury certifies the

 

eligibility of a governing body to establish a promise zone and the

 

governing body, by resolution, establishes a promise zone under the

 

Michigan promise zone act, 2008 PA 550, MCL 390.1641 to 390.1649,

 

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 on

 

the general powers of an authority.

 

     (3) An authority shall be under the supervision and control of

 

a board. consisting of 11 members. Nine members shall be appointed

 

by the All of the following apply to the board of an authority:

 

     (a) The board shall consist of 11 members, as follows:


 

     (i) Nine locally appointed members. The chief executive officer

 

of the eligible entity, with the advice and consent of the

 

governing body, shall appoint the 9 initial locally appointed

 

members of the board described in this subparagraph. If a vacancy

 

occurs in an office of a locally appointed member appointed under

 

this subparagraph, the board shall appoint a new member to fill

 

that vacancy. As used in this subparagraph, 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.

 

     (ii) One member shall be appointed by the senate majority

 

leader.

 

     (iii) One member shall be appointed by the speaker of the house

 

of representatives.

 

     (b) Not more than 3 members of the board shall be government

 

officials.

 

     (c) One member of the board shall be a representative of the

 

public school community. Of

 

     (d) The term of office of a member of the board is 4 years.

 

However, 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.

 

     (e) A member of the board 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.


 

     (f) Members of the board shall serve without compensation, but

 

may be reimbursed for actual and necessary expenses.

 

     (g) 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. 7. (1) A promise zone authority created under section 5

 

shall prepare a promise zone development plan.

 

     (2) The A 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 eligible students residing within the promise

 

zone and who graduate from a public high school or nonpublic high

 

school located within that promise zone, in an amount established

 

by the board to reflect the amount available for disbursement to

 

eligible students and included in the annual budget under section

 

15. The amount of proposed promise of financial assistance shall,

 

at a minimum, provide funding equal or exceed the amount the board

 

determines is sufficient to provide pay for the tuition, mandatory

 

fees, and other necessary expenses for an eligible student the

 

tuition necessary to obtain an associate degree or its equivalent

 

at a community or junior college in this state, or combination of

 

community or junior colleges in this state and, at most, provide

 

funding sufficient to provide an eligible student the tuition

 

necessary and shall not exceed the amount the board determines is

 

sufficient to pay for the tuition, mandatory fees, and other

 

necessary expenses for an eligible student 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, at

 

most, provide funding for an eligible student to attend a private

 

college in this state in an amount not to that does not exceed the

 

average tuition, necessary mandatory fees, and other necessary

 

expenses to obtain a bachelor's degree at all public universities


 

in this state. 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 including, but not limited to, any of

 

the following:

 

     (i) If the promise of financial assistance will be prorated

 

based on the number of years the student has resided within the

 

promise zone. ; if

 

     (ii) If the promise of financial assistance will be restricted

 

to students who have resided within or attended a public high

 

school or nonpublic high school within the promise zone for a

 

minimum number of years. ; if

 

     (iii) 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

 

     (iv) If the promise of financial assistance is restricted to

 

attendance at 1 or more public or private postsecondary

 

institutions in this state.

 

     (v) If the promise of financial assistance is limited to

 

students whose cumulative high school grade point average exceeds a

 

specified minimum. However, a board may revise, establish, or

 

eliminate a high school grade point average requirement for

 

students after it submits a promise zone development plan to the

 

department of treasury and is not required to amend the plan or

 

obtain approval from the department of treasury for that change.


 

     (vi) If the promise of financial assistance is limited to

 

students who comply with reasonable requirements established by the

 

board in order to improve student progress toward degree

 

completion.

 

     (vii) If the promise of financial assistance in a promise zone

 

that encompasses more than 2 school districts is limited to

 

students who reside in and graduate from high schools located

 

within the boundaries of fewer than all of its constituent school

 

districts.

 

     (c) A requirement that graduates of a public high school or

 

nonpublic high school exhaust all other known and available

 

restricted grants for tuition, and fees mandatory fees, and other

 

necessary expenses for postsecondary education provided by a

 

federal, state, or local governmental entity, as determined by the

 

board.

 

     (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,

 

388.1896, 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.

 

     (3) The proposed promise of financial assistance under

 

subsection (2) shall not include funding for attendance at a public

 

or private postsecondary institution not located in this state.

 

     (4) The board shall submit the promise zone development plan

 

to the department of treasury promptly after its adoption. The

 

promise zone development plan shall be published on the website of

 

the eligible entity that established the promise zone.

 

     (5) The department of treasury shall review the promise zone

 

development plan submitted under subsection (4). Not more than 60

 

days after receipt of a promise zone development plan submitted

 

under subsection (4), the department of treasury shall either

 

approve the promise zone development plan or provide a written

 

notice of deficiencies. If the department of treasury does not

 

approve a promise zone development plan submitted under subsection

 

(4) or provide a written notice of deficiencies within 60 days, the

 

promise zone development plan shall be considered approved. If a

 

promise zone development plan is approved, the department of

 

treasury shall certify that the promise zone development plan meets

 

all requirements under this act and is sustainable.

 

     (6) The department of treasury shall review any proposed

 

amendments to a promise zone development plan. Not more than 60

 

days after receipt of proposed amendments to a promise zone

 

development plan, the department of treasury shall either approve

 

the proposed amendments or provide a written notice of

 

deficiencies. If the department of treasury does not approve

 

proposed amendments or provide a written notice of deficiencies


 

within 60 days, the proposed amendments shall be considered

 

approved. If proposed amendments are approved, the department of

 

treasury shall certify that the amendments meet all requirements

 

under this act.

 

     Sec. 11. (1) The board may employ and fix the a director. All

 

of the following apply to a director employed by a board under this

 

subsection:

 

     (a) The board shall establish the director's compensation. of

 

a director.

 

     (b) The director shall serve serves at the pleasure of the

 

board.

 

     (c) A member of the board is not eligible to hold the position

 

of director.

 

     (d) Before beginning his or her duties, the director shall

 

take and subscribe to the constitutional oath and furnish a bond by

 

posting a bond in the sum in an amount 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 money available to the authority for expenses of operation.

 

     (e) The director shall be is the chief executive officer of

 

the authority.

 

     (2) Subject to the approval of the board, the director shall

 

supervise and be is responsible for implementing the promise zone

 

development plan and the performance of the functions of the

 

authority in the manner authorized by under 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 a bond, as required of the director under

 

subsection (1)(d). The director shall furnish the board with any

 

information or reports governing the operation of the authority as

 

that 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 money 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 the treasurer is not

 

required to be maintained by the treasurer. maintain. 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 any other personnel considered that

 

the board considers necessary. by the board.


 

     (7) Money received by the The authority shall immediately be

 

deposited deposit any money it receives to the credit of the

 

authority, subject to disbursement under this act.

 

     (8) The authority shall not expend more than 15% of the

 

proposed annual budget Beginning in the first fiscal year in which

 

it receives revenue from the state from the capture of state

 

education tax revenue under section 17, the authority may use not

 

more than 15% of the amount of that revenue to pay for

 

administrative costs.

 

     Sec. 15. (1) The director of the authority shall submit board

 

shall adopt a budget to the board for the operation of the

 

authority for each fiscal year, before the beginning of the that

 

fiscal year, based on a budget submitted to it by the director. 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 the budget of an

 

authority shall not include any money of the eligible entity. shall

 

not be included in the budget of the authority.

 

     (2) The budget described in subsection (1) shall include the

 

amount the authority intends to disburse to each eligible student

 

in the fiscal year covered by the budget. Subject to the maximum

 

amounts described in section 7(2)(a), the board shall establish the

 

amount of the annual payment to eligible students and, in making

 

that determination, shall consider the financial resources

 

available to the authority for disbursement to those students.


 

     Sec. 17. (1) The authority shall determine the base year for

 

calculating 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 in the year immediately preceding

 

the year in which an authority makes its initial tuition payment

 

payment of tuition, mandatory fees, and other necessary expenses in

 

accordance with the promise of financial assistance or the amount

 

of revenue received from the collection of the state education tax

 

in the promise zone in any 1 of the 3 immediately a succeeding

 

years, year, whichever is less.

 

     (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

 

payments of tuition, mandatory fees, and other necessary expenses

 

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 payments of tuition, mandatory fees, and other necessary

 

expenses 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.