SENATE BILL NO. 359

June 05, 2019, Introduced by Senators LASATA, BUMSTEAD, HORN and ANANICH and referred to the Committee on Appropriations.

"Michigan promise zone authority act,"

by amending sections 3 and 7 (MCL 390.1663 and 390.1667), section 3 as amended by 2013 PA 210 and section 7 as amended by 2016 PA 9.

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 Federal Register by the United States department of health and human services 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 that has legislative powers.

(f) "Intermediate school district" means that term as defined in section 4 of the revised school code, 1976 PA 451, MCL 380.4.

(g) (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.

(h) (g) "Nonpublic school" means that term as defined in section 5 of the revised school code, 1976 PA 451, MCL 380.5.

(i) (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 1 of the following:

(i) A public high school or nonpublic high school located within that promise zone.

(ii) For eligible students who live in the geographic area of a dissolved school district that was located within the promise zone before being dissolved under section 12 of the revised school code, 1976 PA 451, MCL 380.12, a public high school or nonpublic high school located in the geographic area of the intermediate school district to which the dissolved school district, before dissolution, had been a constituent district.

(iii) For eligible students who live in the geographic area of a school district that is located within the promise zone and that ceased operating a high school after January 1, 2020, a public high school or nonpublic high school located in the geographic area of the intermediate school district to which the school district is a constituent district.

(j) (i) "Promise zone" means that area created by a governing body under this act.

(k) (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.

(l) (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.

(m) (l) "Public school" means that term as defined in section 5 of the revised school code, 1976 PA 451, MCL 380.5.

(n) (m) "Qualified educational expenses" means tuition and fees required for the enrollment or attendance of a student at an educational institution and expenses for fees, books, supplies, and equipment required for courses of instruction at that educational institution.

(o) (n) "School district" means that term as defined in the revised school code, 1976 PA 451, MCL 380.1 to 380.1852.

(p) (o) "State education tax" means the tax levied under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906.

(q) (p) "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. 7. (1) A promise zone authority created under section 5 shall prepare a promise zone development plan.

(2) A promise zone development plan shall must 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 must 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, described in section 3(i)(i), (ii), or (iii), 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, must, at a minimum, equal or exceed the amount the board determines is sufficient to pay for the qualified educational expenses for an eligible student to obtain an associate degree at a community or junior college in this state, and shall must not exceed the amount the board determines is sufficient to pay for the qualified educational 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 that does not exceed the average amount of qualified educational 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, 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.

(ii) If the promise of financial assistance will be restricted to students who have resided within the promise zone, or who attended a public high school or nonpublic high school within the promise zone described in section 3(i)(i), (ii), or (iii), for a minimum number of years.

(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.

(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 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 qualified educational 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 388.1896, shall 388.1897l, must not be included as a method of raising the necessary funds. The promise zone development plan shall must 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.

(f) A complete description of the criteria and procedures by which the performance of students receiving financial assistance pursuant to the proposed plan will be assessed and reported. This assessment and reporting methodology shall must include, but is not limited to, the submission of a written report by no later than October 31 of each year to the department of treasury. This annual report shall must include the following information, which may be obtained, in whole or in part, from any reliable source that complies with applicable laws regarding student privacy:

(i) The number of students who received financial assistance pursuant to the authority's approved promise zone development plan during the prior academic year.

(ii) Of those students accounted for under subparagraph (i), the number who successfully completed the following:

(A) A certificate or associate program.

(B) A bachelor's program.

(iii) Of those students accounted for under subparagraph (i), the number who withdrew from classes during the prior academic year.

(iv) Of those students accounted for under subparagraph (i) who initially reached successful completion of more than the equivalent of 23 semester credits during the prior academic year, the average time to successfully complete the equivalent of 24 semester credits.

(v) The 6-year graduation rate for recipients of financial assistance pursuant to the authority's approved promise zone development plan.

(3) The proposed promise of financial assistance under subsection (2) shall must 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 within 5 years after the eligibility to establish the promise zone was certified by the department of treasury under section 4(4). If a promise zone development plan is not submitted within this time frame, the department of treasury may dissolve the promise zone. The promise zone development plan shall must 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 must 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 must be considered approved. If proposed amendments are approved, the department of treasury shall certify that the amendments meet all requirements under this act.

(7) A promise zone development plan approved under this act before the effective date of the amendatory act that added this subsection shall February 16, 2016 must be amended as necessary to meet the assessment and reporting requirements described in subsection (2)(f). That The amendment shall must include a first annual reporting deadline not later than October 31, 2017. That The board shall submit the amendment shall be submitted by the board to the department of treasury within 60 days after the effective date of the amendatory act that added this subsection February 16, 2016, and the amendment is subject to the review process set forth in subsection (6).