HB 5375 and SB 861 were passed end of the end of last session in December and signed by the Governor on January 13, 2009.  These bills create Michigan Promise Zones and Promise Zone Authorities. 

I am currently working closely with the Pontiac School District to create a Pontiac Promise Zone.  The district has entered into the intial steps to create a Promise Zone.  As soon as the Department of Treasury certifies the district as an elgibile entity, the process of setting up an authority board and a financial development plan will proceed.  I would like to thank the Pontiac School Board, Superintendent and the District as a whole for engaging in this opportunity to provide an affordable college education to all students living in the Pontiac school district. 


*8/10/09 - The authorities have been chosen to take on the Promise Zone. The following are the authorities: Gary Russi - Oakland University President, H. Bill Maxey -NAACP activist, Lonnie Bone- vice president of public relations/community involvement at Genisys credit union, Henry Knight-Auburn Hills City Council member, Nellie B. LeGarde-retired senior manager of Education Programs Chrysler Corp., Jeffrey Love-president of Baker College of Auburn Hills, Timothy R. Meyer-chancellor of the fivecampus Oakland Community College, Bishop William Murphy-New Mount Moriah International Church, Shirley A. Rand-attorney and Pontiac city resident, Teresa A. Rodges-executive director of marketing for POH Medical Center Riley Foundation, and Jack Weiner-president and CEO of St. Joseph Mercy Oakland.


* 6/18/09 - The Application Process for the Pontiac Promise Zone Authority Board has been completed.  The Superintendent of the school district is currently in the process of selecting applicants and recommending them to the school board for approval.  Upon selection, the leader's of the House and Senate will each select one person to also sit on the Authority board.  As this process wraps up in the coming weeks, the new Authority Board can begin to develop a fundraising plan. 
* I am proud to say that a number of local organizations have already committed financial support to the Promise Zone.

The passing of Promise Zone legislation was an important step in allowing communities to create college tuition funding programs modeled after the nationally recognized Kalamazoo Promise program.  The Kalamazoo Program is a proactive approach to economic development and ensuring student access to a college education.  Initiated in the fall of 2005, the Kalamazoo Promise offered offered to pay the cost of college tuition to all students in the Kalamazoo school district.  Students have to maintain a full course load in college and attend a Michigan university or community college.  Since its inception, the program has demonstrated tangible benefits for the students in the district and the community at large.  In the first few years, the district has seen increased enrollment in the district, postsecondary instutions, and an uptick in property values.  The Kalamzoo Promise is a unique program created in a Michgian community that has attracted the attention of many other communites and media around the country.  Similar-type programs have now sprung up in a handful of cities around the nation, modeled after the program in Kalamazoo. 

Recognizing the tremendous possibilities of such a program on larger scales, I introduced legislation to replicate the program around the state.  Michigan Promise Zones have a chance to attract people into declining districts and communities, while boosting enrollment in our state colleges and universities.  Providing an affordable path to college will increase access and give more students an incentive to work hard and stick in school.  The investment in getting more students through college has a tremendous economic benefit for our state.  My legislation create public-private partnerships to fund the Promise Zones.  Individual communities must make an investment into a promise zone and demonstrate its sustainability.  In return, a Promise Zone will be able to capture a portion of the State Education Tax, levied on all property.  If the Kalamazoo Promise is any indication, communities making an investment to create a Promise Zone will also see more people move to their community and a rise in property values. 

For more information or research on the Kalamazoo Promise, please visit the following links:
https://www.kalamazoopromise.com/
http://www.upjohninst.org/promise/index.htm

 Michigan Promise Zones can be created in any city, township, county, local school district, or intermediate school district that has a high level of poverty.  To qualify as an "eligible entity" under the act, the percentage of families with children under the age of 18 that are living at or below the federal poverty level must be equal to or greater than the state average.

 If the governing body (school board, city council, etc.) of the eligible entity determines that it is necessary for the best interest of the public to promote access to postsecondary education, the governing body may, by resolution, declare its intention to establish a promise zone.

• In order to adopt a resolution, a governing body must first post hold a public hearing and provide sufficient notice in a local newspaper and around the community. 

 Before the hearing, the board must post notices in 20 places around the community.  Also, notice of the meeting must be posted in a local newspaper twice.  The notice must give general details to the Promise Zone. The posting of the meeting must be at least 20 and no more than 40 days before the public hearing.  The posting in the newspaper shall set the date, time and place of the hearing.  Also, it shall describe the proposed promise zone, details of promise of financial assistance, and criteria for eligibility to receive financial assistance.

After the hearing is held, a new 30 day clock begins in which the adopted resolution may be sent to the Dept of Treasury (the resolution is not officially adopted until a hearing is held, and the board votes on it).  On the 30th day after the hearing, if the Dept. of Treasury has received the resolution declaring its intention to set up some kind of promise zone, Treasury may certify its eligibility as an entity.  After that certification, the board has no time constraints as to how soon they can set up a board and develop a plan to submit for approval.

• The Department will review all applications on a first-come first-served basis.  They can only certify up to ten entities as eligible to establish a promise zone.
• The department has not yet created an application for entities to fill out.  Sending a copy of the adopted resolution and a simple cover letter to Treasury will suffice for eligibility certification. 
• Treasury will accept the adopted resolution anytime after it has been adopted.  However, the entity will not officially be certified until the 30 day waiting period has been reached. 

 After the an eligible entity has established and been certified as a Promise Zone, it must then create a Promise Zone Authority. 

   A Promise Zone Authority(PZA) consists of 11 board members.  The board has supervision and control over the operation of the promise zone authority.  A chairperson/director will be elected by the board members of the authority.

• The CEO of the eligible entity shall appoint 9 members of the promise zone authority. The governing body of the eligible entity shall "advice and consent" on the appointment board members.
• One member shall be appointed by the State Senate Majority leader
• One member shall be appointed by the Speaker of the Michigan House of Representatives.

> One Promise zone authority board member shall be a representative of "Public School Community".
> Not more than 3 authority board members shall be government officials.
>The initial appointment of authority board members shall be in staggered terms.
> After the initial appointments and fulfillment of terms, each board authority board member shall serve a term of 4 years.
>The CEO of the eligible entity shall appoint a new board member to any vacancy on the authority board.  Appointments in these cases, by the CEO shall last for the duration of the unexpired term.

 Promise zone development plan
  The promise zone authority shall prepare a promise zone development plan for submission to the Department of Treasury for approval.  The development plan shall include, but is not limited to:

• Complete description of the promise of financial assistance.  It shall include, but not limited to, financial assistance to all students residing within in the zone that have graduated from a public or nonpublic school within the promise zone.
• The promise of financial assistance must, at a minimum, provide tuition funding to an eligible student, for an associates degree or its equivalent.  A promise of financial assistance must not exceed the equivalent of a bachelor's degree at a postsecondary institution in the state of Michigan. 
• Funding provided to an eligible student who attends a private postsecondary institution will be based on the average tuition cost of all public universities in the state of Michigan.
• The promise zone development plan may also authorize funds dedicated to educational improvement activities for postsecondary readiness.

 The development plan must also include any description of limitations placed on eligible students residing in the Promise Zone.  Examples would include: assistance prorated based the number of years a student resided within the zone, a minimum number of years a student must attend a high school in the zone, whether a student receiving assistance must maintain a grade point average or minimum course load, or if the financial assistance is limited to one postsecondary institution in the state of Michigan. 

• The development plan must also include requirements, determined by the authority board, which students must exhaust available grants that a student may be eligible for, and required by the authority board.
• The development plan must include how the funds necessary to accomplish the promise of financial assistance will be raised (Donation, Revenues, and other sources approved by the authority and law).
• The development plan must also include an actuarial model of the cost of the development plan. Actuarial formulas are to be determined by the Department of Treasury.

 Upon adoption of the Promise Zone Development plan by the promise zone authority board, the plan must be promptly submitted to the Department of Treasury.  The development plan shall be posted on the website of the eligible entity (ex. School district).

The Department of Treasury has 60 days to approve or provide an explanation of deficiencies with the development plan.  If the Department of Treasury does not respond within 60 days, the development plan will be considered approved and sustainable.  The same procedure applies for any amendments (to the development plan) submitted to the Department of Treasury.

  The PZA will then officially announce its fundraising campaign. When the fundraising target is met, the PZA will begin making tuition payments for the students graduating in the promise zone.  If the authority continues to make annual payments, the state will capture half of the increase in revenue, if any, from the collection of the state education tax. The funds will be deposited in a restricted fund to be used solely for this act. For the first two years the PZA must make payments from the locally raised funds.  The captured tax dollars will not be available until the PZA has successfully made the first two years of payments. If the PZA continues to make annual payments in accordance with the promise of financial assistance, two years after the PZA's initial payment and each year after, the state will capture half of the increase in revenue, if any, from the collection of the state education tax and pay it to the authority.

 The year immediately preceding the year in which the PZA makes its initial tuition payments will be considered the base year for determining the amount of incremental growth for the capture of the state education tax.  If the base year declines during the succeeding three years, the base will be readjusted to the lowest of the three. 

Promise Zone Authority Director/CEO

• A board member is not eligible to be director/CEO of an authority.
• The director is responsible for implementing the development plan. 
• The director must attend board meetings and provide regular reports (as determined by the authority board) covering the activities and financial condition of the authority to the authority board, the governing body (school board in this case), and CEO of eligible entity (School Superintendent).

 Promise zone Authority Treasurer and Secretary

The authority board may appoint and the fix compensation for a treasurer and secretary. 

Miscellaneous

• The authority board may retain legal counsel for proper performance of duties.
• Other personnel may be employed, as considered necessary by the authority board.
• No more than 15% of annual budget may be used for administrative costs.
• The authority board may also prepare analysis of postsecondary educational opportunities and the need of financial resources to provide financial assistance. 
• Acquire land or other property that the board determines is reasonably necessary to achieve the purposes of a promise zone.  The authority board may fix, charge or collect rents for any facility or property under the authority's control. 
• Solicit and accept grants or donations from a public or private source.

 Budget
 The director of the authority board shall submit a budget to the authority board for each fiscal year (Prior to beginning of the fiscal year).  Budgets shall be prepared in a manner similar to municipal governments.  After review by the authority board, the budget shall be submitted to the governing body.

• The governing body (school board) must approve the submitted budget before the authority board may approve the budget.