House Bill 431

AN ACT TO CREATE THE MISSISSIPPI PROMISE SCHOLARSHIP ACT OF 2015; TO PROVIDE DEFINITIONS; TO PROVIDE THAT THE POSTSECONDARY EDUCATION FINANCIAL ASSISTANCE BOARD SHALL ADMINISTER THE SCHOLARSHIP PROGRAM; TO PROVIDE THAT THE SCHOLARSHIP PROGRAM IS FOR MISSISSIPPI RESIDENTS SEEKING AN ASSOCIATE'S DEGREE, CERTIFICATE OR DIPLOMA FROM A PUBLIC OR PRIVATE ELIGIBLE POSTSECONDARY INSTITUTION; TO PROVIDE CRITERIA FOR RECEIVING AND RETAINING THE SCHOLARSHIP, INCLUDING PARTICIPATION IN MENTORING AND COMMUNITY SERVICE; TO PROVIDE THE TERMS OF THE SCHOLARSHIP AMOUNT AND TIME LIMIT; TO CREATE THE MISSISSIPPI PROMISE SCHOLARSHIP ENDOWMENT AS AN IRREVOCABLE TRUST; TO PROVIDE FOR TRUSTEES; TO PROVIDE VARIOUS PROVISIONS REGARDING THE TRUST; TO PROVIDE THAT THE POSTSECONDARY EDUCATION FINANCIAL ASSISTANCE BOARD SHALL APPOINT A SPECIAL ADVISORY COMMITTEE COMPRISED OF REPRESENTATIVES FROM EXISTING COLLEGE ACCESS PROGRAMS IN THE STATE; TO PROVIDE THE POSTSECONDARY EDUCATION FINANCIAL ASSISTANCE BOARD WITH RULEMAKING AUTHORITY REGARDING THE SCHOLARSHIP PROGRAM; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) This act shall be known and may be cited as the "Mississippi Promise Scholarship Act of 2015."

SECTION 2. As used in this act, the following words shall have the following meanings, unless the context clearly indicates otherwise:

(a) "Eligible high school" means a high school accredited by a state or regional accrediting agency or approved/licensed by the State Department of Education;

(b) "Eligible postsecondary institution" means a public community or junior college, or another approved institution, as defined in Section 37-106-5, offering an associate's degree program approved by PEFAB;

(c) "Gift aid" means scholarships and grants from any source that do not require repayment, including funds provided through the federal Foster Care Independence Act of 1999, compiled generally in Title 42 USC, and other similar programs. Student loans and work-study awards shall not be considered gift aid;

(d) "Regident" shall have the same meaning as provided in Section 37-106-5.

SECTION 3. The Postsecondary Education Financial Assistance Board (PEFAB) shall administer the Mississippi Promise Scholarship Program for Mississippi residents seeking an associate's degree, certificate or diploma from an eligible postsecondary institution under the following terms and conditions:

(a) To be eligible for the scholarship a student shall be admitted to, and enrolled full time in, an eligible postsecondary program in the fall term following graduation from an eligible high school, or completion of high school as a Mississippi home school student, or obtaining a high school equivalency diploma; provided, that the student obtains the high school equivalency diploma prior to the student reaching nineteen (19) years of age. Exceptions to initial enrollment may be made for extenuating circumstances as provided in rules and regulations promulgated by PEFAB;

(b) Students applying for the scholarship shall complete the Mississippi Promise Scholarship Program application for their initial year of enrollment in accordance with the schedule determined by PEFAB. Students shall complete the free application for federal student aid (FAFSA) each academic year in which they seek to receive the Mississippi Promise Scholarship;

(c) To continue to receive a Mississippi Promise Scholarship at an eligible postsecondary institution, a student shall maintain a minimum cumulative grade point average of 2.0 as set forth in the rules promulgated by PEFAB;

(d) Scholarship recipients shall participate in mentoring and community service programs under the rules and regulations promulgated by PEFAB. PEFAB shall develop the selection and renewal criteria for students and shall have the authority to work with outside organizations to develop the most effective means for delivering the scholarships. In selecting outside organizations for participation in the Mississippi Promise Scholarship Program, PEFAB shall give preference to locally established entities that meet designated standards specified by the program's promulgated rules and regulations;

(e) A Mississippi Promise Scholarship at a Mississippi public community or junior college shall be the cost of tuition and mandatory fees at the college attended less all other gift aid. Gift aid shall be credited first to the student's tuition and mandatory fees;

(f) Notwithstanding paragraph (e) of this section, the amount of the Mississippi Promise Scholarship at an eligible state institution of higher learning or a private eligible postsecondary institution shall be the average cost of tuition and mandatory fees at the state institutions of higher learning less all other gift aid. Gift aid shall be credited first to the average tuition and mandatory fees as described in paragraph (e) of this subsection;

(g) A Mississippi Promise Scholarship student who has an approved medical or personal leave of absence from an eligible postsecondary institution may continue to receive the scholarship upon resuming the student's education at an eligible postsecondary institution so long as the student continues to meet all applicable eligibility requirements. The sum of all approved leaves of absence shall not exceed six (6) months;

(h) A student shall be eligible for the Mississippi Promise Scholarship until the occurrence of the first of the following events:

(i) The student has earned a diploma or associate's degree; or

(ii) The sum of the number of years the student attended a postsecondary institution, exclusive of approved leaves of absence, equals two and one-half (2–1/2) years from the date of the student's initial enrollment at an eligible postsecondary institution; and

(i) Except for a medical or personal leave of absence, as approved by an eligible postsecondary institution, a Mississippi Promise Scholarship student shall maintain continuous enrollment at an eligible postsecondary institution.

SECTION 4. The Mississippi Promise Scholarship Endowment Fund is created. The Mississippi Promise Scholarship Endowment Fund shall be established and funded under the following terms and conditions:

(a) This fund shall be an irrevocable trust that the State Treasurer shall administer. The Attorney General shall approve the terms of the trust instrument. The trust shall consist of the Mississippi Promise Endowment Account and the Mississippi Promise Scholarship Special Reserve Account;

(b) The trustees of the trust shall be as follows:

(i) The Governor, or his designee;

(ii) The State Treasurer;

(iii) The Secretary of State;

(iv) The State Fiscal Officer;

(v) Three (3) members appointed by the Governor who shall serve at the pleasure of the governor;

(c) The State Treasurer shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees;

(d) The trust may invest in any security or investment in which the Public Employees' Retirement System is permitted to invest; provided, that investments by the trust shall be governed by the investment policies and guidelines adopted by the trustees of the trust in accordance with the provisions of this act. The State Treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees;

(e) The initial deposit, from appropriated monies or any other sources, shall constitute the principal of the trust. Subsequent transfers to the trust and trust income shall not increase, or constitute an addition to, the principal of the trust, but shall be placed in the Mississippi Promise Scholarship Special Reserve Account;

(f) The Mississippi Promise Scholarship Special Reserve Account shall be a part of the trust, and the funds in the special reserve account may be commingled with, co-invested with, and invested or reinvested with the other assets of the trust;

(g) The principal of the trust shall not be expended for any purpose. Trust income shall be expended only to fund the Mississippi Promise Scholarship Program and pay expenses incurred in administering and investing the trust assets. Trust income means the income from the trust's investment portfolio from whatever source derived, including, but not limited to, interest, dividends, and realized capital gains or losses;

(h) Any trust income not allocated or distributed to the beneficiaries of the Mississippi Promise Scholarship Program shall be maintained in a Mississippi Promise Scholarship Special Reserve Account and may be subject to future allocations and distributions in accordance with this section;

(i) Any funds transferred for the Mississippi Promise Scholarship Program after the initial deposit, including matching funds or future appropriations made by the Legislature, shall be placed in the Mississippi Promise Scholarship Special Reserve Account of the trust. Unexpended funds remaining in the trust in any fiscal year, whether principal or funds in the Mississippi Promise Scholarship Special Reserve Account shall not lapse into the General Fund;

(j) The funds transferred to this trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred to the trust. All or a portion of the trust may be invested, reinvested and co-invested with other funds, not a part of the trust, which are held by the State Treasurer. The State Treasurer shall account for such trust funds in one or more separate accounts in accordance with this section and other law;

(k) Notwithstanding any other provision of law to the contrary, all funds placed in the Mississippi Promise Scholarship Special Reserve Account shall be available for allocation and distribution as authorized herein only to the extent that funds are available in the Mississippi Promise Scholarship Special Reserve Account, and the state shall not be liable for any amount in excess of such sum. All requests for withdrawals for the payment of program funding that are presented to the State Treasurer shall be used only to fund the Mississippi Promise Scholarship Program. Such requests for withdrawals shall not be commingled with requests for withdrawals presented to the State Treasurer for any other purpose, and the individual or entity requesting the withdrawal of funds shall attest to the same upon presentation of the request for withdrawal to the State Treasurer; and

(l) The provisions of the irrevocable trust are provided in this section, but the trust shall not include the provisions contained in other subsections of this act, which shall be subject to amendment by legislative enactment.

SECTION 5. The Postsecondary Education Financial Assistance Board (PEFAB) and the Board of Trustees of State Institutions of Higher Learning shall provide assistance to the Legislature by researching and analyzing data concerning the scholarship program created under this act, including, but not limited to, student success and scholarship retention. PEFAB shall report its findings annually to the Universities and Colleges Committees of the House of Representatives and Senate by March 15.

SECTION 6. The State Treasurer shall review and study the Mississippi Promise Scholarship Program to determine the effectiveness of the program. The study shall be done in the third year of the program and every four (4) years thereafter. The State Treasurer shall report the findings and conclusions of the study to the Speaker of the House of Representatives, the Lieutenant Governor and the members of the Universities and Colleges Committees of the House of Representatives and the Senate.

SECTION 7. The Postsecondary Education Financial Assistance Board (PEFAB) shall appoint a special advisory committee comprised of representatives from existing college access programs in the state. The committee shall take steps necessary to eliminate barriers to access to scholarships and hold mentoring organizations to the highest standard in serving the students receiving the scholarship. Members of the committee shall serve without compensation.

SECTION 8. The Postsecondary Education Financial Assistance Board (PEFAB) is authorized to promulgate rules to effectuate the purposes of this act, including the determination of student eligibility and for the distribution of funds appropriated for scholarships under the program. Such rules shall include adjustments to scholarship amounts and student eligibility in the event that net proceeds from the trust account established under this section are insufficient to fund fully the Mississippi Promise Scholarship Program.

SECTION 9. This act shall take effect and be in force from and after July 1, 2015.