(1) Subject to subsection (4), the department shall conduct a competitive examination among eligible applicants for state competitive scholarships at times and places as determined by the department. The department may designate a competitive examination to be administered among eligible applicants for state competitive scholarships. The department shall annually establish the examination scores necessary to qualify for the competitive scholarship according to the funding available to meet the award levels established under section 6.

    (2) The department may also use scholastic achievement in determining award winners and shall issue appropriate certificates of recognition to individuals awarded scholarships. The department shall grant annual renewal of scholarships.

    (3) The department shall promulgate rules to implement this act under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, including rules for the conduct of examinations for the award of scholarships, for the procedures for the awarding of annual renewal scholarships, and for the purpose of defining eligible postsecondary institutions under this act.

    (4) Notwithstanding any provision of this act or rule to the contrary, scholastic achievement, including, but not limited to, grade point average, class rank, or other measure of academic success as determined by the department, may be used as an alternative to a competitive examination to determine eligibility for scholarships awarded under this act for the 2021-2022 academic year.