By The Associated Press

Highlights from the prepared text of Gov. Jennifer Granholm’s State of the State address, delivered Tuesday night at the Capitol.

ECONOMY

­­— ­Sees Michigan as a future leader in alternative energy including wind power, ethanol and fuel from wood waste. Michigan can create jobs by expanding its businesses dealing with materials used in solar panels, wind turbines and alternative-fuel cars.

— Proposed setting aside money that could be tapped to offer low-interest loans of up to $4 million to lure new companies to the state. The Michigan Invests! Fund would be designed for young companies that want to grow in Michigan. At least $300 million would be set aside for the fund from state pension funds.

— Proposed an economic stimulus package of nearly $1 billion for infrastructure and building improvements, providing about 28,000 construction and other jobs over the next two years. The package would be paid for by refinancing debt to take advantage of lower interest rates.

— Proposed expanding the No Worker Left Behind program by spending $40 million in state dollars to offer free community college tuition to retrain laid-off workers.

— Called for the Senate to follow the House and pass bills allowing homeowners struggling to meet their mortgage payments to get fixed, low-rate loans through the Michigan State Housing Development Authority. The agency would sell tax-exempt bonds to finance the loans.

— Said she plans to appoint an advocate for insurance customers.

EDUCATION

— Called for creating up to 100 small high schools with no more than 400 students each. The expansion of an existing pilot project would be funded by $300 million raised by borrowing against future school aid revenue. The money would last three to five years. Granholm wants some of the schools opened by late 2009.

— Asked lawmakers to pass legislation requiring teenagers to stay in school until age 18 rather than 16 and making kindergarten mandatory. She also urged having all-day kindergarten.

— Proposed taking some of the money raised through property taxes to match private donations so school districts can copy Kalamazoo’s free college tuition plan. Granholm made a similar proposal last year.

— Said she will propose a budget for next fiscal year that increases investment in K-12 schools and expand early childhood education.

ENERGY AND ENVIRONMENT

—Wants more work on legislation to protect the Great Lakes from water diversion.

—Wants 10 percent of electrical energy to come from renewable sources by 2015. That would increase to 25 percent by 2025.

—Said utilities will make major investments in alternative energy, mostly wind energy, creating 17,000 jobs, once legislation is passed.

HEALTH CARE

—Said she will continue to push for federal help with a plan to expand coverage to the uninsured in Michigan, which so far hasn’t materialized. She said that help might not come until President Bush is out of office.

LAW ENFORCEMENT

—Proposed adding 100 new state police troopers, helping to replace some of the law enforcement personnel who have retired in recent years.

LEGAL REFORMS

—Called for eliminating the state’s unique 1995 law shielding pharmaceutical makers from product liability lawsuits over drugs such as Vioxx. The House has passed the bills; the Senate hasn’t.

PRISONS

—Urged savings in the state’s corrections system similar to those adopted in other Midwestern states. Last year, Granholm said the state could commute sentences or shorten prison terms for inmates who pose no safety threat to the public.