HF 1692

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 04/17/2013 09:36am

A bill for an act
relating to education; postsecondary; establishing a budget for higher education;
appropriating money to the Office of Higher Education, the Board of Trustees
of the Minnesota State Colleges and Universities, the Board of Regents of the
University of Minnesota, and the Mayo Clinic; prohibiting tuition increases;
regulating bonus payments; establishing the Minnesota Discovery, Research,
and InnoVation Economy funding program; providing statewide electronic
infrastructure; modifying provisions related to student grants, awards, and
aid, school registration, and licensure; requiring certain information to be
provided in higher education budget proposals; modifying procedures related
to terminating institutions from financial aid programs; establishing procedure
for cancellation of required surety bond; repealing Higher Education Advisory
Council; amending Minnesota Statutes 2012, sections 135A.031, subdivision 7;
136A.101, subdivision 9; 136A.125, subdivisions 2, 4; 136A.233, subdivision
2; 136A.646; 136A.65, subdivision 8; 136A.653, by adding a subdivision;
136F.40, subdivision 2; 137.027; 141.35; 299A.45, subdivision 4; proposing
coding for new law in Minnesota Statutes, chapters 136A; 137; repealing
Minnesota Statutes 2012, section 136A.031, subdivision 2; Minnesota Rules,
parts 4830.0120; 4830.0130; 4830.0140; 4830.0150; 4830.0160; 4830.0170;
4830.0180; 4830.0190; 4830.0195.

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

ARTICLE 1

HIGHER EDUCATION APPROPRIATIONS

Section 1. new text begin SUMMARY OF APPROPRIATIONS. new text end

new text begin Subdivision 1. new text end

new text begin Summary By Fund. new text end

new text begin The amounts shown in this subdivision
summarize direct appropriations, by fund, made in this article.
new text end

new text begin SUMMARY BY FUND new text end
		new text begin 2014 new text end		new text begin 2015 new text end		new text begin Total new text end
new text begin General new text end	new text begin $ new text end	new text begin 1,336,854,000 new text end	new text begin $ new text end	new text begin 1,378,282,000 new text end	new text begin $ new text end	new text begin 2,715,136,000 new text end
new text begin Health Care Access new text end		new text begin 2,157,000 new text end		new text begin 2,157,000 new text end		new text begin 4,314,000 new text end
new text begin Total new text end	new text begin $ new text end	new text begin 1,339,011,000 new text end	new text begin $ new text end	new text begin 1,380,439,000 new text end	new text begin $ new text end	new text begin 2,719,450,000 new text end

new text begin Subd. 2. new text end

new text begin Summary By Agency - All Funds. new text end

new text begin The amounts shown in this subdivision
summarize direct appropriations, by agency, made in this article.
new text end

new text begin SUMMARY BY AGENCY - ALL FUNDS new text end
		new text begin 2014 new text end		new text begin 2015 new text end		new text begin Total new text end
new text begin Minnesota Office of Higher Education new text end	new text begin $ new text end	new text begin 195,969,000 new text end	new text begin $ new text end	new text begin 196,197,000 new text end	new text begin $ new text end	new text begin 392,166,000 new text end
new text begin Board of Trustees of the Minnesota State Colleges and Universities new text end		new text begin 570,865,000 new text end		new text begin 597,865,000 new text end		new text begin 1,168,730,000 new text end
new text begin Board of Regents of the University of Minnesota new text end		new text begin 570,826,000 new text end		new text begin 585,026,000 new text end		new text begin 1,155,852,000 new text end
new text begin Mayo Clinic new text end		new text begin 1,351,000 new text end		new text begin 1,351,000 new text end		new text begin 2,702,000 new text end
new text begin Total new text end	new text begin $ new text end	new text begin 1,339,011,000 new text end	new text begin $ new text end	new text begin 1,380,439,000 new text end	new text begin $ new text end	new text begin 2,719,450,000 new text end

Sec. 2. new text begin HIGHER EDUCATION APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the
agencies and for the purposes specified in this article. The appropriations are from the
general fund, or another named fund, and are available for the fiscal years indicated
for each purpose. The figures "2014" and "2015" used in this article mean that the
appropriations listed under them are available for the fiscal year ending June 30, 2014, or
June 30, 2015, respectively. "The first year" is fiscal year 2014. "The second year" is fiscal
year 2015. "The biennium" is fiscal years 2014 and 2015.
new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2014 new text end		new text begin 2015 new text end

Sec. 3. new text begin MINNESOTA OFFICE OF HIGHER EDUCATION new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 195,969,000 new text end

new text begin $ new text end

new text begin 196,197,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin State Grants new text end

new text begin 160,005,000 new text end

new text begin 160,214,000 new text end

new text begin If the appropriation in this subdivision for
either year is insufficient, the appropriation
for the other year is available for it.
new text end

new text begin For the biennium, the tuition maximum is
$10,488 in each year for students in four-year
programs, and $5,808 in fiscal year 2014
and $5,808 in fiscal year 2015 for students
in two-year programs.
new text end

new text begin This appropriation sets the living and
miscellaneous expense allowance at $7,000
each year.
new text end

new text begin Notwithstanding section 136A.101,
subdivision 5a, for the biennium ending June
30, 2015, the assigned family responsibility
for independent students without dependents
other than a spouse is 53 percent of the
student contribution, and the assigned family
responsibility for independent students with
dependents other than a spouse is 80 percent
of the student contribution.
new text end

new text begin Subd. 3. new text end new text begin Child Care Grants new text end

new text begin 6,684,000 new text end

new text begin 6,684,000 new text end

new text begin Subd. 4. new text end new text begin State Work-Study new text end

new text begin 14,502,000 new text end

new text begin 14,502,000 new text end

new text begin Subd. 5. new text end new text begin Interstate Tuition Reciprocity new text end

new text begin 3,250,000 new text end

new text begin 3,250,000 new text end

new text begin If the appropriation in this subdivision for
either year is insufficient, the appropriation
for the other year is available to meet
reciprocity contract obligations.
new text end

new text begin Subd. 6. new text end new text begin Safety Officer's Survivors new text end

new text begin 100,000 new text end

new text begin 100,000 new text end

new text begin This appropriation is to provide educational
benefits under Minnesota Statutes, section
299A.45, to eligible dependent children and
to the spouses of public safety officers killed
in the line of duty.
new text end

new text begin If the appropriation in this subdivision for
either year is insufficient, the appropriation
for the other year is available for it.
new text end

new text begin Subd. 7. new text end new text begin Indian Scholarships new text end

new text begin 1,850,000 new text end

new text begin 1,850,000 new text end

new text begin The director must contract with or employ
at least one person with demonstrated
competence in American Indian culture and
residing in or near the city of Bemidji to
assist students with the scholarships under
Minnesota Statutes, section 136A.126, and
with other information about financial aid for
which the students may be eligible. Bemidji
State University must provide office space
at no cost to the Minnesota Office of Higher
Education for purposes of administering the
American Indian scholarship program under
Minnesota Statutes, section 136A.126. This
appropriation includes funding to administer
the American Indian scholarship program.
new text end

new text begin Subd. 8. new text end new text begin Intervention for College Attendance Program Grants new text end

new text begin 671,000 new text end

new text begin 671,000 new text end

new text begin For the intervention for college attendance
program under Minnesota Statutes, section
136A.861.
new text end

new text begin This appropriation includes funding to
administer the intervention for college
attendance program grants.
new text end

new text begin Subd. 9. new text end new text begin Student-Parent Information new text end

new text begin 122,000 new text end

new text begin 122,000 new text end

new text begin Subd. 10. new text end new text begin Get Ready new text end

new text begin 180,000 new text end

new text begin 180,000 new text end

new text begin Subd. 11. new text end new text begin Midwest Higher Education Compact new text end

new text begin 95,000 new text end

new text begin 95,000 new text end

new text begin Subd. 12. new text end new text begin Minnesota Minority Partnership new text end

new text begin 45,000 new text end

new text begin 45,000 new text end

new text begin Subd. 13. new text end new text begin United Family Medicine Residency Program new text end

new text begin 351,000 new text end

new text begin 351,000 new text end

new text begin Subd. 14. new text end new text begin MnLINK Gateway and Minitex new text end

new text begin 5,605,000 new text end

new text begin 5,605,000 new text end

new text begin Subd. 15. new text end new text begin Agency Administration new text end

new text begin 2,491,000 new text end

new text begin 2,491,000 new text end

new text begin Subd. 16. new text end new text begin Balances Forward new text end

new text begin A balance in the first year under this section
does not cancel, but is available for the
second year.
new text end

Sec. 4. new text begin BOARD OF TRUSTEES OF THE MINNESOTA STATE COLLEGES AND UNIVERSITIES new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 570,865,000 new text end

new text begin $ new text end

new text begin 597,865,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Central Office and Shared Services Unit new text end

new text begin 33,074,000 new text end

new text begin 33,074,000 new text end

new text begin For the Office of the Chancellor and the
Shared Services Division.
new text end

new text begin Subd. 3. new text end new text begin Operations and Maintenance new text end

new text begin 533,676,000 new text end

new text begin 560,676,000 new text end

new text begin This appropriation includes $25,500,000 in
fiscal year 2014 and $52,500,000 in fiscal
year 2015 for student tuition relief. The
Board of Trustees may not set the tuition
rate in any undergraduate degree-granting
program for the 2013-2014 and 2014-2015
academic years at a rate greater than the
2012-2013 academic year rate. The student
tuition relief may not be offset by increases
in mandatory fees, charges, or other
assessments to the student.
new text end

new text begin To the extent that appropriations under
this subdivision are insufficient to meet
obligations contained in a labor or program
contract, the Board of Trustees shall fund
those obligations through reductions in costs
associated with central administration of
the system and executive administration of
individual campuses, or through reallocation
of nonstate funds received by the system.
These outstanding obligations may not be
funded through reduction in any program or
service that directly impacts students or that
is newly-authorized by the legislature for the
2014-2015 biennium, or through increased
fees or costs directly assessed to students.
new text end

new text begin Subd. 4. new text end new text begin Learning Network of Minnesota new text end

new text begin 4,115,000 new text end

new text begin 4,115,000 new text end

Sec. 5. new text begin BOARD OF REGENTS OF THE UNIVERSITY OF MINNESOTA new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 570,826,000 new text end

new text begin $ new text end

new text begin 585,026,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2014 new text end	new text begin 2015 new text end
new text begin General new text end	new text begin 568,669,000 new text end	new text begin 582,869,000 new text end
new text begin Health Care Access new text end	new text begin 2,157,000 new text end	new text begin 2,157,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Operations and Maintenance new text end

new text begin 507,081,000 new text end

new text begin 521,281,000 new text end

new text begin This appropriation includes funding for
operation and maintenance of the system.
new text end

new text begin This appropriation includes $14,200,000 in
fiscal year 2014 and $28,400,000 in fiscal
year 2015 for tuition relief for resident
undergraduate students. Notwithstanding
section 137.025, subdivision 1, the
commissioner of management and budget
may not distribute any appropriation provided
under this subdivision until the Board of
Regents certifies to the commissioner that
it has established resident tuition rates for
courses in all undergraduate degree-granting
programs at a rate no greater than the rate
charged for the 2012-2013 academic year,
and that the student tuition relief is not offset
by increases in mandatory fees, charges, or
other assessments to the student.
new text end

new text begin The Board of Regents of the University
of Minnesota must transfer $645,000 in
fiscal year 2014 and $645,000 in fiscal year
2015 from the appropriations made to it for
operations and maintenance to the Hennepin
County Medical Center for graduate family
medicine education programs at Hennepin
County Medical Center.
new text end

new text begin $9,000,000 in fiscal year 2014 and $9,000,000
in fiscal year 2015 are for the Minnesota
Discovery, Research, and InnoVation
Economy (MnDRIVE) funding program.
new text end

new text begin Subd. 3. new text end new text begin Primary Care Education Initiatives new text end

new text begin 2,157,000 new text end

new text begin 2,157,000 new text end

new text begin This appropriation is from the health care
access fund.
new text end

new text begin Subd. 4. new text end new text begin Special Appropriations new text end

new text begin (a) Agriculture and Extension Service new text end

new text begin 42,922,000 new text end

new text begin 42,922,000 new text end

new text begin For the Agricultural Experiment Station and
the Minnesota Extension Service:
new text end

new text begin (1) the agricultural experiment stations
and Minnesota Extension Service must
convene agricultural advisory groups to
focus research, education, and extension
activities on producer needs and implement
an outreach strategy that more effectively
and rapidly transfers research results and best
practices to producers throughout the state;
new text end

new text begin (2) this appropriation includes funding for
research and outreach on the production of
renewable energy from Minnesota biomass
resources, including agronomic crops, plant
and animal wastes, and native plants or trees.
The following areas should be prioritized and
carried out in consultation with Minnesota
producers, renewable energy, and bioenergy
organizations:
new text end

new text begin (i) biofuel and other energy production from
perennial crops, small grains, row crops,
and forestry products in conjunction with
the Natural Resources Research Institute
(NRRI);
new text end

new text begin (ii) alternative bioenergy crops and cropping
systems; and
new text end

new text begin (iii) biofuel coproducts used for livestock
feed;
new text end

new text begin (3) this appropriation includes funding
for the College of Food, Agricultural, and
Natural Resources Sciences to establish and
provide leadership for organic agronomic,
horticultural, livestock, and food systems
research, education, and outreach and for
the purchase of state-of-the-art laboratory,
planting, tilling, harvesting, and processing
equipment necessary for this project;
new text end

new text begin (4) this appropriation includes funding
for research efforts that demonstrate a
renewed emphasis on the needs of the state's
agriculture community. The following
areas should be prioritized and carried
out in consultation with Minnesota farm
organizations:
new text end

new text begin (i) vegetable crop research with priority for
extending the Minnesota vegetable growing
season;
new text end

new text begin (ii) fertilizer and soil fertility research and
development;
new text end

new text begin (iii) soil, groundwater, and surface water
conservation practices and contaminant
reduction research;
new text end

new text begin (iv) discovering and developing plant
varieties that use nutrients more efficiently;
new text end

new text begin (v) breeding and development of turf seed
and other biomass resources in all three
Minnesota biomes;
new text end

new text begin (vi) development of new disease-resistant
and pest-resistant varieties of turf and
agronomic crops;
new text end

new text begin (vii) utilizing plant and livestock cells to treat
and cure human diseases;
new text end

new text begin (viii) the development of dairy coproducts;
new text end

new text begin (ix) a rapid agricultural response fund for
current or emerging animal, plant, and insect
problems affecting production or food safety;
new text end

new text begin (x) crop pest and animal disease research;
new text end

new text begin (xi) developing animal agriculture that is
capable of sustainably feeding the world;
new text end

new text begin (xii) consumer food safety education and
outreach;
new text end

new text begin (xiii) programs to meet the research and
outreach needs of organic livestock and crop
farmers; and
new text end

new text begin (xiv) alternative bioenergy crops and
cropping systems; and growing, harvesting,
and transporting biomass plant material; and
new text end

new text begin (5) by February 1, 2015, the Board of
Regents must submit a report to the
legislative committees with responsibility
for agriculture and higher education finance
on the status and outcomes of research and
initiatives funded in this section.
new text end

new text begin (b) Health Sciences new text end

new text begin 4,854,000 new text end

new text begin 4,854,000 new text end

new text begin $346,000 each year is to support up to 12
resident physicians in the St. Cloud Hospital
family practice residency program. The
program must prepare doctors to practice
primary care medicine in rural areas of the
state. The legislature intends this program
to improve health care in rural communities,
provide affordable access to appropriate
medical care, and manage the treatment of
patients in a more cost-effective manner.
The remainder of this appropriation is for
the rural physicians associates program, the
Veterinary Diagnostic Laboratory, health
sciences research, dental care, and the
Biomedical Engineering Center.
new text end

new text begin (c) new text begin Institute of Technology new text end new text end

new text begin 1,140,000 new text end

new text begin 1,140,000 new text end

new text begin For the Geological Survey and the talented
youth mathematics program.
new text end

new text begin (d) System Special new text end

new text begin 5,181,000 new text end

new text begin 5,181,000 new text end

new text begin For general research, the Labor Education
Service, Natural Resources Research
Institute, Center for Urban and Regional
Affairs, Bell Museum of Natural History, and
the Humphrey exhibit.
new text end

new text begin Of this amount, $125,000 in fiscal year 2014
and $125,000 in fiscal year 2015 are added
to the base for the Labor Education Service.
new text end

new text begin (e) University of Minnesota and Mayo Foundation Partnership new text end

new text begin 7,491,000 new text end

new text begin 7,491,000 new text end

new text begin Subd. 5. new text end new text begin Academic Health Center new text end

new text begin The appropriation for Academic Health
Center funding under Minnesota Statutes,
section 297F.10, is estimated to be
$22,250,000 each year.
new text end

Sec. 6. new text begin MAYO CLINIC new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 1,351,000 new text end

new text begin $ new text end

new text begin 1,351,000 new text end

new text begin The amounts that may be spent for the
purposes are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Medical School new text end

new text begin 665,000 new text end

new text begin 665,000 new text end

new text begin Subd. 3. new text end new text begin Family Practice and Graduate Residency Program new text end

new text begin 686,000 new text end

new text begin 686,000 new text end

ARTICLE 2

HIGHER EDUCATION POLICY

Section 1.

Minnesota Statutes 2012, section 135A.031, subdivision 7, is amended to
read:

Subd. 7.

Reports.

(a) deleted text begin Instructional and noninstructional expenditure data and
enrollment data must be submitted in the biennial budget document under section
135A.034. This report must include a description of the methodology for determining
instructional and noninstructional expenditures and estimates of inflation in higher
education and the methodology or index used to determine the inflation rate. deleted text end new text begin The
University of Minnesota and the Minnesota State Colleges and Universities systems shall
include in their biennial budget proposals to the legislature:
new text end

new text begin (1) a five-year history of systemwide expenditures, reported by:
new text end

new text begin (i) functional areas, including instruction, research, public service, student financial
aid, and auxiliary services, and including direct costs and indirect costs, such as
institutional support, academic support, student services, and facilities management,
associated with each functional area; and
new text end

new text begin (ii) objects of expenditure, such as salaries, benefits, supplies, and equipment;
new text end

new text begin (2) a five-year history of the system's total instructional expenditures per full-year
equivalent student, by level of instruction, including upper-division undergraduate,
lower-division undergraduate, graduate, professional, and other categories of instructional
programs offered by the system;
new text end

new text begin (3) a five-year history of the system's total revenues by funding source, including
tuition, state operations and maintenance appropriations, state special appropriations, other
restricted state funds, federal appropriations, sponsored research funds, gifts, auxiliary
revenue, indirect cost recovery, and any other revenue sources;
new text end

deleted text begin (b) By February 1 of each even-numbered year, the Board of Regents of the University
of Minnesota and the Board of Trustees of the Minnesota State Colleges and Universities
must submit a report to the chairs of the legislative committees with jurisdiction over
higher education policy and finance. The report must describe the following:
deleted text end

deleted text begin (1) deleted text end new text begin (4) an explanation describing new text end how state appropriations made to the system in
the previous deleted text begin odd-numbered year deleted text end new text begin biennium new text end were allocated and the methodology used to
determine the allocation;

deleted text begin (2) deleted text end new text begin (5) new text end data describing how the institution reallocated resources to advance the
priorities set forth in the budget submitted under section 135A.034 and the statewide
objectives under section 135A.011. The information must indicate whether instruction
and support programs received a reduction in or additional resources. The total amount
reallocated must be clearly explained;

deleted text begin (3) deleted text end new text begin (6) new text end the tuition rates and fees established by the governing board in each of the
past ten years and comparison data for peer institutions and national averages;

deleted text begin (4) deleted text end new text begin (7) new text end data on the number and proportion of students graduating within four, five,
and six years from universities and within three years from colleges as reported in the
integrated postsecondary education data system. These data must be provided for each
institution by race, ethnicity, and gender. Data and information must be submitted that
describe the system's plan and progress toward attaining the goals set forth in the plan
to increase the number and proportion of students that graduate within four, five, or six
years from a university or within three years from a college;

deleted text begin (5) deleted text end new text begin (8) new text end data on, and the methodology used to measure, the number of students
traditionally underrepresented in higher education enrolled at the system's institutions.
Data and information must be submitted that describe the system's plan and progress
toward attaining the goals set forth in the plan to increase the recruitment, retention, and
timely graduation of students traditionally underrepresented in higher education; and

deleted text begin (6) deleted text end new text begin (9) new text end data on the revenue received from all sources to support research or
workforce development activities or the system's efforts to license, sell, or otherwise
market products, ideas, technology, and related inventions created in whole or in part by
the system. Data and information must be submitted that describe the system's plan and
progress toward attaining the goals set forth in the plan to increase the revenue received
to support research or workforce development activities or revenue received from the
licensing, sale, or other marketing and technology transfer activities by the system.

deleted text begin (c) Instructional expenditure and enrollment data deleted text end new text begin (b) Data required by this
subdivision new text end shall be submitted by the public postsecondary systems to the Minnesota
Office of Higher Education and the Department of Management and Budget and included
in the biennial budget document. deleted text begin The specific data shall be submitted only after the
director of the Minnesota Office of Higher Education has consulted with a data advisory
task force to determine the need, content, and detail of the information. deleted text end new text begin Representatives
from each system, in consultation with the commissioner of management and budget
and the director of the Office of Higher Education, shall develop consistent reporting
practices for this purpose.
new text end

new text begin (c) To the extent practicable, each system shall develop the ability to respond to
legislative requests for financial analyses that are more detailed than those required by this
subdivision, including but not limited to analyses that show expenditures or revenues by
institution or program, or in multiple categories of expenditures or revenues, and analyses
that show revenue sources for particular types of expenditures.
new text end

Sec. 2.

Minnesota Statutes 2012, section 136A.101, subdivision 9, is amended to read:

Subd. 9.

Independent student.

"Independent student" has the meaning given deleted text begin it in
deleted text end new text begin under Title IV of new text end the Higher Education Act of 1965, deleted text begin United States Code, title 20, section
1070a-6 deleted text end new text begin as amended new text end , and applicable regulations.

Sec. 3.

new text begin [136A.104] INSTITUTION TERMINATION.
new text end

new text begin (a) The office shall have the authority to terminate a postsecondary institution's
eligibility to participate in state student aid programs if the institution meets one of the
following criteria:
new text end

new text begin (1) violates a provision of Minnesota Statutes, Minnesota Rules, or administrative
policies governing student aid programs and fails to correct the violation and reimburse
the office for audit findings within the time frame specified in the audit report or other
notice furnished by the office;
new text end

new text begin (2) has a consistent pattern of noncompliance with Minnesota Statutes, Minnesota
Rules, or administrative policies governing student aid programs as documented by the
office or lacks administrative capability to successfully administer student financial aid
programs on campus based on factors including, but not limited to:
new text end

new text begin (i) adequacy of financial aid staffing levels, experience, training, and turnover of key
financial aid staff;
new text end

new text begin (ii) adequate checks and balances in its system of internal controls;
new text end

new text begin (iii) maintenance of records required for programs; or
new text end

new text begin (iv) the ability to participate in the electronic processes used for program
administration;
new text end

new text begin (3) refuses to allow inspection of or provide information relating to financial aid
records, after written request by the office;
new text end

new text begin (4) misappropriates student aid program funds;
new text end

new text begin (5) falsifies information or engages in misleading or deceptive practices involving
the administration of student financial aid programs;
new text end

new text begin (6) no longer meets institutional eligibility criteria in section 136A.103 or 136A.155,
or additional criteria for state grant participation in Minnesota Rules, part 4830.0300,
subparts 1 and 2; or
new text end

new text begin (7) is terminated from participating in federal financial aid programs by the United
States Department of Education, if such termination was based on violation of laws,
regulations, or participation agreements governing federal financial aid programs.
new text end

Sec. 4.

new text begin [136A.1041] TERMINATION PROCEDURE.
new text end

new text begin The office shall provide written notice of its intent to terminate an institution's
eligibility to participate in student financial aid programs if the institution meets any of
the criteria for termination in section 136A.104. The office shall send the institution
written notification of the termination which is effective 90 days from the date of the
written notification. The office shall also provide an institution an opportunity for a
hearing pursuant to chapter 14.
new text end

Sec. 5.

new text begin [136A.1042] REQUEST FOR HEARING.
new text end

new text begin An institution may request a hearing pursuant to chapter 14 regarding its termination
of eligibility to participate in a student aid program. The request must be in writing and
must be received by the director within 30 days of the date on the written notification of
termination sent by the office. Within ten days of receipt of the request for hearing, the
office shall contact the Office of Administrative Hearings to arrange a hearing date.
new text end

Sec. 6.

new text begin [136A.1043] RESTRICTION ON AWARDS DURING TERMINATION
PERIOD.
new text end

new text begin After the notice of termination and until such time as the termination becomes
effective, the office reserves the right to withhold further financial aid disbursements to the
institution. During this period, the institution may not make any new awards to students
but may use any remaining student aid program funds on campus to make disbursements
to any students awarded funds prior to the notice of termination.
new text end

Sec. 7.

new text begin [136A.1044] FINAL DECISION; ORDERS.
new text end

new text begin The director shall render a decision and order in writing following receipt of the
report issued by the administrative law judge after the hearing. The final decision of the
director shall take into consideration the hearing record and the report of the administrative
law judge. The order of the director is the final decision in the termination of the
institution's eligibility to participate in a student aid program administered by the office.
new text end

Sec. 8.

new text begin [136A.1045] REINSTATEMENT OF ELIGIBILITY.
new text end

new text begin An institution terminated from participating in student financial aid programs
may submit a request for reinstatement of eligibility. The institution must wait at least
12 consecutive months from the effective date of the termination to submit a request
for reinstatement. A request for reinstatement must be in writing and submitted to the
director. If the institution is initially denied reinstatement, the institution must wait at
least 90 days from the date of denial of reinstatement to resubmit a subsequent request
for reinstatement. If an institution's eligibility is reinstated after the start of the academic
term, eligible students shall receive payment retroactively to the beginning of the term
during which the institution was reinstated.
new text end

Sec. 9.

new text begin [136A.1046] REINSTATEMENT REQUIREMENTS.
new text end

new text begin An institution's reinstatement request must include:
new text end

new text begin (1) written documentation specifying changes the institution has made to
successfully address the reasons for termination, as outlined in the termination notice;
new text end

new text begin (2) permission for the office's staff to conduct a reinstatement audit and to evaluate
systems put in place to address the reasons for termination;
new text end

new text begin (3) evidence of full repayment to the office of student aid program funds the
institution improperly received, withheld, disbursed, or caused to be disbursed;
new text end

new text begin (4) new participation agreements with the office for all student aid programs in
which the institution wishes to participate; and
new text end

new text begin (5) if applicable, documentation of the institution's eligibility to participate in
federal financial aid programs.
new text end

Sec. 10.

new text begin [136A.1047] RESPONSE TO REINSTATEMENT REQUEST.
new text end

new text begin Within 60 days of receiving the institution's reinstatement request, the office shall
conduct a reinstatement audit and either:
new text end

new text begin (1) place the institution on probationary status for a period of one year; or
new text end

new text begin (2) deny the request based on the institution meeting one or more of the termination
criteria in section 136A.104.
new text end

Sec. 11.

new text begin [136A.1048] PROBATIONARY PERIOD.
new text end

new text begin During the probationary period, the office may audit the institution's records without
notice. If, while on probation, the institution violates a condition under section 136A.104,
as documented by the office's audit staff, the office must remove the institution from
probationary status and deny the request for reinstatement. If the institution fails to
successfully complete the probationary period, termination is final and effective within 30
days of written notice of the denial of the reinstatement request.
new text end

Sec. 12.

new text begin [136A.1049] REINSTATEMENT.
new text end

new text begin If an institution no longer violates a condition under section 136A.104 and
successfully completes the probationary period, the office must reinstate the institution's
eligibility to participate in student financial aid programs effective the last date of the
probationary period.
new text end

Sec. 13.

new text begin [136A.105] STUDENT AWARDS AFTER TERMINATION.
new text end

new text begin If an institution is terminated from participating in student financial aid programs
during a payment period, and a student at the institution was eligible for an award other
than a Student Educational Loan Fund loan before the effective date of the institution's
termination, the office must issue a payment for that payment period, as long as the student
will not receive a payment for the same payment period from another institution and the
student continues to meet the program's eligibility requirements.
new text end

Sec. 14.

Minnesota Statutes 2012, section 136A.125, subdivision 2, is amended to read:

Subd. 2.

Eligible students.

(a) An applicant is eligible for a child care grant if
the applicant:

(1) is a resident of the state of Minnesota;

(2) has a child 12 years of age or younger, or 14 years of age or younger who is
disabled as defined in section 125A.02, and who is receiving or will receive care on a
regular basis from a licensed or legal, nonlicensed caregiver;

(3) is income eligible as determined by the office's policies and rules, but is not a
recipient of assistance from the Minnesota family investment program;

(4) has not earned a baccalaureate degree and has been enrolled full time less than
eight semesters or the equivalent;

(5) is pursuing a nonsectarian program or course of study that applies to an
undergraduate degree, diploma, or certificate;

(6) is enrolled at least half time in an eligible institution; and

(7) is in good academic standing and making satisfactory academic progress.

(b) A student who withdraws from enrollment for active military service new text begin or for a
major illness, while under the care of a medical professional, that substantially limits the
student's ability to complete the term new text end is entitled to an additional semester or the equivalent
of grant eligibility and will be considered to be in continuing enrollment status upon return.

Sec. 15.

Minnesota Statutes 2012, section 136A.125, subdivision 4, is amended to read:

Subd. 4.

Amount and length of grants.

(a) The amount of a child care grant
must be based on:

(1) the income of the applicant and the applicant's spouse;

(2) the number in the applicant's family, as defined by the office; and

(3) the number of eligible children in the applicant's family.

(b) The maximum award to the applicant shall be deleted text begin $2,600 deleted text end new text begin $2,800 new text end for each eligible
child per academic year, except that the campus financial aid officer may apply to the
office for approval to increase grants by up to ten percent to compensate for higher market
charges for infant care in a community. The office shall develop policies to determine
community market costs and review institutional requests for compensatory grant
increases to ensure need and equal treatment. The office shall prepare a chart to show the
amount of a grant that will be awarded per child based on the factors in this subdivision.
The chart shall include a range of income and family size.

Sec. 16.

Minnesota Statutes 2012, section 136A.233, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of sections 136A.231 to 136A.233, the words
defined in this subdivision have the meanings ascribed to them.

(a) "Eligible student" means a Minnesota resident enrolled or intending to enroll at
least half time in a degree, diploma, or certificate program in a Minnesota postsecondary
institution.

(b) "Minnesota resident" means a student who meets the conditions in section
136A.101, subdivision 8.

(c) "Financial need" means the need for financial assistance in order to attend a
postsecondary institution as determined by a postsecondary institution according to
guidelines established by the Minnesota Office of Higher Education.

(d) "Eligible employer" means any eligible postsecondary institution, any nonprofit,
nonsectarian agency or state institution located in the state of Minnesota, a disabled person
or a person over 65 who employs a student to provide personal services in or about the
person's residence, or a private, for-profit employer employing a student as an intern in a
position directly related to the student's field of study that will enhance the student's
knowledge and skills in that field.

(e) "Eligible postsecondary institution" means any postsecondary institution eligible
for participation in the Minnesota state grant program as specified in section 136A.101,
subdivision 4.

(f) "Independent student" has the meaning given deleted text begin it in deleted text end new text begin under Title IV of new text end the Higher
Education Act of 1965, deleted text begin United States Code, title 20, section 1070a-6 deleted text end new text begin as amended new text end , and
applicable regulations.

(g) "Half time" for undergraduates has the meaning given in section 136A.101,
subdivision 7b, and for graduate students is defined by the institution.

Sec. 17.

Minnesota Statutes 2012, section 136A.646, is amended to read:

136A.646 ADDITIONAL SECURITY.

(a) In the event any registered institution is notified by the United States Department
of Education that it has fallen below minimum financial standards and that its continued
participation in Title IV will be conditioned upon its satisfying either the Zone Alternative,
Code of Federal Regulations, title 34, section 668.175, paragraph (f), or a Letter of Credit
Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (c), the
institution shall provide a surety bond conditioned upon the faithful performance of all
contracts and agreements with students in a sum equal to the "letter of credit" required by
the United States Department of Education in the Letter of Credit Alternative, but in no
event shall such bond be less than $10,000 nor more than $250,000.

(b) In lieu of a bond, the applicant may deposit with the commissioner of
management and budget:

(1) a sum equal to the amount of the required surety bond in cash; or

(2) securities, as may be legally purchased by savings banks or for trust funds, in an
aggregate market value equal to the amount of the required surety bond.

new text begin (c) The surety of any bond may cancel it upon giving 60 days' notice in writing to
the office and shall be relieved of liability for any breach of condition occurring after
the effective date of cancellation.
new text end

Sec. 18.

Minnesota Statutes 2012, section 136A.65, subdivision 8, is amended to read:

Subd. 8.

Disapproval of registration appeal.

deleted text begin (a) If a school's degree or use of a
term in its name is disapproved by the office, the school may request a hearing under
chapter 14. The request must be in writing and made to the office within 30 days of the
date the school is notified of the disapproval.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end The office may refuse to renew, revoke, or suspend registration, approval of
a school's degree, or use of a regulated term in its name by giving written notice and
reasons to the school. deleted text begin The school may request a hearing under chapter 14. If a hearing is
requested, no revocation or suspension shall take effect until after the hearing.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end Reasons for revocation or suspension of registration or approval may be
for one or more of the following reasons:

(1) violating the provisions of sections 136A.61 to 136A.71;

(2) providing false, misleading, or incomplete information to the office;

(3) presenting information about the school which is false, fraudulent, misleading,
deceptive, or inaccurate in a material respect to students or prospective students; or

(4) refusing to allow reasonable inspection or to supply reasonable information after
a written request by the office has been received.

new text begin (c) Any order refusing, revoking, or suspending a school's registration, approval of a
school's degree, or use of a regulated term in the school's name is appealable in accordance
with chapter 14. The request must be in writing and made to the office within 30 days of the
date the school is notified of the action of the office. If a school has been operating and its
registration has been revoked, suspended, or refused by the office, the order is not effective
until the final determination of the appeal, unless immediate effect is ordered by the court.
new text end

Sec. 19.

Minnesota Statutes 2012, section 136A.653, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Free educational courses. new text end

new text begin A school providing exclusively free training or
instructional programs or courses where no tuition, fees, or any other charges are required
for a student to participate is exempt from the provisions of sections 136A.61 to 136A.71.
new text end

Sec. 20.

new text begin [136A.89] STATEWIDE ELECTRONIC INFRASTRUCTURE;
PORTFOLIO SOLUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Collaborative infrastructure. new text end

new text begin (a) The Department of Employment
and Economic Development, the Department of Education, the Office of Higher
Education, the University of Minnesota, and the Minnesota State Colleges and Universities
shall collaborate to implement an electronic infrastructure, maintained under the direction
and control of the Office of Higher Education, to support academic and workforce success
statewide. The infrastructure shall first utilize existing assets, tools, and services, including
but not limited to efolioMinnesota and GPS LifePlan. To facilitate implementation of this
section, the Minnesota State Colleges and Universities shall transfer hosting, support, help
desk responsibilities, software maintenance, and its intellectual property rights associated
with efolioMinnesota and GPS LifePlan to the Office of Higher Education.
new text end

new text begin (b) To the extent possible, the basic electronic infrastructure shall be available at no
charge to all state residents and to all students attending Minnesota educational institutions.
new text end

new text begin Subd. 2. new text end

new text begin Goals; programs. new text end

new text begin The office may enhance the efolioMinnesota platform
to allow, at a minimum, implementation of:
new text end

new text begin (1) a portfolio-based individual learning plan solution that includes comprehensive
academic and life planning instruments, to support student transitions to postsecondary
school or to work; and
new text end

new text begin (2) a student-owned proficiency portfolio solution to support student transitions to
the workplace and employers seeking first-day-work-ready employees.
new text end

new text begin Subd. 3. new text end

new text begin Resources; accountability reports. new text end

new text begin (a) The office may seek and accept
contributions from individuals, businesses, and other organizations to support the goals
required by this section. The parties listed in subdivision 1 are not required to contribute.
All contributions received are appropriated to the office and shall be administered as
directed by the office.
new text end

new text begin (b) The director of the Office of Higher Education shall submit, no later than January
15 of each year, a report to the governor and legislature on the progress of the office's
activities related to implementation of this section.
new text end

Sec. 21.

Minnesota Statutes 2012, section 136F.40, subdivision 2, is amended to read:

Subd. 2.

Contracts.

(a) The board may enter into a contract with the chancellor,
a vice-chancellor, or a president, containing terms and conditions of employment. The
terms of the contract must be authorized under a plan approved under section 43A.18,
subdivision 3a.

(b) Notwithstanding section 43A.17, subdivision 11, or other law to the contrary, a
contract under this section may provide a liquidated salary amount or other compensation
if a contract is terminated by the board prior to its expiration.

(c) Notwithstanding section 356.24 or other law to the contrary, a contract under
this section may contain a deferred compensation plan made in conformance with section
457(f) of the Internal Revenue Code.

new text begin (d) Notwithstanding any provision of the plan approved under section 43A.18,
subdivision 3a, a contract under this section must not authorize or otherwise provide for a
discretionary or mandatory bonus or other performance-based incentive payment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to contracts entered into on or after that date.
new text end

Sec. 22.

Minnesota Statutes 2012, section 137.027, is amended to read:

137.027 APPROPRIATION; FRINGE BENEFITS.

new text begin (a) new text end Direct appropriations to the University of Minnesota include money to pay
the employer's share of Social Security, state retirement, and health insurance. Money
provided for these purposes shall be expended only for these purposes and any amounts in
excess of the employer's share shall be returned to the state treasury.

new text begin (b) Unless otherwise explicitly provided for in law, direct appropriations to the
University of Minnesota do not include, and may not be used to pay, any mandatory or
discretionary bonus or other performance-based incentive payment provided for in an
employment contract with the president or vice-presidents, chancellors, provosts, vice
provosts, deans, or directors of individual programs.
new text end

Sec. 23.

new text begin [137.71] MINNESOTA DISCOVERY, RESEARCH, AND INNOVATION
ECONOMY FUNDING PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin (a) The Minnesota Discovery, Research, and
InnoVation Economy (MnDRIVE) funding program is established to discover new
knowledge through scientific research that will:
new text end

new text begin (1) advance the state's economy;
new text end

new text begin (2) leverage opportunities and establish priorities in sectors of state strength and
comparative advantage;
new text end

new text begin (3) improve the health and wellbeing of Minnesota's citizens;
new text end

new text begin (4) advance the capacity and competitiveness of existing and emerging food- and
manufacturing-related science and technology industries; and
new text end

new text begin (5) build a better Minnesota by driving progress and advancing the common good.
new text end

new text begin (b) The MnDRIVE funding program shall establish priorities by investing in
scientific research that promotes:
new text end

new text begin (1) programs that can position Minnesota as a leader in engineering, science,
technology, and food-related solutions;
new text end

new text begin (2) initiatives that support the growth of targeted industry clusters and the
competitiveness of existing Minnesota engineering, science, technology, and food
companies in developing new products and services;
new text end

new text begin (3) initiatives that can result in creating new Minnesota-based companies;
new text end

new text begin (4) initiatives that can improve the quality of life of Minnesota's citizens, decrease
the incidence of disease, and transform how we prevent, treat, and cure diseases; and
new text end

new text begin (5) initiatives that can secure a safer environment, seek sustainable energy solutions,
and prevent, diagnose, and treat environmental problems associated with Minnesota
industry.
new text end

new text begin Subd. 2. new text end

new text begin Funding requests. new text end

new text begin The Board of Regents of the University of Minnesota,
acting alone or in partnership with other public or private entities, is requested to submit
investment proposals consistent with the goals and objectives of the MnDRIVE funding
program as part of the Board of Regents biennial budget request to the legislature. The
Board of Regents must give consideration to investments in existing scientific research
programs that meet these guidelines but may require additional resources in order to
preserve or accelerate Minnesota into a national or global leadership position. The
governor shall submit a recommendation to the legislature regarding funding requests
submitted by the Board of Regents.
new text end

new text begin Subd. 3. new text end

new text begin Reporting. new text end

new text begin By March 1 of each odd-numbered year, the Board of Regents
of the University of Minnesota must provide to the chairs and ranking minority members
of the legislative committees with primary jurisdiction over higher education policy and
finance a summary report of investments and accomplishments related to funds received
from the state under subdivision 2 from the prior biennium.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 24.

Minnesota Statutes 2012, section 141.35, is amended to read:

141.35 EXEMPTIONS.

Sections 141.21 to 141.32 shall not apply to the following:

(1) public postsecondary institutions;

(2) postsecondary institutions registered under sections 136A.61 to 136A.71;

(3) schools of nursing accredited by the state Board of Nursing or an equivalent
public board of another state or foreign country;

(4) private schools complying with the requirements of section 120A.22, subdivision
4;

(5) courses taught to students in a valid apprenticeship program taught by or
required by a trade union;

(6) schools exclusively engaged in training physically or mentally disabled persons
for the state of Minnesota;

(7) schools licensed by boards authorized under Minnesota law to issue licenses
except schools required to obtain a private career school license due to the use of
"academy," "institute," "college," or "university" in their names;

(8) schools and educational programs, or training programs, contracted for by
persons, firms, corporations, government agencies, or associations, for the training of their
own employees, for which no fee is charged the employee;

(9) schools engaged exclusively in the teaching of purely avocational, recreational,
or remedial subjects as determined by the office except schools required to obtain a private
career school license due to the use of "academy," "institute," "college," or "university" in
their names unless the school used "academy" or "institute" in its name prior to August
1, 2008;

(10) classes, courses, or programs conducted by a bona fide trade, professional, or
fraternal organization, solely for that organization's membership;

(11) programs in the fine arts provided by organizations exempt from taxation
under section 290.05 and registered with the attorney general under chapter 309. For
the purposes of this clause, "fine arts" means activities resulting in artistic creation or
artistic performance of works of the imagination which are engaged in for the primary
purpose of creative expression rather than commercial sale or employment. In making
this determination the office may seek the advice and recommendation of the Minnesota
Board of the Arts;

(12) classes, courses, or programs intended to fulfill the continuing education
requirements for licensure or certification in a profession, that have been approved by a
legislatively or judicially established board or agency responsible for regulating the practice
of the profession, and that are offered exclusively to an individual practicing the profession;

(13) classes, courses, or programs intended to prepare students to sit for
undergraduate, graduate, postgraduate, or occupational licensing and occupational
entrance examinations;

(14) classes, courses, or programs providing 16 or fewer clock hours of instruction
that are not part of the curriculum for an occupation or entry level employment except
schools required to obtain a private career school license due to the use of "academy,"
"institute," "college," or "university" in their names;

(15) classes, courses, or programs providing instruction in personal development,
modeling, or acting;

(16) training or instructional programs, in which one instructor teaches an individual
student, that are not part of the curriculum for an occupation or are not intended to prepare
a person for entry level employment; deleted text begin and
deleted text end

(17) schools with no physical presence in Minnesota, as determined by the office,
engaged exclusively in offering distance instruction that are located in and regulated by
other states or jurisdictions new text begin ; and
new text end

new text begin (18) schools providing exclusively free training or instructional programs or courses
where no tuition, fees, or any other charges are required for a student to participate new text end .

Sec. 25.

Minnesota Statutes 2012, section 299A.45, subdivision 4, is amended to read:

Subd. 4.

Renewal.

Each award must be given for one academic year and is
renewable for a maximum of eight semesters or the equivalent. A student who withdraws
from enrollment for active military service new text begin or for a major illness, while under the care
of a medical professional, that substantially limits the student's ability to complete the
term new text end is entitled to an additional semester or the equivalent of grant eligibility. An award
must not be given to a dependent child who is 23 years of age or older on the first day of
the academic year.

Sec. 26. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2012, section 136A.031, subdivision 2, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Rules, parts 4830.0120; 4830.0130; 4830.0140; 4830.0150;
4830.0160; 4830.0170; 4830.0180; 4830.0190; and 4830.0195, new text end new text begin are repealed.
new text end