1.1                          A bill for an act
  1.2             relating to higher education; establishing a trust 
  1.3             fund to finance aid to students; providing powers 
  1.4             governing the fund; appropriating money; proposing 
  1.5             coding for new law in Minnesota Statutes, chapter 136A.
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [136A.123] [HIGHER EDUCATION ASSISTANCE TRUST 
  1.8   FUND.] 
  1.9      Subdivision 1.  [FUND ESTABLISHED; PURPOSE.] The higher 
  1.10  education trust fund is established as a separate fund in the 
  1.11  state treasury.  The legislature intends the trust fund to be 
  1.12  used to help finance the post-secondary education of 
  1.13  economically disadvantaged students after fiscal year 2020. 
  1.14     Subd. 2.  [DUTIES OF THE COMMISSIONER.] The commissioner of 
  1.15  finance shall maintain and administer the trust fund solely to 
  1.16  accumulate assets through the year 2020.  Assets may be 
  1.17  accumulated from appropriations, investment earnings, and 
  1.18  gifts.  Beginning in fiscal year 2021, the investment income 
  1.19  earned by amounts in the trust fund must be used to provide 
  1.20  higher education assistance. 
  1.21     Subd. 3.  [INVESTMENT EARNINGS.] All investment earnings on 
  1.22  amounts in the trust fund are credited to the fund. 
  1.23     Subd. 4.  [GIFTS.] The commissioner may accept private 
  1.24  gifts of money or property to the trust fund.  The commissioner 
  1.25  may pledge to and agree with contributors to use the gifts, and 
  2.1   investment earnings they accrue, only for the purposes of the 
  2.2   trust fund.  This agreement is a binding contract on the state. 
  2.3      Subd. 5.  [BOARD OF INVESTMENT.] The state board of 
  2.4   investment shall invest the assets of the trust fund in a manner 
  2.5   that is both prudent and intended to provide the best rate of 
  2.6   return, given the goals of accumulating assets through fiscal 
  2.7   year 2020 and providing income to pay higher education 
  2.8   assistance after fiscal year 2020. 
  2.9      Subd. 6.  [ASSISTANCE PROGRAM.] (a) Before January 31, 
  2.10  2018, the governor, in consultation with the higher education 
  2.11  advisory council, shall develop and recommend to the legislature 
  2.12  a program of post-secondary education assistance funded by the 
  2.13  income from the higher education assistance trust.  The program 
  2.14  must provide financial assistance for post-secondary expenses, 
  2.15  which may include tuition, fees, instructional materials and 
  2.16  equipment, and living expenses.  To qualify for a grant students 
  2.17  must demonstrate financial need based on a designated state or 
  2.18  federal standardized need analysis. 
  2.19     (b) Before July 1, 2019, the legislature shall enact a 
  2.20  program for post-secondary education assistance, funded by the 
  2.21  income from the higher education assistance trust fund to 
  2.22  provide assistance beginning in fiscal year 2021. 
  2.23     Subd. 7.  [APPROPRIATION.] An amount is appropriated from 
  2.24  the special revenue fund established in section 16A.67 to the 
  2.25  higher education trust fund each year for fiscal years 2002 
  2.26  through and including 2006.  The amount of this annual 
  2.27  appropriation equals the average annual payments for debt 
  2.28  service on the State Revenue Bonds, Series 1996A, issued under 
  2.29  section 16A.67 that were paid in fiscal years 1997 through 2001. 
  2.30     Sec. 2.  [EFFECTIVE DATE.] 
  2.31     Section 1 is effective July 1, 1998.