1.1                          A bill for an act 
  1.2             relating to appropriations; appropriating money for 
  1.3             higher education and related purposes, with certain 
  1.4             conditions; extending the number of years of education 
  1.5             provided by the state to 13; amending Minnesota 
  1.6             Statutes 1996, sections 136F.46, subdivision 1; and 
  1.7             137.0245, subdivisions 2 and 4; Minnesota Statutes 
  1.8             1997 Supplement, sections 41D.03, subdivision 4; and 
  1.9             136A.121, subdivision 5; Laws 1996, chapter 366, 
  1.10            section 6, as amended; proposing coding for new law in 
  1.11            Minnesota Statutes, chapters 135A; 137; and 290; 
  1.12            repealing Minnesota Statutes 1996, sections 137.01; 
  1.13            and 137.024. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15                             ARTICLE 1 
  1.16                           APPROPRIATIONS
  1.17  Section 1.  [HIGHER EDUCATION APPROPRIATIONS.] 
  1.18     The sums in the columns headed "APPROPRIATIONS" are 
  1.19  appropriated from the general fund, or another named fund, to 
  1.20  the agencies and for the purposes specified to be available for 
  1.21  the fiscal years indicated for each purpose. 
  1.22                   SUMMARY BY AGENCY - ALL FUNDS 
  1.23                            1998          1999           TOTAL
  1.24  Higher Education     
  1.25  Services Office           -0-        $ 4,500,000    $ 4,500,000
  1.26  Board of Trustees of the
  1.27  Minnesota State Colleges 
  1.28  and Universities          -0-         39,000,000     39,000,000
  1.29  Board of Regents of 
  1.30  the University of 
  1.31  Minnesota                 -0-         38,500,000     38,500,000
  1.32                                             APPROPRIATIONS 
  2.1                                          Available for the Year 
  2.2                                              Ending June 30 
  2.3                                             1998         1999 
  2.4   Sec. 2.  HIGHER EDUCATION SERVICES 
  2.5   OFFICE                               $    -0-       $ 4,500,000
  2.6   (a) State Grants             
  2.7          -0-          3,000,000 
  2.8   This appropriation is added to the 
  2.9   appropriation in Laws 1997, chapter 
  2.10  183, article 1, section 2, subdivision 
  2.11  2, to increase the tuition maximum in 
  2.12  the second year for private four-year 
  2.13  institutions to $8,550. 
  2.14  (b)  Work Study              
  2.15         -0-          1,500,000 
  2.16  This appropriation is added to the 
  2.17  appropriation in Laws 1997, chapter 
  2.18  183, article 1, section 2, subdivision 
  2.19  4. 
  2.20  Sec. 3.  MINNESOTA STATE COLLEGES 
  2.21  AND UNIVERSITIES (MnSCU)
  2.22                                     $      -0-     $  39,000,000
  2.23  (a) Enhancing Allocations 
  2.24         -0-         21,500,000
  2.25  This appropriation is to reduce the 
  2.26  funding variances per full year 
  2.27  equivalent student among MnSCU 
  2.28  institutions.  Variances shall be 
  2.29  addressed within categories of 
  2.30  institutions of the same type.  The 
  2.31  allocation method used to address the 
  2.32  variances may also take into account 
  2.33  other contributing factors including, 
  2.34  but not limited to, campus size, types 
  2.35  and costs of programs, and 
  2.36  instructional/program level. 
  2.37  The legislature expects the system 
  2.38  office to develop an allocation model 
  2.39  beginning with fiscal year 2000 that 
  2.40  recognizes the values of access and 
  2.41  mission differentiation while 
  2.42  reflecting internal and external equity 
  2.43  objectives.  The model should minimize 
  2.44  campus and system reliance on one-time 
  2.45  funds, and also include incentives for 
  2.46  excellence, innovation, and 
  2.47  collaboration.  The board of trustees 
  2.48  shall report on the model as part of 
  2.49  its 2000-2001 biennial budget request. 
  2.50  (b) Libraries 
  2.51         -0-          3,000,000
  2.52  This appropriation is for the 
  2.53  acquisition of library materials and 
  2.54  equipment necessary to further develop 
  2.55  regional library centers at the state 
  2.56  universities. 
  3.1   (c) Business and Industry Partnerships 
  3.2          -0-         11,500,000
  3.3   This appropriation is for activities to 
  3.4   enhance partnerships between colleges 
  3.5   and business and industry.  This 
  3.6   appropriation includes $450,000 for 
  3.7   equipment to upgrade the aviation 
  3.8   maintenance programs at Minneapolis 
  3.9   Community and Technical College, 
  3.10  Northland Community Technical College, 
  3.11  and Winona/Red Wing Technical College 
  3.12  to support new industry and FAA 
  3.13  requirements; and $200,000 to plan for 
  3.14  a facility to support specialized needs 
  3.15  of the new composite fiber and avionics 
  3.16  training program planned at Lake 
  3.17  Superior College.  This appropriation 
  3.18  is nonrecurring. 
  3.19  (d) Colleges of Education Curriculum 
  3.20  Redesign and Technology 
  3.21         -0-          3,000,000
  3.22  This appropriation is for colleges of 
  3.23  education to redesign their curriculum, 
  3.24  develop new programs, and improve the 
  3.25  delivery of teacher preparation.  The 
  3.26  legislature intends that the 
  3.27  universities link with their local 
  3.28  school districts to ensure that the 
  3.29  college of education faculty, district 
  3.30  teachers, and students preparing to be 
  3.31  future teachers are prepared for K-12 
  3.32  conditions and demands, including 
  3.33  having technological skills necessary 
  3.34  for the classroom and in implementing 
  3.35  the graduation rule.  This 
  3.36  appropriation is nonrecurring. 
  3.37  Sec. 4.  UNIVERSITY OF MINNESOTA        -0-          38,500,000
  3.38  (a) Faculty and Academic Initiatives 
  3.39         -0-         24,250,000
  3.40  This appropriation is for strategic 
  3.41  academic initiatives in digital 
  3.42  technology, molecular and cellular 
  3.43  biology, design, new media, and 
  3.44  agricultural research and outreach, and 
  3.45  for faculty and staff compensation. 
  3.46  (b) Law Clinics 
  3.47         -0-            250,000
  3.48  This appropriation is for the law 
  3.49  clinic programs in the law school.  The 
  3.50  appropriation must be used to increase 
  3.51  the number of students and faculty who 
  3.52  participate in the clinics, expand 
  3.53  support services, and acquire supplies 
  3.54  necessary to provide legal services to 
  3.55  a greater number of Minnesota citizens 
  3.56  with limited incomes. 
  3.57  (c) Facilities and Equipment 
  4.1          -0-         13,750,000
  4.2   This appropriation is for classroom 
  4.3   improvements and for developing 
  4.4   facilities and equipment for faculty 
  4.5   research.  This appropriation is 
  4.6   nonrecurring. 
  4.7   (d) Project Inform 
  4.8          -0-            250,000
  4.9   This appropriation is to enhance and 
  4.10  expand the work of Project Inform in 
  4.11  providing outreach and information to 
  4.12  K-12 students and their families, 
  4.13  particularly in schools without 
  4.14  counselors.  This program shall be 
  4.15  coordinated by the University, but 
  4.16  shall be operated in conjunction with 
  4.17  the Minnesota State Colleges and 
  4.18  Universities.  Private colleges are 
  4.19  requested to participate.  This 
  4.20  appropriation is nonrecurring.  
  4.21  Sec. 5.  POST-SECONDARY SYSTEMS 
  4.22  The board of trustees and the board of 
  4.23  regents jointly shall evaluate the 
  4.24  costs and benefits and need throughout 
  4.25  the state for additional 
  4.26  practitioner-oriented doctoral degree 
  4.27  opportunities.  The boards shall report 
  4.28  their recommendations as part of their 
  4.29  2000-2001 biennial budget request. 
  4.30     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
  4.31  41D.03, subdivision 4, is amended to read: 
  4.32     Subd. 4.  [EMPLOYEES.] (a) The council shall employ persons 
  4.33  who shall serve in the unclassified service. 
  4.34     (b) The employees hired under this subdivision and any 
  4.35  other necessary employees hired by the council shall be state 
  4.36  employees in the executive branch of the University of Minnesota.
  4.37     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
  4.38  136A.121, subdivision 5, is amended to read: 
  4.39     Subd. 5.  [GRANT STIPENDS.] The grant stipend shall be 
  4.40  based on a sharing of responsibility for covering the recognized 
  4.41  cost of attendance by the applicant, the applicant's family, and 
  4.42  the government.  The amount of a financial stipend must not 
  4.43  exceed a grant applicant's recognized cost of attendance, as 
  4.44  defined in subdivision 6, after deducting the following:  
  4.45     (1) the assigned student responsibility of at least 50 
  4.46  percent of the cost of attending the institution of the 
  4.47  applicant's choosing; 
  5.1      (2) the assigned family responsibility as defined in 
  5.2   section 136A.101; and 
  5.3      (3) the amount of a federal Pell grant award, calculated as 
  5.4   if the maximum Pell grant were $2,700, for which the grant 
  5.5   applicant is eligible. 
  5.6      The minimum financial stipend is $300 per academic year. 
  5.7      Sec. 8.  Minnesota Statutes 1996, section 136F.46, 
  5.8   subdivision 1, is amended to read: 
  5.9      Subdivision 1.  [REQUEST; WARRANT.] The commissioner of 
  5.10  finance, upon the written request of an employee of the board, 
  5.11  may deduct from an employee's salary or wages the amount 
  5.12  requested for payment to a nonprofit state college or university 
  5.13  foundation meeting the requirements in subdivision 2.  The 
  5.14  commissioner shall issue a warrant for the deducted amount to 
  5.15  the nonprofit foundation.  The Penny fellowship and the Nellie 
  5.16  Stone Johnson scholarship program of the Minnesota state 
  5.17  university student association shall be considered a nonprofit 
  5.18  state college and university foundation foundations for purposes 
  5.19  of this section. 
  5.20     Sec. 9.  [137.0241] [REGENT RESIDENCE.] 
  5.21     In electing regents, the legislature must reflect the 
  5.22  distinctive parts of the state by maintaining geographical 
  5.23  balance.  To this end, at least five members of the board shall 
  5.24  reside in the seven-county metropolitan area, and at least five 
  5.25  members shall reside outside the seven-county metropolitan area. 
  5.26     Sec. 10.  Minnesota Statutes 1996, section 137.0245, 
  5.27  subdivision 2, is amended to read: 
  5.28     Subd. 2.  [MEMBERSHIP.] The regent candidate advisory 
  5.29  council shall consist of 24 15 members.  Twelve Six members 
  5.30  shall be appointed by the subcommittee on committees of the 
  5.31  committee on rules and administration of the senate, four by the 
  5.32  majority leader and two by the minority leader.  Twelve Six 
  5.33  members shall be appointed by the speaker of the house of 
  5.34  representatives, four by the speaker and two by the minority 
  5.35  leader.  No more than one-third of the members appointed by each 
  5.36  appointing authority may be current or former legislators.  No 
  6.1   more than two-thirds of the members appointed by each appointing 
  6.2   authority may belong to the same political party; however, 
  6.3   political activity or affiliation is not required for the 
  6.4   appointment of any member Three members shall be appointed by 
  6.5   the governor.  Geographical representation must be taken into 
  6.6   consideration when making appointments.  Section 15.0575 shall 
  6.7   govern the advisory council, except that the members shall be 
  6.8   appointed to six-year terms with one-third appointed each 
  6.9   even-numbered year.  
  6.10     Sec. 11.  Minnesota Statutes 1996, section 137.0245, 
  6.11  subdivision 4, is amended to read: 
  6.12     Subd. 4.  [RECOMMENDATIONS.] The advisory council shall 
  6.13  recommend at least two and not more than four candidates for 
  6.14  each vacancy.  By March 15 February 1 of each odd-numbered year, 
  6.15  the advisory council shall submit its recommendations to the 
  6.16  president of the senate and the speaker of the house of 
  6.17  representatives.  The governor is encouraged to endorse regent 
  6.18  candidates and to communicate this endorsement to the house and 
  6.19  senate education committees.  The legislature shall not be bound 
  6.20  by these recommendations. 
  6.21     Sec. 12.  Laws 1996, chapter 366, section 6, as amended by 
  6.22  Laws 1997, chapter 183, article 3, section 31, is amended to 
  6.23  read: 
  6.24     Sec. 6.  [MORATORIUM.] 
  6.25     Notwithstanding any law to the contrary, until June 30, 
  6.26  1998 1999, an educational institution that was licensed under 
  6.27  Minnesota Statutes, chapter 141, on December 31, 1995, must 
  6.28  continue to comply with the provisions of that chapter and may 
  6.29  not use any of the exemptions available under Minnesota 
  6.30  Statutes, section 141.35. 
  6.31     Sec. 13.  [TRANSITION OF ADVISORY COUNCIL MEMBERS.] 
  6.32     Terms of all members of the regent candidate advisory 
  6.33  council are terminated on June 30, 1998.  By July 1, 1998, the 
  6.34  house, senate, and governor's office shall make their 
  6.35  appointments to the council, as provided in section 10.  These 
  6.36  appointments may include current council members.  The senate 
  7.1   majority leader and speaker of the house shall each appoint one 
  7.2   member to an initial two-year term, one member to an initial 
  7.3   four-year term, and two members to initial six-year terms.  The 
  7.4   minority leaders shall each appoint one member to an initial 
  7.5   two-year term and one member to an initial four-year term.  The 
  7.6   governor shall appoint one member to an initial two-year term, 
  7.7   one member to an initial four-year term, and one member to an 
  7.8   initial six-year term. 
  7.9      Sec. 14.  [REPEALER.] 
  7.10     Minnesota Statutes 1996, sections 137.01; and 137.024 are 
  7.11  repealed. 
  7.12     Sec. 15.  [EFFECTIVE DATE.] 
  7.13     Sections 6, 9, 10, 11, and 13 are effective the day 
  7.14  following final enactment. 
  7.15                             ARTICLE 2 
  7.16                              GRADE 13 
  7.17     Section 1.  [LEGISLATIVE POLICY.] 
  7.18     The legislature has found that it is in the best interest 
  7.19  of the state and its citizens to encourage more students to 
  7.20  continue their education and training beyond high school.  
  7.21  Additionally, the legislature has found that the changing 
  7.22  society and economy have made it necessary for most students to 
  7.23  continue their education in order to have productive careers 
  7.24  that contribute to their personal well-being and to the economic 
  7.25  growth and competitiveness of the state.  Therefore, the 
  7.26  legislature has chosen to extend the number of years of 
  7.27  education that are provided to students by the state through 
  7.28  grade 13.  In order to accomplish this, new high school 
  7.29  graduates or the families may claim an income tax credit of up 
  7.30  to $500 per year for the cost of the student's tuition.  This 
  7.31  credit, coupled with the newly established $1,500 federal income 
  7.32  tax credit, will provide the equivalent of the cost of the first 
  7.33  year of tuition at any Minnesota public two-year college. 
  7.34     Sec. 2.  [135A.60] [GRADE 13.] 
  7.35     Subdivision 1.  [ESTABLISHED.] A program is established to 
  7.36  provide new high school graduates with the first year of 
  8.1   post-secondary education at a public two-year college 
  8.2   tuition-free.  The program also reduces the cost of the first 
  8.3   year of post-secondary education at an eligible four-year 
  8.4   college or university.  The maximum credit allowed for each 
  8.5   eligible student is $500.  This maximum is subject to income 
  8.6   limitations and adjusted for inflation as described in section 
  8.7   290.0675.  Students whose family income falls below the level 
  8.8   necessary to qualify for a full tax credit may qualify for a 
  8.9   credit based on their own income, and otherwise shall receive 
  8.10  similar benefits through state and federal financial aid. 
  8.11     Subd. 2.  [ELIGIBLE STUDENTS.] To be eligible for the grade 
  8.12  13 program, students must: 
  8.13     (1) be Minnesota residents; 
  8.14     (2) graduate from a Minnesota high school in 1998 or later; 
  8.15  and 
  8.16     (3) enroll full time in an eligible Minnesota 
  8.17  post-secondary institution, as defined in subdivision 3, in the 
  8.18  fall immediately following their high school graduation. 
  8.19     A Minnesota GED recipient who enrolls full time in an 
  8.20  eligible institution in the fall immediately following receipt 
  8.21  of the GED, and whose high school cohort graduated in the same 
  8.22  year, is also an eligible student. 
  8.23     Subd. 3.  [ELIGIBLE INSTITUTIONS.] "Eligible institution" 
  8.24  means any of the following post-secondary institutions located 
  8.25  in Minnesota: 
  8.26     (1) a two-year public community college, technical college, 
  8.27  or consolidated community/technical college; 
  8.28     (2) a state university; 
  8.29     (3) the University of Minnesota; or 
  8.30     (4) a private nonprofit, degree granting, two- or four-year 
  8.31  liberal arts or vocational technical school. 
  8.32     Subd. 4.  [QUALIFYING HIGHER EDUCATION EXPENSES.] For 
  8.33  purposes of this section and section 290.0675, "qualifying 
  8.34  higher education expenses" means tuition and fees actually paid 
  8.35  during the taxable year to an eligible institution by a taxpayer 
  8.36  on behalf of an eligible student for the student's first year of 
  9.1   post-secondary education, net of any refunds of tuition and fees 
  9.2   received from the institution.  In tax years in which the 
  9.3   taxpayer pays qualifying higher education expenses that relate 
  9.4   to only the first year of the student's post-secondary 
  9.5   education, the taxpayer must subtract from qualifying higher 
  9.6   education expenses any federal HOPE scholarship credit under 
  9.7   section 25A of the Internal Revenue Code for which the student 
  9.8   is eligible.  Otherwise the taxpayer must subtract from 
  9.9   qualifying higher education expenses any federal HOPE 
  9.10  scholarship credit under section 25A of the Internal Revenue 
  9.11  Code for which the student is eligible, net of tuition and fees 
  9.12  paid for the second year of the student's post-secondary 
  9.13  education. 
  9.14     Sec. 3.  [290.0675] [MINNESOTA HIGHER EDUCATION CREDIT.] 
  9.15     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  9.16  section, the following terms have the meanings given. 
  9.17     (a) "Qualifying higher education expenses" has the meaning 
  9.18  given in section 135A.60, subdivision 4. 
  9.19     (b) "Eligible student" means the taxpayer, spouse, or 
  9.20  person claimed as a dependent of the taxpayer under section 152 
  9.21  of the Internal Revenue Code.  An "eligible student" must also 
  9.22  meet the definition given in section 135A.60, subdivision 2. 
  9.23     (c) "Income" means federal adjusted gross income as defined 
  9.24  in section 62 of the Internal Revenue Code. 
  9.25     Subd. 2.  [CREDIT ALLOWED.] An individual is allowed a 
  9.26  credit against the tax imposed by this chapter equal to 100 
  9.27  percent of qualifying higher education expenses for an eligible 
  9.28  student.  The maximum credit allowed for each eligible student 
  9.29  is $500.  For married couples filing joint returns, the maximum 
  9.30  credit is reduced by five percent for each $1,000 of income over 
  9.31  a threshold.  For all other taxpayers, the maximum credit is 
  9.32  reduced by ten percent for each $1,000 of income over a 
  9.33  threshold.  For married couples filing joint returns, the 
  9.34  threshold is $80,000.  For all other taxpayers, the threshold is 
  9.35  $40,000.  In no case is the credit less than zero.  This credit 
  9.36  is allowed for only one taxable year with respect to each 
 10.1   eligible student. 
 10.2      For a nonresident or part-year resident, the credit 
 10.3   determined under this section must be allocated based on the 
 10.4   percentage calculated under section 290.06, subdivision 2c, 
 10.5   paragraph (e). 
 10.6      Subd. 3.  [INFLATION ADJUSTMENT.] The maximum credit amount 
 10.7   and the thresholds at which the credit begins to be reduced 
 10.8   under subdivision 2 must be adjusted for inflation.  The 
 10.9   commissioner shall adjust the maximum credit and the threshold 
 10.10  amounts by the percentage determined under section 290.06, 
 10.11  subdivision 2d, for the taxable year. 
 10.12     Sec. 4.  [EFFECTIVE DATE.] 
 10.13     Sections 1, 2, and 3, subdivisions 1 and 2, are effective 
 10.14  for tax years beginning after December 31, 1997.  Section 3, 
 10.15  subdivision 3, is effective for tax years beginning after 
 10.16  December 31, 2001.