1.1 	A bill for an act
1.2 	relating to higher education; allocating money for
1.3 	educational and related purposes with certain
1.4 	conditions; modifying various loan, grant, and
1.5 	financial aid provisions; requiring institutions to
1.6 	provide certain data; permitting disclosure of certain
1.7 	data to determine eligibility; amending various
1.8 	reciprocity provisions; providing definitions;
1.9 	amending provisions related to advisory and student
1.10 	groups; directing the Board of Trustees to designate
1.11 	centers of excellence; amending the Minnesota college
1.12 	savings plan; amending provisions related to private
1.13 	career schools; establishing fees; establishing the
1.14 	Rochester University Development Committee;
1.15 	appropriating money; amending Minnesota Statutes 2004,
1.16 	135A.031, subdivisions 3, 4; 135A.052, subdivision 1;
1.17 	135A.30, subdivisions 3, 4, 5; 135A.52, subdivisions
1.18 	1, 2; 136A.01, subdivision 2; 136A.031, subdivisions
1.19 	2, 3, 4, 5; 136A.08, by adding subdivisions; 136A.121,
1.20 	subdivisions 2, 6, 9, 13, by adding subdivisions;
1.21 	136A.125, subdivisions 2, 4; 136A.1701, by adding
1.22 	subdivisions; 136F.04, subdivision 4; 136F.32,
1.23 	subdivision 2; 136G.03, subdivisions 3, 21a, 22, 32;
1.24 	136G.05, subdivision 8; 136G.09, subdivisions 11, 12;
1.25 	136G.11, subdivisions 1, 2, 3, 13; 136G.13,
1.26 	subdivisions 1, 5; 136G.14; 137.0245, subdivisions 1,
1.27 	3, 4; 141.21, by adding a subdivision; 141.25,
1.28 	subdivisions 3, 5, 8, 9, 12; 141.251; 141.26,
1.29 	subdivision 5; 141.271, subdivisions 4, 7, 10, by
1.30 	adding subdivisions; 141.28, subdivision 1, by adding
1.31 	a subdivision; 141.29, subdivision 3; 141.30; 141.35;
1.32 	192.502, subdivision 1; 299A.45, subdivisions 1, 4;
1.33 	proposing coding for new law in Minnesota Statutes,
1.34 	chapters 135A; 136A; 136F; 137; 141; 144; 583;
1.35 	repealing Minnesota Statutes 2004, sections 136A.011;
1.36 	136A.031, subdivision 1; Minnesota Rules, parts
1.37 	4815.0100; 4815.0110; 4815.0120; 4815.0130; 4815.0140;
1.38 	4815.0150; 4815.0160; 4830.8100; 4830.8110; 4830.8120;
1.39 	4830.8130; 4830.8140; 4830.8150.
1.40 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.41 	ARTICLE 1
1.42 	APPROPRIATIONS

2.1 	Section 1. Higher education appropriations.
 2.2 	The sums in the columns marked "APPROPRIATIONS" are appropriated
2.3 	from the general fund, or other named fund, to the agencies and
2.4 	for the purposes specified in this article.  The listing of an
2.5 	amount under the figure "2006" or "2007" in this article
2.6 	indicates that the amount is appropriated to be available for
2.7 	the fiscal year ending June 30, 2006, or June 30, 2007,
2.8 	respectively.  "The first year" is fiscal year 2006.  "The
2.9 	second year" is fiscal year 2007.  "The biennium" is fiscal
2.10 	years 2006 and 2007.
2.11 	SUMMARY BY FUND
2.12 	2006          2007           TOTAL
2.13 	General            $1,365,500,000 $1,395,500,000 $2,761,000,000
2.14 	Health Care
2.15 	Access                  2,157,000      2,157,000      4,314,000
2.16 	SUMMARY BY AGENCY - ALL FUNDS
2.17 	2006          2007           TOTAL
2.18 	Higher Education
2.19 	Services Office       172,129,000    177,181,000    349,310,000
2.20 	Board of Trustees
2.21 	of the Minnesota State
2.22 	Colleges and
2.23 	Universities          600,694,000    602,194,000  1,202,888,000
2.24 	Board of Regents
2.25 	of the University
2.26 	of Minnesota          593,348,000    616,736,000  1,210,084,000
2.27 	Mayo Medical
2.28 	Foundation              1,391,000      1,391,000      2,782,000
2.29 	Minnesota
2.30 	Department of Health       95,000        155,000        250,000
2.31 	APPROPRIATIONS
2.32 	                                       Available for the Year
2.33 	                                           Ending June 30
2.34 	                                          2006         2007

2.35 	Sec. 2. HIGHER EDUCATION
2.36 	SERVICES OFFICE
 2.37 		Subdivision 1.Total
2.38 	Appropriation                     $  172,129,000 $  177,181,000
2.39 	The amounts that may be spent from this
2.40 	appropriation for each purpose are
2.41 	specified in the following subdivisions.
2.42 		Subd. 2.State Grants               136,394,000    144,756,000
2.43 	If the appropriation in this
2.44 	subdivision for either year is
2.45 	insufficient, the appropriation for the
3.1 	other year is available for it.  For
3.2 	the biennium, the tuition and fee
3.3 	maximum shall be $9,208 the first year
3.4 	and $9,438 the second year for students
3.5 	enrolled in four-year programs and
3.6 	$6,567 the first year and $6,436 the
3.7 	second year for students enrolled in
3.8 	two-year programs.
3.9 	The Higher Education Services Office
3.10 	must study the for-profit postsecondary
3.11 	education sector licensed or registered
3.12 	in Minnesota.  The study must examine
3.13 	tuition levels and program offerings,
3.14 	student debt load, financial
3.15 	assistance, and the impact of the
3.16 	tuition and fee maximums set in law on
3.17 	this postsecondary sector and its
3.18 	students.  The study must also analyze
3.19 	the relationship of the tuition and fee
3.20 	maximums and tuition levels.  The
3.21 	office must report on the findings to
3.22 	the legislative committees responsible
3.23 	for higher education finance by
3.24 	November 15, 2006.  This study may be
3.25 	done in conjunction with the licensing
3.26 	study in article 3.
3.27 	This appropriation sets the living and
3.28 	miscellaneous expense allowance at
3.29 	$5,350 each year.
3.30 	This appropriation contains money to
3.31 	provide educational benefits to
3.32 	dependent children under age 23 and the
3.33 	spouses of public safety officers
3.34 	killed in the line of duty under
3.35 	Minnesota Statutes 2004, section
3.36 	299A.45.
3.37 		Subd. 3.Interstate Tuition
3.38 	Reciprocity                            1,000,000      1,000,000
3.39 	If the appropriation in this
3.40 	subdivision for either year is
3.41 	insufficient, the appropriation for the
3.42 	other year is available to meet
3.43 	reciprocity contract obligations.
3.44 		Subd. 4.State Work Study            12,444,000     12,444,000
3.45 		Subd. 5.Child Care Grants            4,934,000      4,934,000
3.46 		Subd. 6.Minitex                      4,381,000      4,381,000
3.47 		Subd. 7.MnLINK Gateway                 400,000        400,000
3.48 		Subd. 8.Learning Network
3.49 	of Minnesota                           4,225,000      4,225,000
3.50 		Subd. 9.Minnesota College
3.51 	Savings Plan                           1,020,000      1,020,000
3.52 		Subd. 10.Midwest Higher
3.53 	Education Compact                         90,000         90,000
3.54 		Subd. 11.Other Small
3.55 	Programs                                 920,000        920,000
3.56 	This appropriation includes funding for
3.57 	postsecondary service learning, student
4.1 	and parent information, get ready
4.2 	outreach, and intervention for college
4.3 	attendance program.
4.4 	No more than $50,000 of this
4.5 	appropriation each year may be used for
4.6 	administrative expenses for the
4.7 	intervention for college attendance
4.8 	program under new Minnesota Statutes,
4.9 	section 136A.861.  This appropriation
4.10 	is added to the agency's permanent
4.11 	budget base.
4.12 	Of this appropriation, $115,000 each
4.13 	year is for grants to increase
4.14 	campus-community collaboration and
4.15 	service learning statewide.  For each
4.16 	$1 in state funding, grant recipients
4.17 	must contribute $2 in campus or
4.18 	community-based support.
4.19 		Subd. 12.Agency
4.20 	Administration                         2,761,000      2,651,000
4.21 	$100,000 the first year and $300,000
4.22 	the second year is for the Higher
4.23 	Education Services Office to develop
4.24 	and implement a process to measure and
4.25 	report on the effectiveness of
4.26 	postsecondary institutions in the state
4.27 	and make a report to the legislature
4.28 	regarding the implementation of the
4.29 	process.  The report must be made by
4.30 	January 15, 2006, to the legislative
4.31 	committees with jurisdiction over
4.32 	higher education policy and finance.
4.33 	The funding base for this initiative in
4.34 	fiscal years 2008 and 2009 is $300,000
4.35 	per year.
4.36 	$310,000 the first year is for the
4.37 	Higher Education Services Office to
4.38 	upgrade computer program application
4.39 	software related to state grant
4.40 	awards.  This appropriation does not
4.41 	cancel but is available until
4.42 	expended.  This is a onetime
4.43 	appropriation and is not added to the
4.44 	agency's base.
4.45 	Subd. 13.  Balances Forward
4.46 	A balance in the first year under this
4.47 	section does not cancel, but is
4.48 	available for the second year.
4.49 	Subd. 14.  Transfers
4.50 	The Higher Education Services Office
4.51 	may transfer unencumbered balances from
4.52 	the appropriations in this section to
4.53 	the state grant appropriation, the
4.54 	interstate tuition reciprocity
4.55 	appropriation, the child care
4.56 	appropriation, and the state work study
4.57 	appropriation.  Transfers from the
4.58 	child care or state work study
4.59 	appropriations may only be made to the
4.60 	extent there is a projected surplus in
4.61 	the appropriation.  A transfer may be
4.62 	made only with the prior written
5.1 	approval of the commissioner of finance
5.2 	and prior written notice to the chairs
5.3 	of the senate Higher Education Budget
5.4 	Division and house Higher Education
5.5 	Finance Committee.
5.6 	Subd. 15.  Reporting
5.7 	The Higher Education Services Office
5.8 	shall collect data monthly from
5.9 	institutions disbursing state financial
5.10 	aid.  The data collected must include,
5.11 	but is not limited to, expenditures by
5.12 	type to date and unexpended balances.
5.13 	The Higher Education Services Office
5.14 	must evaluate and report quarterly
5.15 	state financial aid expenditures and
5.16 	unexpended balances to the chairs of
5.17 	the Higher Education Finances
5.18 	Committees of the senate and house of
5.19 	representatives and the commissioner of
5.20 	finance.  By November 1 and February
5.21 	15, the Higher Education Services
5.22 	Office must provide updated state grant
5.23 	spending projections taking into
5.24 	account the most current and projected
5.25 	enrollment and tuition and fee
5.26 	information, economic conditions, and
5.27 	other relevant factors.  Before
5.28 	submitting state grant spending
5.29 	projections, the Higher Education
5.30 	Services Office must meet and consult
5.31 	with representatives of public and
5.32 	private postsecondary education, the
5.33 	Department of Finance, Governor's
5.34 	Office, legislative staff, and
5.35 	financial aid administrators.
5.36 		Subd. 16.Rochester University        3,200,000       -0-
5.37 	(a) $200,000 is for the Rochester
5.38 	Higher Education Development Committee
5.39 	to carry out its planning activities.
5.40 	This is a onetime appropriation.
5.41 	(b) $3,000,000 is for a onetime
5.42 	appropriation that must be deposited
5.43 	into the Rochester higher education
5.44 	development account under article 4.
5.45 	With the approval of the Higher
5.46 	Education Services Office, money in
5.47 	this account may be used to:  (1)
5.48 	provide additional planning and
5.49 	development funds, if needed; (2)
5.50 	provide initial funding for academic
5.51 	program development; and (3) provide
5.52 	funding related to academic facilities,
5.53 	if needed.  The appropriation under
5.54 	this paragraph is available until June
5.55 	30, 2009.
5.56 		Subd. 17.United Family
5.57 	Practice Residency Program               360,000        360,000
5.58 	For a grant to the United Family
5.59 	Medicine residency program.  This
5.60 	appropriation shall be used to support
5.61 	18 resident physicians each year in
5.62 	family practice at United Family
5.63 	Medicine residency programs and shall
5.64 	prepare doctors to practice family care
6.1 	medicine in underserved rural and urban
6.2 	areas of the state.  It is intended
6.3 	that this program will improve health
6.4 	care in underserved communities,
6.5 	provide affordable access to
6.6 	appropriate medical care, and manage
6.7 	the treatment of patients in a more
6.8 	cost-effective manner.

6.9 	Sec. 3. BOARD OF TRUSTEES OF THE MINNESOTA
6.10 	STATE COLLEGES AND UNIVERSITIES
 6.11 		Subdivision 1.Total
6.12 	Appropriation                        600,694,000    602,194,000
6.13 	The amounts that may be spent from this
6.14 	appropriation for each purpose are
6.15 	specified in the following subdivisions.
6.16 	The legislature estimates that
6.17 	instructional expenditures will be
6.18 	$812,735,000 the first year and
6.19 	$814,764,000 the second year.  The
6.20 	legislature estimates that
6.21 	noninstructional expenditures will be
6.22 	$58,868,000 the first year and
6.23 	$59,015,000 the second year.
6.24 		Subd. 2.General Appropriation      595,694,000    597,194,000
6.25 	This appropriation includes $12,000,000
6.26 	to pay competitive compensation to
6.27 	faculty or staff for initiatives that
6.28 	promote excellence in student
6.29 	learning.  This appropriation also
6.30 	includes funding for the recurring
6.31 	enrollment adjustment and money to
6.32 	strengthen and expand the Minnesota
6.33 	online program, increase the capacity
6.34 	for training nurses and teachers,
6.35 	provide for the management education
6.36 	needs of farm and small business
6.37 	owners, and provide services and
6.38 	outreach to underserved populations.
6.39 		Subd. 3.Centers of Excellence        5,000,000      5,000,000
6.40 	This appropriation is for centers of
6.41 	excellence under new Minnesota
6.42 	Statutes, section 136F.31.
6.43 	The board must develop a process to
6.44 	designate centers of excellence under
6.45 	new Minnesota Statutes, section 136F.31.

6.46 	Sec. 4. BOARD OF REGENTS OF THE
6.47 	UNIVERSITY OF MINNESOTA
 6.48 		Subdivision 1.Total
6.49 	Appropriation                        593,348,000    616,736,000
6.50 	The amounts that may be spent from this
6.51 	appropriation for each purpose are
6.52 	specified in the following subdivisions.
6.53 		Subd. 2.Operations and
6.54 	Maintenance                          527,824,000    551,212,000
6.55 	The legislature estimates that
6.56 	instructional expenditures will be
6.57 	$451,372,000 the first year and
7.1 	$469,229,000 the second year.  The
7.2 	legislature estimates that
7.3 	noninstructional expenditures will be
7.4 	$290,275,000 the first year and
7.5 	$301,758,000 the second year.
7.6 	This appropriation includes $13,000,000
7.7 	for competitive compensation to enable
7.8 	the university to attract and retain
7.9 	quality faculty members.
7.10 	This appropriation includes funding for
7.11 	the recurring enrollment adjustment and
7.12 	the following initiatives:  Biosciences
7.13 	for a Healthy Society to advance the
7.14 	university's expertise and to increase
7.15 	the university's competitiveness in
7.16 	leveraging new funding from federal and
7.17 	private sources; Preparing Students for
7.18 	the 21st Century to enhance the ability
7.19 	of the university to attract and retain
7.20 	exceptional students; research support
7.21 	to provide resources for the university
7.22 	to maintain a competitive advantage in
7.23 	emerging and ongoing research
7.24 	initiatives; 21st Century Technology to
7.25 	support enhancement to major university
7.26 	systems; and outreach services to
7.27 	historically underserved students.
7.28 		Subd. 3.Health Care Access Fund      2,157,000      2,157,000
7.29 	This appropriation is from the health
7.30 	care access fund and is for primary
7.31 	care education initiatives.
7.32 		Subd. 4.Special
7.33 	Appropriation                         63,367,000     63,367,000
7.34 	(a) Agriculture and Extension Service
7.35 	50,625,000     50,625,000
7.36 	For the Agricultural Experiment
7.37 	Station, Minnesota Extension Service.
7.38 	(b) Health Sciences
7.39 	4,929,000      4,929,000
7.40 	For the rural physicians associates
7.41 	program, the Veterinary Diagnostic
7.42 	Laboratory, health sciences research,
7.43 	dental care, and the Biomedical
7.44 	Engineering Center.
7.45 	(c) Institute of Technology
7.46 	1,387,000      1,387,000
7.47 	For the Geological Survey and the
7.48 	Talented Youth Mathematics Program.
7.49 	(d) System Specials
7.50 	6,426,000      6,426,000
7.51 	For general research, student loans
7.52 	matching money, industrial relations
7.53 	education, Natural Resources Research
7.54 	Institute, Center for Urban and
8.1 	Regional Affairs, Bell Museum of
8.2 	Natural History, and the Humphrey
8.3 	exhibit.
8.4 		Subd. 5.Academic Health Center
8.5 	The appropriation to the Academic
8.6 	Health Center under Minnesota Statutes,
8.7 	section 297F.10, is anticipated to be
8.8 	$20,890,000 in the first year and
8.9 	$20,474,000 in the second year.

8.10 	Sec. 5. MAYO MEDICAL FOUNDATION
 8.11 		Subdivision 1.Total
8.12 	Appropriation                          1,391,000      1,391,000
8.13 	The amounts that may be spent from this
8.14 	appropriation for each purpose are
8.15 	specified in the following subdivisions.
8.16 		Subd. 2.Medical School                 514,000        514,000
8.17 	The state of Minnesota must pay a
8.18 	capitation each year for each student
8.19 	who is a resident of Minnesota.  The
8.20 	appropriation may be transferred
8.21 	between years of the biennium to
8.22 	accommodate enrollment fluctuations.
8.23 	It is intended that during the biennium
8.24 	the Mayo Foundation use the capitation
8.25 	money to increase the number of doctors
8.26 	practicing in rural areas in need of
8.27 	doctors.
8.28 		Subd. 3.Family Practice and
8.29 	Graduate Residency Program               531,000        531,000
8.30 	The state of Minnesota must pay a
8.31 	capitation of up to 27 residents each
8.32 	year.
8.33 		Subd. 4.St. Cloud Hospital-Mayo Family
8.34 	Practice Residency Program
8.35 	346,000        346,000
8.36 	This appropriation is to the Mayo
8.37 	Foundation to support 12 resident
8.38 	physicians each year in the St. Cloud
8.39 	Hospital-Mayo family practice residency
8.40 	program.  The program must prepare
8.41 	doctors to practice primary care
8.42 	medicine in the rural areas of the
8.43 	state.  It is intended that this
8.44 	program will improve health care in
8.45 	rural communities, provide affordable
8.46 	access to appropriate medical care, and
8.47 	manage the treatment of patients in a
8.48 	more cost-effective manner.

8.49 	Sec. 6. COMMISSIONER OF HEALTH           95,000        155,000
 8.50 	To the commissioner of health to
8.51 	implement new Minnesota Statutes,
8.52 	section 144.1498.

8.53 	ARTICLE 2
8.54 	RELATED PROVISIONS

9.1 	Section 1. Minnesota Statutes 2004, section 135A.031,
9.2 	subdivision 3, is amended to read:
9.3 		Subd. 3.Determination of instructional services base.
 9.4 	The instructional services base for each public postsecondary
9.5 	system is the sum of:  (1) the state share; and (2) the
9.6 	legislatively estimated tuition for the second year of the most
9.7 	recent biennium; and (3) adjustments for inflation, enrollment
9.8 	changes as calculated in subdivision 4, and performance as
9.9 	calculated in subdivision 5.
9.10 	
EFFECTIVE DATE. This section is effective June 30, 2007.

9.11 	Sec. 2. Minnesota Statutes 2004, section 135A.031,
9.12 	subdivision 4, is amended to read:
9.13 		Subd. 4.adjustment for enrollments for budgeting. (a)
9.14 	Each public postsecondary system's instructional services base
9.15 	shall be adjusted for estimated changes in enrollments.  For
9.16 	each two percent change in estimated full-year equivalent
9.17 	enrollment, an adjustment shall be made to 65 percent of the
9.18 	instructional services base.  The remaining 35 percent of the
9.19 	instructional services base is not subject to the adjustment in
9.20 	this subdivision.
9.21 	(b) For all purposes where student enrollment is used for
9.22 	budgeting purposes, student enrollment shall be measured in
9.23 	full-year equivalents and shall include only enrollments in
9.24 	courses that award credit or otherwise satisfy any of the
9.25 	requirements of an academic or vocational program.
9.26 	(c) The enrollment adjustment shall be made for each year
9.27 	of the subsequent biennium.  The base enrollment year is the
9.28 	1995 fiscal year enrollment.  The base enrollment shall be
9.29 	updated for each two percent change in estimated full-year
9.30 	equivalent enrollment.  If the actual enrollment differs from
9.31 	the estimated enrollment, an adjustment shall be made in the
9.32 	next biennium.
9.33 	
EFFECTIVE DATE. This section is effective June 30, 2007.

9.34 	Sec. 3. Minnesota Statutes 2004, section 135A.052,
9.35 	subdivision 1, is amended to read:
9.36 		Subdivision 1.Statement of missions.  The legislature
10.1 	recognizes each type of public postsecondary institution to have
10.2 	a distinctive mission within the overall provision of public
10.3 	higher education in the state and a responsibility to cooperate
10.4 	with each other.  These missions are as follows:
10.5 	(1) the technical colleges shall offer vocational training
10.6 	and education to prepare students for skilled occupations that
10.7 	do not require a baccalaureate degree;
10.8 	(2) the community colleges shall offer lower division
10.9 	instruction in academic programs, occupational programs in which
10.10 	all credits earned will be accepted for transfer to a
10.11 	baccalaureate degree in the same field of study, and remedial
10.12 	studies, for students transferring to baccalaureate institutions
10.13 	and for those seeking associate degrees;
10.14 	(3) consolidated community technical colleges shall offer
10.15 	the same types of instruction, programs, certificates, diplomas,
10.16 	and degrees as the technical colleges and community colleges
10.17 	offer;
10.18 	(4) the state universities shall offer undergraduate and
10.19 	graduate instruction through the master's degree, including
10.20 	specialist certificates, in the liberal arts and sciences and
10.21 	professional education, and may offer applied doctoral degrees
10.22 	in education, business, psychology, physical therapy, audiology,
10.23 	and nursing; and
10.24 	(5) the University of Minnesota shall offer undergraduate,
10.25 	graduate, and professional instruction through the doctoral
10.26 	degree, and shall be the primary state supported academic agency
10.27 	for research and extension services.
10.28 	It is part of the mission of each system that within the
10.29 	system's resources the system's governing board and chancellor
10.30 	or president shall endeavor to:
10.31 	(a) prevent the waste or unnecessary spending of public
10.32 	money;
10.33 	(b) use innovative fiscal and human resource practices to
10.34 	manage the state's resources and operate the system as
10.35 	efficiently as possible;
10.36 	(c) coordinate the system's activities wherever appropriate
11.1 	with the activities of the other system and governmental
11.2 	agencies;
11.3 	(d) use technology where appropriate to increase system
11.4 	productivity, improve customer service, increase public access
11.5 	to information about the system, and increase public
11.6 	participation in the business of the system;
11.7 	(e) utilize constructive and cooperative labor-management
11.8 	practices to the extent otherwise required by chapters 43A and
11.9 	179A; and
11.10 	(f) recommend to the legislature appropriate changes in law
11.11 	necessary to carry out the mission of the system.

11.12 	Sec. 4. [135A.165] DEAF STUDENTS; TUITION ASSISTANCE.
11.13 	(a) For the purpose of this section, a "deaf person" means
11.14 	an individual with a hearing loss of such severity that the
11.15 	individual must depend primarily on visual communication, such
11.16 	as writing, lip reading, manual communication, and gestures.
11.17 	(b) A deaf person, who is a resident student as defined in
11.18 	section 136A.101, subdivision 8, is entitled to tuition
11.19 	assistance for the tuition and fees remaining after deducting
11.20 	any federal or state grants or other public or private grants
11.21 	made to the person for the purpose of paying the tuition and
11.22 	fees at a Minnesota state college or university or the
11.23 	University of Minnesota.  A deaf person must receive either a
11.24 	federal Pell grant or a state grant under section 136A.121 for a
11.25 	term to receive tuition assistance for that term.

11.26 	Sec. 5. Minnesota Statutes 2004, section 135A.30,
11.27 	subdivision 3, is amended to read:
11.28 		Subd. 3.Selection of recipients.  The governing board of
11.29 	an eligible institution shall determine, in consultation with
11.30 	its campuses, application dates and procedures, criteria to be
11.31 	considered, and methods of selecting students to receive
11.32 	scholarships.  A campus, with the approval of its governing
11.33 	board, may award a scholarship in any of the specified
11.34 	fields field of study (1) in which the campus offers a program
11.35 	that is of the quality and rigor to meet the needs of the
11.36 	talented student, and (2) that is pertinent to the mission of
12.1 	the campus.

12.2 	Sec. 6. Minnesota Statutes 2004, section 135A.30,
12.3 	subdivision 4, is amended to read:
12.4 		Subd. 4.Amount of scholarship.  The amount of the
12.5 	scholarship must may be (1) at public institutions, up to the
12.6 	cost of tuition and fees for full-time attendance for one
12.7 	academic year, or (2) at private institutions, an amount equal 
12.8 	up to the lesser of the actual tuition and fees charged by the
12.9 	institution or the tuition and fees in comparable public
12.10 	institutions.  Scholarships awarded under this section must not
12.11 	be considered in determining a student's financial need as
12.12 	provided in section 136A.101, subdivision 5.

12.13 	Sec. 7. Minnesota Statutes 2004, section 135A.30,
12.14 	subdivision 5, is amended to read:
12.15 		Subd. 5.Renewals.  The scholarship shall may be renewed
12.16 	yearly, for up to three additional academic years, if the
12.17 	student:
12.18 	(1) maintains full-time enrollment with a grade point
12.19 	average of at least 3.0 on a four point scale;
12.20 	(2) pursues studies and continues to demonstrate
12.21 	outstanding ability, achievement, and potential in the field for
12.22 	which the award was made; and
12.23 	(3) is achieving satisfactory progress toward a degree.

12.24 	Sec. 8. Minnesota Statutes 2004, section 135A.52,
12.25 	subdivision 1, is amended to read:
12.26 		Subdivision 1.Fees and tuition.  Except for an
12.27 	administration fee established by the governing board at a level
12.28 	to recover costs, to be collected only when a course is taken
12.29 	for credit, a senior citizen who is a legal resident of
12.30 	Minnesota is entitled without payment of tuition or activity
12.31 	fees to attend courses offered for credit, audit any courses
12.32 	offered for credit, or enroll in any noncredit adult vocational
12.33 	education courses in any state supported institution of higher
12.34 	education in Minnesota when space is available after all
12.35 	tuition-paying students have been accommodated. A senior
12.36 	citizen enrolled under this section must pay any materials,
13.1 	personal property, or service charges for the course.  In
13.2 	addition, a senior citizen who is enrolled in a course for
13.3 	credit must pay an administrative fee in an amount established
13.4 	by the governing board of the institution to recover the course
13.5 	costs.  There shall be no administrative fee charges to a senior
13.6 	citizen auditing a course.For the purposes of this section and
13.7 	section 135A.51, the term "noncredit adult vocational education 
13.8 	courses" shall not include those adult vocational education 
13.9 	courses designed and offered specifically and exclusively for
13.10 	senior citizens.
13.11 	The provisions of this section and section 135A.51 do not
13.12 	apply to noncredit courses designed and offered by the
13.13 	University of Minnesota, and the Minnesota State Colleges and
13.14 	Universities specifically and exclusively for senior citizens.
13.15 	Senior citizens enrolled under the provisions of this section
13.16 	and section 135A.51 shall not be included by such institutions
13.17 	in their computation of full-time equivalent students when
13.18 	requesting staff or appropriations. The enrollee shall pay
13.19 	laboratory or material fees.

13.20 	Sec. 9. Minnesota Statutes 2004, section 135A.52,
13.21 	subdivision 2, is amended to read:
13.22 		Subd. 2.Term; income of senior citizens. (a) Except
13.23 	under paragraph (b),there shall be no limit to the number of
13.24 	terms, quarters or semesters a senior citizen may attend
13.25 	courses, nor income limitation imposed in determining
13.26 	eligibility.
13.27 	(b) A senior citizen enrolled in a closed enrollment
13.28 	contract training or professional continuing education program
13.29 	is not eligible for benefits under subdivision 1.

13.30 	Sec. 10. Minnesota Statutes 2004, section 136A.01,
13.31 	subdivision 2, is amended to read:
13.32 		Subd. 2.Responsibilities.  The Higher Education Services
13.33 	Office is responsible for:
13.34 	(1) necessary state level administration of financial aid
13.35 	programs, including accounting, auditing, and disbursing state
13.36 	and federal financial aid funds, and reporting on financial aid
14.1 	programs to the governor and the legislature;
14.2 	(2) approval, registration, licensing, and financial aid
14.3 	eligibility of private collegiate and career schools, under
14.4 	sections 136A.61 to 136A.71 and chapter 141;
14.5 	(3) administering the Telecommunications Council under Laws
14.6 	1993, First Special Session chapter 2, article 5, section 2,the
14.7 	Learning Network of Minnesota, and the Statewide Library Task
14.8 	Force;
14.9 	(4) negotiating and administering reciprocity agreements;
14.10 	(5) publishing and distributing financial aid information
14.11 	and materials, and other information and materials under section
14.12 	136A.87, to students and parents;
14.13 	(6) collecting and maintaining student enrollment and
14.14 	financial aid data and reporting data on students and
14.15 	postsecondary institutions to develop and implement a process to
14.16 	measure and report on the effectiveness of postsecondary
14.17 	institutions;
14.18 	(7) administering the federal programs that affect students
14.19 	and institutions on a statewide basis; and
14.20 	(8) prescribing policies, procedures, and rules under
14.21 	chapter 14 necessary to administer the programs under its
14.22 	supervision.

14.23 	Sec. 11. Minnesota Statutes 2004, section 136A.031,
14.24 	subdivision 2, is amended to read:
14.25 		Subd. 2.Higher education advisory council.  A Higher
14.26 	Education Advisory Council (HEAC) is established.  The HEAC is
14.27 	composed of the president of the University of Minnesota or
14.28 	designee; the chancellor of the Minnesota State Colleges and
14.29 	Universities or designee; the commissioner of education; the
14.30 	president of the Private College Council; a representative from
14.31 	the Minnesota Association of Private Postsecondary Schools 
14.32 	Career College Association; and a member appointed by the
14.33 	governor.  The HEAC shall (1) bring to the attention of the
14.34 	Higher Education Services Council Office any matters that the
14.35 	HEAC deems necessary, and (2) review and comment upon matters
14.36 	before the council.  The council shall refer all proposals to
15.1 	the HEAC before submitting recommendations to the governor and
15.2 	the legislature.  The council shall provide time for a report
15.3 	from the HEAC at each meeting of the council.

15.4 	Sec. 12. Minnesota Statutes 2004, section 136A.031,
15.5 	subdivision 3, is amended to read:
15.6 		Subd. 3.Student advisory council.  A Student Advisory
15.7 	Council (SAC) to the Higher Education Services Council Office is
15.8 	established.  The members of SAC shall include:  the chair of
15.9 	the University of Minnesota student senate; the state chair of
15.10 	the Minnesota State University Student Association; the
15.11 	president of the Minnesota State College Student Association and
15.12 	an officer of the Minnesota State College Student Association,
15.13 	one in a community college course of study and one in a
15.14 	technical college course of study; the president of the
15.15 	Minnesota Association of Private College Students; and a student
15.16 	who is enrolled in a private vocational school, to be appointed
15.17 	by the Minnesota Association of Private Postsecondary Schools 
15.18 	Career College Association.  A member may be represented by a
15.19 	student designee who attends an institution from the same system
15.20 	that the absent member represents.  The SAC shall select one of
15.21 	its members to serve as chair.
15.22 	The Higher Education Services Council Office shall inform
15.23 	the SAC of all matters related to student issues under
15.24 	consideration and shall refer all proposals to the SAC before
15.25 	taking action or sending the proposals to the governor or
15.26 	legislature.  The SAC shall report to the Higher Education
15.27 	Services Council Office quarterly and at other times that the
15.28 	SAC considers desirable.  The SAC shall determine its meeting
15.29 	times, but it shall also meet with the council office within 30
15.30 	days after the director's request for a meeting.
15.31 	The SAC shall:
15.32 	(1) bring to the attention of the Higher Education Services
15.33 	Council Office any matter that the SAC believes needs the
15.34 	attention of the council office;
15.35 	(2) make recommendations to the Higher Education Services
15.36 	Council Office as it finds appropriate; and 
16.1 	(3) appoint approve student members to appointments by the
16.2 	Higher Education Services Council Office for each advisory
16.3 	groups group as provided in subdivision 4; and 
16.4 	(4) provide any reasonable assistance to the council.

16.5 	Sec. 13. Minnesota Statutes 2004, section 136A.031,
16.6 	subdivision 4, is amended to read:
16.7 		Subd. 4.Student representation. If requested by the
16.8 	SAC,The director must place at least one student from an
16.9 	affected educational system on any task force created under
16.10 	subdivision 1.  The student member or members shall be appointed
16.11 	by the SAC by the office.  The director must submit to the SAC
16.12 	the name of any student appointed to an advisory group or task
16.13 	force.  The student appointment is not approved if four SAC
16.14 	members vote to disapprove of the appointment.  If an
16.15 	appointment is disapproved, the director must submit another
16.16 	student appointment to the SAC in a timely manner.

16.17 	Sec. 14. Minnesota Statutes 2004, section 136A.031,
16.18 	subdivision 5, is amended to read:
16.19 		Subd. 5.Expiration.  Notwithstanding section 15.059,
16.20 	subdivision 5, the advisory groups established in this section
16.21 	expire on June 30, 2005 2007.

16.22 	Sec. 15. Minnesota Statutes 2004, section 136A.08, is
16.23 	amended by adding a subdivision to read:
16.24 		Subd. 7.Reporting. The Higher Education Services Office
16.25 	must annually, before the last day in January, submit a report
16.26 	to the committees in the house of representatives and the senate
16.27 	with responsibility for higher education finance on:
16.28 	(1) participation in the tuition reciprocity program by
16.29 	Minnesota students and students from other states attending
16.30 	Minnesota postsecondary institutions under a reciprocity
16.31 	agreement;
16.32 	(2) reciprocity and resident tuition rates at each
16.33 	institution; and 
16.34 	(3) interstate payments and obligations for each state
16.35 	participating in the tuition reciprocity program in the prior
16.36 	year.

17.1 	Sec. 16. Minnesota Statutes 2004, section 136A.08, is
17.2 	amended by adding a subdivision to read:
17.3 		Subd. 8.Data sharing. (a) The Higher Education Services
17.4 	Office must consider developing data collection procedures and
17.5 	agreements to monitor the extent to which students who attend
17.6 	Minnesota postsecondary institutions under reciprocity
17.7 	agreements are employed in Minnesota after graduation.  These
17.8 	procedures must include matching Social Security numbers of
17.9 	reciprocity students for purposes of tracking the migration and
17.10 	employment of students who receive associate, baccalaureate, or
17.11 	graduate degrees through a tuition reciprocity program.  State
17.12 	agencies must share wage and earnings data under section 268.19
17.13 	for the purpose of evaluating the tuition reciprocity program.
17.14 	(b) The reciprocity application must request the use of
17.15 	student Social Security numbers for the purposes of this
17.16 	subdivision.  Reciprocity students must be informed that Social
17.17 	Security numbers will be used only for monitoring described in
17.18 	paragraph (a), by sharing information with Minnesota agencies
17.19 	and departments responsible for the administration of covered
17.20 	wage data and revenue collections.  Social Security numbers must
17.21 	not be used for any other purpose or reported to any other
17.22 	government entity.
17.23 	(c) The office must include summary data on the migration
17.24 	and earnings of reciprocity graduates in the reciprocity report
17.25 	to the legislature.  This report must include summary statistics
17.26 	on number of graduates by institution, degree granted and year
17.27 	of graduation, total number of reciprocity students employed in
17.28 	the state, and total earnings of graduates.

17.29 	Sec. 17. Minnesota Statutes 2004, section 136A.121,
17.30 	subdivision 2, is amended to read:
17.31 		Subd. 2.Eligibility for grants.  An applicant is
17.32 	eligible to be considered for a grant, regardless of the
17.33 	applicant's sex, creed, race, color, national origin, or
17.34 	ancestry, under sections 136A.095 to 136A.131 if the office
17.35 	finds that the applicant:
17.36 	(1) is a resident of the state of Minnesota;
18.1 	(2) is a graduate of a secondary school or its equivalent,
18.2 	or is 17 years of age or over, and has met all requirements for
18.3 	admission as a student to an eligible college or technical
18.4 	college of choice as defined in sections 136A.095 to 136A.131;
18.5 	(3) has met the financial need criteria established in
18.6 	Minnesota Rules;
18.7 	(4) is not in default, as defined by the office, of any
18.8 	federal or state student educational loan; and
18.9 	(5) is not more than 30 days in arrears for any in
18.10 	court-ordered child support payments owed to a that is collected
18.11 	or enforced by the public agency authority responsible for child
18.12 	support enforcement or, if the applicant is more than 30 days in
18.13 	arrears in court-ordered child support that is collected or
18.14 	enforced by the public authority responsible for child support
18.15 	enforcement, but is complying with a written payment
18.16 	agreement under section 518.553or order for arrearages. An
18.17 	agreement must provide for a repayment of arrearages at no less
18.18 	than 20 percent per month of the amount of the monthly child
18.19 	support obligation or no less than $30 per month if there is no
18.20 	current monthly child support obligation.  Compliance means that
18.21 	payments are made by the payment date.
18.22 	The director and the commissioner of human services shall
18.23 	develop procedures to implement clause (5).

18.24 	Sec. 18. Minnesota Statutes 2004, section 136A.121,
18.25 	subdivision 6, is amended to read:
18.26 		Subd. 6.Cost of attendance.  (a) The recognized cost of
18.27 	attendance consists of allowances specified in law for living
18.28 	and miscellaneous expenses, and an allowance for tuition and
18.29 	fees equal to the lesser of the average tuition and fees charged
18.30 	by the institution, or the tuition and fee maximums established
18.31 	in law.
18.32 	(b) For a student registering for less than full time, the
18.33 	office shall prorate the cost of attendance to the actual number
18.34 	of credits for which the student is enrolled.
18.35 	The recognized cost of attendance for a student who is
18.36 	confined to a Minnesota correctional institution shall consist
19.1 	of the tuition and fee component in paragraph (a), with no
19.2 	allowance for living and miscellaneous expenses.
19.3 	For the purpose of this subdivision, "fees" include only
19.4 	those fees that are mandatory and charged to full-time resident
19.5 	students attending the institution. Fees do not include charges
19.6 	for tools, equipment, computers, or other similar materials
19.7 	where the student retains ownership.  Fees include charges for
19.8 	these materials if the institution retains ownership.  Fees do
19.9 	not include optional or punitive fees.

19.10 	Sec. 19. Minnesota Statutes 2004, section 136A.121, is
19.11 	amended by adding a subdivision to read:
19.12 		Subd. 7a.Surplus appropriation. If the amount
19.13 	appropriated is determined by the office to be more than
19.14 	sufficient to fund projected grant demand in the second year of
19.15 	the biennium, the office may increase the living and
19.16 	miscellaneous expense allowance in the second year of the
19.17 	biennium by up to an amount that retains sufficient
19.18 	appropriations to fund the projected grant demand.  The
19.19 	adjustment may be made one or more times.  In making the
19.20 	determination that there is more than sufficient funds, the
19.21 	office shall balance the need for sufficient resources to meet
19.22 	the projected demand for grants with the goal of fully
19.23 	allocating the appropriation for state grants.  An increase in
19.24 	the living and miscellaneous expense allowance under this
19.25 	subdivision does not carry forward into a subsequent biennium.
19.26 	This subdivision expires June 30, 2007.

19.27 	Sec. 20. Minnesota Statutes 2004, section 136A.121,
19.28 	subdivision 9, is amended to read:
19.29 		Subd. 9.Awards.  An undergraduate student who meets the
19.30 	office's requirements is eligible to apply for and receive a
19.31 	grant in any year of undergraduate study unless the student has
19.32 	obtained a baccalaureate degree or previously has been enrolled
19.33 	full time or the equivalent for eight semesters or the
19.34 	equivalent, excluding courses taken from a Minnesota school or
19.35 	postsecondary institution which is not participating in the
19.36 	state grant program and from which a student transferred no
20.1 	credit. A student who withdraws from enrollment for active
20.2 	military service is entitled to an additional semester or the
20.3 	equivalent of grant eligibility.A student enrolled in a
20.4 	two-year program at a four-year institution is only eligible for
20.5 	the tuition and fee maximums established by law for two-year
20.6 	institutions.

20.7 	Sec. 21. Minnesota Statutes 2004, section 136A.121,
20.8 	subdivision 13, is amended to read:
20.9 		Subd. 13.Deadline.  The deadline for the office to
20.10 	accept applications for state grants for a term is 14 30 days
20.11 	after the start of that term.

20.12 	Sec. 22. Minnesota Statutes 2004, section 136A.121, is
20.13 	amended by adding a subdivision to read:
20.14 		Subd. 18.Data. (a) An eligible institution must provide
20.15 	to the office data on student enrollment and federal and state
20.16 	financial aid.
20.17 	(b) An institution or its agent must provide to the office
20.18 	aggregate and distributional financial or other data as
20.19 	determined by the director that is directly related to the
20.20 	responsibilities of the office under this chapter and chapter
20.21 	141.  The director may only request aggregate and distributional
20.22 	data after establishing and consulting with a data advisory task
20.23 	force to determine the need, content, and detail of the
20.24 	information.  Data provided by nonpublic institutions under this
20.25 	paragraph is considered nonpublic data under chapter 13.

20.26 	Sec. 23. Minnesota Statutes 2004, section 136A.125,
20.27 	subdivision 2, is amended to read:
20.28 		Subd. 2.Eligible students. (a) An applicant is eligible
20.29 	for a child care grant if the applicant:
20.30 	(1) is a resident of the state of Minnesota;
20.31 	(2) has a child 12 years of age or younger, or 14 years of
20.32 	age or younger who is handicapped as defined in section 125A.02,
20.33 	and who is receiving or will receive care on a regular basis
20.34 	from a licensed or legal, nonlicensed caregiver;
20.35 	(3) is income eligible as determined by the office's
20.36 	policies and rules, but is not a recipient of assistance from
21.1 	the Minnesota family investment program;
21.2 	(4) has not earned a baccalaureate degree and has been
21.3 	enrolled full time less than eight semesters or the equivalent;
21.4 	(5) is pursuing a nonsectarian program or course of study
21.5 	that applies to an undergraduate degree, diploma, or
21.6 	certificate;
21.7 	(6) is enrolled at least half time in an eligible
21.8 	institution; and
21.9 	(7) is in good academic standing and making satisfactory
21.10 	academic progress.
21.11 	(b) A student who withdraws from enrollment for active
21.12 	military service is entitled to an additional semester or the
21.13 	equivalent of grant eligibility.

21.14 	Sec. 24. Minnesota Statutes 2004, section 136A.125,
21.15 	subdivision 4, is amended to read:
21.16 		Subd. 4.Amount and length of grants.  The amount of a
21.17 	child care grant must be based on:
21.18 	(1) the income of the applicant and the applicant's spouse;
21.19 	(2) the number in the applicant's family, as defined by the
21.20 	office; and
21.21 	(3) the number of eligible children in the applicant's
21.22 	family.
21.23 	The maximum award to the applicant shall be $2,200 $2,300 
21.24 	for each eligible child per academic year, except that the
21.25 	campus financial aid officer may apply to the office for
21.26 	approval to increase grants by up to ten percent to compensate
21.27 	for higher market charges for infant care in a community.  The
21.28 	office shall develop policies to determine community market
21.29 	costs and review institutional requests for compensatory grant
21.30 	increases to ensure need and equal treatment.  The office shall
21.31 	prepare a chart to show the amount of a grant that will be
21.32 	awarded per child based on the factors in this subdivision.  The
21.33 	chart shall include a range of income and family size.

21.34 	Sec. 25. Minnesota Statutes 2004, section 136A.1701, is
21.35 	amended by adding a subdivision to read:
21.36 		Subd. 11.Data. (a) An eligible institution must provide
22.1 	to the office data on student enrollment and federal and state
22.2 	financial aid.
22.3 	(b) An institution or its agent must provide to the office
22.4 	aggregate and distributional financial or other data as
22.5 	determined by the director that is directly related to the
22.6 	responsibilities of the office under this chapter and chapter
22.7 	141.  The director may only request aggregate and distributional
22.8 	data after establishing and consulting with a data advisory task
22.9 	force to determine the need, content, and detail of the
22.10 	information.  Data provided by nonpublic institutions under this
22.11 	paragraph is considered nonpublic data under chapter 13.

22.12 	Sec. 26. Minnesota Statutes 2004, section 136A.1701, is
22.13 	amended by adding a subdivision to read:
22.14 		Subd. 12.Eligible student. "Eligible student" means a
22.15 	student who is a Minnesota resident who is enrolled or accepted
22.16 	for enrollment at an eligible institution in Minnesota or in
22.17 	another state or province.  Non-Minnesota residents are eligible
22.18 	students if they are enrolled or accepted for enrollment in a
22.19 	minimum of one course of at least 30 days in length during the
22.20 	academic year that requires physical attendance at an eligible
22.21 	institution located in Minnesota.  Non-Minnesota resident
22.22 	students enrolled exclusively during the academic year in
22.23 	correspondence courses or courses offered over the Internet are
22.24 	not eligible students.  Non-Minnesota resident students not
22.25 	physically attending classes in Minnesota due to enrollment in a
22.26 	study abroad program for 12 months or less are eligible students.
22.27 	Non-Minnesota residents enrolled in study abroad programs
22.28 	exceeding 12 months are not eligible students.  For purposes of
22.29 	this section, an "eligible student" must also meet the
22.30 	eligibility requirements of section 136A.15, subdivision 8.

22.31 	Sec. 27. [136A.1703] INCOME-CONTINGENT LOANS.
22.32 	The office shall administer an income-contingent loan
22.33 	repayment program to assist graduates of Minnesota schools in
22.34 	medicine, dentistry, pharmacy, chiropractic medicine, public
22.35 	health, and veterinary medicine, and Minnesota residents
22.36 	graduating from optometry and osteopathy programs.  Applicant
23.1 	data collected by the office for this program may be disclosed
23.2 	to a consumer credit reporting agency under the same conditions
23.3 	as those that apply to the supplemental loan program under
23.4 	section 136A.162.  No new applicants may be accepted after June
23.5 	30, 1995.

23.6 	Sec. 28. [136A.1785] LOAN CAPITAL FUND.
23.7 	The office may deposit and hold assets derived from the
23.8 	operation of its student loan programs authorized by this
23.9 	chapter in a fund known as the loan capital fund.  Assets in the
23.10 	loan capital fund are available to the office solely for
23.11 	carrying out the purposes and terms of sections 136A.15 to
23.12 	136A.1703, including, but not limited to, making student loans
23.13 	authorized by this chapter, paying administrative expenses
23.14 	associated with the operation of its student loan programs,
23.15 	repurchasing defaulted student loans, and paying expenses in
23.16 	connection with the issuance of revenue bonds authorized under
23.17 	this chapter.  Assets in the loan capital fund may be invested
23.18 	as provided in sections 11A.24 and 136A.16, subdivision 8.  All
23.19 	interest and earnings from the investment of the loan capital
23.20 	fund inure to the benefit of the fund and are deposited into the
23.21 	fund.

23.22 	Sec. 29. [136A.861] INTERVENTION FOR COLLEGE ATTENDANCE
23.23 	PROGRAM GRANTS.
23.24 		Subdivision 1.Grants. The director of the Higher
23.25 	Education Services Office shall award grants to foster
23.26 	postsecondary attendance by providing outreach services to
23.27 	historically underserved students in grades six through 12.
23.28 	Grants must be awarded to programs that provide precollege
23.29 	services, including, but not limited to:
23.30 	(1) academic counseling;
23.31 	(2) mentoring;
23.32 	(3) fostering and improving parental involvement in
23.33 	planning for and facilitating a college education;
23.34 	(4) services for students with English as a second
23.35 	language;
23.36 	(5) academic enrichment activities;
24.1 	(6) tutoring;
24.2 	(7) career awareness and exploration;
24.3 	(8) orientation to college life;
24.4 	(9) assistance with high school course selection and
24.5 	information about college admission requirements; and 
24.6 	(10) financial aid counseling.
24.7 	Grants shall be awarded to postsecondary institutions,
24.8 	professional organizations, community-based organizations, or
24.9 	others deemed appropriate by the director.
24.10 	Grants shall be awarded for one year and may be renewed for
24.11 	a second year with documentation to the Higher Education
24.12 	Services Office of successful program outcomes.
24.13 		Subd. 2.Eligible students. Eligible students include
24.14 	students in grades six through 12 who meet one or more of the
24.15 	following criteria:
24.16 	(1) are counted under section 1124(c) of the Elementary and
24.17 	Secondary Education Act of 1965 (Title I);
24.18 	(2) are eligible for free or reduced-price lunch under the
24.19 	National School Lunch Act;
24.20 	(3) receive assistance under the Temporary Assistance for
24.21 	Needy Families Law (Title I of the Personal Responsibility and
24.22 	Work Opportunity Reconciliation Act of 1996); or 
24.23 	(4) are a member of a group traditionally underrepresented
24.24 	in higher education.
24.25 		Subd. 3.Application process. The director of the Higher
24.26 	Education Services Office shall develop a grant application
24.27 	process.  The director shall attempt to support projects in a
24.28 	manner that ensures that eligible students throughout the state
24.29 	have access to precollege services.
24.30 	The grant application must include, at a minimum, the
24.31 	following information:
24.32 	(1) a description of the characteristics of the students to
24.33 	be served reflective of the need for services listed in
24.34 	subdivision 1;
24.35 	(2) a description of the services to be provided and a
24.36 	timeline for implementation of the activities;
25.1 	(3) a description of how the services provided will foster
25.2 	postsecondary attendance;
25.3 	(4) a description of how the services will be evaluated to
25.4 	determine whether the program goals were met; and 
25.5 	(5) other information as identified by the director.
25.6 	Grant recipients must specify both program and student outcome
25.7 	goals, and performance measures for each goal.
25.8 		Subd. 4.Match required. Applicants are required to
25.9 	match the grant amount dollar-for-dollar.  The match may be in
25.10 	cash or an in-kind contribution.
25.11 		Subd. 5.Review committee. The director must establish
25.12 	and convene a grant selection committee to review applications
25.13 	and award grants.  The members of the committee may include
25.14 	representatives of postsecondary institutions, school districts,
25.15 	organizations providing precollege outreach services, and others
25.16 	deemed appropriate by the director.
25.17 		Subd. 6.Program evaluation. Each grant recipient must
25.18 	annually submit a report to the Higher Education Services Office
25.19 	delineating its program and student outcome goals, and
25.20 	activities implemented to achieve the stated outcomes.  The
25.21 	goals must be clearly stated and measurable.  Grant recipients
25.22 	are required to collect, analyze, and report on participation
25.23 	and outcome data that enable the office to verify that the
25.24 	program goals were met.  The office shall maintain:
25.25 	(1) information about successful precollege program
25.26 	activities for dissemination to individuals throughout the state
25.27 	interested in adopting or replicating successful program
25.28 	practices; and 
25.29 	(2) data on the success of the funded projects in
25.30 	increasing the high school graduation and college participation
25.31 	rates of students served by the grant recipients.  The office
25.32 	may convene meetings of the grant recipients, as needed, to
25.33 	discuss issues pertaining to the implementation of precollege
25.34 	services.
25.35 		Subd. 7.Report. By January 15 of each odd-numbered
25.36 	year, the office shall submit a report to the committees in the
26.1 	legislature with jurisdiction over higher education finance
26.2 	regarding the grant recipients and their activities.  The report
26.3 	shall include information about the students served, the
26.4 	organizations providing services, program activities, program
26.5 	goals and outcomes, and program revenue sources and funding
26.6 	levels.

26.7 	Sec. 30. Minnesota Statutes 2004, section 136F.04,
26.8 	subdivision 4, is amended to read:
26.9 		Subd. 4.Recommendations.  Each student association shall
26.10 	recommend at least two and not more than four candidates for its
26.11 	student member.  By January 2 April 15 of the year in which its
26.12 	members' term expires, each student association shall submit its
26.13 	recommendations to the governor.  The governor is not bound by
26.14 	these recommendations.

26.15 	Sec. 31. [136F.31] CENTERS OF EXCELLENCE.
26.16 		Subdivision 1.Board designation. The board must
26.17 	designate at least three and up to eight different program
26.18 	centers of excellence.  The board must determine the form and
26.19 	required information contained in applications from member
26.20 	institutions.
26.21 		Subd. 2.Center selection criteria. The board must
26.22 	select programs based on institutional proposals demonstrating:
26.23 	(1) the capacity to build multistate regional or national
26.24 	recognition of the program within five years;
26.25 	(2) a commitment to expanding the influence of the center
26.26 	to improve results in related programs in participating
26.27 	institutions;
26.28 	(3) the capacity to improve employment placement and income
26.29 	expectations of graduates from the program;
26.30 	(4) a strong partnership between a four-year and at least
26.31 	one two-year institution that maximizes the leverage of academic
26.32 	and training capacities in each institution;
26.33 	(5) a comprehensive academic plan that includes a seamless
26.34 	continuum of academic offerings in the program area that
26.35 	supports career development at multiple levels in related
26.36 	employment fields;
27.1 	(6) a specific development plan that includes a description
27.2 	of how the institution will pursue continuous improvement and
27.3 	accountability;
27.4 	(7) identified commitments from employers that include
27.5 	measurable financial and programmatic commitment to the center
27.6 	of excellence on the part of employers who will benefit from the
27.7 	development of the center.  A center for teacher education must
27.8 	demonstrate support from local school districts;
27.9 	(8) a commitment from the institution that the new
27.10 	designated funding will not supplant current budgets from
27.11 	related programs;
27.12 	(9) a strong existing program upon which the proposed
27.13 	center will build; and 
27.14 	(10) a separate fund for donations dedicated for the
27.15 	program within current institutional foundations.
27.16 	The board may adopt additional criteria that promote
27.17 	general goals of the centers.  The board shall give priority to
27.18 	programs that integrate the academic and training outcomes of
27.19 	the center with business clusters that have a significant
27.20 	multiplier effect on the state's economy based on projections of
27.21 	job, income, or general economic growth.  The board shall
27.22 	consult with the Department of Employment and Economic
27.23 	Development to identify these clusters and the potential
27.24 	economic impact of developing a center for excellence.
27.25 		Subd. 3.Advisory committee and reports required. A
27.26 	center of excellence must create an advisory committee
27.27 	representing local, statewide, and national leaders in the
27.28 	field.  By January 15 of each odd-numbered year, each designated
27.29 	center must provide a report to the governor and the chairs of
27.30 	committees of the legislature with jurisdiction over higher
27.31 	education finance, that includes annual and integrated data on
27.32 	program enrollment, student demographics, student admission
27.33 	data, endowment growth, graduation rates, graduation outcomes,
27.34 	employer involvement, indicators of student or graduate
27.35 	employment success, and other outcomes as determined by the
27.36 	board.  After a center has been in existence for three years,
28.1 	the report must include measures of the program's impact on the
28.2 	local economy.

28.3 	Sec. 32. Minnesota Statutes 2004, section 136F.32,
28.4 	subdivision 2, is amended to read:
28.5 		Subd. 2.Technical and consolidated technical colleges.
 28.6 	(a) A technical college or consolidated technical community
28.7 	college shall offer students the option of pursuing diplomas and 
28.8 	or certificates in each technical education program, unless the
28.9 	board determines that a degree is the only acceptable credential
28.10 	for career entry in a specific field.  All vocational and
28.11 	technical credits earned for a diploma or certificate shall be
28.12 	applicable toward any available degree in the same program.
28.13 	(b) Certificates and diplomas are credentials that
28.14 	demonstrate competence in a vocational or technical area and,
28.15 	therefore, may include a general education component only as
28.16 	part of an articulation agreement or to meet occupational
28.17 	requirements as established by the trade or profession, or by
28.18 	the program advisory committee.  Students shall be provided with
28.19 	applied training in general studies as necessary for competence
28.20 	in the program area.  Students who have earned a certificate or
28.21 	diploma may earn a degree in the same field if they complete the
28.22 	general education and other degree requirements.

28.23 	Sec. 33. Minnesota Statutes 2004, section 136G.03,
28.24 	subdivision 3, is amended to read:
28.25 		Subd. 3.Account owner.  "Account owner" means a person
28.26 	who enters into a participation agreement and is entitled
28.27 	to select or change conduct transactions on the account,
28.28 	including selecting and changing the beneficiary of an account
28.29 	or to receive and receiving distributions from the account for
28.30 	other than payment of qualified higher education expenses.

28.31 	Sec. 34. Minnesota Statutes 2004, section 136G.03,
28.32 	subdivision 21a, is amended to read:
28.33 		Subd. 21a.Minor trust account.  "Minor trust account"
28.34 	means a Uniform Gift to Minors Act account,or a Uniform
28.35 	Transfers to Minors Act account, or a trust instrument naming a
28.36 	minor person as beneficiary,created and operating under the
29.1 	laws of Minnesota or another state.

29.2 	Sec. 35. Minnesota Statutes 2004, section 136G.03,
29.3 	subdivision 22, is amended to read:
29.4 		Subd. 22.Nonqualified distribution.  "Nonqualified
29.5 	distribution" means a distribution made from an account other
29.6 	than (1) a qualified distribution; or (2) a distribution due to
29.7 	the death or disability of, or scholarship to, or attendance at
29.8 	a United States military academy by,a beneficiary.

29.9 	Sec. 36. Minnesota Statutes 2004, section 136G.03,
29.10 	subdivision 32, is amended to read:
29.11 		Subd. 32.Scholarship.  "Scholarship" means a
29.12 	scholarship,or educational assistance allowance, or payment
29.13 	under section 529(b)(3)(C) of the Internal Revenue Code.

29.14 	Sec. 37. Minnesota Statutes 2004, section 136G.05,
29.15 	subdivision 8, is amended to read:
29.16 		Subd. 8.Administration.  The director shall administer
29.17 	the program, including accepting and processing applications,
29.18 	maintaining account records, making payments, making matching
29.19 	grants under section 136G.11, and undertaking any other
29.20 	necessary tasks to administer the program.  The office may
29.21 	contract with one or more third parties to carry out some or all
29.22 	of these administrative duties, including promotion providing
29.23 	incentives and marketing of the program.  The office and the
29.24 	board may jointly contract with third-party providers, if the
29.25 	office and board determine that it is desirable to contract with
29.26 	the same entity or entities for administration and investment
29.27 	management.

29.28 	Sec. 38. Minnesota Statutes 2004, section 136G.09,
29.29 	subdivision 11, is amended to read:
29.30 		Subd. 11.Effect of plan changes on participation
29.31 	agreement.  Amendments to sections 136G.01 to 136G.13
29.32 	automatically amend the participation agreement.  Any amendments
29.33 	to the operating procedures and policies of the plan shall
29.34 	automatically amend the participation agreement 30 days after
29.35 	adoption by the office or the board.

29.36 	Sec. 39. Minnesota Statutes 2004, section 136G.09,
30.1 	subdivision 12, is amended to read:
30.2 		Subd. 12.Special account to hold plan assets in trust.
 30.3 	All assets of the plan, including contributions to accounts and
30.4 	matching grant accounts and earnings, are held in trust for the
30.5 	exclusive benefit of account owners and beneficiaries.  Assets
30.6 	must be held in a separate account in the state treasury to be
30.7 	known as the Minnesota college savings plan account or in
30.8 	accounts with the third party provider selected pursuant to
30.9 	section 136G.05, subdivision 8.  Plan assets are not subject to
30.10 	claims by creditors of the state, are not part of the general
30.11 	fund, and are not subject to appropriation by the state.
30.12 	Payments from the Minnesota college savings plan account shall
30.13 	be made under sections 136G.01 to 136G.13.

30.14 	Sec. 40. Minnesota Statutes 2004, section 136G.11,
30.15 	subdivision 1, is amended to read:
30.16 		Subdivision 1.Matching grant qualification.  By June 30
30.17 	of each year, a state matching grant must be added to each
30.18 	account established under the program if the following
30.19 	conditions are met:
30.20 	(1) the contributor applies, in writing in a form
30.21 	prescribed by the director, for a matching grant;
30.22 	(2) a minimum contribution of $200 was made during the
30.23 	preceding calendar year; and 
30.24 	(3) the beneficiary's family meets Minnesota college
30.25 	savings plan residency requirements; and 
30.26 	(4) the family income of the beneficiary did not exceed
30.27 	$80,000.

30.28 	Sec. 41. Minnesota Statutes 2004, section 136G.11,
30.29 	subdivision 2, is amended to read:
30.30 		Subd. 2.Family income.  (a) For purposes of this
30.31 	section, "family income" means:
30.32 	(1) if the beneficiary is under age 25, the combined
30.33 	adjusted gross income of the beneficiary's parents or legal
30.34 	guardians as reported on the federal tax return or returns for
30.35 	the calendar year in which contributions were made.  If the
30.36 	beneficiary's parents or legal guardians are divorced, the
31.1 	income of the parent claiming the beneficiary as a dependent on
31.2 	the federal individual income tax return and the income of that
31.3 	parent's spouse, if any, is used to determine family income; or
31.4 	(2) if the beneficiary is age 25 or older, the combined
31.5 	adjusted gross income of the beneficiary and spouse, if any.
31.6 	(b) For a parent or legal guardian of beneficiaries under
31.7 	age 25 and for beneficiaries age 25 or older who resided in
31.8 	Minnesota and filed a federal individual income tax return, the
31.9 	matching grant must be based on family income from the calendar
31.10 	year in which contributions were made.

31.11 	Sec. 42. Minnesota Statutes 2004, section 136G.11,
31.12 	subdivision 3, is amended to read:
31.13 		Subd. 3.Residency requirement.  (a) If the beneficiary
31.14 	is under age 25, the beneficiary's parents or legal guardians
31.15 	must be Minnesota residents to qualify for a matching grant.  If
31.16 	the beneficiary is age 25 or older, the beneficiary must be a
31.17 	Minnesota resident to qualify for a matching grant.
31.18 	(b) To meet the residency requirements, the parent or legal
31.19 	guardian of beneficiaries under age 25 must have filed a
31.20 	Minnesota individual income tax return as a Minnesota resident
31.21 	and claimed the beneficiary as a dependent on the parent or
31.22 	legal guardian's federal tax return for the calendar year in
31.23 	which contributions were made. If the beneficiary's parents are
31.24 	divorced, the parent or legal guardian claiming the beneficiary
31.25 	as a dependent on the federal individual income tax return must
31.26 	be a Minnesota resident.For beneficiaries age 25 or older, the
31.27 	beneficiary, and a spouse, if any, must have filed a Minnesota
31.28 	and a federal individual income tax return as a Minnesota
31.29 	resident for the calendar year in which contributions were made.
31.30 	(c) A parent of beneficiaries under age 25 and
31.31 	beneficiaries age 25 or older who did not reside in Minnesota in
31.32 	the calendar year in which contributions were made are not
31.33 	eligible for a matching grant.

31.34 	Sec. 43. Minnesota Statutes 2004, section 136G.11,
31.35 	subdivision 13, is amended to read:
31.36 		Subd. 13.Forfeiture of matching grants.  (a) Matching
32.1 	grants are forfeited if:
32.2 	(1) the account owner transfers the total account balance
32.3 	of an account to another account or to another qualified tuition
32.4 	program;
32.5 	(2) the beneficiary receives a full tuition scholarship or
32.6 	admission to is attending a United States service academy;
32.7 	(3) the beneficiary dies or becomes disabled;
32.8 	(4) the account owner changes the beneficiary of the
32.9 	account; or
32.10 	(5) the account owner closes the account with a
32.11 	nonqualified withdrawal.
32.12 	(b) Matching grants must be proportionally forfeited if:
32.13 	(1) the account owner transfers a portion of an account to
32.14 	another account or to another qualified tuition program;
32.15 	(2) the beneficiary receives a scholarship covering a
32.16 	portion of qualified higher education expenses; or
32.17 	(3) the account owner makes a partial nonqualified
32.18 	withdrawal.
32.19 	(c) If the account owner makes a misrepresentation in a
32.20 	participation agreement or an application for a matching grant
32.21 	that results in a matching grant, the matching grant associated
32.22 	with the misrepresentation is forfeited.  The office and the
32.23 	board must instruct the plan administrator as to the amount to
32.24 	be forfeited from the matching grant account.  The office and
32.25 	the board must withdraw the matching grant or the proportion of
32.26 	the matching grant that is related to the misrepresentation.

32.27 	Sec. 44. Minnesota Statutes 2004, section 136G.13,
32.28 	subdivision 1, is amended to read:
32.29 		Subdivision 1.Qualified distribution methods.  (a)
32.30 	Qualified distributions may be made:
32.31 	(1) directly to participating eligible educational
32.32 	institutions on behalf of the beneficiary; or 
32.33 	(2) in the form of a check payable to both the beneficiary
32.34 	and the eligible educational institution; or 
32.35 	(3) directly to the account owner or beneficiary if the
32.36 	account owner or beneficiary has already paid qualified higher
33.1 	education expenses.
33.2 	(b) Qualified distributions must be withdrawn
33.3 	proportionally from contributions and earnings in an account
33.4 	owner's account on the date of distribution as provided in
33.5 	section 529 of the Internal Revenue Code.

33.6 	Sec. 45. Minnesota Statutes 2004, section 136G.13,
33.7 	subdivision 5, is amended to read:
33.8 		Subd. 5.Distributions due to death or disability of, or
33.9 	scholarship to, or attendance at a united states military
33.10 	academy by,a beneficiary.  An account owner may request a
33.11 	distribution due to the death or disability of, or scholarship
33.12 	to, or attendance at a United States military academy by,a
33.13 	beneficiary from an account by submitting a completed request to
33.14 	the plan.  Prior to distribution, the account owner shall
33.15 	certify the reason for the distribution and provide written
33.16 	confirmation from a third party that the beneficiary has died,
33.17 	become disabled, or received a scholarship for attendance at an
33.18 	eligible educational institution, or is attending a United
33.19 	States military academy.  The plan must not consider a request
33.20 	to make a distribution until a third-party written confirmation
33.21 	is received by the plan.  For purposes of this subdivision, a
33.22 	third-party written confirmation consists of the following:
33.23 	(1) for death of the beneficiary, a certified copy of the
33.24 	beneficiary's death record;
33.25 	(2) for disability of the beneficiary, a certification by a
33.26 	physician who is a doctor of medicine or osteopathy stating that
33.27 	the doctor is legally authorized to practice in a state of the
33.28 	United States and that the beneficiary is unable to attend any
33.29 	eligible educational institution because of an injury or illness
33.30 	that is expected to continue indefinitely or result in death.
33.31 	Certification must be on a form approved by the plan; or 
33.32 	(3) for a scholarship award to the beneficiary, a letter
33.33 	from the grantor of the scholarship or from the eligible
33.34 	educational institution receiving or administering the
33.35 	scholarship, that identifies the beneficiary by name and Social
33.36 	Security number or taxpayer identification number as the
34.1 	recipient of the scholarship and states the amount of the
34.2 	scholarship, the period of time or number of credits or units to
34.3 	which it applies, the date of the scholarship, and, if
34.4 	applicable, the eligible educational institution to which the
34.5 	scholarship is to be applied; or 
34.6 	(4) for attendance by the beneficiary at a United States
34.7 	military academy, a letter from the military academy indicating
34.8 	the beneficiary's enrollment and attendance.

34.9 	Sec. 46. Minnesota Statutes 2004, section 136G.14, is
34.10 	amended to read:
34.11 	136G.14 MINOR TRUST ACCOUNTS.
34.12 	(a) This section applies to a plan account in which funds
34.13 	of a minor trust account are invested.
34.14 	(b) The account owner may not be changed to any person
34.15 	other than a successor custodian or the beneficiary unless a
34.16 	court order directing the change of ownership is provided to the
34.17 	plan administrator.  The custodian must sign all forms and
34.18 	requests submitted to the plan administrator in the custodian's
34.19 	representative capacity.  The custodian must notify the plan
34.20 	administrator in writing when the beneficiary becomes legally
34.21 	entitled to be the account owner.  An account owner under this
34.22 	section may not select a contingent account owner.
34.23 	(c) The beneficiary of an account under this section may
34.24 	not be changed.  If the beneficiary dies, assets in a plan
34.25 	account become the property of the beneficiary's estate.  Funds
34.26 	in an account must not be transferred or rolled over to another
34.27 	account owner or to an account for another beneficiary.  A
34.28 	nonqualified distribution from an account, or a distribution due
34.29 	to the disability or scholarship award to the beneficiary, or
34.30 	made on account of the beneficiary's attendance at a United
34.31 	States military academy,must be used for the benefit of the
34.32 	beneficiary.

34.33 	Sec. 47. Minnesota Statutes 2004, section 137.0245,
34.34 	subdivision 1, is amended to read:
34.35 		Subdivision 1.Establishment.  A Regent Candidate
34.36 	Advisory Council is established to assist the legislature in
35.1 	determining criteria for, and identifying and recruiting
35.2 	qualified candidates for membership on the Board of Regents and
35.3 	making recommendations to the governor.

35.4 	Sec. 48. Minnesota Statutes 2004, section 137.0245,
35.5 	subdivision 3, is amended to read:
35.6 		Subd. 3.Duties. (a) The advisory council shall:
35.7 	(1) develop, in consultation with current and former
35.8 	regents and the administration of the University of Minnesota, a
35.9 	statement of the selection criteria to be applied and a
35.10 	description of the responsibilities and duties of a regent, and
35.11 	shall distribute this to potential candidates; and
35.12 	(2) for each position on the board, identify and recruit
35.13 	qualified candidates for the Board of Regents, based on the
35.14 	background and experience of the candidates, and their potential
35.15 	for discharging the responsibilities of a member of the Board of
35.16 	Regents, and the needs of the board.  The selection criteria
35.17 	must not include a limitation on the number of terms an
35.18 	individual may serve on the Board of Regents.
35.19 	(b) The selection criteria developed under paragraph (a),
35.20 	clause (1), must include a criterion that regents represent
35.21 	diversity in geography; gender; race; occupation, including
35.22 	business and labor; and experience.
35.23 	(c) The selection criterion must include an identification
35.24 	of the membership needs of the board for individual skills
35.25 	relevant to the governance of the University of Minnesota and
35.26 	the needs for certain individual characteristics.  Individual
35.27 	characteristics relate to qualities such as gender, race, and
35.28 	geographic location of residence.

35.29 	Sec. 49. Minnesota Statutes 2004, section 137.0245,
35.30 	subdivision 4, is amended to read:
35.31 		Subd. 4.Recommendations. (a) The advisory council shall
35.32 	recommend at least two and not more than four candidates.  By
35.33 	March 15 January 15 of each odd-numbered year, the advisory
35.34 	council shall submit its recommendations to the president of the
35.35 	senate and the speaker of the house of representatives.  The
35.36 	legislature shall not be bound by these recommendations governor.
36.1 	(b) The advisory council must submit a report to the
36.2 	governor on the needs criterion identified under subdivision 3,
36.3 	paragraph (c), at the same time it submits its recommendations.

36.4 	Sec. 50. [137.0246] REGENT NOMINATION AND ELECTION.
36.5 		Subdivision 1.Governor nomination. By February 15
36.6 	following the receipt of recommendations from the advisory
36.7 	council, the governor must submit to the joint committee
36.8 	established under subdivision 2 a slate of regent nominations
36.9 	that complies with sections 137.023 and 137.024.  The slate must
36.10 	name one nominee for each vacancy.  In selecting nominees, the
36.11 	governor must consider the needs of the Board of Regents and the
36.12 	balance of the board membership with respect to gender, racial,
36.13 	and ethnic composition.  The governor must inform the joint
36.14 	committee how each candidate and the slate meets the needs
36.15 	identified in the report under section 137.0245, subdivision 4,
36.16 	paragraph (b).
36.17 		Subd. 2.Joint committee. (a) The joint legislative
36.18 	committee consists of 20 legislator members.  Ten members shall
36.19 	be appointed by the speaker of the house.  Ten members shall be
36.20 	appointed by the Subcommittee on Committees of the Committee on
36.21 	Rules and Administration from the senate.  An equal number of
36.22 	members from the majority and minority party shall be appointed
36.23 	from each house.  The members appointed from the minority party
36.24 	must be appointed from among those recommended by the minority
36.25 	leader.  The chairs of the education policy committees and of
36.26 	the higher education budget divisions and the ranking minority
36.27 	member of those committees and divisions must be appointed.  A
36.28 	majority of the members from each house is a quorum of the joint
36.29 	committee.
36.30 	(b) By February 28 of each odd-numbered year, or at a date
36.31 	agreed to by concurrent resolution, the joint legislative
36.32 	committee shall meet to consider the governor's nominees for
36.33 	regent of the University of Minnesota for possible presentation
36.34 	to a joint convention of the legislature.
36.35 	(c) The joint committee may only recommend to the joint
36.36 	convention nominees recommended by the governor.  If the joint
37.1 	committee does not recommend a governor's nominee, the governor
37.2 	must submit a different nominee for the same vacancy.

37.3 	Sec. 51. [144.1498] NURSING LOW-INCOME LOAN REPAYMENT.
37.4 		Subdivision 1.Definition. For purposes of this section,
37.5 	"qualifying educational loans" means government, commercial, and
37.6 	foundation loans for actual costs paid for tuition, reasonable
37.7 	education expenses, and reasonable living expenses related to
37.8 	the graduate or undergraduate education of a licensed practical
37.9 	nurse or registered nurse.
37.10 		Subd. 2.Creation of account; loan repayment program. A
37.11 	low-income nursing education account is created in the general
37.12 	fund.  The commissioner of health shall use money from the
37.13 	account to establish a loan repayment program for licensed
37.14 	practical or registered nurses who agree to practice in a
37.15 	Minnesota nursing home or work in a position in Minnesota as a
37.16 	nurse educator.  Appropriations made to the account do not
37.17 	cancel and are available until expended.
37.18 		Subd. 3.Eligibility. (a) To be eligible to apply to
37.19 	participate in the loan repayment program, an individual must:
37.20 	(1) be a resident of Minnesota;
37.21 	(2) currently be attending a program leading to a degree in
37.22 	practical or registered nursing or a graduate nursing degree in
37.23 	a public or private postsecondary education institution located
37.24 	in Minnesota; and 
37.25 	(3) submit an application to the commissioner of health.
37.26 	(b) An applicant selected to participate must sign a
37.27 	contract to agree to serve a minimum three-year, full-time
37.28 	service obligation in a position or place of employment
37.29 	described in subdivision 2.  The service must begin no later
37.30 	than March 31 following completion of required training.  If
37.31 	fewer applications are submitted by nursing students than there
37.32 	are participant slots available, the commissioner may consider
37.33 	applications submitted by nursing program graduates who are
37.34 	licensed or registered nurses or nurses who are nurse
37.35 	educators.  Nurses selected for loan repayment assistance must
37.36 	comply with this section.
38.1 		Subd. 4.Loan repayment. The commissioner of health may
38.2 	accept applicants each year for participation in the loan
38.3 	repayment program, within the limits of available funding.
38.4 	Applicants are responsible for securing their own loans.  The
38.5 	commissioner shall select participants in a priority based upon
38.6 	lowest family income, followed in order of ascending family
38.7 	income.  Family income may be determined in the same manner as
38.8 	for state grants under section 136A.121 or in another manner the
38.9 	commissioner determines fairly represents family income.  The
38.10 	commissioner shall give preference to applicants closest to
38.11 	completing their training.  For each year that a participant
38.12 	meets the service obligation required under subdivision 3, up to
38.13 	a maximum of four years, the commissioner shall make annual
38.14 	disbursements directly to the participant equivalent to 15
38.15 	percent of the average educational debt for indebted nursing
38.16 	school graduates in the year closest to the applicant's
38.17 	selection for which information is available or the balance of
38.18 	the qualifying educational loans, whichever is less.  Before
38.19 	receiving loan repayment disbursements and as requested, the
38.20 	participant must complete and return to the commissioner an
38.21 	affidavit of practice form provided by the commissioner
38.22 	verifying that the participant is practicing as required under
38.23 	subdivision 3.  The participant must provide the commissioner
38.24 	with verification that the full amount of loan repayment
38.25 	disbursement received by the participant has been applied toward
38.26 	the designated loans.  After each disbursement, verification
38.27 	must be received by the commissioner and approved before the
38.28 	next loan repayment disbursement is made.  Participants remain
38.29 	eligible for loan repayment as long as they practice as required
38.30 	under subdivision 3.
38.31 		Subd. 5.Penalty for nonfulfillment. If a participant
38.32 	does not fulfill the service commitment under subdivision 3, the
38.33 	commissioner of health shall collect from the participant 100
38.34 	percent of any payments made for qualified educational loans and
38.35 	interest at a rate established according to section 270.75.  The
38.36 	commissioner shall deposit the money collected in the low-income
39.1 	nursing education account established under subdivision 2.
39.2 		Subd. 6.Suspension or waiver of obligation. Payment or
39.3 	service obligations cancel in the event of a participant's
39.4 	death.  The commissioner of health may waive or suspend payment
39.5 	or service obligations in cases of total and permanent
39.6 	disability or long-term temporary disability lasting for more
39.7 	than two years.  The commissioner shall evaluate all other
39.8 	requests for suspension or waivers on a case-by-case basis and
39.9 	may grant a waiver of all or part of the money owed as a result
39.10 	of a nonfulfillment penalty if emergency circumstances prevented
39.11 	fulfillment of the required service commitment.

39.12 	Sec. 52. Minnesota Statutes 2004, section 192.502,
39.13 	subdivision 1, is amended to read:
39.14 		Subdivision 1.Postsecondary students.  (a) A member of
39.15 	the Minnesota National Guard or any other military reserve
39.16 	component who is a As used in this subdivision, the terms
39.17 	"qualified person" and "qualified student" have the same meaning
39.18 	and include:
39.19 	(1) any student at a postsecondary education educational 
39.20 	institution and who is called or ordered to state into active
39.21 	military service in the Minnesota National Guard, as defined in
39.22 	section 190.05, subdivision 5, or who is called or ordered to
39.23 	federal active military service ; and 
39.24 	(2) a veteran, as defined in section 197.447, who has a
39.25 	service-connected disability as certified by the United States
39.26 	Department of Veterans Affairs, who is a student at a
39.27 	postsecondary educational institution, and whose service
39.28 	connected medical condition or medical treatment requirements
39.29 	reasonably prevent the person's attendance at or progress in
39.30 	part or all of the person's higher educational training or
39.31 	studies at any given time.  The terms "medical condition" and
39.32 	"medical treatment requirements" must be broadly construed and
39.33 	without regard for whether or not they relate directly to the
39.34 	person's service-connected disability.
39.35 	(b) A qualified person or qualified student has the
39.36 	following rights:
40.1 	(1) with regard to courses in which the person is enrolled,
40.2 	the person may:
40.3 	(i) withdraw from one or more courses for which tuition and
40.4 	fees have been paid that are attributable to the courses.  The
40.5 	tuition and fees must be credited to the person's account at the
40.6 	postsecondary institution.  Any refunds are subject to the
40.7 	requirements of the state or federal financial aid programs of
40.8 	origination.  In such a case, the student must not receive
40.9 	credit for the courses and must not receive a failing grade, an
40.10 	incomplete, or other negative annotation on the student's
40.11 	record, and the student's grade point average must not be
40.12 	altered or affected in any manner because of action under this
40.13 	item;
40.14 	(ii) be given a grade of incomplete and be allowed to
40.15 	complete the course upon release from active duty service, upon
40.16 	completion of medical treatment, or upon sufficient medical
40.17 	recovery under the postsecondary institution's standard practice
40.18 	for completion of incompletes; or
40.19 	(iii) continue and complete the course for full credit.
40.20 	Class sessions the student misses due to performance of state or
40.21 	federal active military service or due to the person's medical
40.22 	treatment or medical condition must be counted as excused
40.23 	absences and must not be used in any way to adversely impact the
40.24 	student's grade or standing in the class.  Any student who
40.25 	selects this option is not, however, automatically excused from
40.26 	completing assignments due during the period the student is
40.27 	performing state or federal active military service or receiving
40.28 	medical treatment or recovering from a medical condition.  A
40.29 	letter grade or a grade of pass must only be awarded only if, in
40.30 	the opinion of the faculty member teaching the course, the
40.31 	student has completed sufficient work and has demonstrated
40.32 	sufficient progress toward meeting course requirements to
40.33 	justify the grade;
40.34 	(2) to receive a refund of amounts paid for room, board,
40.35 	and fees attributable to the time period during which the
40.36 	student was serving in state or federal active military service
41.1 	or receiving medical treatment or dealing with the person's
41.2 	medical condition and did not use the facilities or services for
41.3 	which the amounts were paid.  Any refund of room, board, and
41.4 	fees is subject to the requirements of the state or federal
41.5 	financial aid programs of origination; and
41.6 	(3) if the student chooses to withdraw, the student has the
41.7 	right to be readmitted and reenrolled as a student at the
41.8 	postsecondary education institution, without penalty or
41.9 	redetermination of admission eligibility, within one year two
41.10 	years following release from the state or federal active
41.11 	military service or following completion of medical treatment or
41.12 	sufficient recovery from the person's medical condition.
41.13 	(b) (c) The protections in this section may be invoked as
41.14 	follows:
41.15 	(1) the qualified person or qualified student, or an
41.16 	appropriate officer from the military organization in which the
41.17 	person will be serving, or an appropriate medical authority or
41.18 	the person's authorized caregiver or family member,must give
41.19 	advance verbal or written notice that the person is being called
41.20 	or ordered to qualifying active military service or will be
41.21 	undertaking medical treatment or a period of recovery for a
41.22 	medical condition;
41.23 	(2) advance notice is not required if the giving of notice
41.24 	is precluded by military or medical necessity or, under all the
41.25 	relevant circumstances, the giving of notice is impossible or
41.26 	unreasonable; and
41.27 	(3) upon written request from the postsecondary
41.28 	institution, the person must provide written verification of the
41.29 	order to active service or of the existence of the medical
41.30 	condition or medical treatment.
41.31 	(c) (d) This section provides minimum protections for
41.32 	qualified students.  Nothing in this section prevents
41.33 	postsecondary institutions from providing additional options or
41.34 	protections to students who are called or ordered to state or
41.35 	federal active military service or are undertaking medical
41.36 	treatment or a period of recovery from a medical condition.
42.1 	
EFFECTIVE DATE. This section is effective the day
42.2 	following final enactment.

42.3 	Sec. 53. Minnesota Statutes 2004, section 299A.45,
42.4 	subdivision 1, is amended to read:
42.5 		Subdivision 1.Eligibility.  Following certification
42.6 	under section 299A.44 and compliance with this section and rules
42.7 	of the commissioner of public safety and the higher education
42.8 	services office, dependent children less than 23 years of age
42.9 	and the surviving spouse of a public safety officer killed in
42.10 	the line of duty on or after January 1, 1973, are eligible to
42.11 	receive educational benefits under this section.  To qualify for
42.12 	an award, they must be enrolled in undergraduate degree or
42.13 	certificate programs after June 30, 1990, at an eligible
42.14 	Minnesota institution as provided in section 136A.101,
42.15 	subdivision 4. A student who withdraws from enrollment for
42.16 	active military service is entitled to an additional semester or
42.17 	the equivalent of grant eligibility.Persons who have received
42.18 	a baccalaureate degree or have been enrolled full time or the
42.19 	equivalent of ten semesters or the equivalent, whichever occurs
42.20 	first, are no longer eligible.

42.21 	Sec. 54. Minnesota Statutes 2004, section 299A.45,
42.22 	subdivision 4, is amended to read:
42.23 		Subd. 4.Renewal.  Each award must be given for one
42.24 	academic year and is renewable for a maximum of eight semesters
42.25 	or the equivalent. A student who withdraws from enrollment for
42.26 	active military service is entitled to an additional semester or
42.27 	the equivalent of grant eligibility.An award must not be given
42.28 	to a dependent child who is 23 years of age or older on the
42.29 	first day of the academic year.

42.30 	Sec. 55. [583.215] EXPIRATION.
42.31 	(a) Sections 336.9-601, subsections (h) and (i); 550.365;
42.32 	559.209; 582.039; and 583.20 to 583.32, expire June 30, 2009.
42.33 	(b) Laws 1986, chapter 398, article 1, section 18, as
42.34 	amended, is repealed.

42.35 	EFFECTIVE DATE. This section is effective the day
42.36 	following final enactment.

43.1 	Sec. 56. RECIPROCITY NEGOTIATIONS.
 43.2 		Subdivision 1.South dakota. The Higher Education
43.3 	Services Office must examine reinstating interstate payments in
43.4 	the Minnesota-South Dakota reciprocity program while maintaining
43.5 	the tuition reciprocity agreement.  The office must examine the
43.6 	advantages and disadvantages of computing interstate payments
43.7 	under the reciprocity agreement and the impact of interstate
43.8 	payments on participating students, institutions, and the
43.9 	general funds of the two states.  The office must report on the
43.10 	impacts of reinstating reciprocity payments to the committees of
43.11 	the legislature with responsibility for higher education by
43.12 	January 15, 2006.
43.13 		Subd. 2.Wisconsin. The Higher Education Services Office
43.14 	must, as soon as possible, commence negotiations with the state
43.15 	of Wisconsin on the tuition reciprocity agreement.  The
43.16 	negotiations must include the issue of the disparity between the
43.17 	tuition paid by Wisconsin residents and Minnesota residents at
43.18 	campuses of the University of Minnesota with a goal of reducing
43.19 	or eliminating the disparity.
43.20 	This section does not mandate the inclusion of any
43.21 	particular term in a tuition reciprocity agreement.

43.22 	Sec. 57. ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY
43.23 	FUNDING.
 43.24 	The Higher Education Services Office shall convene an
43.25 	advisory task force to study the current postsecondary funding
43.26 	policy under Minnesota Statutes, sections 135A.01 to 135A.034.
43.27 	The task force must include the chief financial officers of the
43.28 	University of Minnesota and the Minnesota State Colleges and
43.29 	Universities, and the commissioner of finance, or their
43.30 	designees.  The task force may include other members as selected
43.31 	by the Higher Education Services Office.  The task force must
43.32 	study and make specific recommendations on alternatives to the
43.33 	methods currently used by the postsecondary systems to implement
43.34 	the provisions of Minnesota Statutes, section 135A.031,
43.35 	subdivision 4.  The task force must submit its recommendations
43.36 	to the legislature and the governor by January 15, 2006.  The
44.1 	task force expires on June 30, 2007.

44.2 	Sec. 58. ALTERNATIVE FORMAT INSTRUCTIONAL MATERIAL
44.3 	NETWORK.
 44.4 	The Higher Education Services Office must convene a group
44.5 	with representatives from publishers of postsecondary
44.6 	instructional materials, the Association of American Publishers
44.7 	(AAP), the Minnesota State Colleges and Universities, the
44.8 	University of Minnesota, all sectors of private postsecondary
44.9 	education, and Minnesota State Services for the Blind to develop
44.10 	a network to make available postsecondary instructional material
44.11 	in an electronic format or to identify other solutions, such as
44.12 	a national system, to address the specialized format needs of
44.13 	postsecondary students with disabilities.  The material
44.14 	available through the network must be made available to
44.15 	Minnesota postsecondary institutions and to postsecondary
44.16 	students with disabilities that require a reading
44.17 	accommodation.  The group must establish standards for the
44.18 	instructional material that is available through the network.
44.19 	Instructional material must be in a format that is compatible
44.20 	with assistive technology used by students who require a reading
44.21 	accommodation.  Instructional material includes, but is not
44.22 	limited to, commercially printed materials published or produced
44.23 	primarily for use by students in postsecondary educational
44.24 	courses.  Instructional materials also include materials
44.25 	produced by postsecondary institutions, as defined by the group,
44.26 	for use in conjunction with a course of study.  The Higher
44.27 	Education Services Office must report to the committees in the
44.28 	house of representatives and senate with responsibility for
44.29 	higher education finance by January 15, 2006, on progress in
44.30 	developing the network and with recommendations on methods to
44.31 	meet the needs of students for instructional materials in
44.32 	alternative formats.

44.33 	Sec. 59. APPLICATION OF ELIGIBILITY.
 44.34 	The additional semester or the equivalent of grant
44.35 	eligibility under sections 20, 23, 53, and 54 applies to any
44.36 	student who withdrew from enrollment in a postsecondary
45.1 	institution after December 31, 2002, because the student was
45.2 	ordered to active military service as defined in Minnesota
45.3 	Statutes, section 190.05, subdivision 5b or 5c.

45.4 	Sec. 60. REVISOR'S INSTRUCTION.
 45.5 	The revisor of statutes shall change the terms "HESO" and
45.6 	"Higher Education Services Office" to "Minnesota Office of
45.7 	Higher Education" wherever in Minnesota Statutes and Minnesota
45.8 	Rules the terms appear.

45.9 	Sec. 61. REPEALER.
 45.10 	(a) Minnesota Statutes 2004, sections 136A.011, and
45.11 	136A.031, subdivision 1, are repealed.
45.12 	(b) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120;
45.13 	4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100;
45.14 	4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are
45.15 	repealed.

45.16 	ARTICLE 3
45.17 	PRIVATE CAREER SCHOOLS

45.18 	Section 1. Minnesota Statutes 2004, section 141.21, is
45.19 	amended by adding a subdivision to read:
45.20 		Subd. 6a.Multiple location. "Multiple location" means
45.21 	any site where classes or administrative services are provided
45.22 	to students and which has a street address that is different
45.23 	than the street address found on the school's private career
45.24 	school license.

45.25 	Sec. 2. Minnesota Statutes 2004, section 141.25,
45.26 	subdivision 3, is amended to read:
45.27 		Subd. 3.Application.  Application for a license shall be
45.28 	on forms prepared and furnished by the office, and shall include
45.29 	the following and other information as the office may require:
45.30 	(1) the title or name of the school, ownership and
45.31 	controlling officers, members, managing employees, and director;
45.32 	(2) the specific programs which will be offered and the
45.33 	specific purposes of the instruction;
45.34 	(3) the place or places where the instruction will be
45.35 	given;
45.36 	(4) a listing of the equipment available for instruction in
46.1 	each program;
46.2 	(5) the maximum enrollment to be accommodated with
46.3 	equipment available in each specified program;
46.4 	(6) the qualifications of instructors and supervisors in
46.5 	each specified program;
46.6 	(7) a current balance sheet, income statement, and adequate
46.7 	supporting documentation, prepared and certified by an
46.8 	independent public accountant or CPA;
46.9 	(8) copies of all media advertising and promotional
46.10 	literature and brochures or electronic display currently used or
46.11 	reasonably expected to be used by the school;
46.12 	(9) copies of all Minnesota enrollment agreement forms and
46.13 	contract forms and all enrollment agreement forms and contract
46.14 	forms used in Minnesota; and
46.15 	(10) gross income earned in the preceding year from student
46.16 	tuition, fees, and other required institutional charges, unless
46.17 	the school files with the office a surety bond equal to at least
46.18 	$50,000 $250,000 as described in subdivision 5.

46.19 	Sec. 3. Minnesota Statutes 2004, section 141.25,
46.20 	subdivision 5, is amended to read:
46.21 		Subd. 5.Bond.  (a) No license shall be issued to any
46.22 	school which maintains, conducts, solicits for, or advertises
46.23 	within the state of Minnesota any program, unless the applicant
46.24 	files with the office a continuous corporate surety bond written
46.25 	by a company authorized to do business in Minnesota conditioned
46.26 	upon the faithful performance of all contracts and agreements
46.27 	with students made by the applicant.
46.28 	(b) The amount of the surety bond shall be ten percent of
46.29 	the preceding year's gross income from student tuition, fees,
46.30 	and other required institutional charges, but in no event less
46.31 	than $10,000 nor greater than $50,000 $250,000, except that a
46.32 	school may deposit a greater amount at its own discretion.  A
46.33 	school in each annual application for licensure must compute the
46.34 	amount of the surety bond and verify that the amount of the
46.35 	surety bond complies with this subdivision, unless the school
46.36 	maintains a surety bond equal to at least $50,000 $250,000.  A
47.1 	school that operates at two or more locations may combine gross
47.2 	income from student tuition, fees, and other required
47.3 	institutional charges for all locations for the purpose of
47.4 	determining the annual surety bond requirement.  The gross
47.5 	tuition and fees used to determine the amount of the surety bond
47.6 	required for a school having a license for the sole purpose of
47.7 	recruiting students in Minnesota shall be only that paid to the
47.8 	school by the students recruited from Minnesota.
47.9 	(c) The bond shall run to the state of Minnesota and to any
47.10 	person who may have a cause of action against the applicant
47.11 	arising at any time after the bond is filed and before it is
47.12 	canceled for breach of any contract or agreement made by the
47.13 	applicant with any student.  The aggregate liability of the
47.14 	surety for all breaches of the conditions of the bond shall not
47.15 	exceed the principal sum deposited by the school under paragraph
47.16 	(b).  The surety of any bond may cancel it upon giving 60 days'
47.17 	notice in writing to the office and shall be relieved of
47.18 	liability for any breach of condition occurring after the
47.19 	effective date of cancellation.
47.20 	(d) In lieu of bond, the applicant may deposit with the
47.21 	commissioner of finance a sum equal to the amount of the
47.22 	required surety bond in cash, or securities as may be legally
47.23 	purchased by savings banks or for trust funds in an aggregate
47.24 	market value equal to the amount of the required surety bond.
47.25 	(e) Failure of a school to post and maintain the required
47.26 	surety bond or deposit under paragraph (d) may result in denial,
47.27 	suspension, or revocation of the school's license.

47.28 	Sec. 4. Minnesota Statutes 2004, section 141.25,
47.29 	subdivision 8, is amended to read:
47.30 		Subd. 8.Fees and terms of license.  An application for
47.31 	an initial license under sections 141.21 to 141.35 shall be
47.32 	accompanied by a nonrefundable application fee established by
47.33 	the office as provided in section 141.255that is sufficient to
47.34 	recover, but not exceed, its the administrative costs of the
47.35 	office.
47.36 	All licenses shall expire one year from the date issued by
48.1 	the office, except as provided in section 141.251.

48.2 	Sec. 5. Minnesota Statutes 2004, section 141.25,
48.3 	subdivision 9, is amended to read:
48.4 		Subd. 9.Catalog, brochure, or electronic display.
 48.5 	Before a license is issued to a school, the school shall furnish
48.6 	to the office a catalog, brochure, or electronic display
48.7 	including:
48.8 	(1) identifying data, such as volume number and date of
48.9 	publication;
48.10 	(2) name and address of the school and its governing body
48.11 	and officials;
48.12 	(3) a calendar of the school showing legal holidays,
48.13 	beginning and ending dates of each course quarter, term, or
48.14 	semester, and other important dates;
48.15 	(4) the school policy and regulations on enrollment
48.16 	including dates and specific entrance requirements for each
48.17 	program;
48.18 	(5) the school policy and regulations about leave,
48.19 	absences, class cuts, make-up work, tardiness, and interruptions
48.20 	for unsatisfactory attendance;
48.21 	(6) the school policy and regulations about standards of
48.22 	progress for the student including the grading system of the
48.23 	school, the minimum grades considered satisfactory, conditions
48.24 	for interruption for unsatisfactory grades or progress, a
48.25 	description of any probationary period allowed by the school,
48.26 	and conditions of reentrance for those dismissed for
48.27 	unsatisfactory progress;
48.28 	(7) the school policy and regulations about student conduct
48.29 	and conditions for dismissal for unsatisfactory conduct;
48.30 	(8) a detailed schedule of fees, charges for tuition,
48.31 	books, supplies, tools, student activities, laboratory fees,
48.32 	service charges, rentals, deposits, and all other charges;
48.33 	(9) the school policy and regulations, including an
48.34 	explanation of section 141.271, about refunding tuition, fees,
48.35 	and other charges if the student does not enter the program,
48.36 	withdraws from the program, or the program is discontinued;
49.1 	(10) a description of the available facilities and
49.2 	equipment;
49.3 	(11) a course outline syllabus for each course offered
49.4 	showing course objectives, subjects or units in the course, type
49.5 	of work or skill to be learned, and approximate time, hours, or
49.6 	credits to be spent on each subject or unit;
49.7 	(12) the school policy and regulations about granting
49.8 	credit for previous education and preparation;
49.9 	(13) a procedure for investigating and resolving student
49.10 	complaints; and
49.11 	(14) the name and address of the Minnesota Higher Education
49.12 	Services Office.
49.13 	A school that is exclusively a distance education school is
49.14 	exempt from clauses (3) and (5).

49.15 	Sec. 6. Minnesota Statutes 2004, section 141.25,
49.16 	subdivision 12, is amended to read:
49.17 		Subd. 12.Permanent records.  A school licensed under
49.18 	this chapter and located in Minnesota shall maintain a permanent
49.19 	record for each student for 50 years from the last date of the
49.20 	student's attendance.  A school licensed under this chapter and
49.21 	offering distance instruction to a student located in Minnesota
49.22 	shall maintain a permanent record for each Minnesota student for
49.23 	50 years from the last date of the student's attendance.
49.24 	Records include school transcripts, documents, and files
49.25 	containing student data about academic credits earned, courses
49.26 	completed, grades awarded, degrees awarded, and periods of
49.27 	attendance.  To preserve permanent records, a school shall
49.28 	submit a plan that meets the following requirements:
49.29 	(1) at least one copy of the records must be held in a
49.30 	secure, fireproof depository;
49.31 	(2) an appropriate official must be designated to provide a
49.32 	student with copies of records or a transcript upon request;
49.33 	(3) an alternative method, approved by the office,of
49.34 	complying with clauses (1) and (2) must be established if the
49.35 	school ceases to exist; and
49.36 	(4) a continuous surety bond must be filed with the office
50.1 	in an amount not to exceed $20,000 if the school has no binding
50.2 	agreement for preserving student records or a trust must be
50.3 	arranged if the school ceases to exist.

50.4 	Sec. 7. Minnesota Statutes 2004, section 141.251, is
50.5 	amended to read:
50.6 	141.251 LICENSE RENEWAL.
50.7 		Subdivision 1.Application. Application for renewal of a
50.8 	license must be made at least 30 60 days before expiration of
50.9 	the current license on a form provided by the office.  A renewal
50.10 	application shall be accompanied by a nonrefundable fee
50.11 	established by the office as provided in section 141.255that is
50.12 	sufficient to recover, but does not exceed, its the 
50.13 	administrative costs of the office.
50.14 		Subd. 2.Conditions. The office shall adopt rules
50.15 	establishing the conditions for renewal of a license.  The
50.16 	conditions shall permit two levels of renewal based on the
50.17 	record of the school.  A school that has demonstrated the
50.18 	quality of its program and operation through longevity and
50.19 	performance in the state may renew its license based on a
50.20 	relaxed standard of scrutiny.  A school that has been in
50.21 	operation in Minnesota for a limited period of time or that has
50.22 	not performed adequately on performance indicators shall renew
50.23 	its license based on a strict standard of scrutiny.  The office
50.24 	shall specify minimum longevity standards and performance
50.25 	indicators that must be met before a school may be permitted to
50.26 	operate under the relaxed standard of scrutiny.  The performance
50.27 	indicators used in this determination shall include, but not be
50.28 	limited to:  degree granting status, regional or national
50.29 	accreditation, loan default rates, placement rate of graduates,
50.30 	student withdrawal rates, audit results, student complaints, and
50.31 	school status with the United States Department of Education.
50.32 	Schools that meet the requirements established in rule shall be
50.33 	required to submit a full relicensure report once every four
50.34 	years, and in the interim years will be exempt from the
50.35 	requirements of section 141.25, subdivision 3, clauses (4), (5),
50.36 	and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and
51.1 	4880.2100, subpart 4.

51.2 	Sec. 8. [141.255] FEES.
51.3 		Subdivision 1.Initial licensure fee. The office
51.4 	processing fee for an initial licensure application is:
51.5 	(1) $1,500 for a school that will offer no more than one
51.6 	program during its first year of operation;
51.7 	(2) $2,000 for a school that will offer two or more
51.8 	nondegree level programs during its first year of operation; and 
51.9 	(3) $2,500 for a school that will offer two or more degree
51.10 	level programs during its first year of operation.
51.11 		Subd. 2.Renewal licensure fee; late fee. (a) The office
51.12 	processing fee for a renewal licensure application is:
51.13 	(1) for a category A school, as determined by the office,
51.14 	the fee is $865 if the school offers one program or $1,150 if
51.15 	the school offers two or more programs; and 
51.16 	(2) for a category B or C school, as determined by the
51.17 	office, the fee is $430 if the school offers one program or $575
51.18 	if the school offers two or more programs.
51.19 	(b) If a license renewal application is not received by the
51.20 	office by the close of business at least 60 days before the
51.21 	expiration of the current license, a late fee of $100 per
51.22 	business day shall be assessed.
51.23 		Subd. 3.Degree level addition fee. The office
51.24 	processing fee for adding a degree level to an existing program
51.25 	is $2,000 per program.
51.26 		Subd. 4.Program addition fee. The office processing fee
51.27 	for adding a program that represents a significant departure in
51.28 	the objectives, content, or method of delivery of programs that
51.29 	are currently offered by the school is $500 per program.
51.30 		Subd. 5.Visit or consulting fee. If the office
51.31 	determines that a fact-finding visit or outside consultant is
51.32 	necessary to review or evaluate any new or revised program, the
51.33 	office shall be reimbursed for the expenses incurred related to
51.34 	the review as follows:
51.35 	(1) $300 for the team base fee or for a paper review
51.36 	conducted by a consultant if the office determines that a
52.1 	fact-finding visit is not required;
52.2 	(2) $300 for each day or part thereof on site per team
52.3 	member; and 
52.4 	(3) the actual cost of customary meals, lodging, and
52.5 	related travel expenses incurred by team members.
52.6 		Subd. 6.Modification fee. The fee for modification of
52.7 	any existing program is $100 and is due if there is:
52.8 	(1) an increase or decrease of 25 percent or more, from the
52.9 	original date of program approval, in clock hours, credit hours,
52.10 	or calendar length of an existing program;
52.11 	(2) a change in academic measurement from clock hours to
52.12 	credit hours or vice versa; or 
52.13 	(3) an addition or alteration of courses that represent a
52.14 	25 percent change or more in the objectives, content, or methods
52.15 	of delivery.
52.16 		Subd. 7.Solicitor permit fee. The solicitor permit fee
52.17 	is $350 and must be paid annually.
52.18 		Subd. 8.Multiple location fee. Schools wishing to
52.19 	operate at multiple locations must pay:
52.20 	(1) $250 per location, for two to five locations; and 
52.21 	(2) an additional $50 for each location over five.
52.22 		Subd. 9.Student transcript fee. The fee for a student
52.23 	transcript requested from a closed school whose records are held
52.24 	by the office is $10, with a maximum of five transcripts per
52.25 	request.
52.26 		Subd. 10.Public office documents; copies. The office
52.27 	shall establish rates for copies of any public office document.

52.28 	Sec. 9. Minnesota Statutes 2004, section 141.26,
52.29 	subdivision 5, is amended to read:
52.30 		Subd. 5.Fee.  The initial and renewal application for
52.31 	each permit shall be accompanied by a nonrefundable fee as
52.32 	established by the office under section 141.255.

52.33 	Sec. 10. Minnesota Statutes 2004, section 141.271, is
52.34 	amended by adding a subdivision to read:
52.35 		Subd. 1b.Short-term programs. Licensed schools
52.36 	conducting programs not exceeding 40 hours in length shall not
53.1 	be required to make a full refund once a program has commenced
53.2 	and shall be allowed to prorate any refund based on the actual
53.3 	length of the program as stated in the school catalog or
53.4 	advertisements and the number of hours attended by the student.

53.5 	Sec. 11. Minnesota Statutes 2004, section 141.271,
53.6 	subdivision 4, is amended to read:
53.7 		Subd. 4.Resident schools.  When a student has been
53.8 	accepted by a school offering a resident program and gives
53.9 	written notice of cancellation, or the school has actual notice
53.10 	of a student's nonattendance after the start of the period of
53.11 	instruction for which the student has been charged, but before
53.12 	completion of 75 percent of the period of instruction, the
53.13 	amount charged for tuition, fees, and all other charges shall be
53.14 	prorated based on number of days in the term as a portion of the
53.15 	total charges for tuition, fees, and all other charges.  An
53.16 	additional 25 percent of the total cost of the period of
53.17 	instruction may be added, but shall not exceed $100.  After
53.18 	completion of 75 percent of the period of instruction for which
53.19 	the student has been charged, no refunds are required.

53.20 	Sec. 12. Minnesota Statutes 2004, section 141.271,
53.21 	subdivision 7, is amended to read:
53.22 		Subd. 7.Equipment and supplies.  The fair market retail
53.23 	price, if separately stated in the catalog and contract or
53.24 	enrollment agreement, of equipment or supplies furnished to the
53.25 	student, which the student fails to return in condition suitable
53.26 	for resale, and which may reasonably be resold,within ten
53.27 	business days following cancellation may be retained by the
53.28 	school and may be deducted from the total cost for tuition, fees
53.29 	and all other charges when computing refunds.
53.30 	An overstatement of the fair market retail price of any
53.31 	equipment or supplies furnished the student shall be considered
53.32 	inconsistent with this provision.

53.33 	Sec. 13. Minnesota Statutes 2004, section 141.271,
53.34 	subdivision 10, is amended to read:
53.35 		Subd. 10.Cancellation occurrence.  Written notice of
53.36 	cancellation shall take place on the date the letter of
54.1 	cancellation is postmarked or, in the cases where the notice is
54.2 	hand carried, it shall occur on the date the notice is delivered
54.3 	to the school. If a student has not attended classes for a
54.4 	period of 21 consecutive days, the student is considered to have
54.5 	withdrawn from school for all purposes as of the student's last
54.6 	documented date of attendance.

54.7 	Sec. 14. Minnesota Statutes 2004, section 141.271, is
54.8 	amended by adding a subdivision to read:
54.9 		Subd. 14.Closed school. In the event a school closes
54.10 	for any reason during a term and interrupts and terminates
54.11 	classes during that term, all tuition for the term shall be
54.12 	refunded to the students or the appropriate state or federal
54.13 	agency or private lender that provided any funding for the term
54.14 	and any outstanding obligation of the student for the term is
54.15 	canceled.

54.16 	Sec. 15. Minnesota Statutes 2004, section 141.28,
54.17 	subdivision 1, is amended to read:
54.18 		Subdivision 1.Not to advertise state approval.  Schools,
54.19 	agents of schools, and solicitors may not advertise or represent
54.20 	in writing or orally that such school is approved or accredited
54.21 	by the state of Minnesota, except that any school, agent, or
54.22 	solicitor may advertise that the school and solicitor have been
54.23 	duly licensed by the state.using the following language:
54.24 	"(Name of school) is licensed as a private career school with
54.25 	the Minnesota Higher Education Services Office.  Licensure is
54.26 	not an endorsement of the institution.  Credits earned at the
54.27 	institution may not transfer to all other institutions.  The
54.28 	educational programs may not meet the needs of every student or
54.29 	employer." 

54.30 	Sec. 16. Minnesota Statutes 2004, section 141.28, is
54.31 	amended by adding a subdivision to read:
54.32 		Subd. 6.Financial aid payments. (a) All schools must
54.33 	collect, assess, and distribute funds received from loans or
54.34 	other financial aid as provided in this subdivision.
54.35 	(b) Student loans or other financial aid funds received
54.36 	from federal, state, or local governments or administered in
55.1 	accordance with federal student financial assistance programs
55.2 	under title IV of the Higher Education Act of 1965, as amended,
55.3 	United States Code, title 20, chapter 28, must be collected and
55.4 	applied as provided by applicable federal, state, or local law
55.5 	or regulation.
55.6 	(c) Student loans or other financial aid assistance
55.7 	received from a bank, finance or credit card company, or other
55.8 	private lender must be collected or disbursed as provided in
55.9 	paragraphs (d) and (e).
55.10 	(d) Loans or other financial aid payments for amounts
55.11 	greater than $3,000 must be disbursed:
55.12 	(1) in two equal disbursements, if the term length is more
55.13 	than four months.  The loan or payment amounts may be disbursed
55.14 	no earlier than the first day the student attends class with the
55.15 	remainder to be disbursed halfway through the term; or 
55.16 	(2) in three equal disbursements, if the term length is
55.17 	more than six months.  The loan or payment amounts may be
55.18 	disbursed no earlier than the first day the student attends
55.19 	class, one-third of the way through the term, and two-thirds of
55.20 	the way through the term.
55.21 	(e) Loans or other financial aid payments for amounts less
55.22 	than $3,000 may be disbursed as a single disbursement on the
55.23 	first day a student attends class, regardless of term length.
55.24 	(f) No school may enter into a contract or agreement with,
55.25 	or receive any money from, a bank, finance or credit card
55.26 	company, or other private lender, unless the private lender
55.27 	follows the requirements for disbursements provided in
55.28 	paragraphs (d) and (e).

55.29 	Sec. 17. Minnesota Statutes 2004, section 141.29,
55.30 	subdivision 3, is amended to read:
55.31 		Subd. 3.Powers and duties.  The office shall have (in
55.32 	addition to the powers and duties now vested therein by law) the
55.33 	following powers and duties:
55.34 	(a) To negotiate and enter into interstate reciprocity
55.35 	agreements with similar agencies in other states, if in the
55.36 	judgment of the office such agreements are or will be helpful in
56.1 	effectuating the purposes of Laws 1973, Chapter 714;
56.2 	(b) To grant conditional school license for periods of less
56.3 	than one year if in the judgment of the office correctable
56.4 	deficiencies exist at the time of application and when refusal
56.5 	to issue school license would adversely affect currently
56.6 	enrolled students;
56.7 	(c) The office may upon its own motion, and shall upon the
56.8 	verified complaint in writing of any person setting forth fact
56.9 	which, if proved, would constitute grounds for refusal or
56.10 	revocation under Laws 1973, Chapter 714, investigate the actions
56.11 	of any applicant or any person or persons holding or claiming to
56.12 	hold a license or permit.  However, before proceeding to a
56.13 	hearing on the question of whether a license or permit shall be
56.14 	refused, revoked or suspended for any cause enumerated in
56.15 	subdivision 1, the office may shall grant a reasonable time to
56.16 	the holder of or applicant for a license or permit to correct
56.17 	the situation.  If within such time the situation is corrected
56.18 	and the school is in compliance with the provisions of this
56.19 	chapter, no further action leading to refusal, revocation, or
56.20 	suspension shall be taken.

56.21 	Sec. 18. Minnesota Statutes 2004, section 141.30, is
56.22 	amended to read:
56.23 	141.30 INSPECTION.
56.24 	(a) The office or a delegate may inspect the instructional
56.25 	books and records, classrooms, dormitories, tools, equipment and
56.26 	classes of any school or applicant for license at any reasonable
56.27 	time.  The office may require the submission of a certified
56.28 	public audit, or if there is no such audit available the office
56.29 	or a delegate may inspect the financial books and records of the
56.30 	school.  In no event shall such financial information be used by
56.31 	the office to regulate or set the tuition or fees charged by the
56.32 	school.
56.33 	(b) Data obtained from an inspection of the financial
56.34 	records of a school or submitted to the office as part of a
56.35 	license application or renewal are nonpublic data as defined in
56.36 	section 13.02, subdivision 9.  Data obtained from inspections
57.1 	may be disclosed to other members of the office, to law
57.2 	enforcement officials, or in connection with a legal or
57.3 	administrative proceeding commenced to enforce a requirement of
57.4 	law.

57.5 	Sec. 19. Minnesota Statutes 2004, section 141.35, is
57.6 	amended to read:
57.7 	141.35 EXEMPTIONS.
57.8 	Sections 141.21 to 141.35 shall not apply to the following:
57.9 	(1) public postsecondary institutions;
57.10 	(2) private postsecondary institutions registered under
57.11 	sections 136A.61 to 136A.71 that are nonprofit, or that are for
57.12 	profit and registered under sections 136A.61 to 136A.71 as of
57.13 	December 31, 1998, or are approved to offer exclusively
57.14 	baccalaureate or postbaccalaureate programs;
57.15 	(3) schools of nursing accredited by the state Board of
57.16 	Nursing or an equivalent public board of another state or
57.17 	foreign country;
57.18 	(4) private schools complying with the requirements of
57.19 	section 120A.22, subdivision 4;
57.20 	(5) courses taught to students in a valid apprenticeship
57.21 	program taught by or required by a trade union;
57.22 	(6) schools exclusively engaged in training physically or
57.23 	mentally handicapped persons for the state of Minnesota;
57.24 	(7) schools licensed by boards authorized under Minnesota
57.25 	law to issue licenses;
57.26 	(8) schools and educational programs, or training programs,
57.27 	contracted for by persons, firms, corporations, government
57.28 	agencies, or associations, for the training of their own
57.29 	employees, for which no fee is charged the employee;
57.30 	(9) schools engaged exclusively in the teaching of purely
57.31 	avocational, recreational, or remedial subjects as determined by
57.32 	the office;
57.33 	(10) driver training schools and instructors as defined in
57.34 	section 171.33, subdivisions 1 and 2;
57.35 	(11) classes, courses, or programs conducted by a bona fide
57.36 	trade, professional, or fraternal organization, solely for that
58.1 	organization's membership;
58.2 	(12) programs in the fine arts provided by organizations
58.3 	exempt from taxation under section 290.05 and registered with
58.4 	the attorney general under chapter 309.  For the purposes of
58.5 	this clause, "fine arts" means activities resulting in artistic
58.6 	creation or artistic performance of works of the imagination
58.7 	which are engaged in for the primary purpose of creative
58.8 	expression rather than commercial sale or employment.  In making
58.9 	this determination the office may seek the advice and
58.10 	recommendation of the Minnesota Board of the Arts;
58.11 	(13) classes, courses, or programs intended to fulfill the
58.12 	continuing education requirements for licensure or certification
58.13 	in a profession, that have been approved by a legislatively or
58.14 	judicially established board or agency responsible for
58.15 	regulating the practice of the profession, and that are offered
58.16 	primarily exclusively to an individual practicing the
58.17 	profession;
58.18 	(14) classes, courses, or programs intended to prepare
58.19 	students to sit for undergraduate, graduate, postgraduate, or
58.20 	occupational licensing and occupational entrance examinations;
58.21 	(15) classes, courses, or programs providing 16 or fewer
58.22 	clock hours of instruction that are not part of the curriculum
58.23 	for an occupation or entry level employment;
58.24 	(16) classes, courses, or programs providing instruction in
58.25 	personal development, modeling, or acting;
58.26 	(17) training or instructional programs, in which one
58.27 	instructor teaches an individual student, that are not part of
58.28 	the curriculum for an occupation or are not intended to prepare
58.29 	a person for entry level employment; and
58.30 	(18) schools with no physical presence in Minnesota, as
58.31 	determined by the office,engaged exclusively in offering
58.32 	distance instruction that are located in and regulated by other
58.33 	states or jurisdictions.

58.34 	Sec. 20. REGULATION OF PRIVATE AND OUT-OF-STATE
58.35 	POSTSECONDARY INSTITUTIONS.
 58.36 	The Higher Education Services Office must convene a working
59.1 	group to develop recommendations to revise the regulation under
59.2 	Minnesota Statutes, sections 136A.61 to 136A.71, and chapter
59.3 	141, of private and out-of-state postsecondary institutions that
59.4 	offer instruction in Minnesota or to Minnesota residents who are
59.5 	not required to leave the state.  Members of the working group
59.6 	are appointed by the director of the Higher Education Services
59.7 	Office and must include one or more representatives of the
59.8 	Minnesota Private College Council, the Minnesota Career College
59.9 	Association, and other interested institutions that are
59.10 	registered or licensed under state law.
59.11 	In developing recommendations, the working group must
59.12 	consider the office's mission to protect both consumers of
59.13 	postsecondary education and the state's interests.  The
59.14 	recommendations must address the provision of degrees,
59.15 	certificates, diplomas, and training offered by for-profit and
59.16 	nonprofit institutions in Minnesota and outside of Minnesota, in
59.17 	classrooms or online, and regulatory issues under federal law.
59.18 	The recommendations may include other relevant issues as
59.19 	determined by the working group.
59.20 	The office must provide preliminary recommendations to the
59.21 	committees of the legislature with jurisdiction over higher
59.22 	education policy and higher education finance by November 15,
59.23 	2005, and must provide final recommendations by January 15, 2006.

59.24 	ARTICLE 4
59.25 	ROCHESTER

59.26 	Section 1. ROCHESTER HIGHER EDUCATION DEVELOPMENT
59.27 	COMMITTEE.
 59.28 		Subdivision 1.Establishment. The Rochester Higher
59.29 	Education Development Committee is established to research and
59.30 	make recommendations to the governor and legislature on the
59.31 	creation of mission-driven postsecondary educational programs or
59.32 	institutions in the Rochester area that meet the educational
59.33 	needs of the region and the state and that capitalize on the
59.34 	unique opportunities for educational partnerships presented in
59.35 	the Rochester area.
59.36 		Subd. 2.Membership. The committee is composed of 11
60.1 	members, to be appointed by the governor, as follows:
60.2 	(1) a trustee of the Minnesota State Colleges and
60.3 	Universities, or the trustee's designee;
60.4 	(2) a regent of the University of Minnesota, or the
60.5 	regent's designee;
60.6 	(3) six persons from the Rochester area representing
60.7 	business, health and medical sciences, and technology;
60.8 	(4) the commissioner of finance, as a nonvoting member, or
60.9 	the commissioner's designee;
60.10 	(5) one person who by training or experience has special
60.11 	expertise in postsecondary finance and planning; and 
60.12 	(6) one person who by training or experience has special
60.13 	expertise in postsecondary academic planning and programming.
60.14 	Before the first meeting of the committee, the governor
60.15 	shall select one person from the committee who shall serve as
60.16 	chair.
60.17 		Subd. 3.Compensation and removal. Appointments to the
60.18 	committee are not subject to Minnesota Statutes, section 15.0597.
60.19 	Members of the committee are not entitled to reimbursement under
60.20 	Minnesota Statutes, section 15.059, subdivision 6.  Members may
60.21 	be removed and vacancies filled pursuant to Minnesota Statutes,
60.22 	section 15.059, subdivision 4.  The director of the Higher
60.23 	Education Services Office may provide administrative support to
60.24 	the committee.
60.25 		Subd. 4.Duties. (a) The committee shall develop a
60.26 	proposal for establishment and implementation of expanded higher
60.27 	education programs or institutions in Rochester.  The
60.28 	committee's report must include recommendations on:
60.29 	(1) the mission and focus of the programs or institutions;
60.30 	(2) the nature of undergraduate and graduate programs to be
60.31 	offered;
60.32 	(3) site and facility needs;
60.33 	(4) funding sources and opportunities;
60.34 	(5) operational needs;
60.35 	(6) alliances or other types of cooperative arrangements
60.36 	with public and private institutions;
61.1 	(7) governance structures; and 
61.2 	(8) mechanisms to ensure that the expanded programs are
61.3 	aligned with the unique needs and opportunities of the Rochester
61.4 	area and that programs take advantage of opportunities presented
61.5 	by regional business and industry.
61.6 	(b) If the committee recommends any programmatic changes
61.7 	that result in institutional realignments, the committee must
61.8 	consult with the representatives of affected employees and
61.9 	address the continuation of collective bargaining and
61.10 	contractual rights and benefits, including accumulated sick
61.11 	leave, vacation time, seniority, time to tenure, separation or
61.12 	retirement benefits, and pension plan coverage.
61.13 	(c) The committee must consider specifically whether
61.14 	expansion of the University of Minnesota in Rochester is the
61.15 	most appropriate method of meeting the region's needs.
61.16 	(d) The committee may also research and provide
61.17 	recommendations on sites for the facilities and programs.  The
61.18 	committee shall recommend any changes to Minnesota law required
61.19 	to implement recommendations of the committee.
61.20 		Subd. 5.Report. The committee must issue a report with
61.21 	recommendations to the governor and the legislature by January
61.22 	15, 2006.
61.23 		Subd. 6.Sunset. The committee expires on December 31,
61.24 	2007.

61.25 	Sec. 2. ROCHESTER HIGHER EDUCATION DEVELOPMENT ACCOUNT.
 61.26 	A Rochester higher education development account is created
61.27 	in the state treasury in the special revenue fund.  Money in
61.28 	this account is appropriated to the Higher Education Services
61.29 	Office for allocation to the committee established in section 1,
61.30 	subdivision 1, and the implementation activities outlined in
61.31 	article 1, section 2, subdivision 16, paragraph (b).  The office
61.32 	shall serve as fiscal agent for the committee established in
61.33 	section 1.

61.34 	Sec. 3. EFFECTIVE DATE.
 61.35 	This article is effective the day following final enactment.