1.1                          A bill for an act 
  1.2             relating to higher education; providing funding for 
  1.3             the University of Minnesota, the Minnesota State 
  1.4             Colleges and Universities, the Higher Education 
  1.5             Services Office, and the Mayo Medical Foundation; 
  1.6             providing for the mission of state universities; 
  1.7             regulating the marketing of credit cards to students; 
  1.8             regulating the responsibilities of and changing the 
  1.9             name of the Higher Education Services Office; 
  1.10            regulating the state grant program and other financial 
  1.11            aid programs; providing benefits for students entering 
  1.12            active military service; providing assistance for 
  1.13            low-income students to increase college awareness; 
  1.14            regulating the selection of regents of the University 
  1.15            of Minnesota; regulating the Minnesota college savings 
  1.16            program; providing assistance to nursing students; 
  1.17            creating a task force on postsecondary funding; 
  1.18            creating a Rochester higher education development 
  1.19            committee; regulating private career schools; 
  1.20            appropriating money; amending Minnesota Statutes 2004, 
  1.21            sections 135A.052, subdivision 1; 136A.01, subdivision 
  1.22            2; 136A.031, subdivisions 2, 3, 5; 136A.121, 
  1.23            subdivisions 2, 6, 9, 13, by adding subdivisions; 
  1.24            136A.125, subdivision 2; 136A.1701, by adding 
  1.25            subdivisions; 136F.02, subdivision 1; 136F.04, 
  1.26            subdivision 4; 136G.03, subdivisions 3, 21a, 22, 32; 
  1.27            136G.05, subdivision 8; 136G.09, subdivisions 11, 12; 
  1.28            136G.11, subdivisions 1, 3, 13, by adding a 
  1.29            subdivision; 136G.13, subdivisions 1, 5; 136G.14; 
  1.30            137.0245, subdivision 3; 141.21, by adding a 
  1.31            subdivision; 141.25, subdivisions 3, 5, 8, 9, 12; 
  1.32            141.251; 141.26, subdivision 5; 141.271, subdivisions 
  1.33            4, 7, 10, by adding subdivisions; 141.28, subdivision 
  1.34            1, by adding a subdivision; 141.29, subdivision 3; 
  1.35            141.30; 141.35; 299A.45, subdivisions 1, 4; proposing 
  1.36            coding for new law in Minnesota Statutes, chapters 
  1.37            135A; 136A; 137; 141; 144; 583; repealing Minnesota 
  1.38            Statutes 2004, sections 136A.011; 136A.031, 
  1.39            subdivision 1; Laws 1986, chapter 398, article 1, 
  1.40            section 18, as amended; Minnesota Rules, parts 
  1.41            4815.0100; 4815.0110; 4815.0120; 4815.0130; 4815.0140; 
  1.42            4815.0150; 4815.0160; 4830.8100; 4830.8110; 4830.8120; 
  1.43            4830.8130; 4830.8140; 4830.8150. 
  1.44  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.1                              ARTICLE 1
  2.2                   HIGHER EDUCATION APPROPRIATIONS
  2.3   Section 1.  [HIGHER EDUCATION APPROPRIATIONS.] 
  2.4      The sums in the columns marked "APPROPRIATIONS" are added 
  2.5   to, or, if shown in parentheses, are subtracted from the 
  2.6   appropriations to the specified agencies in 2005 S.F. No. 1879, 
  2.7   article 5, if enacted.  The appropriations are from the general 
  2.8   fund, unless another fund is named, and are available for the 
  2.9   fiscal year indicated for each purpose.  The figures "2006" and 
  2.10  "2007," where used in this article, mean that the additions to 
  2.11  or subtractions from the appropriations listed under them are 
  2.12  for the fiscal year ending June 30, 2006, or June 30, 2007, 
  2.13  respectively.  The "first year" is fiscal year 2006.  The 
  2.14  "second year" is fiscal year 2007.  The "biennium" is fiscal 
  2.15  years 2006 and 2007. 
  2.16                          SUMMARY BY FUND 
  2.17                            2006          2007           TOTAL
  2.18  General           ($   25,640,000)$  106,706,000 $   81,066,000
  2.19                   SUMMARY BY AGENCY - ALL FUNDS
  2.20                            2006          2007           TOTAL
  2.21  Higher Education
  2.22  Services Office         3,818,000      1,007,000      4,825,000
  2.23  Board of Trustees
  2.24  of the Minnesota
  2.25  State Colleges and
  2.26  Universities          (35,020,000)    29,780,000     (5,240,000)
  2.27  Board of Regents
  2.28  of the University
  2.29  of Minnesota            5,467,000     75,764,000     81,231,000
  2.30  Commissioner
  2.31  of Health                  95,000        155,000        250,000
  2.32                                            APPROPRIATIONS 
  2.33                                         Available for the Year 
  2.34                                             Ending June 30 
  2.35                                            2006         2007 
  2.36  Sec. 2.  HIGHER EDUCATION
  2.37  SERVICES OFFICE
  2.38  Subdivision 1. Total
  2.39  Appropriation                     $    3,818,000 $    1,007,000
  2.40  The amounts that may be spent from this 
  2.41  appropriation for each purpose are 
  2.42  specified in the following subdivisions.
  2.43  Subd. 2.  State Grants
  3.1   Notwithstanding 2005 S.F. No. 1879, 
  3.2   article 5, section 2, subdivision 2, if 
  3.3   enacted, the living and miscellaneous 
  3.4   expense allowance is set at $5,280 in 
  3.5   each year. 
  3.6   Subd. 3.  Child Care Grants              125,000        125,000
  3.7   Subd. 4.  Intervention for College
  3.8   Attendance Program                       500,000        500,000
  3.9   For the purpose of new Minnesota 
  3.10  Statutes, section 136A.861.  No more 
  3.11  than $50,000 of this appropriation in 
  3.12  each year may be used for 
  3.13  administrative expenses.  This 
  3.14  appropriation is added to the agency's 
  3.15  permanent budget base.  
  3.16  Subd. 5.  United Family
  3.17  Medicine Residency                       360,000        360,000
  3.18  For a grant to the United Family 
  3.19  Medicine residency program.  This 
  3.20  appropriation shall be used to support 
  3.21  18 resident physicians each year in 
  3.22  family practice at United Family 
  3.23  Medicine residency programs and shall 
  3.24  prepare doctors to practice family care 
  3.25  medicine in underserved rural and urban 
  3.26  areas of the state.  It is intended 
  3.27  that this program will improve health 
  3.28  care in underserved communities, 
  3.29  provide affordable access to 
  3.30  appropriate medical care, and manage 
  3.31  the treatment of patients in a more 
  3.32  cost-effective manner. 
  3.33  Subd. 6.  Rochester Higher
  3.34  Education                              2,500,000          -0-
  3.35  (a) $200,000 is for the Rochester 
  3.36  Higher Education Development Committee 
  3.37  to carry out its planning activities.  
  3.38  This is a onetime appropriation.  
  3.39  (b) $2,300,000 is for a onetime 
  3.40  appropriation that must be deposited 
  3.41  into the Rochester higher education 
  3.42  development account.  With the approval 
  3.43  of the Higher Education Services 
  3.44  Office, money in this account may be 
  3.45  used to: (1) provide additional 
  3.46  planning and development funds, if 
  3.47  needed; (2) provide initial funding for 
  3.48  academic program development; and (3) 
  3.49  provide funding related to academic 
  3.50  facilities, if needed. The 
  3.51  appropriation under this paragraph is 
  3.52  available until June 30, 2009. 
  3.53  Subd. 7.  Agency Administration          333,000         22,000
  3.54  Of this appropriation, $15,000 each 
  3.55  year is for grants to increase 
  3.56  campus-community collaboration and 
  3.57  service learning statewide.  For each 
  3.58  $1 in state funding, grant recipients 
  3.59  must contribute $2 in campus or 
  3.60  community-based support.  
  4.1   Of this appropriation, $310,000 in the 
  4.2   first year is for the Higher Education 
  4.3   Services Office to upgrade computer 
  4.4   program application software related to 
  4.5   state grant awards.  This appropriation 
  4.6   does not cancel but is available until 
  4.7   expended.  This is a onetime 
  4.8   appropriation and is not added to the 
  4.9   agency's base. 
  4.10  Of this appropriation, $8,000 in the 
  4.11  first year and $7,000 in the second 
  4.12  year is for increased dues for the 
  4.13  Midwestern Higher Education Compact.  
  4.14  This appropriation is ongoing and 
  4.15  $15,000 is added to the agency's base. 
  4.16  Subd. 8.  Balance Forward
  4.17  A balance in the first year under this 
  4.18  section does not cancel, but is 
  4.19  available for the second year.  
  4.20  Subd. 9.  Transfers 
  4.21  Notwithstanding 2005 S.F. No. 1879, 
  4.22  article 5, section 2, subdivision 13, 
  4.23  if enacted, the higher education 
  4.24  services office may transfer 
  4.25  unencumbered balances from the 
  4.26  appropriations in this section and in 
  4.27  2005 S.F. No. 1879, article 5, section 
  4.28  2, if enacted, to the state grant 
  4.29  appropriation, the child care grants 
  4.30  appropriation, and the interstate 
  4.31  tuition reciprocity appropriation. 
  4.32  Subd. 10.  Reporting
  4.33  Notwithstanding 2005 S.F. No. 1879, 
  4.34  article 5, section 2, subdivision 14, 
  4.35  if enacted, the higher education 
  4.36  services office shall evaluate and 
  4.37  report quarterly on state financial aid 
  4.38  expenditures and unexpended balances to 
  4.39  the chairs of the higher education 
  4.40  finance committees of the senate and 
  4.41  house of representatives and the 
  4.42  commissioner of finance.  By November 1 
  4.43  and February 15, the services office 
  4.44  shall provide updated state grant 
  4.45  spending projections taking into 
  4.46  account the most current and projected 
  4.47  enrollment and tuition and fee 
  4.48  information, economic conditions, and 
  4.49  other relevant factors.  
  4.50  Sec. 3.  BOARD OF TRUSTEES OF THE
  4.51  MINNESOTA STATE COLLEGES AND UNIVERSITIES
  4.52  Subdivision 1.  Total
  4.53  Appropriation                        (35,020,000)    29,780,000 
  4.54  The amounts that may be spent from this 
  4.55  appropriation for each purpose are 
  4.56  specified in the following subdivision. 
  4.57  Subd. 2.  Estimated Expenditures
  4.58  and Appropriations 
  4.59  Notwithstanding 2005 S.F. No. 1879, 
  5.1   article 5, section 3, subdivision 2, if 
  5.2   enacted, the legislature estimates that 
  5.3   instructional expenditures will be 
  5.4   $547,942,000 in the first year and 
  5.5   $553,354,000 in the second year.  The 
  5.6   legislature estimates that 
  5.7   noninstructional expenditures will be 
  5.8   $59,532,000 in the first year and 
  5.9   $60,120,000 in the second year. 
  5.10  This appropriation includes funding for 
  5.11  the recurring enrollment adjustment and 
  5.12  money to strengthen and expand the 
  5.13  Minnesota online program, increase the 
  5.14  capacity for training nurses and 
  5.15  teachers, provide for the management 
  5.16  education needs of farm and small 
  5.17  business owners, provide services and 
  5.18  outreach to underserved populations, 
  5.19  provide needed repair and replacement 
  5.20  of facilities, and encourage and reward 
  5.21  excellent performance by faculty or 
  5.22  staff. 
  5.23  The Board of Trustees of the Minnesota 
  5.24  State Colleges and Universities may not 
  5.25  in the 2005-2006 and 2006-2007 academic 
  5.26  years increase tuition more than four 
  5.27  percent above the level for the 
  5.28  previous academic year. 
  5.29  Sec. 4.  BOARD OF REGENTS OF THE 
  5.30  UNIVERSITY OF MINNESOTA 
  5.31  Subdivision 1.  Total
  5.32  Appropriation                          5,467,000     75,764,000 
  5.33  The amounts that may be spent from this 
  5.34  appropriation for each purpose are 
  5.35  specified in the following subdivisions.
  5.36  Subd. 2.  Operations and
  5.37  Maintenance
  5.38       5,467,000     75,764,000
  5.39  Estimated Expenditures 
  5.40  and Appropriations 
  5.41  Notwithstanding 2005 S.F. No. 1879, 
  5.42  article 5, section 4, subdivision 2, if 
  5.43  enacted, the legislature estimates that 
  5.44  instructional expenditures will be 
  5.45  $303,539,000 in the first year and 
  5.46  $318,209,000 in the second year.  The 
  5.47  legislature estimates that 
  5.48  noninstructional expenditures will be 
  5.49  $292,805,000 the first year and 
  5.50  $306,956,000 in the second year. 
  5.51  This appropriation includes funding for 
  5.52  the recurring enrollment adjustment and 
  5.53  the following initiatives:  Biosciences 
  5.54  for a Healthy Society to advance the 
  5.55  university's expertise and to increase 
  5.56  the university's competitiveness in 
  5.57  leveraging new funding from federal and 
  5.58  private sources; Preparing Students for 
  5.59  the 21st Century to enhance the ability 
  5.60  of the university to attract and retain 
  5.61  exceptional students; competitive 
  6.1   compensation to enable the university 
  6.2   to attract and retain quality faculty 
  6.3   members; research support to provide 
  6.4   resources for the university to 
  6.5   maintain a competitive advantage in 
  6.6   emerging and ongoing research 
  6.7   initiatives; and 21st Century 
  6.8   Technology to support enhancement to 
  6.9   major university systems.  
  6.10  This appropriation includes $4,000,000 
  6.11  for outreach services to historically 
  6.12  underserved students.  
  6.13  This appropriation includes $68,000 in 
  6.14  the first year and $67,000 in the 
  6.15  second year for the information 
  6.16  exchange program in the Minnesota 
  6.17  Institute for Sustainable Agriculture.  
  6.18  $135,000 is added to the university's 
  6.19  base. 
  6.20  Sec. 5.  COMMISSIONER OF HEALTH           95,000        155,000
  6.21  To the commissioner of health to 
  6.22  implement new Minnesota Statutes, 
  6.23  section 144.1498.  The funding base for 
  6.24  this program is $219,000 in fiscal year 
  6.25  2008 and $280,000 in fiscal year 2009. 
  6.26                             ARTICLE 2 
  6.27                         RELATED PROVISIONS 
  6.28     Section 1.  Minnesota Statutes 2004, section 135A.052, 
  6.29  subdivision 1, is amended to read: 
  6.30     Subdivision 1.  [STATEMENT OF MISSIONS.] The legislature 
  6.31  recognizes each type of public postsecondary institution to have 
  6.32  a distinctive mission within the overall provision of public 
  6.33  higher education in the state and a responsibility to cooperate 
  6.34  with each other.  These missions are as follows: 
  6.35     (1) the technical colleges shall offer vocational training 
  6.36  and education to prepare students for skilled occupations that 
  6.37  do not require a baccalaureate degree; 
  6.38     (2) the community colleges shall offer lower division 
  6.39  instruction in academic programs, occupational programs in which 
  6.40  all credits earned will be accepted for transfer to a 
  6.41  baccalaureate degree in the same field of study, and remedial 
  6.42  studies, for students transferring to baccalaureate institutions 
  6.43  and for those seeking associate degrees; 
  6.44     (3) consolidated community technical colleges shall offer 
  6.45  the same types of instruction, programs, certificates, diplomas, 
  6.46  and degrees as the technical colleges and community colleges 
  7.1   offer; 
  7.2      (4) the state universities shall offer undergraduate and 
  7.3   graduate instruction through the master's applied doctoral 
  7.4   degree, including specialist certificates, in the liberal arts 
  7.5   and sciences and professional education; and 
  7.6      (5) the University of Minnesota shall offer undergraduate, 
  7.7   graduate, and professional instruction through the doctoral 
  7.8   degree, and shall be the primary state supported academic agency 
  7.9   for research and extension services. 
  7.10     It is part of the mission of each system that within the 
  7.11  system's resources the system's governing board and chancellor 
  7.12  or president shall endeavor to: 
  7.13     (a) prevent the waste or unnecessary spending of public 
  7.14  money; 
  7.15     (b) use innovative fiscal and human resource practices to 
  7.16  manage the state's resources and operate the system as 
  7.17  efficiently as possible; 
  7.18     (c) coordinate the system's activities wherever appropriate 
  7.19  with the activities of the other system and governmental 
  7.20  agencies; 
  7.21     (d) use technology where appropriate to increase system 
  7.22  productivity, improve customer service, increase public access 
  7.23  to information about the system, and increase public 
  7.24  participation in the business of the system; 
  7.25     (e) utilize constructive and cooperative labor-management 
  7.26  practices to the extent otherwise required by chapters 43A and 
  7.27  179A; and 
  7.28     (f) recommend to the legislature appropriate changes in law 
  7.29  necessary to carry out the mission of the system. 
  7.30     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
  7.31  following final enactment. 
  7.32     Sec. 2.  [135A.145] [SALE OF STUDENT INFORMATION; MARKETING 
  7.33  CREDIT CARDS TO STUDENTS.] 
  7.34     Subdivision 1.  [PROHIBITED PRACTICES.] No public or 
  7.35  private postsecondary educational institution in this state, 
  7.36  including its agents, employees, student or alumni 
  8.1   organizations, or affiliates, may: 
  8.2      (1) sell, give, or otherwise transfer to any card issuer 
  8.3   the name, address, telephone number, or other contact 
  8.4   information of a student at the postsecondary educational 
  8.5   institution without the student's consent; or 
  8.6      (2) enter into any agreement to market credit cards to 
  8.7   students at a postsecondary educational institution. 
  8.8      For purposes of this section, the terms "credit," "credit 
  8.9   card," and "card issuer" have the meanings given them in the 
  8.10  Truth in Lending Act, United States Code, title 15, section 1602.
  8.11     Subd. 2.  [VIOLATIONS.] The attorney general may seek the 
  8.12  penalties and remedies available under section 8.31 against any 
  8.13  person who violates this section. 
  8.14     Sec. 3.  [135A.165] [DEAF STUDENTS; TUITION WAIVER.] 
  8.15     (a) For the purpose of this section, a "deaf person" means 
  8.16  an individual with a hearing loss of such severity that the 
  8.17  individual must depend primarily on visual communication, such 
  8.18  as writing, lip reading, manual communication, and gestures. 
  8.19     (b) A deaf person, who is a resident student as defined in 
  8.20  section 136A.101, subdivision 8, is entitled to the waiver of 
  8.21  tuition and fees remaining after deducting any federal or state 
  8.22  grants or other public or private grants made to the person for 
  8.23  the purpose of paying the tuition and fees at a Minnesota state 
  8.24  college or university or the University of Minnesota.  A deaf 
  8.25  person must receive either a federal Pell grant or a state grant 
  8.26  under section 136A.121 for a term to receive a waiver for that 
  8.27  term.  
  8.28     Sec. 4.  [135A.175] [CAMPUS ACCESS ASSURANCE.] 
  8.29     The Board of Trustees of the Minnesota State Colleges and 
  8.30  Universities and the Board of Regents of the University of 
  8.31  Minnesota shall maintain access to campuses and students for 
  8.32  purposes of military recruiting by the armed forces of the 
  8.33  United States that is at least equal in quality and scope to the 
  8.34  access to campuses and students that is provided to any other 
  8.35  employer. 
  8.36     Sec. 5.  [135A.53] [RESIDENT TUITION.] 
  9.1      (a) A student shall qualify for a resident tuition rate or 
  9.2   its equivalent at state universities and colleges, including the 
  9.3   University of Minnesota, if the student meets all of the 
  9.4   following requirements: 
  9.5      (1) high school attendance within the state for three or 
  9.6   more years; 
  9.7      (2) graduation from a state high school or attainment 
  9.8   within the state of the equivalent of high school graduation; 
  9.9   and 
  9.10     (3) registration as an entering student at, or current 
  9.11  enrollment in, a public institution of higher education.  
  9.12     (b) This section is in addition to any other statute, rule, 
  9.13  or higher education institution regulation or policy providing 
  9.14  eligibility for a resident tuition rate or its equivalent to a 
  9.15  student.  
  9.16     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
  9.17  following final enactment and applies to tuition for school 
  9.18  terms commencing on or after that date. 
  9.19     Sec. 6.  Minnesota Statutes 2004, section 136A.01, 
  9.20  subdivision 2, is amended to read: 
  9.21     Subd. 2.  [RESPONSIBILITIES.] The Higher Education Services 
  9.22  Office is responsible for: 
  9.23     (1) necessary state level administration of financial aid 
  9.24  programs, including accounting, auditing, and disbursing state 
  9.25  and federal financial aid funds, and reporting on financial aid 
  9.26  programs to the governor and the legislature; 
  9.27     (2) approval, registration, licensing, and financial aid 
  9.28  eligibility of private collegiate and career schools, under 
  9.29  sections 136A.61 to 136A.71 and chapter 141; 
  9.30     (3) administering the Telecommunications Council under Laws 
  9.31  1993, First Special Session chapter 2, article 5, section 2, the 
  9.32  Learning Network of Minnesota, and the Statewide Library Task 
  9.33  Force; 
  9.34     (4) negotiating and administering reciprocity agreements; 
  9.35     (5) publishing and distributing financial aid information 
  9.36  and materials, and other information and materials under section 
 10.1   136A.87, to students and parents; 
 10.2      (6) collecting and maintaining student enrollment and 
 10.3   financial aid data; 
 10.4      (7) administering the federal programs that affect students 
 10.5   and institutions on a statewide basis; and 
 10.6      (8) prescribing policies, procedures, and rules under 
 10.7   chapter 14 necessary to administer the programs under its 
 10.8   supervision. 
 10.9      Sec. 7.  Minnesota Statutes 2004, section 136A.031, 
 10.10  subdivision 2, is amended to read: 
 10.11     Subd. 2.  [HIGHER EDUCATION ADVISORY COUNCIL.] A Higher 
 10.12  Education Advisory Council (HEAC) is established.  The HEAC is 
 10.13  composed of the president of the University of Minnesota or 
 10.14  designee; the chancellor of the Minnesota State Colleges and 
 10.15  Universities or designee; the commissioner of education; the 
 10.16  president of the Private College Council; a representative from 
 10.17  the Minnesota Association of Private Postsecondary Schools 
 10.18  Career College Association; and a member appointed by the 
 10.19  governor.  The HEAC shall (1) bring to the attention of the 
 10.20  Higher Education Services Council Office any matters that the 
 10.21  HEAC deems necessary, and (2) review and comment upon matters 
 10.22  before the council.  The council shall refer all proposals to 
 10.23  the HEAC before submitting recommendations to the governor and 
 10.24  the legislature.  The council shall provide time for a report 
 10.25  from the HEAC at each meeting of the council. 
 10.26     Sec. 8.  Minnesota Statutes 2004, section 136A.031, 
 10.27  subdivision 3, is amended to read: 
 10.28     Subd. 3.  [STUDENT ADVISORY COUNCIL.] A Student Advisory 
 10.29  Council (SAC) to the Higher Education Services Council Office is 
 10.30  established.  The members of SAC shall include:  the chair of 
 10.31  the University of Minnesota student senate; the state chair of 
 10.32  the Minnesota State University Student Association; the 
 10.33  president of the Minnesota State College Student Association and 
 10.34  an officer of the Minnesota State College Student Association, 
 10.35  one in a community college course of study and one in a 
 10.36  technical college course of study; the president of the 
 11.1   Minnesota Association of Private College Students; and a student 
 11.2   who is enrolled in a private vocational school, to be appointed 
 11.3   by the Minnesota Association of Private Postsecondary Schools 
 11.4   Career College Association.  A member may be represented by a 
 11.5   student designee who attends an institution from the same system 
 11.6   that the absent member represents.  The SAC shall select one of 
 11.7   its members to serve as chair. 
 11.8      The Higher Education Services Council Office shall inform 
 11.9   the SAC of all matters related to student issues under 
 11.10  consideration and shall refer all proposals to the SAC before 
 11.11  taking action or sending the proposals to the governor or 
 11.12  legislature.  The SAC shall report to the Higher Education 
 11.13  Services Council Office quarterly and at other times that the 
 11.14  SAC considers desirable.  The SAC shall determine its meeting 
 11.15  times, but it shall also meet with the council office within 30 
 11.16  days after the director's request for a meeting. 
 11.17     The SAC shall: 
 11.18     (1) bring to the attention of the Higher Education Services 
 11.19  Council Office any matter that the SAC believes needs the 
 11.20  attention of the council office; 
 11.21     (2) make recommendations to the Higher Education Services 
 11.22  Council Office as it finds appropriate; 
 11.23     (3) appoint student members to the Higher Education 
 11.24  Services Council Office advisory groups as provided in 
 11.25  subdivision 4; and 
 11.26     (4) provide any reasonable assistance to the council office.
 11.27     Sec. 9.  Minnesota Statutes 2004, section 136A.031, 
 11.28  subdivision 5, is amended to read: 
 11.29     Subd. 5.  [EXPIRATION.] Notwithstanding section 15.059, 
 11.30  subdivision 5, the advisory groups established in this section 
 11.31  expire on June 30, 2005 2007. 
 11.32     Sec. 10.  Minnesota Statutes 2004, section 136A.121, 
 11.33  subdivision 2, is amended to read: 
 11.34     Subd. 2.  [ELIGIBILITY FOR GRANTS.] An applicant is 
 11.35  eligible to be considered for a grant, regardless of the 
 11.36  applicant's sex, creed, race, color, national origin, or 
 12.1   ancestry, under sections 136A.095 to 136A.131 if the office 
 12.2   finds that the applicant: 
 12.3      (1) is a resident of the state of Minnesota; 
 12.4      (2) is a graduate of a secondary school or its equivalent, 
 12.5   or is 17 years of age or over, and has met all requirements for 
 12.6   admission as a student to an eligible college or technical 
 12.7   college of choice as defined in sections 136A.095 to 136A.131; 
 12.8      (3) has met the financial need criteria established in 
 12.9   Minnesota Rules; 
 12.10     (4) is not in default, as defined by the office, of any 
 12.11  federal or state student educational loan; and 
 12.12     (5) is not more than 30 days in arrears for any in 
 12.13  court-ordered child support payments owed to a that is collected 
 12.14  or enforced by the public agency authority responsible for child 
 12.15  support enforcement or, if the applicant is more than 30 days in 
 12.16  arrears in court-ordered child support that is collected or 
 12.17  enforced by the public authority responsible for child support 
 12.18  enforcement, but is complying with a written payment 
 12.19  agreement under section 518.553 or order for arrearages.  An 
 12.20  agreement must provide for a repayment of arrearages at no less 
 12.21  than 20 percent per month of the amount of the monthly child 
 12.22  support obligation or no less than $30 per month if there is no 
 12.23  current monthly child support obligation.  Compliance means that 
 12.24  payments are made by the payment date. 
 12.25     The director and the commissioner of human services shall 
 12.26  develop procedures to implement clause (5).  
 12.27     Sec. 11.  Minnesota Statutes 2004, section 136A.121, 
 12.28  subdivision 6, is amended to read: 
 12.29     Subd. 6.  [COST OF ATTENDANCE.] (a) The recognized cost of 
 12.30  attendance consists of allowances specified in law for living 
 12.31  and miscellaneous expenses, and an allowance for tuition and 
 12.32  fees equal to the lesser of the average actual tuition and fees 
 12.33  charged by the institution, or the tuition and fee maximums 
 12.34  established in law. 
 12.35     (b) For a student registering for less than full time, the 
 12.36  office shall prorate the cost of attendance to the actual number 
 13.1   of credits for which the student is enrolled. 
 13.2      The recognized cost of attendance for a student who is 
 13.3   confined to a Minnesota correctional institution shall consist 
 13.4   of the tuition and fee component in paragraph (a), with no 
 13.5   allowance for living and miscellaneous expenses. 
 13.6      For the purpose of this subdivision, "fees" include only 
 13.7   those fees that are mandatory and charged to full-time resident 
 13.8   students attending the institution.  Fees do not include charges 
 13.9   for tools, equipment, computers, or other similar materials 
 13.10  where the student retains ownership.  Fees include charges for 
 13.11  these materials if the institution retains ownership.  Fees do 
 13.12  not include optional or punitive fees.  
 13.13     Sec. 12.  Minnesota Statutes 2004, section 136A.121, is 
 13.14  amended by adding a subdivision to read: 
 13.15     Subd. 7a.  [SURPLUS APPROPRIATION.] If the amount 
 13.16  appropriated is determined by the office to be more than 
 13.17  sufficient to fund projected grant demand in the second year of 
 13.18  the biennium, the office may increase the living and 
 13.19  miscellaneous expense allowance in the second year of the 
 13.20  biennium to the extent of the excess.  The adjustment may be 
 13.21  made one or more times.  In making the determination that there 
 13.22  is more than sufficient funds, the office shall balance the need 
 13.23  for sufficient resources to meet the projected demand for grants 
 13.24  with the goal of fully allocating the appropriation for state 
 13.25  grants. 
 13.26     Sec. 13.  Minnesota Statutes 2004, section 136A.121, 
 13.27  subdivision 9, is amended to read: 
 13.28     Subd. 9.  [AWARDS.] An undergraduate student who meets the 
 13.29  office's requirements is eligible to apply for and receive a 
 13.30  grant in any year of undergraduate study unless the student has 
 13.31  obtained a baccalaureate degree or previously has been enrolled 
 13.32  full time or the equivalent for eight semesters or the 
 13.33  equivalent, excluding courses taken from a Minnesota school or 
 13.34  postsecondary institution which is not participating in the 
 13.35  state grant program and from which a student transferred no 
 13.36  credit.  A student who withdraws from enrollment for active 
 14.1   military service is entitled to an additional semester or the 
 14.2   equivalent of grant eligibility.  A student enrolled in a 
 14.3   two-year program at a four-year institution is only eligible for 
 14.4   the tuition and fee maximums established by law for two-year 
 14.5   institutions. 
 14.6      Sec. 14.  Minnesota Statutes 2004, section 136A.121, 
 14.7   subdivision 13, is amended to read: 
 14.8      Subd. 13.  [DEADLINE.] The deadline for the office to 
 14.9   accept applications for state grants for a term is 14 30 days 
 14.10  after the start of that term. 
 14.11     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 14.12  following final enactment and is retroactive to July 1, 2003.  
 14.13  An applicant who missed the 14-day deadline previously in effect 
 14.14  between July 1, 2003, and June 30, 2005, but who met the 30-day 
 14.15  deadline, has until September 1, 2005, to reapply.  Retroactive 
 14.16  awards under this section must be made on a first come, first 
 14.17  served funds available basis. 
 14.18     Sec. 15.  Minnesota Statutes 2004, section 136A.121, is 
 14.19  amended by adding a subdivision to read: 
 14.20     Subd. 19.  [DATA.] An eligible institution must provide to 
 14.21  the office aggregate and distributional data on student 
 14.22  enrollment, financial aid, financial, and other aggregate and 
 14.23  other distributional data as determined by the director, to 
 14.24  enable the office to carry out its responsibilities under 
 14.25  chapters 136A and 141. 
 14.26     Sec. 16.  Minnesota Statutes 2004, section 136A.125, 
 14.27  subdivision 2, is amended to read: 
 14.28     Subd. 2.  [ELIGIBLE STUDENTS.] (a) An applicant is eligible 
 14.29  for a child care grant if the applicant: 
 14.30     (1) is a resident of the state of Minnesota; 
 14.31     (2) has a child 12 years of age or younger, or 14 years of 
 14.32  age or younger who is handicapped as defined in section 125A.02, 
 14.33  and who is receiving or will receive care on a regular basis 
 14.34  from a licensed or legal, nonlicensed caregiver; 
 14.35     (3) is income eligible as determined by the office's 
 14.36  policies and rules, but is not a recipient of assistance from 
 15.1   the Minnesota family investment program; 
 15.2      (4) has not earned a baccalaureate degree and has been 
 15.3   enrolled full time less than eight semesters or the equivalent; 
 15.4      (5) is pursuing a nonsectarian program or course of study 
 15.5   that applies to an undergraduate degree, diploma, or 
 15.6   certificate; 
 15.7      (6) is enrolled at least half time in an eligible 
 15.8   institution; and 
 15.9      (7) is in good academic standing and making satisfactory 
 15.10  academic progress. 
 15.11     (b) A student who withdraws from enrollment for active 
 15.12  military service is entitled to an additional semester or the 
 15.13  equivalent of grant eligibility.  
 15.14     Sec. 17.  Minnesota Statutes 2004, section 136A.1701, is 
 15.15  amended by adding a subdivision to read: 
 15.16     Subd. 11.  [DATA.] An eligible institution must provide to 
 15.17  the office aggregate and distributional data on student 
 15.18  enrollment, financial aid, financial, and other aggregate and 
 15.19  distributional data on data as determined by the director, to 
 15.20  enable the office to carry out its responsibilities under 
 15.21  chapters 136A and 141. 
 15.22     Sec. 18.  Minnesota Statutes 2004, section 136A.1701, is 
 15.23  amended by adding a subdivision to read: 
 15.24     Subd. 12.  [ELIGIBLE STUDENT.] "Eligible student" means a 
 15.25  student who is a Minnesota resident who is enrolled or accepted 
 15.26  for enrollment at an eligible school in Minnesota or in another 
 15.27  state or province.  Non-Minnesota residents are eligible 
 15.28  students if they are enrolled or accepted for enrollment in a 
 15.29  minimum of one course of at least 30 days in length during the 
 15.30  academic year that requires physical attendance at an eligible 
 15.31  school located in Minnesota.  Non-Minnesota resident students 
 15.32  enrolled exclusively during the academic year in correspondence 
 15.33  courses or courses offered over the Internet are not eligible 
 15.34  students.  Non-Minnesota resident students not physically 
 15.35  attending classes in Minnesota due to enrollment in a study 
 15.36  abroad program for 12 months or less are eligible students.  
 16.1   Non-Minnesota residents enrolled in study abroad programs 
 16.2   exceeding 12 months are not eligible students.  For purposes of 
 16.3   this section, an "eligible student" must also meet the 
 16.4   eligibility requirements of section 136A.15, subdivision 8.  
 16.5      Sec. 19.  [136A.1703] [INCOME-CONTINGENT LOANS.] 
 16.6      The office shall administer an income-contingent loan 
 16.7   repayment program to assist graduates of Minnesota schools in 
 16.8   medicine, dentistry, pharmacy, chiropractic medicine, public 
 16.9   health, and veterinary medicine, and Minnesota residents 
 16.10  graduating from optometry and osteopathy programs.  Applicant 
 16.11  data collected by the office for this program may be disclosed 
 16.12  to a consumer credit reporting agency under the same conditions 
 16.13  as those that apply to the supplemental loan program under 
 16.14  section 136A.162.  No new applicants may be accepted after June 
 16.15  30, 1995. 
 16.16     Sec. 20.  [136A.1785] [LOAN CAPITAL FUND.] 
 16.17     The office may deposit and hold assets derived from the 
 16.18  operation of its student loan programs authorized by this 
 16.19  chapter in a fund known as the loan capital fund.  Assets in the 
 16.20  loan capital fund are available to the office solely for 
 16.21  carrying out the purposes and terms of sections 136A.15 to 
 16.22  136A.1702, including, but not limited to, making student loans 
 16.23  authorized by this chapter, paying administrative expenses 
 16.24  associated with the operation of its student loan programs, 
 16.25  repurchasing defaulted student loans, and paying expenses in 
 16.26  connection with the issuance of revenue bonds authorized under 
 16.27  this chapter.  Assets in the loan capital fund may be invested 
 16.28  as provided in sections 11A.24 and 136A.16, subdivision 8.  All 
 16.29  interest and earnings from the investment of the loan capital 
 16.30  fund inure to the benefit of the fund and are deposited into the 
 16.31  fund. 
 16.32     Sec. 21.  [136A.861] [INTERVENTION FOR COLLEGE ATTENDANCE 
 16.33  PROGRAM GRANTS.] 
 16.34     Subdivision 1.  [GRANTS.] The director of the Higher 
 16.35  Education Services Office shall award grants to foster 
 16.36  postsecondary attendance by providing outreach services to 
 17.1   historically underserved groups of elementary and secondary 
 17.2   students.  Grants must be awarded to programs that provide 
 17.3   precollege services, including, but not limited to: 
 17.4      (1) academic counseling; 
 17.5      (2) mentoring; 
 17.6      (3) fostering and improving parental involvement in 
 17.7   planning for and facilitating a college education; 
 17.8      (4) services for students with English as a second 
 17.9   language; 
 17.10     (5) academic enrichment activities; 
 17.11     (6) tutoring; 
 17.12     (7) career awareness and exploration; 
 17.13     (8) orientation to college life; 
 17.14     (9) assistance with high school course selection and 
 17.15  information about college admission requirements; 
 17.16     (10) financial aid counseling; and 
 17.17     (11) summer academic enrichment programs.  
 17.18  Services may be provided by postsecondary institutions, school 
 17.19  districts, businesses, foundations, professional organizations, 
 17.20  community-based organizations, or others deemed appropriate by 
 17.21  the director.  
 17.22     Subd. 2.  [ELIGIBLE STUDENTS.] Eligible students include 
 17.23  elementary and secondary students who meet one or more of the 
 17.24  following criteria: 
 17.25     (1) are counted under section 1124(c) of the Elementary and 
 17.26  Secondary Education Act of 1965 (Title I); 
 17.27     (2) are eligible for free or reduced-price lunch under the 
 17.28  National School Lunch Act; 
 17.29     (3) receive assistance under the Temporary Assistance for 
 17.30  Needy Families Law (Title I of the Personal Responsibility and 
 17.31  Work Opportunity Reconciliation Act of 1996); or 
 17.32     (4) are a member of a group traditionally underrepresented 
 17.33  in higher education. 
 17.34     Subd. 3.  [APPLICATION PROCESS.] The director of the Higher 
 17.35  Education Services Office shall develop a grant application 
 17.36  process.  The director shall attempt to distribute grants in a 
 18.1   manner that ensures that eligible students throughout the state 
 18.2   have access to precollege services. 
 18.3      The grant application must include, at a minimum, the 
 18.4   following information: 
 18.5      (1) a description of the characteristics of the students to 
 18.6   be served; 
 18.7      (2) a description of the services to be provided and a 
 18.8   timeline for implementation of the activities; 
 18.9      (3) a description of how the services provided will foster 
 18.10  postsecondary attendance; 
 18.11     (4) a description of how the services will be evaluated to 
 18.12  determine whether the program goals were met; and 
 18.13     (5) other information as identified by the director. 
 18.14  Grant recipients must specify both program and student outcome 
 18.15  goals, and performance measures for each goal.  
 18.16  Priority shall be given to collaborative efforts between two or 
 18.17  more organizations.  
 18.18     Subd. 4.  [MATCH REQUIRED.] Applicants are required to 
 18.19  match the grant amount dollar-for-dollar.  The match may be in 
 18.20  cash or an in-kind contribution.  
 18.21     Subd. 5.  [REVIEW COMMITTEE.] The director must establish 
 18.22  and convene a grant selection committee to review applications 
 18.23  and award grants.  The members of the committee may include 
 18.24  representatives of postsecondary institutions, elementary and 
 18.25  secondary education, organizations providing precollege outreach 
 18.26  services, and others deemed appropriate by the director. 
 18.27     Subd. 6.  [PROGRAM EVALUATION.] Each grant recipient must 
 18.28  annually submit a report to the Higher Education Services Office 
 18.29  delineating its program and student outcome goals, and 
 18.30  activities implemented to achieve the stated outcomes.  The 
 18.31  goals must be clearly stated and measurable.  Grant recipients 
 18.32  are required to collect, analyze, and report on participation 
 18.33  and outcome data that enable the office to verify that the 
 18.34  program goals were met.  The office shall maintain: 
 18.35     (1) information about successful precollege program 
 18.36  activities for dissemination to individuals throughout the state 
 19.1   interested in adopting or replicating successful program 
 19.2   practices; and 
 19.3      (2) data on the success of the funded projects in 
 19.4   increasing the high school graduation and college participation 
 19.5   rates of students served by the grant recipients.  The office 
 19.6   may convene meetings of the grant recipients, as needed, to 
 19.7   discuss issues pertaining to the implementation of precollege 
 19.8   services.  
 19.9      Subd. 7.  [REPORT.] By January 15 of each odd-numbered 
 19.10  year, the office shall submit a report to the committees in the 
 19.11  legislature with jurisdiction over higher education finance 
 19.12  regarding the grant recipients and their activities.  The report 
 19.13  shall include information about the students served, the 
 19.14  organizations providing services, program activities, program 
 19.15  goals and outcomes, and program revenue sources and funding 
 19.16  levels. 
 19.17     Sec. 22.  Minnesota Statutes 2004, section 136F.02, 
 19.18  subdivision 1, is amended to read: 
 19.19     Subdivision 1.  [MEMBERSHIP.] The board consists of 15 18 
 19.20  members appointed by the governor with the advice and consent of 
 19.21  the senate.  At least one member of the board shall have 
 19.22  experience in and represent business and at least one member 
 19.23  shall have experience in and represent organized labor.  At 
 19.24  least one member of the board must be a resident of each 
 19.25  congressional district, except that congressional districts 
 19.26  containing all or part of 17 or more counties shall be split in 
 19.27  approximately half geographically along county lines and one 
 19.28  member must be a resident of each half.  Three members must be 
 19.29  students who are enrolled at least half time in a degree, 
 19.30  diploma, or certificate program or have graduated from an 
 19.31  institution governed by the board within one year of the date of 
 19.32  appointment.  The student members shall include:  one member 
 19.33  from a community college, one member from a state university, 
 19.34  and one member from a technical college.  The remaining members 
 19.35  must be appointed to represent the state at large.  
 19.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 20.1   following final enactment.  Of the three members added to the 
 20.2   board by this section, one shall be appointed for an original 
 20.3   two-year term, one for a four-year term, and one for a six-year 
 20.4   term.  The governor shall determine which term applies to an 
 20.5   appointment.  After the original terms, all succeeding terms 
 20.6   shall be six years.  If there is not a member representing 
 20.7   business and labor respectively, as provided by this section, 
 20.8   the governor shall make those appointments at the first 
 20.9   opportunity to do so.  
 20.10     Sec. 23.  Minnesota Statutes 2004, section 136F.04, 
 20.11  subdivision 4, is amended to read: 
 20.12     Subd. 4.  [RECOMMENDATIONS.] Each student association shall 
 20.13  recommend at least two and not more than four candidates for its 
 20.14  student member.  By January 2 April 15 of the year in which its 
 20.15  members' term expires, each student association shall submit its 
 20.16  recommendations to the governor.  The governor is not bound by 
 20.17  these recommendations. 
 20.18     Sec. 24.  Minnesota Statutes 2004, section 136G.03, 
 20.19  subdivision 3, is amended to read: 
 20.20     Subd. 3.  [ACCOUNT OWNER.] "Account owner" means a person 
 20.21  who enters into a participation agreement and is entitled 
 20.22  to select or change conduct transactions on the account, 
 20.23  including selecting and changing the beneficiary of an account 
 20.24  or to receive and receiving distributions from the account for 
 20.25  other than payment of qualified higher education expenses. 
 20.26     Sec. 25.  Minnesota Statutes 2004, section 136G.03, 
 20.27  subdivision 21a, is amended to read: 
 20.28     Subd. 21a.  [MINOR TRUST ACCOUNT.] "Minor trust account" 
 20.29  means a Uniform Gift to Minors Act account, or a Uniform 
 20.30  Transfers to Minors Act account, or a trust instrument naming a 
 20.31  minor person as beneficiary, created and operating under the 
 20.32  laws of Minnesota or another state. 
 20.33     Sec. 26.  Minnesota Statutes 2004, section 136G.03, 
 20.34  subdivision 22, is amended to read: 
 20.35     Subd. 22.  [NONQUALIFIED DISTRIBUTION.] "Nonqualified 
 20.36  distribution" means a distribution made from an account other 
 21.1   than (1) a qualified distribution; or (2) a distribution due to 
 21.2   the death or disability of, or scholarship to, or attendance at 
 21.3   a United States military academy by, a beneficiary. 
 21.4      Sec. 27.  Minnesota Statutes 2004, section 136G.03, 
 21.5   subdivision 32, is amended to read: 
 21.6      Subd. 32.  [SCHOLARSHIP.] "Scholarship" means a 
 21.7   scholarship, or educational assistance allowance, or payment 
 21.8   under section 529(b)(3)(C) of the Internal Revenue Code. 
 21.9      Sec. 28.  Minnesota Statutes 2004, section 136G.05, 
 21.10  subdivision 8, is amended to read: 
 21.11     Subd. 8.  [ADMINISTRATION.] The director shall administer 
 21.12  the program, including accepting and processing applications, 
 21.13  maintaining account records, making payments, making matching 
 21.14  grants under section 136G.11, and undertaking any other 
 21.15  necessary tasks to administer the program.  The office may 
 21.16  contract with one or more third parties to carry out some or all 
 21.17  of these administrative duties, including promotion providing 
 21.18  incentives and marketing of the program.  The office and the 
 21.19  board may jointly contract with third-party providers, if the 
 21.20  office and board determine that it is desirable to contract with 
 21.21  the same entity or entities for administration and investment 
 21.22  management. 
 21.23     Sec. 29.  Minnesota Statutes 2004, section 136G.09, 
 21.24  subdivision 11, is amended to read: 
 21.25     Subd. 11.  [EFFECT OF PLAN CHANGES ON PARTICIPATION 
 21.26  AGREEMENT.] Amendments to sections 136G.01 to 136G.13 
 21.27  automatically amend the participation agreement.  Any amendments 
 21.28  to the operating procedures and policies of the plan shall 
 21.29  automatically amend the participation agreement 30 days after 
 21.30  adoption by the office or the board. 
 21.31     Sec. 30.  Minnesota Statutes 2004, section 136G.09, 
 21.32  subdivision 12, is amended to read: 
 21.33     Subd. 12.  [SPECIAL ACCOUNT TO HOLD PLAN ASSETS IN TRUST.] 
 21.34  All assets of the plan, including contributions to accounts and 
 21.35  matching grant accounts and earnings, are held in trust for the 
 21.36  exclusive benefit of account owners and beneficiaries.  Assets 
 22.1   must be held in a separate account in the state treasury to be 
 22.2   known as the Minnesota college savings plan account or in 
 22.3   accounts with the third party provider selected pursuant to 
 22.4   section 136G.05, subdivision 8.  Plan assets are not subject to 
 22.5   claims by creditors of the state, are not part of the general 
 22.6   fund, and are not subject to appropriation by the state.  
 22.7   Payments from the Minnesota college savings plan account shall 
 22.8   be made under sections 136G.01 to 136G.13. 
 22.9      Sec. 31.  Minnesota Statutes 2004, section 136G.11, 
 22.10  subdivision 1, is amended to read: 
 22.11     Subdivision 1.  [MATCHING GRANT QUALIFICATION.] By June 30 
 22.12  of each year, a state matching grant must be added to each 
 22.13  account established under the program if the following 
 22.14  conditions are met: 
 22.15     (1) the contributor applies, in writing in a form 
 22.16  prescribed by the director, for a matching grant; 
 22.17     (2) a minimum contribution of $200 was made during the 
 22.18  preceding calendar year; and 
 22.19     (3) the beneficiary's family meets Minnesota college 
 22.20  savings plan residency requirements; and 
 22.21     (4) the family income of the beneficiary did not exceed 
 22.22  $80,000. 
 22.23     Sec. 32.  Minnesota Statutes 2004, section 136G.11, 
 22.24  subdivision 3, is amended to read: 
 22.25     Subd. 3.  [RESIDENCY REQUIREMENT.] (a) If the beneficiary 
 22.26  is under age 25, the beneficiary's parents or legal guardians 
 22.27  must be Minnesota residents to qualify for a matching grant.  If 
 22.28  the beneficiary is age 25 or older, the beneficiary must be a 
 22.29  Minnesota resident to qualify for a matching grant. 
 22.30     (b) To meet the residency requirements, the parent or legal 
 22.31  guardian of beneficiaries under age 25 must have filed a 
 22.32  Minnesota individual income tax return as a Minnesota resident 
 22.33  and claimed the beneficiary as a dependent on the parent or 
 22.34  legal guardian's federal tax return for the calendar year in 
 22.35  which contributions were made.  If the beneficiary's parents are 
 22.36  divorced, the parent or legal guardian claiming the beneficiary 
 23.1   as a dependent on the federal individual income tax return must 
 23.2   be a Minnesota resident.  For beneficiaries age 25 or older, the 
 23.3   beneficiary, and a spouse, if any, must have filed a Minnesota 
 23.4   and a federal individual income tax return as a Minnesota 
 23.5   resident for the calendar year in which contributions were made. 
 23.6      (c) A parent of beneficiaries under age 25 and 
 23.7   beneficiaries age 25 or older who did not reside in Minnesota in 
 23.8   the calendar year in which contributions were made are not 
 23.9   eligible for a matching grant. 
 23.10     Sec. 33.  Minnesota Statutes 2004, section 136G.11, is 
 23.11  amended by adding a subdivision to read: 
 23.12     Subd. 3a.  [FAMILY INCOME.] (a) For purposes of this 
 23.13  section, "family income" means: 
 23.14     (1) if the beneficiary is under age 25, the combined 
 23.15  adjusted gross income of the beneficiary's parents or legal 
 23.16  guardians as reported on the federal tax return or returns for 
 23.17  the calendar year in which contributions were made.  If the 
 23.18  beneficiary's parents or legal guardians are divorced, the 
 23.19  income of the parent claiming the beneficiary as a dependent on 
 23.20  the federal individual income tax return and the income of that 
 23.21  parent's spouse, if any, is used to determine family income; or 
 23.22     (2) if the beneficiary is age 25 or older, the combined 
 23.23  adjusted gross income of the beneficiary and spouse, if any. 
 23.24     (b) For a parent or legal guardian of beneficiaries under 
 23.25  age 25 and for beneficiaries age 25 or older who resided in 
 23.26  Minnesota and filed a federal individual income tax return, the 
 23.27  matching grant must be based on family income from the calendar 
 23.28  year in which contributions were made. 
 23.29     Sec. 34.  Minnesota Statutes 2004, section 136G.11, 
 23.30  subdivision 13, is amended to read: 
 23.31     Subd. 13.  [FORFEITURE OF MATCHING GRANTS.] (a) Matching 
 23.32  grants are forfeited if: 
 23.33     (1) the account owner transfers the total account balance 
 23.34  of an account to another account or to another qualified tuition 
 23.35  program; 
 23.36     (2) the beneficiary receives a full tuition scholarship or 
 24.1   admission to is attending a United States service academy; 
 24.2      (3) the beneficiary dies or becomes disabled; 
 24.3      (4) the account owner changes the beneficiary of the 
 24.4   account; or 
 24.5      (5) the account owner closes the account with a 
 24.6   nonqualified withdrawal. 
 24.7      (b) Matching grants must be proportionally forfeited if: 
 24.8      (1) the account owner transfers a portion of an account to 
 24.9   another account or to another qualified tuition program; 
 24.10     (2) the beneficiary receives a scholarship covering a 
 24.11  portion of qualified higher education expenses; or 
 24.12     (3) the account owner makes a partial nonqualified 
 24.13  withdrawal. 
 24.14     (c) If the account owner makes a misrepresentation in a 
 24.15  participation agreement or an application for a matching grant 
 24.16  that results in a matching grant, the matching grant associated 
 24.17  with the misrepresentation is forfeited.  The office and the 
 24.18  board must instruct the plan administrator as to the amount to 
 24.19  be forfeited from the matching grant account.  The office and 
 24.20  the board must withdraw the matching grant or the proportion of 
 24.21  the matching grant that is related to the misrepresentation. 
 24.22     Sec. 35.  Minnesota Statutes 2004, section 136G.13, 
 24.23  subdivision 1, is amended to read: 
 24.24     Subdivision 1.  [QUALIFIED DISTRIBUTION METHODS.] (a) 
 24.25  Qualified distributions may be made: 
 24.26     (1) directly to participating eligible educational 
 24.27  institutions on behalf of the beneficiary; or 
 24.28     (2) in the form of a check payable to both the beneficiary 
 24.29  and the eligible educational institution; or 
 24.30     (3) directly to the account owner or beneficiary if the 
 24.31  account owner or beneficiary has already paid qualified higher 
 24.32  education expenses. 
 24.33     (b) Qualified distributions must be withdrawn 
 24.34  proportionally from contributions and earnings in an account 
 24.35  owner's account on the date of distribution as provided in 
 24.36  section 529 of the Internal Revenue Code. 
 25.1      Sec. 36.  Minnesota Statutes 2004, section 136G.13, 
 25.2   subdivision 5, is amended to read: 
 25.3      Subd. 5.  [DISTRIBUTIONS DUE TO DEATH OR DISABILITY OF, OR 
 25.4   SCHOLARSHIP TO, OR ATTENDANCE AT A UNITED STATES MILITARY 
 25.5   ACADEMY BY, A BENEFICIARY.] An account owner may request a 
 25.6   distribution due to the death or disability of, or scholarship 
 25.7   to, or attendance at a United States military academy by, a 
 25.8   beneficiary from an account by submitting a completed request to 
 25.9   the plan.  Prior to distribution, the account owner shall 
 25.10  certify the reason for the distribution and provide written 
 25.11  confirmation from a third party that the beneficiary has died, 
 25.12  become disabled, or received a scholarship for attendance at an 
 25.13  eligible educational institution, or is attending a United 
 25.14  States military academy.  The plan must not consider a request 
 25.15  to make a distribution until a third-party written confirmation 
 25.16  is received by the plan.  For purposes of this subdivision, a 
 25.17  third-party written confirmation consists of the following: 
 25.18     (1) for death of the beneficiary, a certified copy of the 
 25.19  beneficiary's death record; 
 25.20     (2) for disability of the beneficiary, a certification by a 
 25.21  physician who is a doctor of medicine or osteopathy stating that 
 25.22  the doctor is legally authorized to practice in a state of the 
 25.23  United States and that the beneficiary is unable to attend any 
 25.24  eligible educational institution because of an injury or illness 
 25.25  that is expected to continue indefinitely or result in death.  
 25.26  Certification must be on a form approved by the plan; or 
 25.27     (3) for a scholarship award to the beneficiary, a letter 
 25.28  from the grantor of the scholarship or from the eligible 
 25.29  educational institution receiving or administering the 
 25.30  scholarship, that identifies the beneficiary by name and Social 
 25.31  Security number or taxpayer identification number as the 
 25.32  recipient of the scholarship and states the amount of the 
 25.33  scholarship, the period of time or number of credits or units to 
 25.34  which it applies, the date of the scholarship, and, if 
 25.35  applicable, the eligible educational institution to which the 
 25.36  scholarship is to be applied; or 
 26.1      (4) for attendance by the beneficiary at a United States 
 26.2   military academy, a letter from the military academy indicating 
 26.3   the beneficiary's enrollment and attendance. 
 26.4      Sec. 37.  Minnesota Statutes 2004, section 136G.14, is 
 26.5   amended to read: 
 26.6      136G.14 [MINOR TRUST ACCOUNTS.] 
 26.7      (a) This section applies to a plan account in which funds 
 26.8   of a minor trust account are invested. 
 26.9      (b) The account owner may not be changed to any person 
 26.10  other than a successor custodian or the beneficiary unless a 
 26.11  court order directing the change of ownership is provided to the 
 26.12  plan administrator.  The custodian must sign all forms and 
 26.13  requests submitted to the plan administrator in the custodian's 
 26.14  representative capacity.  The custodian must notify the plan 
 26.15  administrator in writing when the beneficiary becomes legally 
 26.16  entitled to be the account owner.  An account owner under this 
 26.17  section may not select a contingent account owner. 
 26.18     (c) The beneficiary of an account under this section may 
 26.19  not be changed.  If the beneficiary dies, assets in a plan 
 26.20  account become the property of the beneficiary's estate.  Funds 
 26.21  in an account must not be transferred or rolled over to another 
 26.22  account owner or to an account for another beneficiary.  A 
 26.23  nonqualified distribution from an account, or a distribution due 
 26.24  to the disability or scholarship award to the beneficiary, or 
 26.25  made on account of the beneficiary's attendance at a United 
 26.26  States military academy, must be used for the benefit of the 
 26.27  beneficiary. 
 26.28     Sec. 38.  Minnesota Statutes 2004, section 137.0245, 
 26.29  subdivision 3, is amended to read: 
 26.30     Subd. 3.  [DUTIES.] (a) The advisory council shall: 
 26.31     (1) develop, in consultation with current and former 
 26.32  regents and the administration of the University of Minnesota, a 
 26.33  statement of the selection criteria to be applied and a 
 26.34  description of the responsibilities and duties of a regent, and 
 26.35  shall distribute this to potential candidates; and 
 26.36     (2) for each position on the board, identify and recruit 
 27.1   qualified candidates for the Board of Regents, based on the 
 27.2   background and experience of the candidates, and their potential 
 27.3   for discharging the responsibilities of a member of the Board of 
 27.4   Regents.  The selection criteria must not include a limitation 
 27.5   on the number of terms an individual may serve on the Board of 
 27.6   Regents; and 
 27.7      (3) report to the joint committee established under section 
 27.8   137.0246 on the membership needs of the board in terms of 
 27.9   individual skills and characteristics.  Individual skills relate 
 27.10  to training and experience in fields such as finance, higher 
 27.11  education, labor, and management.  Individual characteristics 
 27.12  relate to qualities such as gender, race, and geographic 
 27.13  location of residence. 
 27.14     (b) The selection criteria developed under paragraph (a), 
 27.15  clause (1), must include a criterion that regents represent 
 27.16  diversity in geography; gender; race; occupation, including 
 27.17  business and labor; and experience.  
 27.18     Sec. 39.  [137.0246] [REGENT SELECTION; LEGISLATURE.] 
 27.19     (a) By February 15 of each odd-numbered year, or at a date 
 27.20  agreed to by concurrent resolution, a joint legislative 
 27.21  committee shall meet to recommend nominees for regent of the 
 27.22  University of Minnesota to be presented to a joint convention of 
 27.23  the legislature.  The joint legislative committee consists of 20 
 27.24  legislator members.  Ten members shall be appointed by the 
 27.25  speaker of the house.  Ten members shall be appointed by the 
 27.26  Subcommittee on Committees of the Committee on Rules and 
 27.27  Administration from the senate.  An equal number of members from 
 27.28  the majority and minority party shall be appointed from each 
 27.29  house.  The members appointed from the minority party must be 
 27.30  appointed from among those recommended by the minority leader.  
 27.31  The chairs of the education policy committees and of the higher 
 27.32  education budget divisions and the ranking minority member of 
 27.33  those committees and divisions must be appointed.  A majority of 
 27.34  the members from each house is a quorum of the joint committee.  
 27.35     (b) The joint committee shall determine the number of 
 27.36  persons, and the person or persons to be recommended for each 
 28.1   open seat.  
 28.2      (c) The joint convention must meet on or before March 7 of 
 28.3   that same odd-numbered year. 
 28.4      Sec. 40.  [144.1498] [NURSING LOW-INCOME LOAN REPAYMENT.] 
 28.5      Subdivision 1.  [DEFINITION.] For purposes of this section, 
 28.6   "qualifying educational loans" means government, commercial, and 
 28.7   foundation loans for actual costs paid for tuition, reasonable 
 28.8   education expenses, and reasonable living expenses related to 
 28.9   the graduate or undergraduate education of a licensed practical 
 28.10  nurse or registered nurse. 
 28.11     Subd. 2.  [CREATION OF ACCOUNT; LOAN REPAYMENT PROGRAM.] A 
 28.12  low-income nursing education account is created in the general 
 28.13  fund.  The commissioner of health shall use money from the 
 28.14  account to establish a loan repayment program for licensed 
 28.15  practical or registered nurses who agree to practice in a 
 28.16  Minnesota nursing home or work in a position in Minnesota as a 
 28.17  nurse educator.  Appropriations made to the account do not 
 28.18  cancel and are available until expended.  
 28.19     Subd. 3.  [ELIGIBILITY.] (a) To be eligible to apply to 
 28.20  participate in the loan repayment program, an individual must: 
 28.21     (1) be a resident of Minnesota; 
 28.22     (2) currently be attending a program leading to a degree in 
 28.23  practical or registered nursing or a graduate nursing degree in 
 28.24  a public or private postsecondary education institution located 
 28.25  in Minnesota; and 
 28.26     (3) submit an application to the commissioner of health.  
 28.27     (b) An applicant selected to participate must sign a 
 28.28  contract to agree to serve a minimum three-year, full-time 
 28.29  service obligation in a position or place of employment 
 28.30  described in subdivision 2.  The service must begin no later 
 28.31  than March 31 following completion of required training.  If 
 28.32  fewer applications are submitted by nursing students than there 
 28.33  are participant slots available, the commissioner may consider 
 28.34  applications submitted by nursing program graduates who are 
 28.35  licensed or registered nurses or nurses who are nurse 
 28.36  educators.  Nurses selected for loan repayment assistance must 
 29.1   comply with this section.  
 29.2      Subd. 4.  [LOAN REPAYMENT.] The commissioner of health may 
 29.3   accept applicants each year for participation in the loan 
 29.4   repayment program, within the limits of available funding.  
 29.5   Applicants are responsible for securing their own loans.  The 
 29.6   commissioner shall select participants in a priority based upon 
 29.7   lowest family income, followed in order of ascending family 
 29.8   income.  Family income may be determined in the same manner as 
 29.9   for state grants under section 136A.121 or in another manner the 
 29.10  commissioner determines fairly represents family income.  The 
 29.11  commissioner shall give preference to applicants closest to 
 29.12  completing their training.  For each year that a participant 
 29.13  meets the service obligation required under subdivision 3, up to 
 29.14  a maximum of four years, the commissioner shall make annual 
 29.15  disbursements directly to the participant equivalent to 15 
 29.16  percent of the average educational debt for indebted nursing 
 29.17  school graduates in the year closest to the applicant's 
 29.18  selection for which information is available or the balance of 
 29.19  the qualifying educational loans, whichever is less.  Before 
 29.20  receiving loan repayment disbursements and as requested, the 
 29.21  participant must complete and return to the commissioner an 
 29.22  affidavit of practice form provided by the commissioner 
 29.23  verifying that the participant is practicing as required under 
 29.24  subdivision 3.  The participant must provide the commissioner 
 29.25  with verification that the full amount of loan repayment 
 29.26  disbursement received by the participant has been applied toward 
 29.27  the designated loans.  After each disbursement, verification 
 29.28  must be received by the commissioner and approved before the 
 29.29  next loan repayment disbursement is made.  Participants remain 
 29.30  eligible for loan repayment as long as they practice as required 
 29.31  under subdivision 3.  
 29.32     Subd. 5.  [PENALTY FOR NONFULFILLMENT.] If a participant 
 29.33  does not fulfill the service commitment under subdivision 3, the 
 29.34  commissioner of health shall collect from the participant 100 
 29.35  percent of any payments made for qualified educational loans and 
 29.36  interest at a rate established according to section 270.75.  The 
 30.1   commissioner shall deposit the money collected in the low-income 
 30.2   nursing education account established under subdivision 2.  
 30.3      Subd. 6.  [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or 
 30.4   service obligations cancel in the event of a participant's 
 30.5   death.  The commissioner of health may waive or suspend payment 
 30.6   or service obligations in cases of total and permanent 
 30.7   disability or long-term temporary disability lasting for more 
 30.8   than two years.  The commissioner shall evaluate all other 
 30.9   requests for suspension or waivers on a case-by-case basis and 
 30.10  may grant a waiver of all or part of the money owed as a result 
 30.11  of a nonfulfillment penalty if emergency circumstances prevented 
 30.12  fulfillment of the required service commitment. 
 30.13     Sec. 41.  Minnesota Statutes 2004, section 299A.45, 
 30.14  subdivision 1, is amended to read: 
 30.15     Subdivision 1.  [ELIGIBILITY.] Following certification 
 30.16  under section 299A.44 and compliance with this section and rules 
 30.17  of the commissioner of public safety and the higher education 
 30.18  services office, dependent children less than 23 years of age 
 30.19  and the surviving spouse of a public safety officer killed in 
 30.20  the line of duty on or after January 1, 1973, are eligible to 
 30.21  receive educational benefits under this section.  To qualify for 
 30.22  an award, they must be enrolled in undergraduate degree or 
 30.23  certificate programs after June 30, 1990, at an eligible 
 30.24  Minnesota institution as provided in section 136A.101, 
 30.25  subdivision 4.  A student who withdraws from enrollment for 
 30.26  active military service is entitled to an additional semester or 
 30.27  the equivalent of grant eligibility.  Persons who have received 
 30.28  a baccalaureate degree or have been enrolled full time or the 
 30.29  equivalent of ten semesters or the equivalent, whichever occurs 
 30.30  first, are no longer eligible. 
 30.31     Sec. 42.  Minnesota Statutes 2004, section 299A.45, 
 30.32  subdivision 4, is amended to read: 
 30.33     Subd. 4.  [RENEWAL.] Each award must be given for one 
 30.34  academic year and is renewable for a maximum of eight semesters 
 30.35  or the equivalent.  A student who withdraws from enrollment for 
 30.36  active military service is entitled to an additional semester or 
 31.1   the equivalent of grant eligibility.  An award must not be given 
 31.2   to a dependent child who is 23 years of age or older on the 
 31.3   first day of the academic year. 
 31.4      Sec. 43.  [583.215] [EXPIRATION.] 
 31.5      Sections 336.9-601, subsections (h) and (i); 550.365; 
 31.6   559.209; 582.039; and 583.20 to 583.32, expire June 30, 2009. 
 31.7      Sec. 44.  [APPLICATION OF ELIGIBILITY.] 
 31.8      The additional semester or the equivalent of grant 
 31.9   eligibility under sections 13, 16, 41, and 42 applies to any 
 31.10  student who withdrew from enrollment in a postsecondary 
 31.11  institution after December 31, 2002, for enrollment for active 
 31.12  military service as defined in Minnesota Statutes, section 
 31.13  190.05, subdivision 5b or 5c. 
 31.14     Sec. 45.  [ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY 
 31.15  FUNDING.] 
 31.16     The Higher Education Services Office shall convene an 
 31.17  advisory task force to study the current postsecondary funding 
 31.18  policy under Minnesota Statutes, sections 135A.01 to 135A.034.  
 31.19  The task force must include a legislative fiscal analysis staff 
 31.20  member from the senate assigned to the senate higher education 
 31.21  finance division, a legislative fiscal analysis staff member 
 31.22  assigned to the house Higher Education Finance Committee, the 
 31.23  chief financial officers of the University of Minnesota and the 
 31.24  Minnesota State Colleges and Universities, and the commissioner 
 31.25  of finance, or their designees.  The task force may include 
 31.26  other members as selected by the Higher Education Services 
 31.27  Office.  The task force must study and make specific 
 31.28  recommendations on alternatives to the methods currently used by 
 31.29  the postsecondary systems to implement the provisions of 
 31.30  Minnesota Statutes, section 135A.031, subdivision 4.  The task 
 31.31  force must submit its recommendations to the legislature and the 
 31.32  governor by January 15, 2006.  The task force expires on June 
 31.33  30, 2007. 
 31.34     Sec. 46.  [RECIPROCITY NEGOTIATIONS.] 
 31.35     The Higher Education Services Office must, as soon as 
 31.36  possible, enter into negotiations with the appropriate officials 
 32.1   of the state of Wisconsin concerning higher education 
 32.2   reciprocity.  The office must attempt to negotiate an agreement 
 32.3   that would result in Wisconsin resident students attending 
 32.4   Minnesota public higher education institutions paying no less 
 32.5   than Minnesota resident students attending those institutions.  
 32.6   The office must report the results of the negotiations to the 
 32.7   legislature by November 1, 2005. 
 32.8      Sec. 47.  [REVISOR INSTRUCTION.] 
 32.9      The revisor of statutes shall change the terms "HESO" and 
 32.10  "Higher Education Services Office" to "Minnesota Office of 
 32.11  Higher Education" wherever in Minnesota Statutes and Minnesota 
 32.12  Rules the terms appear. 
 32.13     Sec. 48.  [REPEALER.] 
 32.14     (a) Minnesota Statutes 2004, sections 136A.011 and 
 32.15  136A.031, subdivision 1, are repealed. 
 32.16     (b) Laws 1986, chapter 398, article 1, section 18, as 
 32.17  amended, is repealed. 
 32.18     (c) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120; 
 32.19  4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100; 
 32.20  4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are 
 32.21  repealed. 
 32.22                             ARTICLE 3 
 32.23                     ROCHESTER HIGHER EDUCATION
 32.24     Section 1.  [ROCHESTER HIGHER EDUCATION DEVELOPMENT 
 32.25  COMMITTEE.] 
 32.26     Subdivision 1.  [ESTABLISHMENT.] The Rochester Higher 
 32.27  Education Development Committee is established to research and 
 32.28  make recommendations to the governor and legislature on the 
 32.29  creation of mission-driven postsecondary educational programs or 
 32.30  institutions in the Rochester area that meet the educational 
 32.31  needs of the region and the state and that capitalize on the 
 32.32  unique opportunities for educational partnerships presented in 
 32.33  the Rochester area. 
 32.34     Subd. 2.  [MEMBERSHIP.] The committee is composed of 11 
 32.35  members, to be appointed by the governor, as follows: 
 32.36     (1) a trustee of the Minnesota State Colleges and 
 33.1   Universities, or the trustee's designee; 
 33.2      (2) a regent of the University of Minnesota, or the 
 33.3   regent's designee; 
 33.4      (3) six persons from the Rochester area representing 
 33.5   business, health and medical sciences, and technology; 
 33.6      (4) the commissioner of finance, or the commissioner's 
 33.7   designee; 
 33.8      (5) one person who by training or experience has special 
 33.9   expertise in postsecondary finance and planning; and 
 33.10     (6) one person who by training or experience has special 
 33.11  expertise in postsecondary academic planning and programming. 
 33.12     Before the first meeting of the committee, the governor 
 33.13  shall select one person from the committee who shall serve as 
 33.14  chair. 
 33.15     Subd. 3.  [COMPENSATION AND REMOVAL.] Appointments to the 
 33.16  committee are not subject to Minnesota Statutes, section 15.0597.
 33.17  Members of the committee are not entitled to reimbursement under 
 33.18  Minnesota Statutes, section 15.059, subdivision 6.  Members may 
 33.19  be removed and vacancies filled pursuant to Minnesota Statutes, 
 33.20  section 15.059, subdivision 4.  The director of the Higher 
 33.21  Education Services Office may provide administrative support to 
 33.22  the committee.  
 33.23     Subd. 4.  [DUTIES.] (a) The committee shall develop a 
 33.24  recommendation for establishment and implementation of expanded 
 33.25  higher education programs or institutions in Rochester.  The 
 33.26  committee's report must include recommendations on:  
 33.27     (1) the mission and focus of the programs or institutions; 
 33.28     (2) the nature of undergraduate and graduate programs to be 
 33.29  offered; 
 33.30     (3) site and facility needs; 
 33.31     (4) funding sources and opportunities; 
 33.32     (5) operational needs; 
 33.33     (6) alliances or other types of cooperative arrangements 
 33.34  with public and private institutions; 
 33.35     (7) governance structures; and 
 33.36     (8) mechanisms to ensure that the expanded programs are 
 34.1   aligned with the unique needs and opportunities of the Rochester 
 34.2   area and that programs take advantage of opportunities presented 
 34.3   by regional business and industry.  
 34.4      (b) If the committee recommends any programmatic changes 
 34.5   that result in institutional realignments, the committee must 
 34.6   consult with the representatives of affected employees and 
 34.7   address the continuation of collective bargaining and 
 34.8   contractual rights and benefits, including accumulated sick 
 34.9   leave, vacation time, seniority, time to tenure, separation or 
 34.10  retirement benefits, and pension plan coverage.  
 34.11     (c) The committee must consider specifically whether 
 34.12  expansion of the University of Minnesota in Rochester is the 
 34.13  most appropriate method of meeting the region's needs. 
 34.14     (d) The committee may also research and provide 
 34.15  recommendations on sites for the facilities and programs.  The 
 34.16  committee shall recommend any changes to Minnesota law required 
 34.17  to implement recommendations of the committee. 
 34.18     Subd. 5.  [REPORT.] The committee must issue a report with 
 34.19  recommendations to the governor and the legislature by January 
 34.20  15, 2006. 
 34.21     Subd. 6.  [SUNSET.] The committee expires on December 31, 
 34.22  2007. 
 34.23     Sec. 2.  [ROCHESTER HIGHER EDUCATION DEVELOPMENT ACCOUNT.] 
 34.24     A Rochester higher education development account is created 
 34.25  in the state treasury in the special revenue fund.  Money in 
 34.26  this account is appropriated to the Higher Education Services 
 34.27  Office for allocation to the committee established in section 1, 
 34.28  subdivision 1, and the implementation activities outlined in 
 34.29  article 1, section 2, subdivision 6, paragraph (b).  The office 
 34.30  shall serve as fiscal agent for the committee established in 
 34.31  section 1. 
 34.32     Sec. 3.  [EFFECTIVE DATE.] 
 34.33     This article is effective the day following final enactment.
 34.34                             ARTICLE 4
 34.35                       PRIVATE CAREER SCHOOLS 
 34.36     Section 1.  Minnesota Statutes 2004, section 141.21, is 
 35.1   amended by adding a subdivision to read: 
 35.2      Subd. 6a.  [MULTIPLE LOCATION.] "Multiple location" means 
 35.3   any site where classes or administrative services are provided 
 35.4   to students and which has a street address that is different 
 35.5   than the street address found on the school's private career 
 35.6   school license. 
 35.7      Sec. 2.  Minnesota Statutes 2004, section 141.25, 
 35.8   subdivision 3, is amended to read: 
 35.9      Subd. 3.  [APPLICATION.] Application for a license shall be 
 35.10  on forms prepared and furnished by the office, and shall include 
 35.11  the following and other information as the office may require: 
 35.12     (1) the title or name of the school, ownership and 
 35.13  controlling officers, members, managing employees, and director; 
 35.14     (2) the specific programs which will be offered and the 
 35.15  specific purposes of the instruction; 
 35.16     (3) the place or places where the instruction will be 
 35.17  given; 
 35.18     (4) a listing of the equipment available for instruction in 
 35.19  each program; 
 35.20     (5) the maximum enrollment to be accommodated with 
 35.21  equipment available in each specified program; 
 35.22     (6) the qualifications of instructors and supervisors in 
 35.23  each specified program; 
 35.24     (7) a current balance sheet, income statement, and adequate 
 35.25  supporting documentation, prepared and certified by an 
 35.26  independent public accountant or CPA; 
 35.27     (8) copies of all media advertising and promotional 
 35.28  literature and brochures or electronic display currently used or 
 35.29  reasonably expected to be used by the school; 
 35.30     (9) copies of all Minnesota enrollment agreement forms and 
 35.31  contract forms and all enrollment agreement forms and contract 
 35.32  forms used in Minnesota; and 
 35.33     (10) gross income earned in the preceding year from student 
 35.34  tuition, fees, and other required institutional charges, unless 
 35.35  the school files with the office a surety bond equal to at least 
 35.36  $50,000 $250,000 as described in subdivision 5.  
 36.1      Sec. 3.  Minnesota Statutes 2004, section 141.25, 
 36.2   subdivision 5, is amended to read: 
 36.3      Subd. 5.  [BOND.] (a) No license shall be issued to any 
 36.4   school which maintains, conducts, solicits for, or advertises 
 36.5   within the state of Minnesota any program, unless the applicant 
 36.6   files with the office a continuous corporate surety bond written 
 36.7   by a company authorized to do business in Minnesota conditioned 
 36.8   upon the faithful performance of all contracts and agreements 
 36.9   with students made by the applicant.  
 36.10     (b) The amount of the surety bond shall be ten percent of 
 36.11  the preceding year's gross income from student tuition, fees, 
 36.12  and other required institutional charges, but in no event less 
 36.13  than $10,000 nor greater than $50,000 $250,000, except that a 
 36.14  school may deposit a greater amount at its own discretion.  A 
 36.15  school in each annual application for licensure must compute the 
 36.16  amount of the surety bond and verify that the amount of the 
 36.17  surety bond complies with this subdivision, unless the school 
 36.18  maintains a surety bond equal to at least $50,000 $250,000.  A 
 36.19  school that operates at two or more locations may combine gross 
 36.20  income from student tuition, fees, and other required 
 36.21  institutional charges for all locations for the purpose of 
 36.22  determining the annual surety bond requirement.  The gross 
 36.23  tuition and fees used to determine the amount of the surety bond 
 36.24  required for a school having a license for the sole purpose of 
 36.25  recruiting students in Minnesota shall be only that paid to the 
 36.26  school by the students recruited from Minnesota. 
 36.27     (c) The bond shall run to the state of Minnesota and to any 
 36.28  person who may have a cause of action against the applicant 
 36.29  arising at any time after the bond is filed and before it is 
 36.30  canceled for breach of any contract or agreement made by the 
 36.31  applicant with any student.  The aggregate liability of the 
 36.32  surety for all breaches of the conditions of the bond shall not 
 36.33  exceed the principal sum deposited by the school under paragraph 
 36.34  (b).  The surety of any bond may cancel it upon giving 60 days' 
 36.35  notice in writing to the office and shall be relieved of 
 36.36  liability for any breach of condition occurring after the 
 37.1   effective date of cancellation. 
 37.2      (d) In lieu of bond, the applicant may deposit with the 
 37.3   commissioner of finance a sum equal to the amount of the 
 37.4   required surety bond in cash, or securities as may be legally 
 37.5   purchased by savings banks or for trust funds in an aggregate 
 37.6   market value equal to the amount of the required surety bond.  
 37.7      (e) Failure of a school to post and maintain the required 
 37.8   surety bond or deposit under paragraph (d) may result in denial, 
 37.9   suspension, or revocation of the school's license.  
 37.10     Sec. 4.  Minnesota Statutes 2004, section 141.25, 
 37.11  subdivision 8, is amended to read: 
 37.12     Subd. 8.  [FEES AND TERMS OF LICENSE.] An application for 
 37.13  an initial license under sections 141.21 to 141.35 shall be 
 37.14  accompanied by a nonrefundable application fee established by 
 37.15  the office as provided in section 141.255 that is sufficient to 
 37.16  recover, but not exceed, its the administrative costs of the 
 37.17  office. 
 37.18     All licenses shall expire one year from the date issued by 
 37.19  the office, except as provided in section 141.251.  
 37.20     Sec. 5.  Minnesota Statutes 2004, section 141.25, 
 37.21  subdivision 9, is amended to read: 
 37.22     Subd. 9.  [CATALOG, BROCHURE, OR ELECTRONIC DISPLAY.] 
 37.23  Before a license is issued to a school, the school shall furnish 
 37.24  to the office a catalog, brochure, or electronic display 
 37.25  including: 
 37.26     (1) identifying data, such as volume number and date of 
 37.27  publication; 
 37.28     (2) name and address of the school and its governing body 
 37.29  and officials; 
 37.30     (3) a calendar of the school showing legal holidays, 
 37.31  beginning and ending dates of each course quarter, term, or 
 37.32  semester, and other important dates; 
 37.33     (4) the school policy and regulations on enrollment 
 37.34  including dates and specific entrance requirements for each 
 37.35  program; 
 37.36     (5) the school policy and regulations about leave, 
 38.1   absences, class cuts, make-up work, tardiness, and interruptions 
 38.2   for unsatisfactory attendance; 
 38.3      (6) the school policy and regulations about standards of 
 38.4   progress for the student including the grading system of the 
 38.5   school, the minimum grades considered satisfactory, conditions 
 38.6   for interruption for unsatisfactory grades or progress, a 
 38.7   description of any probationary period allowed by the school, 
 38.8   and conditions of reentrance for those dismissed for 
 38.9   unsatisfactory progress; 
 38.10     (7) the school policy and regulations about student conduct 
 38.11  and conditions for dismissal for unsatisfactory conduct; 
 38.12     (8) a detailed schedule of fees, charges for tuition, 
 38.13  books, supplies, tools, student activities, laboratory fees, 
 38.14  service charges, rentals, deposits, and all other charges; 
 38.15     (9) the school policy and regulations, including an 
 38.16  explanation of section 141.271, about refunding tuition, fees, 
 38.17  and other charges if the student does not enter the program, 
 38.18  withdraws from the program, or the program is discontinued; 
 38.19     (10) a description of the available facilities and 
 38.20  equipment; 
 38.21     (11) a course outline syllabus for each course offered 
 38.22  showing course objectives, subjects or units in the course, type 
 38.23  of work or skill to be learned, and approximate time, hours, or 
 38.24  credits to be spent on each subject or unit; 
 38.25     (12) the school policy and regulations about granting 
 38.26  credit for previous education and preparation; 
 38.27     (13) a procedure for investigating and resolving student 
 38.28  complaints; and 
 38.29     (14) the name and address of the Minnesota Higher Education 
 38.30  Services Office. 
 38.31     A school that is exclusively a distance education school is 
 38.32  exempt from clauses (3) and (5). 
 38.33     Sec. 6.  Minnesota Statutes 2004, section 141.25, 
 38.34  subdivision 12, is amended to read: 
 38.35     Subd. 12.  [PERMANENT RECORDS.] A school licensed under 
 38.36  this chapter and located in Minnesota shall maintain a permanent 
 39.1   record for each student for 50 years from the last date of the 
 39.2   student's attendance.  A school licensed under this chapter and 
 39.3   offering distance instruction to a student located in Minnesota 
 39.4   shall maintain a permanent record for each Minnesota student for 
 39.5   50 years from the last date of the student's attendance.  
 39.6   Records include school transcripts, documents, and files 
 39.7   containing student data about academic credits earned, courses 
 39.8   completed, grades awarded, degrees awarded, and periods of 
 39.9   attendance.  To preserve permanent records, a school shall 
 39.10  submit a plan that meets the following requirements: 
 39.11     (1) at least one copy of the records must be held in a 
 39.12  secure, fireproof depository; 
 39.13     (2) an appropriate official must be designated to provide a 
 39.14  student with copies of records or a transcript upon request; 
 39.15     (3) an alternative method, approved by the office, of 
 39.16  complying with clauses (1) and (2) must be established if the 
 39.17  school ceases to exist; and 
 39.18     (4) a continuous surety bond must be filed with the office 
 39.19  in an amount not to exceed $20,000 if the school has no binding 
 39.20  agreement for preserving student records or a trust must be 
 39.21  arranged if the school ceases to exist. 
 39.22     Sec. 7.  Minnesota Statutes 2004, section 141.251, is 
 39.23  amended to read: 
 39.24     141.251 [LICENSE RENEWAL.] 
 39.25     Subdivision 1.  [APPLICATION.] Application for renewal of a 
 39.26  license must be made at least 30 60 days before expiration of 
 39.27  the current license on a form provided by the office.  A renewal 
 39.28  application shall be accompanied by a nonrefundable fee 
 39.29  established by the office as provided in section 141.255 that is 
 39.30  sufficient to recover, but does not exceed, its the 
 39.31  administrative costs of the office. 
 39.32     Subd. 2.  [CONDITIONS.] The office shall adopt rules 
 39.33  establishing the conditions for renewal of a license.  The 
 39.34  conditions shall permit two levels of renewal based on the 
 39.35  record of the school.  A school that has demonstrated the 
 39.36  quality of its program and operation through longevity and 
 40.1   performance in the state may renew its license based on a 
 40.2   relaxed standard of scrutiny.  A school that has been in 
 40.3   operation in Minnesota for a limited period of time or that has 
 40.4   not performed adequately on performance indicators shall renew 
 40.5   its license based on a strict standard of scrutiny.  The office 
 40.6   shall specify minimum longevity standards and performance 
 40.7   indicators that must be met before a school may be permitted to 
 40.8   operate under the relaxed standard of scrutiny.  The performance 
 40.9   indicators used in this determination shall include, but not be 
 40.10  limited to:  degree granting status, regional or national 
 40.11  accreditation, loan default rates, placement rate of graduates, 
 40.12  student withdrawal rates, audit results, student complaints, and 
 40.13  school status with the United States Department of Education.  
 40.14  Schools that meet the requirements established in rule shall be 
 40.15  required to submit a full relicensure report once every four 
 40.16  years, and in the interim years will be exempt from the 
 40.17  requirements of section 141.25, subdivision 3, clauses (4), (5), 
 40.18  and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and 
 40.19  4880.2100, subpart 4. 
 40.20     Sec. 8.  [141.255] [FEES.] 
 40.21     Subdivision 1.  [INITIAL LICENSURE FEE.] The office 
 40.22  processing fee for an initial licensure application is: 
 40.23     (1) $1,500 for a school that will offer no more than one 
 40.24  program during its first year of operation; 
 40.25     (2) $2,000 for a school that will offer two or more 
 40.26  nondegree level programs during its first year of operation; and 
 40.27     (3) $2,500 for a school that will offer two or more degree 
 40.28  level programs during its first year of operation. 
 40.29     Subd. 2.  [RENEWAL LICENSURE FEE; LATE FEE.] (a) The office 
 40.30  processing fee for a renewal licensure application is: 
 40.31     (1) for a category A school, as determined by the office, 
 40.32  the fee is $865 if the school offers one program or $1,150 if 
 40.33  the school offers two or more programs; and 
 40.34     (2) for a category B or C school, as determined by the 
 40.35  office, the fee is $430 if the school offers one program or $575 
 40.36  if the school offers two or more programs. 
 41.1      (b) If a license renewal application is not received by the 
 41.2   office by the close of business at least 60 days before the 
 41.3   expiration of the current license, a late fee of $100 per 
 41.4   business day shall be assessed. 
 41.5      Subd. 3.  [DEGREE LEVEL ADDITION FEE.] The office 
 41.6   processing fee for adding a degree level to an existing program 
 41.7   is $2,000 per program. 
 41.8      Subd. 4.  [PROGRAM ADDITION FEE.] The office processing fee 
 41.9   for adding a program that represents a significant departure in 
 41.10  the objectives, content, or method of delivery of programs that 
 41.11  are currently offered by the school is $500 per program. 
 41.12     Subd. 5.  [VISIT OR CONSULTING FEE.] If the office 
 41.13  determines that a fact-finding visit or outside consultant is 
 41.14  necessary to review or evaluate any new or revised program, the 
 41.15  office shall be reimbursed for the expenses incurred related to 
 41.16  the review as follows: 
 41.17     (1) $300 for the team base fee or for a paper review 
 41.18  conducted by a consultant if the office determines that a 
 41.19  fact-finding visit is not required; 
 41.20     (2) $300 for each day or part thereof on site per team 
 41.21  member; and 
 41.22     (3) the actual cost of customary meals, lodging, and 
 41.23  related travel expenses incurred by team members. 
 41.24     Subd. 6.  [MODIFICATION FEE.] The fee for modification of 
 41.25  any existing program is $100 and is due if there is: 
 41.26     (1) an increase or decrease of 25 percent or more, from the 
 41.27  original date of program approval, in clock hours, credit hours, 
 41.28  or calendar length of an existing program; 
 41.29     (2) a change in academic measurement from clock hours to 
 41.30  credit hours or vice versa; or 
 41.31     (3) an addition or alteration of courses that represent a 
 41.32  25 percent change or more in the objectives, content, or methods 
 41.33  of delivery. 
 41.34     Subd. 7.  [SOLICITOR PERMIT FEE.] The solicitor permit fee 
 41.35  is $350 and must be paid annually. 
 41.36     Subd. 8.  [MULTIPLE LOCATION FEE.] Schools wishing to 
 42.1   operate at multiple locations must pay: 
 42.2      (1) $250 per location, for two to five locations; and 
 42.3      (2) an additional $50 for each location over five. 
 42.4      Subd. 9.  [STUDENT TRANSCRIPT FEE.] The fee for a student 
 42.5   transcript requested from a closed school whose records are held 
 42.6   by the office is $10, with a maximum of five transcripts per 
 42.7   request. 
 42.8      Sec. 9.  Minnesota Statutes 2004, section 141.26, 
 42.9   subdivision 5, is amended to read: 
 42.10     Subd. 5.  [FEE.] The initial and renewal application for 
 42.11  each permit shall be accompanied by a nonrefundable fee as 
 42.12  established by the office under section 141.255. 
 42.13     Sec. 10.  Minnesota Statutes 2004, section 141.271, is 
 42.14  amended by adding a subdivision to read: 
 42.15     Subd. 1b.  [SHORT-TERM PROGRAMS.] Licensed schools 
 42.16  conducting programs not exceeding 40 hours in length shall not 
 42.17  be required to make a full refund once a program has commenced 
 42.18  and shall be allowed to prorate any refund based on the actual 
 42.19  length of the program as stated in the school catalog or 
 42.20  advertisements and the number of hours attended by the student. 
 42.21     Sec. 11.  Minnesota Statutes 2004, section 141.271, 
 42.22  subdivision 4, is amended to read: 
 42.23     Subd. 4.  [RESIDENT SCHOOLS.] When a student has been 
 42.24  accepted by a school offering a resident program and gives 
 42.25  written notice of cancellation, or the school has actual notice 
 42.26  of a student's nonattendance after the start of the period of 
 42.27  instruction for which the student has been charged, but before 
 42.28  completion of 75 percent of the period of instruction, the 
 42.29  amount charged for tuition, fees, and all other charges shall be 
 42.30  prorated based on number of days in the term as a portion of the 
 42.31  total charges for tuition, fees, and all other charges.  An 
 42.32  additional 25 percent of the total cost of the period of 
 42.33  instruction may be added, but shall not exceed $100.  After 
 42.34  completion of 75 percent of the period of instruction for which 
 42.35  the student has been charged, no refunds are required.  
 42.36     Sec. 12.  Minnesota Statutes 2004, section 141.271, 
 43.1   subdivision 7, is amended to read: 
 43.2      Subd. 7.  [EQUIPMENT AND SUPPLIES.] The fair market retail 
 43.3   price, if separately stated in the catalog and contract or 
 43.4   enrollment agreement, of equipment or supplies furnished to the 
 43.5   student, which the student fails to return in condition suitable 
 43.6   for resale, and which may reasonably be resold, within ten 
 43.7   business days following cancellation may be retained by the 
 43.8   school and may be deducted from the total cost for tuition, fees 
 43.9   and all other charges when computing refunds.  
 43.10     An overstatement of the fair market retail price of any 
 43.11  equipment or supplies furnished the student shall be considered 
 43.12  inconsistent with this provision.  
 43.13     Sec. 13.  Minnesota Statutes 2004, section 141.271, 
 43.14  subdivision 10, is amended to read: 
 43.15     Subd. 10.  [CANCELLATION OCCURRENCE.] Written notice of 
 43.16  cancellation shall take place on the date the letter of 
 43.17  cancellation is postmarked or, in the cases where the notice is 
 43.18  hand carried, it shall occur on the date the notice is delivered 
 43.19  to the school.  If a student has not attended classes for a 
 43.20  period of 21 consecutive days, the student is considered to have 
 43.21  withdrawn from school for all purposes as of the student's last 
 43.22  documented date of attendance. 
 43.23     Sec. 14.  Minnesota Statutes 2004, section 141.271, is 
 43.24  amended by adding a subdivision to read: 
 43.25     Subd. 14.  [CLOSED SCHOOL.] In the event a school closes 
 43.26  for any reason during a term and interrupts and terminates 
 43.27  classes during that term, all tuition for the term shall be 
 43.28  refunded to the students or the appropriate state or federal 
 43.29  agency or private lender that provided any funding for the term 
 43.30  and any outstanding obligation of the student for the term is 
 43.31  canceled. 
 43.32     Sec. 15.  Minnesota Statutes 2004, section 141.28, 
 43.33  subdivision 1, is amended to read: 
 43.34     Subdivision 1.  [NOT TO ADVERTISE STATE APPROVAL.] Schools, 
 43.35  agents of schools, and solicitors may not advertise or represent 
 43.36  in writing or orally that such school is approved or accredited 
 44.1   by the state of Minnesota, except that any school, agent, or 
 44.2   solicitor may advertise that the school and solicitor have been 
 44.3   duly licensed by the state. using the following language: 
 44.4   "(Name of school) is licensed as a private career school with 
 44.5   the Minnesota Higher Education Services Office.  Licensure is 
 44.6   not an endorsement of the institution.  Credits earned at the 
 44.7   institution may not transfer to all other institutions.  The 
 44.8   educational programs may not meet the needs of every student or 
 44.9   employer." 
 44.10     Sec. 16.  Minnesota Statutes 2004, section 141.28, is 
 44.11  amended by adding a subdivision to read: 
 44.12     Subd. 6.  [FINANCIAL AID PAYMENTS.] (a) All schools must 
 44.13  collect, assess, and distribute funds received from loans or 
 44.14  other financial aid as provided in this subdivision.  
 44.15     (b) Student loans or other financial aid funds received 
 44.16  from federal, state, or local governments or administered in 
 44.17  accordance with federal student financial assistance programs 
 44.18  under title IV of the Higher Education Act of 1965, as amended, 
 44.19  United States Code, title 20, chapter 28, must be collected and 
 44.20  applied as provided by applicable federal, state, or local law 
 44.21  or regulation. 
 44.22     (c) Student loans or other financial aid assistance 
 44.23  received from a bank, finance or credit card company, or other 
 44.24  private lender must be collected or disbursed as provided in 
 44.25  paragraphs (d) and (e). 
 44.26     (d) Loans or other financial aid payments for amounts 
 44.27  greater than $3,000 must be disbursed: 
 44.28     (1) in two equal disbursements, if the course or term 
 44.29  length is less than six months.  The loan or payment amounts may 
 44.30  be disbursed no earlier than the first day the student attends 
 44.31  class with the remainder to be disbursed halfway through the 
 44.32  class or term; 
 44.33     (2) in three equal disbursements, if the course or term 
 44.34  length is more than six months, but less than 12 months.  The 
 44.35  loan or payment amounts may be disbursed no earlier than the 
 44.36  first day the student attends class, one-third of the way 
 45.1   through the class or term, and two-thirds of the way through the 
 45.2   class or term; or 
 45.3      (3) in four equal disbursements, if the course or term 
 45.4   length is greater than 12 months.  The loan or payment amounts 
 45.5   may be disbursed no earlier than the first day a student attends 
 45.6   class, one-quarter of the way through the class or term, halfway 
 45.7   through the class or term, and three-fourths of the way through 
 45.8   the class or term. 
 45.9      (e) Loans or other financial aid payments for amounts less 
 45.10  than $3,000 may be disbursed as a single disbursement on the 
 45.11  first day a student attends class, regardless of course length. 
 45.12     (f) No school may enter into a contract or agreement with, 
 45.13  or receive any money from, a bank, finance or credit card 
 45.14  company, or other private lender, unless the private lender 
 45.15  follows the requirements for disbursements provided in 
 45.16  paragraphs (d) and (e). 
 45.17     Sec. 17.  Minnesota Statutes 2004, section 141.29, 
 45.18  subdivision 3, is amended to read: 
 45.19     Subd. 3.  [POWERS AND DUTIES.] The office shall have (in 
 45.20  addition to the powers and duties now vested therein by law) the 
 45.21  following powers and duties: 
 45.22     (a) To negotiate and enter into interstate reciprocity 
 45.23  agreements with similar agencies in other states, if in the 
 45.24  judgment of the office such agreements are or will be helpful in 
 45.25  effectuating the purposes of Laws 1973, Chapter 714; 
 45.26     (b) To grant conditional school license for periods of less 
 45.27  than one year if in the judgment of the office correctable 
 45.28  deficiencies exist at the time of application and when refusal 
 45.29  to issue school license would adversely affect currently 
 45.30  enrolled students; 
 45.31     (c) The office may upon its own motion, and shall upon the 
 45.32  verified complaint in writing of any person setting forth fact 
 45.33  which, if proved, would constitute grounds for refusal or 
 45.34  revocation under Laws 1973, Chapter 714, investigate the actions 
 45.35  of any applicant or any person or persons holding or claiming to 
 45.36  hold a license or permit.  However, before proceeding to a 
 46.1   hearing on the question of whether a license or permit shall be 
 46.2   refused, revoked or suspended for any cause enumerated in 
 46.3   subdivision 1, the office may shall grant a reasonable time to 
 46.4   the holder of or applicant for a license or permit to correct 
 46.5   the situation.  If within such time the situation is corrected 
 46.6   and the school is in compliance with the provisions of this 
 46.7   chapter, no further action leading to refusal, revocation, or 
 46.8   suspension shall be taken.  
 46.9      Sec. 18.  Minnesota Statutes 2004, section 141.30, is 
 46.10  amended to read: 
 46.11     141.30 [INSPECTION.] 
 46.12     (a) The office or a delegate may inspect the instructional 
 46.13  books and records, classrooms, dormitories, tools, equipment and 
 46.14  classes of any school or applicant for license at any reasonable 
 46.15  time.  The office may require the submission of a certified 
 46.16  public audit, or if there is no such audit available the office 
 46.17  or a delegate may inspect the financial books and records of the 
 46.18  school.  In no event shall such financial information be used by 
 46.19  the office to regulate or set the tuition or fees charged by the 
 46.20  school.  
 46.21     (b) Data obtained from an inspection of the financial 
 46.22  records of a school or submitted to the office as part of a 
 46.23  license application or renewal are nonpublic data as defined in 
 46.24  section 13.02, subdivision 9.  Data obtained from inspections 
 46.25  may be disclosed to other members of the office, to law 
 46.26  enforcement officials, or in connection with a legal or 
 46.27  administrative proceeding commenced to enforce a requirement of 
 46.28  law. 
 46.29     Sec. 19.  Minnesota Statutes 2004, section 141.35, is 
 46.30  amended to read: 
 46.31     141.35 [EXEMPTIONS.] 
 46.32     Sections 141.21 to 141.35 shall not apply to the following: 
 46.33     (1) public postsecondary institutions; 
 46.34     (2) private postsecondary institutions registered under 
 46.35  sections 136A.61 to 136A.71 that are nonprofit, or that are for 
 46.36  profit and registered under sections 136A.61 to 136A.71 as of 
 47.1   December 31, 1998, or are approved to offer exclusively 
 47.2   baccalaureate or postbaccalaureate programs; 
 47.3      (3) schools of nursing accredited by the state Board of 
 47.4   Nursing or an equivalent public board of another state or 
 47.5   foreign country; 
 47.6      (4) private schools complying with the requirements of 
 47.7   section 120A.22, subdivision 4; 
 47.8      (5) courses taught to students in a valid apprenticeship 
 47.9   program taught by or required by a trade union; 
 47.10     (6) schools exclusively engaged in training physically or 
 47.11  mentally handicapped persons for the state of Minnesota; 
 47.12     (7) schools licensed by boards authorized under Minnesota 
 47.13  law to issue licenses; 
 47.14     (8) schools and educational programs, or training programs, 
 47.15  contracted for by persons, firms, corporations, government 
 47.16  agencies, or associations, for the training of their own 
 47.17  employees, for which no fee is charged the employee; 
 47.18     (9) schools engaged exclusively in the teaching of purely 
 47.19  avocational, recreational, or remedial subjects as determined by 
 47.20  the office; 
 47.21     (10) driver training schools and instructors as defined in 
 47.22  section 171.33, subdivisions 1 and 2; 
 47.23     (11) classes, courses, or programs conducted by a bona fide 
 47.24  trade, professional, or fraternal organization, solely for that 
 47.25  organization's membership; 
 47.26     (12) programs in the fine arts provided by organizations 
 47.27  exempt from taxation under section 290.05 and registered with 
 47.28  the attorney general under chapter 309.  For the purposes of 
 47.29  this clause, "fine arts" means activities resulting in artistic 
 47.30  creation or artistic performance of works of the imagination 
 47.31  which are engaged in for the primary purpose of creative 
 47.32  expression rather than commercial sale or employment.  In making 
 47.33  this determination the office may seek the advice and 
 47.34  recommendation of the Minnesota Board of the Arts; 
 47.35     (13) classes, courses, or programs intended to fulfill the 
 47.36  continuing education requirements for licensure or certification 
 48.1   in a profession, that have been approved by a legislatively or 
 48.2   judicially established board or agency responsible for 
 48.3   regulating the practice of the profession, and that are offered 
 48.4   primarily exclusively to an individual practicing the 
 48.5   profession; 
 48.6      (14) classes, courses, or programs intended to prepare 
 48.7   students to sit for undergraduate, graduate, postgraduate, or 
 48.8   occupational licensing and occupational entrance examinations; 
 48.9      (15) classes, courses, or programs providing 16 or fewer 
 48.10  clock hours of instruction that are not part of the curriculum 
 48.11  for an occupation or entry level employment; 
 48.12     (16) classes, courses, or programs providing instruction in 
 48.13  personal development, modeling, or acting; 
 48.14     (17) training or instructional programs, in which one 
 48.15  instructor teaches an individual student, that are not part of 
 48.16  the curriculum for an occupation or are not intended to prepare 
 48.17  a person for entry level employment; and 
 48.18     (18) schools with no physical presence in Minnesota, as 
 48.19  determined by the office, engaged exclusively in offering 
 48.20  distance instruction that are located in and regulated by other 
 48.21  states or jurisdictions. 
 48.22     Sec. 20.  [POSTSECONDARY PRIVATE SCHOOL REGULATION.] 
 48.23     The director of the Higher Education Services Office must 
 48.24  convene a group to study regulation of private postsecondary 
 48.25  schools subject to regulation under Minnesota Statutes, chapters 
 48.26  136A and 141.  The purpose of the study is to determine the 
 48.27  appropriate level of regulation for the various types of private 
 48.28  postsecondary schools.  The study group must, at a minimum, 
 48.29  include representatives from the Minnesota Private College 
 48.30  Council, the Minnesota Career College Association, and staff of 
 48.31  the higher education finance divisions and committees of the 
 48.32  house of representatives and the senate.  The director must make 
 48.33  recommendations accompanied with legislation to implement those 
 48.34  recommendations to the chairs of the legislative committees and 
 48.35  divisions with primary jurisdiction over higher education 
 48.36  finance by January 15, 2006.