1.1 	A bill for an act
1.2 	relating to higher education; appropriating money for
1.3 	educational and related purposes to the Higher
1.4 	Education Services Office, Board of Trustees of the
1.5 	Minnesota State Colleges and Universities, Board of
1.6 	Regents of the University of Minnesota, and the Mayo
1.7 	Medical Foundation, with certain conditions; modifying
1.8 	various grant and financial aid eligibility
1.9 	provisions; requiring eligible institutions to provide
1.10 	certain data; providing definitions; directing the
1.11 	Board of Trustees to designate centers of excellence;
1.12 	amending the Minnesota college savings plan;
1.13 	authorizing transfer of certain bonding authority;
1.14 	amending provisions related to private career schools;
1.15 	establishing fees; providing for merger with the
1.16 	Higher Education Facilities Authority; making
1.17 	technical, clarifying, and conforming changes;
1.18 	amending Minnesota Statutes 2004, sections 13.46,
1.19 	subdivision 2; 136A.01, subdivision 2; 136A.031,
1.20 	subdivisions 2, 3, 4; 136A.121, subdivisions 2, 6, 9,
1.21 	by adding a subdivision; 136A.125, subdivisions 2, 4;
1.22 	136A.1701, by adding subdivisions; 136G.03,
1.23 	subdivisions 3, 21a, 22, 32; 136G.05, subdivision 8;
1.24 	136G.09, subdivisions 11, 12; 136G.11, subdivisions 1,
1.25 	3, 13, by adding a subdivision; 136G.13, subdivisions
1.26 	1, 5; 136G.14; 141.21, by adding a subdivision;
1.27 	141.25, subdivisions 3, 5, 7, 8, 9, 12; 141.251;
1.28 	141.26, subdivision 5; 141.271, subdivisions 4, 7, 10,
1.29 	by adding subdivisions; 141.28, subdivision 1, by
1.30 	adding a subdivision; 141.29, subdivision 3; 141.30;
1.31 	141.35; 299A.45, subdivisions 1, 4; proposing coding
1.32 	for new law in Minnesota Statutes, chapters 136A;
1.33 	136F; 141; repealing Minnesota Statutes 2004, sections
1.34 	136A.011; 136A.031, subdivision 1; 136A.25; 136A.26;
1.35 	Minnesota Rules, parts 4815.0100; 4815.0110;
1.36 	4815.0120; 4815.0130; 4815.0140; 4815.0150; 4815.0160;
1.37 	4830.8100; 4830.8110; 4830.8120; 4830.8130; 4830.8140;
1.38 	4830.8150.
1.39 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.40 	ARTICLE 1
1.41 	APPROPRIATIONS

1.42 	Section 1. Higher education appropriations.
 2.1 	The sums in the columns marked "APPROPRIATIONS" are appropriated
2.2 	from the general fund, or other named fund, to the agencies and
2.3 	for the purposes specified in this article.  The listing of an
2.4 	amount under the figure "2006" or "2007" in this article
2.5 	indicates that the amount is appropriated to be available for
2.6 	the fiscal year ending June 30, 2006, or June 30, 2007,
2.7 	respectively.  "The first year" is fiscal year 2006.  "The
2.8 	second year" is fiscal year 2007.  "The biennium" is fiscal
2.9 	years 2006 and 2007.
2.10 	SUMMARY BY FUND
2.11 	2006          2007           TOTAL
2.12 	General            $1,385,214,000 $1,385,504,000 $2,770,718,000
2.13 	Health Care
2.14 	Access                  2,157,000      2,157,000      4,314,000
2.15 	SUMMARY BY AGENCY - ALL FUNDS
2.16 	2006          2007           TOTAL
2.17 	Higher Education
2.18 	Services Office       172,262,000    172,152,000    344,414,000
2.19 	Board of Trustees
2.20 	of the Minnesota State
2.21 	Colleges and
2.22 	Universities          602,994,000    599,894,000  1,202,888,000
2.23 	Board of Regents
2.24 	of the University
2.25 	of Minnesota          610,724,000    614,224,000  1,224,948,000
2.26 	Mayo Medical
2.27 	Foundation              1,391,000      1,391,000      2,782,000
2.28 	APPROPRIATIONS
2.29 	                                       Available for the Year
2.30 	                                           Ending June 30
2.31 	                                          2006         2007

2.32 	Sec. 2. HIGHER EDUCATION
2.33 	SERVICES OFFICE
 2.34 		Subdivision 1.Total
2.35 	Appropriation                     $  172,262,000 $  172,152,000
2.36 	The amounts that may be spent from this
2.37 	appropriation for each purpose are
2.38 	specified in the following subdivisions.
2.39 		Subd. 2.State Grants               140,575,000    140,575,000
2.40 	If the appropriation in this
2.41 	subdivision for either year is
2.42 	insufficient, the appropriation for the
2.43 	other year is available for it.  For
2.44 	the biennium, the private institution
2.45 	maximum shall be $8,983 in the first
2.46 	year and $8,983 in the second year for
2.47 	four-year institutions and $6,913 in
3.1 	the first year and $6,913 in the second
3.2 	year for two-year institutions.
3.3 	This appropriation sets the living and
3.4 	miscellaneous expense allowance at
3.5 	$5,280 in each year.
3.6 	Savings in the state grant program in
3.7 	fiscal years 2006 and 2007 resulting
3.8 	from any changes in the federal needs
3.9 	analysis formula must be used as
3.10 	provided in this subdivision and under
3.11 	article 2, section 7.
3.12 		Subd. 3.Interstate Tuition
3.13 	Reciprocity                            1,000,000      1,000,000
3.14 	If the appropriation in this
3.15 	subdivision for either year is
3.16 	insufficient, the appropriation for the
3.17 	other year is available to meet
3.18 	reciprocity contract obligations.
3.19 		Subd. 4.State Work Study            12,444,000     12,444,000
3.20 		Subd. 5.Child Care Grants            4,743,000      4,743,000
3.21 		Subd. 6.Minitex                      4,381,000      4,381,000
3.22 		Subd. 7.MnLINK Gateway                 400,000        400,000
3.23 		Subd. 8.Learning Network
3.24 	of Minnesota                           4,329,000      4,329,000
3.25 		Subd. 9.Minnesota College
3.26 	Savings Plan                           1,120,000      1,120,000
3.27 		Subd. 10.Other Small
3.28 	Programs                                 664,000        664,000
3.29 	Of this appropriation, $100,000 each
3.30 	year is for grants to increase
3.31 	campus-community collaboration and
3.32 	service learning statewide.  For each
3.33 	$1 in state funding, grant recipients
3.34 	must contribute $2 in campus or
3.35 	community-based support.
3.36 		Subd. 11.Agency
3.37 	Administration                        2,606,000      2,496,000
3.38 	Of this appropriation, $100,000 in the
3.39 	first year and $300,000 in the second
3.40 	year is for the Higher Education
3.41 	Services Office to develop and
3.42 	implement a process to measure and
3.43 	report on the effectiveness of
3.44 	postsecondary institutions in the
3.45 	state.  The funding base for this
3.46 	initiative in fiscal years 2008 and
3.47 	2009 is $300,000 per year.
3.48 	Of this appropriation, $310,000 in the
3.49 	first year is for the Higher Education
3.50 	Services Office to upgrade computer
3.51 	program application software related to
3.52 	state grant awards.  This appropriation
3.53 	does not cancel but is available until
3.54 	expended.  This is a onetime
3.55 	appropriation and is not added to the
3.56 	agency's base.
4.1 	Subd. 12.  Balances Forward
4.2 	A balance in the first year under this
4.3 	section does not cancel, but is
4.4 	available for the second year.
4.5 	Subd. 13.  Transfers
4.6 	The Higher Education Services Office
4.7 	may transfer unencumbered balances from
4.8 	the appropriations in this section to
4.9 	the state grant appropriation, the
4.10 	interstate tuition reciprocity
4.11 	appropriation, the child care
4.12 	appropriation, and the state work study
4.13 	appropriation.
4.14 	Subd. 14.  Reporting
4.15 	The Higher Education Services Office
4.16 	shall collect data monthly from
4.17 	institutions disbursing state financial
4.18 	aid.  The data collected must include,
4.19 	but is not limited to, expenditures by
4.20 	type to date and unexpended balances.
4.21 	The Higher Education Services Office
4.22 	must evaluate and report quarterly
4.23 	state financial aid expenditures and
4.24 	unexpended balances to the chairs of
4.25 	the Higher Education Finances
4.26 	Committees of the senate and house of
4.27 	representatives and the commissioner of
4.28 	finance.  By November 1 and February
4.29 	15, the Higher Education Services
4.30 	Office must provide updated state grant
4.31 	spending projections taking into
4.32 	account the most current and projected
4.33 	enrollment and tuition and fee
4.34 	information, economic conditions, and
4.35 	other relevant factors.  Before
4.36 	submitting state grant spending
4.37 	projections, the Higher Education
4.38 	Services Office must meet and consult
4.39 	with representatives of public and
4.40 	private postsecondary education, the
4.41 	Department of Finance, Governor's
4.42 	Office, legislative staff, and
4.43 	financial aid administrators.

4.44 	Sec. 3. BOARD OF TRUSTEES OF THE MINNESOTA
4.45 	STATE COLLEGES AND UNIVERSITIES
 4.46 		Subdivision 1.Total
4.47 	Appropriation                        602,994,000    599,894,000
4.48 	The amounts that may be spent from this
4.49 	appropriation for each purpose are
4.50 	specified in the following subdivisions.
4.51 		Subd. 2.General Appropriation       565,494,000    562,394,000
4.52 	Of this appropriation, $9,000,000 the
4.53 	first year and $5,000,000 the second
4.54 	year are for the board to strengthen
4.55 	and expand its Minnesota on-line
4.56 	program.
4.57 	Of this appropriation, $4,800,000 the
4.58 	first year and $5,200,000 the second
4.59 	year are for the board to increase its
4.60 	capacity for training nurses.
5.1 	Of this appropriation, $2,500,000 the
5.2 	first year and $3,000,000 the second
5.3 	year are to provide resources for the
5.4 	board to establish an innovations fund.
5.5 	Of this appropriation, $1,500,000 each
5.6 	year is for the board to address the
5.7 	management education needs of farm and
5.8 	small business owners.
5.9 		Subd. 3.Allocation Framework         25,000,000     25,000,000
5.10 	The appropriation in this subdivision
5.11 	is for the board to reinvest in its
5.12 	member colleges and universities,
5.13 	through fully funding its allocation
5.14 	framework.
5.15 		Subd. 4.Centers of Excellence and
5.16 	Competitive Salaries                  12,500,000     12,500,000
5.17 	Of this appropriation, $10,000,000 each
5.18 	year is for the board to support
5.19 	designated centers of excellence, as
5.20 	provided under article 2, section 16.
5.21 	Of this appropriation, $2,500,000 each
5.22 	year is for the board to make incentive
5.23 	payments to faculty or staff for
5.24 	initiatives that promote excellence in
5.25 	student learning.  To the extent
5.26 	practicable, the board must make
5.27 	payments under this paragraph available
5.28 	first to faculty or staff associated
5.29 	with a designated center of excellence.

5.30 	Sec. 4. BOARD OF REGENTS OF THE
5.31 	UNIVERSITY OF MINNESOTA
 5.32 		Subdivision 1.Total
5.33 	Appropriation                        608,567,000    612,067,000
5.34 	The amounts that may be spent from this
5.35 	appropriation for each purpose are
5.36 	specified in the following subdivisions.
5.37 		Subd. 2.Operations and
5.38 	Maintenance                          545,200,000    548,700,000
5.39 	Of this amount, $15,000,000 in the
5.40 	first year is for the collaborative
5.41 	research partnership for biotechnology
5.42 	and medical genomics of the university
5.43 	and the Mayo Foundation.  This is a
5.44 	onetime appropriation that is to be
5.45 	evenly divided between the two
5.46 	partnering organizations.  This
5.47 	appropriation must be matched dollar
5.48 	for dollar by nonstate funds.  The
5.49 	state funds must be made available
5.50 	after certification to the director of
5.51 	the Higher Education Services Office of
5.52 	the nonstate match.  An annual report
5.53 	on the expenditure of these funds must
5.54 	be submitted to the governor and to the
5.55 	chairs of the senate Higher Education
5.56 	Budget Division and the house Higher
5.57 	Education Finance Committee by June 30
5.58 	of each fiscal year.  This
5.59 	appropriation is available until June
5.60 	30, 2007.
6.1 	Of this amount, $12,000,000 the first
6.2 	year and $24,000,000 the second year is
6.3 	for academic initiatives that are part
6.4 	of the board's biosciences for a
6.5 	healthy society initiative.
6.6 	Of this amount, $5,000,000 the first
6.7 	year and $10,000,000 the second year is
6.8 	to award faculty compensation increases
6.9 	differentially.
6.10 	Of this amount, $20,000,000 the first
6.11 	year and $15,000,000 the second year is
6.12 	for research support.  The funding base
6.13 	for this initiative in fiscal years
6.14 	2008 and 2009 is $15,000,000 per year.
6.15 	Of this amount, $6,500,000 the first
6.16 	year and $13,000,000 the second year is
6.17 	for initiatives to attract and retain
6.18 	students.
6.19 		Subd. 3.Health Care Access Fund      2,157,000      2,157,000
6.20 	This appropriation is from the health
6.21 	care access fund and is for primary
6.22 	care education initiatives.
6.23 		Subd. 4.Special
6.24 	Appropriation                         63,367,000     63,367,000
6.25 	(a) Agriculture and Extension Service
6.26 	50,625,000     50,625,000
6.27 	This appropriation is for the
6.28 	Agricultural Experiment Station,
6.29 	Minnesota Extension Service.
6.30 	(b) Health Sciences
6.31 	4,929,000      4,929,000
6.32 	This appropriation is for the rural
6.33 	physicians associates program, the
6.34 	Veterinary Diagnostic Laboratory,
6.35 	health sciences research, dental care,
6.36 	and the Biomedical Engineering Center.
6.37 	(c) Institute of Technology
6.38 	1,387,000      1,387,000
6.39 	This appropriation is for the
6.40 	Geological Survey and the Talented
6.41 	Youth Mathematics Program.
6.42 	(d) System Specials
6.43 	6,426,000      6,426,000
6.44 	This appropriation is for general
6.45 	research, student loans matching money,
6.46 	industrial relations education, Natural
6.47 	Resources Research Institute, Center
6.48 	for Urban and Regional Affairs, Bell
6.49 	Museum of Natural History, and the
6.50 	Humphrey exhibit.
6.51 		Subd. 5.Academic Health Center
7.1 	The appropriation to the Academic
7.2 	Health Center under Minnesota Statutes,
7.3 	section 297F.10, is anticipated to be
7.4 	$21,594,000 in the first year and
7.5 	$21,379,000 in the second year.

7.6 	Sec. 5. MAYO MEDICAL FOUNDATION
 7.7 		Subdivision 1.Total
7.8 	Appropriation                          1,391,000      1,391,000
7.9 	The amounts that may be spent from this
7.10 	appropriation for each purpose are
7.11 	specified in the following subdivisions.
7.12 		Subd. 2.Medical School                 514,000        514,000
7.13 	The state of Minnesota must pay a
7.14 	capitation each year for each student
7.15 	who is a resident of Minnesota.  The
7.16 	appropriation may be transferred
7.17 	between years of the biennium to
7.18 	accommodate enrollment fluctuations.
7.19 	It is intended that during the biennium
7.20 	the Mayo Foundation use the capitation
7.21 	money to increase the number of doctors
7.22 	practicing in rural areas in need of
7.23 	doctors.
7.24 		Subd. 3.Family Practice and
7.25 	Graduate Residency Program               531,000        531,000
7.26 	The state of Minnesota must pay a
7.27 	capitation of up to 27 residents each
7.28 	year.
7.29 		Subd. 4.St. Cloud Hospital-Mayo Family
7.30 	Practice Residency Program
7.31 	346,000        346,000
7.32 	This appropriation is to the Mayo
7.33 	Foundation to support 12 resident
7.34 	physicians each year in the St. Cloud
7.35 	Hospital-Mayo family practice residency
7.36 	program.  The program must prepare
7.37 	doctors to practice primary care
7.38 	medicine in the rural areas of the
7.39 	state.  It is intended that this
7.40 	program will improve health care in
7.41 	rural communities, provide affordable
7.42 	access to appropriate medical care, and
7.43 	manage the treatment of patients in a
7.44 	more cost-effective manner.

7.45 	Sec. 6. HEFA BALANCES TRANSFER
 7.46 	Up to $390,000 of the amount
7.47 	transferred under article 4, section 1,
7.48 	is appropriated to the Higher Education
7.49 	Services Office for the fiscal year
7.50 	ending June 30, 2006.  The remaining
7.51 	balance must be transferred to the
7.52 	general fund.

7.53 	ARTICLE 2
7.54 	RELATED PROVISIONS

7.55 	Section 1. Minnesota Statutes 2004, section 13.46,
8.1 	subdivision 2, is amended to read:
8.2 		Subd. 2.General.  (a) Unless the data is summary data or
8.3 	a statute specifically provides a different classification, data
8.4 	on individuals collected, maintained, used, or disseminated by
8.5 	the welfare system is private data on individuals, and shall not
8.6 	be disclosed except:
8.7 	(1) according to section 13.05;
8.8 	(2) according to court order;
8.9 	(3) according to a statute specifically authorizing access
8.10 	to the private data;
8.11 	(4) to an agent of the welfare system, including a law
8.12 	enforcement person, attorney, or investigator acting for it in
8.13 	the investigation or prosecution of a criminal or civil
8.14 	proceeding relating to the administration of a program;
8.15 	(5) to personnel of the welfare system who require the data
8.16 	to verify an individual's identity; determine eligibility,
8.17 	amount of assistance, and the need to provide services to an
8.18 	individual or family across programs; evaluate the effectiveness
8.19 	of programs; and investigate suspected fraud;
8.20 	(6) to administer federal funds or programs;
8.21 	(7) between personnel of the welfare system working in the
8.22 	same program;
8.23 	(8) to the Department of Revenue to administer and evaluate
8.24 	tax refund or tax credit programs and to identify individuals
8.25 	who may benefit from these programs.  The following information
8.26 	may be disclosed under this paragraph:  an individual's and
8.27 	their dependent's names, dates of birth, Social Security
8.28 	numbers, income, addresses, and other data as required, upon
8.29 	request by the Department of Revenue.  Disclosures by the
8.30 	commissioner of human services for the purposes described in
8.31 	this clause are governed by section 270B.14, subdivision 1.  Tax
8.32 	refund or tax credit programs include, but are not limited to,
8.33 	the dependent care credit under section 290.067, the Minnesota
8.34 	working family credit under section 290.0671, the property tax
8.35 	refund and rental credit under section 290A.04, and the
8.36 	Minnesota education credit under section 290.0674;
9.1 	(9) between the Department of Human Services, the
9.2 	Department of Education, and the Department of Employment and
9.3 	Economic Development for the purpose of monitoring the
9.4 	eligibility of the data subject for unemployment benefits, for
9.5 	any employment or training program administered, supervised, or
9.6 	certified by that agency, for the purpose of administering any
9.7 	rehabilitation program or child care assistance program, whether
9.8 	alone or in conjunction with the welfare system, or to monitor
9.9 	and evaluate the Minnesota family investment program by
9.10 	exchanging data on recipients and former recipients of food
9.11 	support, cash assistance under chapter 256, 256D, 256J, or 256K,
9.12 	child care assistance under chapter 119B, or medical programs
9.13 	under chapter 256B, 256D, or 256L;
9.14 	(10) to appropriate parties in connection with an emergency
9.15 	if knowledge of the information is necessary to protect the
9.16 	health or safety of the individual or other individuals or
9.17 	persons;
9.18 	(11) data maintained by residential programs as defined in
9.19 	section 245A.02 may be disclosed to the protection and advocacy
9.20 	system established in this state according to Part C of Public
9.21 	Law 98-527 to protect the legal and human rights of persons with
9.22 	mental retardation or other related conditions who live in
9.23 	residential facilities for these persons if the protection and
9.24 	advocacy system receives a complaint by or on behalf of that
9.25 	person and the person does not have a legal guardian or the
9.26 	state or a designee of the state is the legal guardian of the
9.27 	person;
9.28 	(12) to the county medical examiner or the county coroner
9.29 	for identifying or locating relatives or friends of a deceased
9.30 	person;
9.31 	(13) data on a child support obligor who makes payments to
9.32 	the public agency may be disclosed to the Higher Education
9.33 	Services Office to the extent necessary to determine eligibility
9.34 	under section sections 136A.121, subdivision 2, clause (5), and
9.35 	136A.125, subdivision 2, clause (8);
9.36 	(14) participant Social Security numbers and names
10.1 	collected by the telephone assistance program may be disclosed
10.2 	to the Department of Revenue to conduct an electronic data match
10.3 	with the property tax refund database to determine eligibility
10.4 	under section 237.70, subdivision 4a;
10.5 	(15) the current address of a Minnesota family investment
10.6 	program participant may be disclosed to law enforcement officers
10.7 	who provide the name of the participant and notify the agency
10.8 	that:
10.9 	(i) the participant:
10.10 	(A) is a fugitive felon fleeing to avoid prosecution, or
10.11 	custody or confinement after conviction, for a crime or attempt
10.12 	to commit a crime that is a felony under the laws of the
10.13 	jurisdiction from which the individual is fleeing; or
10.14 	(B) is violating a condition of probation or parole imposed
10.15 	under state or federal law;
10.16 	(ii) the location or apprehension of the felon is within
10.17 	the law enforcement officer's official duties; and
10.18 	(iii) the request is made in writing and in the proper
10.19 	exercise of those duties;
10.20 	(16) the current address of a recipient of general
10.21 	assistance or general assistance medical care may be disclosed
10.22 	to probation officers and corrections agents who are supervising
10.23 	the recipient and to law enforcement officers who are
10.24 	investigating the recipient in connection with a felony level
10.25 	offense;
10.26 	(17) information obtained from food support applicant or
10.27 	recipient households may be disclosed to local, state, or
10.28 	federal law enforcement officials, upon their written request,
10.29 	for the purpose of investigating an alleged violation of the
10.30 	Food Stamp Act, according to Code of Federal Regulations, title
10.31 	7, section 272.1(c);
10.32 	(18) the address, Social Security number, and, if
10.33 	available, photograph of any member of a household receiving
10.34 	food support shall be made available, on request, to a local,
10.35 	state, or federal law enforcement officer if the officer
10.36 	furnishes the agency with the name of the member and notifies
11.1 	the agency that:
11.2 	(i) the member:
11.3 	(A) is fleeing to avoid prosecution, or custody or
11.4 	confinement after conviction, for a crime or attempt to commit a
11.5 	crime that is a felony in the jurisdiction the member is
11.6 	fleeing;
11.7 	(B) is violating a condition of probation or parole imposed
11.8 	under state or federal law; or
11.9 	(C) has information that is necessary for the officer to
11.10 	conduct an official duty related to conduct described in subitem
11.11 	(A) or (B);
11.12 	(ii) locating or apprehending the member is within the
11.13 	officer's official duties; and
11.14 	(iii) the request is made in writing and in the proper
11.15 	exercise of the officer's official duty;
11.16 	(19) the current address of a recipient of Minnesota family
11.17 	investment program, general assistance, general assistance
11.18 	medical care, or food support may be disclosed to law
11.19 	enforcement officers who, in writing, provide the name of the
11.20 	recipient and notify the agency that the recipient is a person
11.21 	required to register under section 243.166, but is not residing
11.22 	at the address at which the recipient is registered under
11.23 	section 243.166;
11.24 	(20) certain information regarding child support obligors
11.25 	who are in arrears may be made public according to section
11.26 	518.575;
11.27 	(21) data on child support payments made by a child support
11.28 	obligor and data on the distribution of those payments excluding
11.29 	identifying information on obligees may be disclosed to all
11.30 	obligees to whom the obligor owes support, and data on the
11.31 	enforcement actions undertaken by the public authority, the
11.32 	status of those actions, and data on the income of the obligor
11.33 	or obligee may be disclosed to the other party;
11.34 	(22) data in the work reporting system may be disclosed
11.35 	under section 256.998, subdivision 7;
11.36 	(23) to the Department of Education for the purpose of
12.1 	matching Department of Education student data with public
12.2 	assistance data to determine students eligible for free and
12.3 	reduced price meals, meal supplements, and free milk according
12.4 	to United States Code, title 42, sections 1758, 1761, 1766,
12.5 	1766a, 1772, and 1773; to allocate federal and state funds that
12.6 	are distributed based on income of the student's family; and to
12.7 	verify receipt of energy assistance for the telephone assistance
12.8 	plan;
12.9 	(24) the current address and telephone number of program
12.10 	recipients and emergency contacts may be released to the
12.11 	commissioner of health or a local board of health as defined in
12.12 	section 145A.02, subdivision 2, when the commissioner or local
12.13 	board of health has reason to believe that a program recipient
12.14 	is a disease case, carrier, suspect case, or at risk of illness,
12.15 	and the data are necessary to locate the person;
12.16 	(25) to other state agencies, statewide systems, and
12.17 	political subdivisions of this state, including the attorney
12.18 	general, and agencies of other states, interstate information
12.19 	networks, federal agencies, and other entities as required by
12.20 	federal regulation or law for the administration of the child
12.21 	support enforcement program;
12.22 	(26) to personnel of public assistance programs as defined
12.23 	in section 256.741, for access to the child support system
12.24 	database for the purpose of administration, including monitoring
12.25 	and evaluation of those public assistance programs;
12.26 	(27) to monitor and evaluate the Minnesota family
12.27 	investment program by exchanging data between the Departments of
12.28 	Human Services and Education, on recipients and former
12.29 	recipients of food support, cash assistance under chapter 256,
12.30 	256D, 256J, or 256K, child care assistance under chapter 119B,
12.31 	or medical programs under chapter 256B, 256D, or 256L;
12.32 	(28) to evaluate child support program performance and to
12.33 	identify and prevent fraud in the child support program by
12.34 	exchanging data between the Department of Human Services,
12.35 	Department of Revenue under section 270B.14, subdivision 1,
12.36 	paragraphs (a) and (b), without regard to the limitation of use
13.1 	in paragraph (c), Department of Health, Department of Employment
13.2 	and Economic Development, and other state agencies as is
13.3 	reasonably necessary to perform these functions; or
13.4 	(29) counties operating child care assistance programs
13.5 	under chapter 119B may disseminate data on program participants,
13.6 	applicants, and providers to the commissioner of education.
13.7 	(b) Information on persons who have been treated for drug
13.8 	or alcohol abuse may only be disclosed according to the
13.9 	requirements of Code of Federal Regulations, title 42, sections
13.10 	2.1 to 2.67.
13.11 	(c) Data provided to law enforcement agencies under
13.12 	paragraph (a), clause (15), (16), (17), or (18), or paragraph
13.13 	(b), are investigative data and are confidential or protected
13.14 	nonpublic while the investigation is active.  The data are
13.15 	private after the investigation becomes inactive under section
13.16 	13.82, subdivision 5, paragraph (a) or (b).
13.17 	(d) Mental health data shall be treated as provided in
13.18 	subdivisions 7, 8, and 9, but is not subject to the access
13.19 	provisions of subdivision 10, paragraph (b).
13.20 	For the purposes of this subdivision, a request will be
13.21 	deemed to be made in writing if made through a computer
13.22 	interface system.

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

14.15 	Sec. 3. Minnesota Statutes 2004, section 136A.031,
14.16 	subdivision 2, is amended to read:
14.17 		Subd. 2.Higher education advisory council.  A Higher
14.18 	Education Advisory Council (HEAC) is established.  The HEAC is
14.19 	composed of the president of the University of Minnesota or
14.20 	designee; the chancellor of the Minnesota State Colleges and
14.21 	Universities or designee; the commissioner of education; the
14.22 	president of the Private College Council; a representative from
14.23 	the Minnesota Association of Private Postsecondary Schools; and
14.24 	a member appointed by the governor.  The HEAC shall (1) bring to
14.25 	the attention of the Higher Education Services Council Office 
14.26 	any matters that the HEAC deems necessary, and (2) review and
14.27 	comment upon matters before the council.  The council shall
14.28 	refer all proposals to the HEAC before submitting
14.29 	recommendations to the governor and the legislature.  The
14.30 	council shall provide time for a report from the HEAC at each
14.31 	meeting of the council.

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

15.33 	Sec. 5. Minnesota Statutes 2004, section 136A.031,
15.34 	subdivision 4, is amended to read:
15.35 		Subd. 4.Student representation.  If requested by the
15.36 	SAC, the director must place at least one student from an
16.1 	affected educational system on any task force created under
16.2 	subdivision 1. The student member or members shall be appointed
16.3 	by the SAC.

16.4 	Sec. 6. Minnesota Statutes 2004, section 136A.121,
16.5 	subdivision 2, is amended to read:
16.6 		Subd. 2.Eligibility for grants.  An applicant is
16.7 	eligible to be considered for a grant, regardless of the
16.8 	applicant's sex, creed, race, color, national origin, or
16.9 	ancestry, under sections 136A.095 to 136A.131 if the office
16.10 	finds that the applicant:
16.11 	(1) is a resident of the state of Minnesota;
16.12 	(2) is a graduate of a secondary school or its equivalent,
16.13 	or is 17 years of age or over, and has met all requirements for
16.14 	admission as a student to an eligible college or technical
16.15 	college of choice as defined in sections 136A.095 to 136A.131;
16.16 	(3) has met the financial need criteria established in
16.17 	Minnesota Rules;
16.18 	(4) is not in default, as defined by the office, of any
16.19 	federal or state student educational loan; and
16.20 	(5) is not more than 30 days in arrears for any in
16.21 	court-ordered child support payments owed to a that is collected
16.22 	or enforced by the public agency authority responsible for child
16.23 	support enforcement or, if the applicant is more than 30 days in
16.24 	arrears in court-ordered child support that is collected or
16.25 	enforced by the public authority responsible for child support
16.26 	enforcement, but is complying with a written payment
16.27 	agreement under section 518.553or order for arrearages. An
16.28 	agreement must provide for a repayment of arrearages at no less
16.29 	than 20 percent per month of the amount of the monthly child
16.30 	support obligation or no less than $30 per month if there is no
16.31 	current monthly child support obligation.  Compliance means that
16.32 	payments are made by the payment date.
16.33 	The director and the commissioner of human services shall
16.34 	develop procedures to implement clause (5).

16.35 	Sec. 7. Minnesota Statutes 2004, section 136A.121,
16.36 	subdivision 6, is amended to read:
17.1 		Subd. 6.Cost of attendance.  (a) The recognized cost of
17.2 	attendance consists of allowances specified in law for living
17.3 	and miscellaneous expenses, and an allowance for tuition and
17.4 	fees equal to the lesser of the average actual tuition and fees
17.5 	charged by the institution, or the tuition and fee maximums
17.6 	established in law.
17.7 	(b) For a student registering for less than full time, the
17.8 	office shall prorate the cost of attendance to the actual number
17.9 	of credits for which the student is enrolled.
17.10 	The recognized cost of attendance for a student who is
17.11 	confined to a Minnesota correctional institution shall consist
17.12 	of the tuition and fee component in paragraph (a), with no
17.13 	allowance for living and miscellaneous expenses.
17.14 	For the purpose of this subdivision, "fees" include only
17.15 	those fees that are mandatory and charged to full-time resident
17.16 	students attending the institution.

17.17 	Sec. 8. Minnesota Statutes 2004, section 136A.121,
17.18 	subdivision 9, is amended to read:
17.19 		Subd. 9.Awards.  An undergraduate student who meets the
17.20 	office's requirements is eligible to apply for and receive a
17.21 	grant in any year of undergraduate study unless the student has
17.22 	obtained a baccalaureate degree or previously has been enrolled
17.23 	full time or the equivalent for eight semesters or the
17.24 	equivalent, excluding courses taken from a Minnesota school or
17.25 	postsecondary institution which is not participating in the
17.26 	state grant program and from which a student transferred no
17.27 	credit. A student who withdraws from enrollment for active
17.28 	military service is entitled to an additional semester of grant
17.29 	eligibility.A student enrolled in a two-year program at a
17.30 	four-year institution is only eligible for the tuition and fee
17.31 	maximums established by law for two-year institutions.

17.32 	Sec. 9. Minnesota Statutes 2004, section 136A.121, is
17.33 	amended by adding a subdivision to read:
17.34 		Subd. 18.Data. An eligible institution must provide to
17.35 	the office student enrollment, financial aid, financial, and
17.36 	other data as determined by the director, to enable the office
18.1 	to carry out its responsibilities under chapter 136A.

18.2 	Sec. 10. Minnesota Statutes 2004, section 136A.125,
18.3 	subdivision 2, is amended to read:
18.4 		Subd. 2.Eligible students.  An applicant is eligible for
18.5 	a child care grant if the applicant:
18.6 	(1) is a resident of the state of Minnesota;
18.7 	(2) has a child 12 years of age or younger, or 14 years of
18.8 	age or younger who is handicapped as defined in section 125A.02,
18.9 	and who is receiving or will receive care on a regular basis
18.10 	from a licensed or legal, nonlicensed caregiver;
18.11 	(3) is income eligible as determined by the office's
18.12 	policies and rules, but is not a recipient of assistance from
18.13 	the Minnesota family investment program;
18.14 	(4) has not earned a baccalaureate degree and has been
18.15 	enrolled full time less than eight semesters or the equivalent;
18.16 	(5) is pursuing a nonsectarian program or course of study
18.17 	that applies to an undergraduate degree, diploma, or
18.18 	certificate;
18.19 	(6) is enrolled at least half time in an eligible
18.20 	institution; and 
18.21 	(7) is in good academic standing and making satisfactory
18.22 	academic progress; and 
18.23 	(8) is not more than 30 days in arrears in court-ordered
18.24 	child support that is collected or enforced by the public
18.25 	authority responsible for child support enforcement or, if the
18.26 	applicant is more than 30 days in arrears in court-ordered child
18.27 	support that is collected or enforced by the public authority
18.28 	responsible for child support enforcement, but is complying with
18.29 	a written payment agreement under section 518.553 or order for
18.30 	arrearages.

18.31 	Sec. 11. Minnesota Statutes 2004, section 136A.125,
18.32 	subdivision 4, is amended to read:
18.33 		Subd. 4.Amount and length of grants.  The amount of a
18.34 	child care grant must be based on:
18.35 	(1) the income of the applicant and the applicant's spouse;
18.36 	(2) the number in the applicant's family, as defined by the
19.1 	office; and
19.2 	(3) the number of eligible children in the applicant's
19.3 	family.
19.4 	The maximum award to the applicant shall be $2,200 for each
19.5 	eligible child per academic year, except that the campus
19.6 	financial aid officer may apply to the office for approval to
19.7 	increase grants by up to ten percent to compensate for higher
19.8 	market charges for infant care in a community. A student who
19.9 	withdraws from enrollment for active military service is
19.10 	entitled to an additional semester of grant eligibility.The
19.11 	office shall develop policies to determine community market
19.12 	costs and review institutional requests for compensatory grant
19.13 	increases to ensure need and equal treatment.  The office shall
19.14 	prepare a chart to show the amount of a grant that will be
19.15 	awarded per child based on the factors in this subdivision.  The
19.16 	chart shall include a range of income and family size.

19.17 	Sec. 12. Minnesota Statutes 2004, section 136A.1701, is
19.18 	amended by adding a subdivision to read:
19.19 		Subd. 11.Data. An eligible institution must provide to
19.20 	the office student enrollment, financial aid, financial, and
19.21 	other data as determined by the director, to enable the office
19.22 	to carry out its responsibilities under chapter 136A.

19.23 	Sec. 13. Minnesota Statutes 2004, section 136A.1701, is
19.24 	amended by adding a subdivision to read:
19.25 		Subd. 12.Eligible student. "Eligible student" means a
19.26 	student who is a Minnesota resident who is enrolled or accepted
19.27 	for enrollment at an eligible institution in Minnesota or in
19.28 	another state or province.  Non-Minnesota residents are eligible
19.29 	students if they are enrolled or accepted for enrollment at an
19.30 	eligible institution in Minnesota and will be physically
19.31 	attending classes in Minnesota for at least 50 percent of the
19.32 	academic term.  Non-Minnesota resident students not physically
19.33 	attending classes in Minnesota due to an approved study abroad
19.34 	program for 12 months or less are eligible students.
19.35 	Non-Minnesota residents enrolled in study abroad programs
19.36 	exceeding 12 months are not eligible students.

20.1 	Sec. 14. [136A.1703] INCOME-CONTINGENT LOANS.
20.2 	The office shall administer an income-contingent loan
20.3 	repayment program to assist graduates of Minnesota schools in
20.4 	medicine, dentistry, pharmacy, chiropractic medicine, public
20.5 	health, and veterinary medicine, and Minnesota residents
20.6 	graduating from optometry and osteopathy programs.  Applicant
20.7 	data collected by the office for this program may be disclosed
20.8 	to a consumer credit reporting agency under the same conditions
20.9 	as those that apply to the supplemental loan program under
20.10 	section 136A.162.  No new applicants may be accepted after June
20.11 	30, 1995.

20.12 	Sec. 15. [136A.1785] LOAN CAPITAL FUND.
20.13 	The office may deposit and hold assets derived from the
20.14 	operation of its student loan programs authorized by this
20.15 	chapter in a fund known as the loan capital fund.  Assets in the
20.16 	loan capital fund are available to the office solely for
20.17 	carrying out the purposes and terms of sections 136A.15 to
20.18 	136A.1702, including, but not limited to, making student loans
20.19 	authorized by this chapter, paying administrative expenses
20.20 	associated with the operation of its student loan programs,
20.21 	repurchasing defaulted student loans, and paying expenses in
20.22 	connection with the issuance of revenue bonds authorized under
20.23 	this chapter.  Assets in the loan capital fund may be invested
20.24 	as provided in sections 11A.24 and 136A.16, subdivision 8.  All
20.25 	interest and earnings from the investment of the loan capital
20.26 	fund inure to the benefit of the fund and are deposited into the
20.27 	fund.

20.28 	Sec. 16. [136F.31] CENTERS OF EXCELLENCE.
20.29 		Subdivision 1.Board designation. The board must
20.30 	designate at least three and up to eight different program
20.31 	centers of excellence in manufacturing technology,
20.32 	science/engineering, health care, information technology,
20.33 	business, and teacher education.  The board must determine the
20.34 	form and required information contained in applications from
20.35 	member institutions.  A center of excellence must include no
20.36 	more than one state university working with up to two community
21.1 	and technical colleges.
21.2 		Subd. 2.Center selection criteria. The board must
21.3 	select programs based on institutional proposals demonstrating:
21.4 	(1) a comprehensive academic plan that includes a seamless
21.5 	continuum of academic offerings in the program area including
21.6 	associate, baccalaureate, and customized training and continuing
21.7 	education;
21.8 	(2) a specific development plan that includes a description
21.9 	of how the institution will pursue continuous improvement,
21.10 	accountability and work toward becoming nationally recognized;
21.11 	(3) identified commitments from employers that include a
21.12 	measurable financial and programmatic commitment to the center
21.13 	of excellence on the part of employers who will benefit from the
21.14 	development of the center.  A center for teacher education must
21.15 	demonstrate support from local school districts;
21.16 	(4) a commitment from the institution that demonstrates
21.17 	support from the entire institution for the proposal, and that
21.18 	new designated funding will not supplant current budgets for the
21.19 	programs; and 
21.20 	(5) a separate endowment amount created for the program
21.21 	within current institutional foundations.
21.22 		Subd. 3.Advisory committee and reports required. A
21.23 	center of excellence must create an advisory committee
21.24 	representing local, statewide, and national leaders in the
21.25 	field.  By January 15 of each odd-numbered year, each designated
21.26 	center must provide a report to the governor and the chairs of
21.27 	the senate Higher Education Budget Division and the house Higher
21.28 	Education Finance Committee that includes annual and integrated
21.29 	data on program enrollment, student demographics, student
21.30 	admission data, endowment growth, graduation rates, graduation
21.31 	outcomes, employer involvement, and other outcomes as determined
21.32 	by the board.  A report under this subdivision must also include
21.33 	the use of any funds made available by a legislative
21.34 	appropriation for incentive payments to faculty or staff.

21.35 	Sec. 17. Minnesota Statutes 2004, section 136G.03,
21.36 	subdivision 3, is amended to read:
22.1 		Subd. 3.Account owner.  "Account owner" means a person
22.2 	who enters into a participation agreement and is entitled
22.3 	to select or change conduct transactions on the account,
22.4 	including selecting and changing the beneficiary of an account
22.5 	or to receive and receiving distributions from the account for
22.6 	other than payment of qualified higher education expenses.

22.7 	Sec. 18. Minnesota Statutes 2004, section 136G.03,
22.8 	subdivision 21a, is amended to read:
22.9 		Subd. 21a.Minor trust account.  "Minor trust account"
22.10 	means a Uniform Gift to Minors Act account,or a Uniform
22.11 	Transfers to Minors Act account, or a trust instrument naming a
22.12 	minor person as beneficiary,created and operating under the
22.13 	laws of Minnesota or another state.

22.14 	Sec. 19. Minnesota Statutes 2004, section 136G.03,
22.15 	subdivision 22, is amended to read:
22.16 		Subd. 22.Nonqualified distribution.  "Nonqualified
22.17 	distribution" means a distribution made from an account other
22.18 	than (1) a qualified distribution; or (2) a distribution due to
22.19 	the death or disability of, or scholarship to, or attendance at
22.20 	a United States military academy by,a beneficiary.

22.21 	Sec. 20. Minnesota Statutes 2004, section 136G.03,
22.22 	subdivision 32, is amended to read:
22.23 		Subd. 32.Scholarship.  "Scholarship" means a
22.24 	scholarship,or educational assistance allowance, or payment
22.25 	under section 529(b)(3)(C) of the Internal Revenue Code.

22.26 	Sec. 21. Minnesota Statutes 2004, section 136G.05,
22.27 	subdivision 8, is amended to read:
22.28 		Subd. 8.Administration.  The director shall administer
22.29 	the program, including accepting and processing applications,
22.30 	maintaining account records, making payments, making matching
22.31 	grants under section 136G.11, and undertaking any other
22.32 	necessary tasks to administer the program.  The office may
22.33 	contract with one or more third parties to carry out some or all
22.34 	of these administrative duties, including promotion providing
22.35 	incentives and marketing of the program.  The office and the
22.36 	board may jointly contract with third-party providers, if the
23.1 	office and board determine that it is desirable to contract with
23.2 	the same entity or entities for administration and investment
23.3 	management.

23.4 	Sec. 22. Minnesota Statutes 2004, section 136G.09,
23.5 	subdivision 11, is amended to read:
23.6 		Subd. 11.Effect of plan changes on participation
23.7 	agreement.  Amendments to sections 136G.01 to 136G.13
23.8 	automatically amend the participation agreement.  Any amendments
23.9 	to the operating procedures and policies of the plan shall
23.10 	automatically amend the participation agreement 30 days after
23.11 	adoption by the office or the board.

23.12 	Sec. 23. Minnesota Statutes 2004, section 136G.09,
23.13 	subdivision 12, is amended to read:
23.14 		Subd. 12.Special account to hold plan assets in trust.
 23.15 	All assets of the plan, including contributions to accounts and
23.16 	matching grant accounts and earnings, are held in trust for the
23.17 	exclusive benefit of account owners and beneficiaries.  Assets
23.18 	must be held in a separate account in the state treasury to be
23.19 	known as the Minnesota college savings plan account or in
23.20 	accounts with the third party provider selected pursuant to
23.21 	section 136G.05, subdivision 8.  Plan assets are not subject to
23.22 	claims by creditors of the state, are not part of the general
23.23 	fund, and are not subject to appropriation by the state.
23.24 	Payments from the Minnesota college savings plan account shall
23.25 	be made under sections 136G.01 to 136G.13.

23.26 	Sec. 24. Minnesota Statutes 2004, section 136G.11,
23.27 	subdivision 1, is amended to read:
23.28 		Subdivision 1.Matching grant qualification.  By June 30
23.29 	of each year, a state matching grant must be added to each
23.30 	account established under the program if the following
23.31 	conditions are met:
23.32 	(1) the contributor applies, in writing in a form
23.33 	prescribed by the director, for a matching grant;
23.34 	(2) a minimum contribution of $200 was made during the
23.35 	preceding calendar year; and 
23.36 	(3) the beneficiary's family meets Minnesota college
24.1 	savings plan residency requirements; and 
24.2 	(4) the family income of the beneficiary did not exceed
24.3 	$80,000.

24.4 	Sec. 25. Minnesota Statutes 2004, section 136G.11,
24.5 	subdivision 3, is amended to read:
24.6 		Subd. 3.Residency requirement.  (a) If the beneficiary
24.7 	is under age 25, the beneficiary's parents or legal guardians
24.8 	must be Minnesota residents to qualify for a matching grant.  If
24.9 	the beneficiary is age 25 or older, the beneficiary must be a
24.10 	Minnesota resident to qualify for a matching grant.
24.11 	(b) To meet the residency requirements, the parent or legal
24.12 	guardian of beneficiaries under age 25 must have filed a
24.13 	Minnesota individual income tax return as a Minnesota resident
24.14 	and claimed the beneficiary as a dependent on the parent or
24.15 	legal guardian's federal tax return for the calendar year in
24.16 	which contributions were made. If the beneficiary's parents are
24.17 	divorced, the parent or legal guardian claiming the beneficiary
24.18 	as a dependent on the federal individual income tax return must
24.19 	be a Minnesota resident.For beneficiaries age 25 or older, the
24.20 	beneficiary, and a spouse, if any, must have filed a Minnesota
24.21 	and a federal individual income tax return as a Minnesota
24.22 	resident for the calendar year in which contributions were made.
24.23 	(c) A parent of beneficiaries under age 25 and
24.24 	beneficiaries age 25 or older who did not reside in Minnesota in
24.25 	the calendar year in which contributions were made are not
24.26 	eligible for a matching grant.

24.27 	Sec. 26. Minnesota Statutes 2004, section 136G.11, is
24.28 	amended by adding a subdivision to read:
24.29 		Subd. 3a.Family income. (a) For purposes of this
24.30 	section, "family income" means:
24.31 	(1) if the beneficiary is under age 25, the combined
24.32 	adjusted gross income of the beneficiary's parents or legal
24.33 	guardians as reported on the federal tax return or returns for
24.34 	the calendar year in which contributions were made.  If the
24.35 	beneficiary's parents or legal guardians are divorced, the
24.36 	income of the parent claiming the beneficiary as a dependent on
25.1 	the federal individual income tax return and the income of that
25.2 	parent's spouse, if any, is used to determine family income; or 
25.3 	(2) if the beneficiary is age 25 or older, the combined
25.4 	adjusted gross income of the beneficiary and spouse, if any.
25.5 	(b) For a parent or legal guardian of beneficiaries under
25.6 	age 25 and for beneficiaries age 25 or older who resided in
25.7 	Minnesota and filed a federal individual income tax return, the
25.8 	matching grant must be based on family income from the calendar
25.9 	year in which contributions were made.

25.10 	Sec. 27. Minnesota Statutes 2004, section 136G.11,
25.11 	subdivision 13, is amended to read:
25.12 		Subd. 13.Forfeiture of matching grants.  (a) Matching
25.13 	grants are forfeited if:
25.14 	(1) the account owner transfers the total account balance
25.15 	of an account to another account or to another qualified tuition
25.16 	program;
25.17 	(2) the beneficiary receives a full tuition scholarship or
25.18 	admission to is attending a United States service academy;
25.19 	(3) the beneficiary dies or becomes disabled;
25.20 	(4) the account owner changes the beneficiary of the
25.21 	account; or
25.22 	(5) the account owner closes the account with a
25.23 	nonqualified withdrawal.
25.24 	(b) Matching grants must be proportionally forfeited if:
25.25 	(1) the account owner transfers a portion of an account to
25.26 	another account or to another qualified tuition program;
25.27 	(2) the beneficiary receives a scholarship covering a
25.28 	portion of qualified higher education expenses; or
25.29 	(3) the account owner makes a partial nonqualified
25.30 	withdrawal.
25.31 	(c) If the account owner makes a misrepresentation in a
25.32 	participation agreement or an application for a matching grant
25.33 	that results in a matching grant, the matching grant associated
25.34 	with the misrepresentation is forfeited.  The office and the
25.35 	board must instruct the plan administrator as to the amount to
25.36 	be forfeited from the matching grant account.  The office and
26.1 	the board must withdraw the matching grant or the proportion of
26.2 	the matching grant that is related to the misrepresentation.

26.3 	Sec. 28. Minnesota Statutes 2004, section 136G.13,
26.4 	subdivision 1, is amended to read:
26.5 		Subdivision 1.Qualified distribution methods.  (a)
26.6 	Qualified distributions may be made:
26.7 	(1) directly to participating eligible educational
26.8 	institutions on behalf of the beneficiary; or 
26.9 	(2) in the form of a check payable to both the beneficiary
26.10 	and the eligible educational institution; or 
26.11 	(3) directly to the account owner or beneficiary if the
26.12 	account owner or beneficiary has already paid qualified higher
26.13 	education expenses.
26.14 	(b) Qualified distributions must be withdrawn
26.15 	proportionally from contributions and earnings in an account
26.16 	owner's account on the date of distribution as provided in
26.17 	section 529 of the Internal Revenue Code.

26.18 	Sec. 29. Minnesota Statutes 2004, section 136G.13,
26.19 	subdivision 5, is amended to read:
26.20 		Subd. 5.Distributions due to death or disability of, or
26.21 	scholarship to, or attendance at a united states military
26.22 	academy by,a beneficiary.  An account owner may request a
26.23 	distribution due to the death or disability of, or scholarship
26.24 	to, or attendance at a United States military academy by,a
26.25 	beneficiary from an account by submitting a completed request to
26.26 	the plan.  Prior to distribution, the account owner shall
26.27 	certify the reason for the distribution and provide written
26.28 	confirmation from a third party that the beneficiary has died,
26.29 	become disabled, or received a scholarship for attendance at an
26.30 	eligible educational institution, or is attending a United
26.31 	States military academy.  The plan must not consider a request
26.32 	to make a distribution until a third-party written confirmation
26.33 	is received by the plan.  For purposes of this subdivision, a
26.34 	third-party written confirmation consists of the following:
26.35 	(1) for death of the beneficiary, a certified copy of the
26.36 	beneficiary's death record;
27.1 	(2) for disability of the beneficiary, a certification by a
27.2 	physician who is a doctor of medicine or osteopathy stating that
27.3 	the doctor is legally authorized to practice in a state of the
27.4 	United States and that the beneficiary is unable to attend any
27.5 	eligible educational institution because of an injury or illness
27.6 	that is expected to continue indefinitely or result in death.
27.7 	Certification must be on a form approved by the plan; or 
27.8 	(3) for a scholarship award to the beneficiary, a letter
27.9 	from the grantor of the scholarship or from the eligible
27.10 	educational institution receiving or administering the
27.11 	scholarship, that identifies the beneficiary by name and Social
27.12 	Security number or taxpayer identification number as the
27.13 	recipient of the scholarship and states the amount of the
27.14 	scholarship, the period of time or number of credits or units to
27.15 	which it applies, the date of the scholarship, and, if
27.16 	applicable, the eligible educational institution to which the
27.17 	scholarship is to be applied; or 
27.18 	(4) for attendance by the beneficiary at a United States
27.19 	military academy, a letter from the military academy indicating
27.20 	the beneficiary's enrollment and attendance.

27.21 	Sec. 30. Minnesota Statutes 2004, section 136G.14, is
27.22 	amended to read:
27.23 	136G.14 MINOR TRUST ACCOUNTS.
27.24 	(a) This section applies to a plan account in which funds
27.25 	of a minor trust account are invested.
27.26 	(b) The account owner may not be changed to any person
27.27 	other than a successor custodian or the beneficiary unless a
27.28 	court order directing the change of ownership is provided to the
27.29 	plan administrator.  The custodian must sign all forms and
27.30 	requests submitted to the plan administrator in the custodian's
27.31 	representative capacity.  The custodian must notify the plan
27.32 	administrator in writing when the beneficiary becomes legally
27.33 	entitled to be the account owner.  An account owner under this
27.34 	section may not select a contingent account owner.
27.35 	(c) The beneficiary of an account under this section may
27.36 	not be changed.  If the beneficiary dies, assets in a plan
28.1 	account become the property of the beneficiary's estate.  Funds
28.2 	in an account must not be transferred or rolled over to another
28.3 	account owner or to an account for another beneficiary.  A
28.4 	nonqualified distribution from an account, or a distribution due
28.5 	to the disability or scholarship award to the beneficiary, or
28.6 	made on account of the beneficiary's attendance at a United
28.7 	States military academy,must be used for the benefit of the
28.8 	beneficiary.

28.9 	Sec. 31. Minnesota Statutes 2004, section 299A.45,
28.10 	subdivision 1, is amended to read:
28.11 		Subdivision 1.Eligibility.  Following certification
28.12 	under section 299A.44 and compliance with this section and rules
28.13 	of the commissioner of public safety and the higher education
28.14 	services office, dependent children less than 23 years of age
28.15 	and the surviving spouse of a public safety officer killed in
28.16 	the line of duty on or after January 1, 1973, are eligible to
28.17 	receive educational benefits under this section.  To qualify for
28.18 	an award, they must be enrolled in undergraduate degree or
28.19 	certificate programs after June 30, 1990, at an eligible
28.20 	Minnesota institution as provided in section 136A.101,
28.21 	subdivision 4. A student who withdraws from enrollment for
28.22 	active military service is entitled to an additional semester of
28.23 	grant eligibility.Persons who have received a baccalaureate
28.24 	degree or have been enrolled full time or the equivalent of ten
28.25 	semesters or the equivalent, whichever occurs first, are no
28.26 	longer eligible.

28.27 	Sec. 32. Minnesota Statutes 2004, section 299A.45,
28.28 	subdivision 4, is amended to read:
28.29 		Subd. 4.Renewal.  Each award must be given for one
28.30 	academic year and is renewable for a maximum of eight semesters
28.31 	or the equivalent. A student who withdraws from enrollment for
28.32 	active military service is entitled to an additional semester of
28.33 	grant eligibility.An award must not be given to a dependent
28.34 	child who is 23 years of age or older on the first day of the
28.35 	academic year.

28.36 	Sec. 33. TRANSFER OF MHFA BONDING AUTHORITY TO HESO.
 29.1 	Notwithstanding Minnesota Statutes, section 474A.03,
29.2 	subdivision 2a, paragraph (b), the Minnesota Housing Finance
29.3 	Agency may enter into an agreement with the Higher Education
29.4 	Services Office under which the Higher Education Services Office
29.5 	issues qualified student loan bonds, up to $50,000,000 of which
29.6 	are issued pursuant to bonding authority allocated to the
29.7 	Minnesota Housing Finance Agency in 2005 under Minnesota
29.8 	Statutes, section 474A.03, subdivision 2a, paragraph (a).  This
29.9 	amount is in addition to the bonding authority otherwise
29.10 	allocated to the Higher Education Services Office under
29.11 	Minnesota Statutes, chapter 474A.  Notwithstanding Minnesota
29.12 	Statutes, section 474A.04, subdivision 1a, 474A.061, or
29.13 	474A.091, subdivision 2, bonding authority carried forward by
29.14 	the Minnesota Housing Financing Agency from its allocation for
29.15 	2005 under Minnesota Statutes, section 474A.03, subdivision 2a,
29.16 	paragraph (b), are exempt from the requirement that the bonding
29.17 	authority be permanently issued by December 31 of the next
29.18 	succeeding calendar year.

29.19 	Sec. 34. APPLICATION OF ELIGIBILITY.
 29.20 	The additional semester of grant eligibility under sections
29.21 	8, 11, 31, and 32 applies to any student who withdrew from
29.22 	enrollment in a postsecondary institution after December 31,
29.23 	2002, because the student was ordered to active military service
29.24 	as defined in Minnesota Statutes, section 190.05, subdivision 5b
29.25 	or 5c.

29.26 	Sec. 35. ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY
29.27 	FUNDING.
 29.28 	The Higher Education Services Office shall convene an
29.29 	advisory task force to study the current postsecondary funding
29.30 	policy under Minnesota Statutes, sections 135A.01 to 135A.034.
29.31 	The task force must include the chief financial officers of the
29.32 	University of Minnesota and the Minnesota State Colleges and
29.33 	Universities and the commissioner of finance, or their
29.34 	designees.  The task force may include other members as selected
29.35 	by the Higher Education Services Office.  The task force must
29.36 	study and make specific recommendations on alternatives to the
30.1 	methods currently used by the postsecondary systems to implement
30.2 	the provisions of Minnesota Statutes, section 135A.031,
30.3 	subdivision 4.  The task force must submit its recommendations
30.4 	to the legislature and the governor by January 15, 2006.  The
30.5 	task force expires on June 30, 2007.

30.6 	Sec. 36. REVISOR INSTRUCTION.
 30.7 	The revisor of statutes shall change the terms "HESO" and
30.8 	"Higher Education Services Office" to "Minnesota Office of
30.9 	Higher Education" wherever in Minnesota Statutes and Minnesota
30.10 	Rules the terms appear.

30.11 	Sec. 37. REPEALER.
 30.12 	(a) Minnesota Statutes 2004, sections 136A.011 and
30.13 	136A.031, subdivision 1, are repealed.
30.14 	(b) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120;
30.15 	4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100;
30.16 	4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are
30.17 	repealed.

30.18 	ARTICLE 3
30.19 	PRIVATE CAREER SCHOOLS

30.20 	Section 1. Minnesota Statutes 2004, section 141.21, is
30.21 	amended by adding a subdivision to read:
30.22 		Subd. 6a.Multiple location. "Multiple location" means
30.23 	any site where classes or administrative services are provided
30.24 	and which has a street address that is different than the street
30.25 	address found on the school's private career school license.

30.26 	Sec. 2. Minnesota Statutes 2004, section 141.25,
30.27 	subdivision 3, is amended to read:
30.28 		Subd. 3.Application.  Application for a license shall be
30.29 	on forms prepared and furnished by the office, and shall include
30.30 	the following and other information as the office may require:
30.31 	(1) the title or name of the school, ownership and
30.32 	controlling officers, members, managing employees, and director;
30.33 	(2) the specific programs which will be offered and the
30.34 	specific purposes of the instruction;
30.35 	(3) the place or places where the instruction will be
30.36 	given;
31.1 	(4) a listing of the equipment available for instruction in
31.2 	each program;
31.3 	(5) the maximum enrollment to be accommodated with
31.4 	equipment available in each specified program;
31.5 	(6) the qualifications of instructors and supervisors in
31.6 	each specified program;
31.7 	(7) a current balance sheet, income statement, and adequate
31.8 	supporting documentation, prepared and certified by an
31.9 	independent public accountant or CPA;
31.10 	(8) copies of all media advertising and promotional
31.11 	literature and brochures or electronic display currently used or
31.12 	reasonably expected to be used by the school;
31.13 	(9) copies of all Minnesota enrollment agreement forms and
31.14 	contract forms and all enrollment agreement forms and contract
31.15 	forms used in Minnesota; and
31.16 	(10) gross income earned in the preceding year from student
31.17 	tuition, fees, and other required institutional charges, unless
31.18 	the school files with the office a surety bond equal to at least
31.19 	$50,000 $250,000 as described in subdivision 5.

31.20 	Sec. 3. Minnesota Statutes 2004, section 141.25,
31.21 	subdivision 5, is amended to read:
31.22 		Subd. 5.Bond.  (a) No license shall be issued to any
31.23 	school which maintains, conducts, solicits for, or advertises
31.24 	within the state of Minnesota any program, unless the applicant
31.25 	files with the office a continuous corporate surety bond written
31.26 	by a company authorized to do business in Minnesota conditioned
31.27 	upon the faithful performance of all contracts and agreements
31.28 	with students made by the applicant.
31.29 	(b) The amount of the surety bond shall be ten percent of
31.30 	the preceding year's gross income from student tuition, fees,
31.31 	and other required institutional charges, but in no event less
31.32 	than $10,000 $25,000 nor greater than $50,000 $250,000, except
31.33 	that a school may deposit a greater amount at its own
31.34 	discretion.  A school in each annual application for licensure
31.35 	must compute the amount of the surety bond and verify that the
31.36 	amount of the surety bond complies with this subdivision, unless
32.1 	the school maintains a surety bond equal to at
32.2 	least $50,000 $250,000.  A school that operates at two or more
32.3 	locations may combine gross income from student tuition, fees,
32.4 	and other required institutional charges for all locations for
32.5 	the purpose of determining the annual surety bond requirement.
32.6 	The gross tuition and fees used to determine the amount of the
32.7 	surety bond required for a school having a license for the sole
32.8 	purpose of recruiting students in Minnesota shall be only that
32.9 	paid to the school by the students recruited from Minnesota.
32.10 	(c) The bond shall run to the state of Minnesota and to any
32.11 	person who may have a cause of action against the applicant
32.12 	arising at any time after the bond is filed and before it is
32.13 	canceled for breach of any contract or agreement made by the
32.14 	applicant with any student.  The aggregate liability of the
32.15 	surety for all breaches of the conditions of the bond shall not
32.16 	exceed the principal sum deposited by the school under paragraph
32.17 	(b).  The surety of any bond may cancel it upon giving 60 days'
32.18 	notice in writing to the office and shall be relieved of
32.19 	liability for any breach of condition occurring after the
32.20 	effective date of cancellation.
32.21 	(d) In lieu of bond, the applicant may deposit with the
32.22 	commissioner of finance a sum equal to the amount of the
32.23 	required surety bond in cash, or securities as may be legally
32.24 	purchased by savings banks or for trust funds in an aggregate
32.25 	market value equal to the amount of the required surety bond.
32.26 	(e) Failure of a school to post and maintain the required
32.27 	surety bond or deposit under paragraph (d) may result in denial,
32.28 	suspension, or revocation of the school's license.

32.29 	Sec. 4. Minnesota Statutes 2004, section 141.25,
32.30 	subdivision 7, is amended to read:
32.31 		Subd. 7.Minimum standards.  A license shall be issued if
32.32 	the office first determines:
32.33 	(1) that the applicant has a sound financial condition with
32.34 	sufficient resources available to:
32.35 	(i) meet the school's financial obligations;
32.36 	(ii) refund all tuition and other charges, within a
33.1 	reasonable period of time, in the event of dissolution of the
33.2 	school or in the event of any justifiable claims for refund
33.3 	against the school by the student body;
33.4 	(iii) provide adequate service to its students and
33.5 	prospective students; and
33.6 	(iv) maintain and support the school;
33.7 	(2) that the applicant has satisfactory facilities with
33.8 	sufficient tools and equipment and the necessary number of work
33.9 	stations to prepare adequately the students currently enrolled,
33.10 	and those proposed to be enrolled;
33.11 	(3) that the applicant employs a sufficient number of
33.12 	qualified teaching personnel to provide the educational programs
33.13 	contemplated;
33.14 	(4) that the school has an organizational framework with
33.15 	administrative and instructional personnel to provide the
33.16 	programs and services it intends to offer;
33.17 	(5) that the premises and conditions under which the
33.18 	students work and study are sanitary, healthful, and safe,
33.19 	according to modern standards;
33.20 	(6) that the quality and content of each occupational
33.21 	course or program of study provides education and adequate
33.22 	preparation to enrolled students for entry level positions in
33.23 	the occupation for which prepared;
33.24 	(7) that the living quarters which are owned, maintained,
33.25 	recommended,or approved by the applicant for students are
33.26 	sanitary and safe;
33.27 	(8) that the contract or enrollment agreement used by the
33.28 	school complies with the provisions in section 141.265;
33.29 	(9) that contracts and agreements do not contain a wage
33.30 	assignment provision or a confession of judgment clause; and
33.31 	(10) that there has been no adjudication of fraud or
33.32 	misrepresentation in any criminal, civil, or administrative
33.33 	proceeding in any jurisdiction against the school or its owner,
33.34 	officers, agents, or sponsoring organization.

33.35 	Sec. 5. Minnesota Statutes 2004, section 141.25,
33.36 	subdivision 8, is amended to read:
34.1 		Subd. 8.Fees and terms of license.  An application for
34.2 	an initial license under sections 141.21 to 141.35 shall be
34.3 	accompanied by a nonrefundable application fee established by
34.4 	the office as provided in section 141.255that is sufficient to
34.5 	recover, but not exceed, its the administrative costs of the
34.6 	office.
34.7 	All licenses shall expire one year from the date issued by
34.8 	the office, except as provided in section 141.251.

34.9 	Sec. 6. Minnesota Statutes 2004, section 141.25,
34.10 	subdivision 9, is amended to read:
34.11 		Subd. 9.Catalog, brochure, or electronic display.
 34.12 	Before a license is issued to a school, the school shall furnish
34.13 	to the office a catalog, brochure, or electronic display
34.14 	including:
34.15 	(1) identifying data, such as volume number and date of
34.16 	publication;
34.17 	(2) name and address of the school and its governing body
34.18 	and officials;
34.19 	(3) a calendar of the school showing legal holidays,
34.20 	beginning and ending dates of each course quarter, term, or
34.21 	semester, and other important dates;
34.22 	(4) the school policy and regulations on enrollment
34.23 	including dates and specific entrance requirements for each
34.24 	program;
34.25 	(5) the school policy and regulations about leave,
34.26 	absences, class cuts, make-up work, tardiness, and interruptions
34.27 	for unsatisfactory attendance;
34.28 	(6) the school policy and regulations about standards of
34.29 	progress for the student including the grading system of the
34.30 	school, the minimum grades considered satisfactory, conditions
34.31 	for interruption for unsatisfactory grades or progress, a
34.32 	description of any probationary period allowed by the school,
34.33 	and conditions of reentrance for those dismissed for
34.34 	unsatisfactory progress;
34.35 	(7) the school policy and regulations about student conduct
34.36 	and conditions for dismissal for unsatisfactory conduct;
35.1 	(8) a detailed schedule of fees, charges for tuition,
35.2 	books, supplies, tools, student activities, laboratory fees,
35.3 	service charges, rentals, deposits, and all other charges;
35.4 	(9) the school policy and regulations, including an
35.5 	explanation of section 141.271, about refunding tuition, fees,
35.6 	and other charges if the student does not enter the program,
35.7 	withdraws from the program, or the program is discontinued;
35.8 	(10) a description of the available facilities and
35.9 	equipment;
35.10 	(11) a course outline syllabus for each course offered
35.11 	showing course objectives, subjects or units in the course, type
35.12 	of work or skill to be learned, and approximate time, hours, or
35.13 	credits to be spent on each subject or unit;
35.14 	(12) the school policy and regulations about granting
35.15 	credit for previous education and preparation;
35.16 	(13) a procedure for investigating and resolving student
35.17 	complaints; and
35.18 	(14) the name and address of the Minnesota Higher Education
35.19 	Services Office.
35.20 	A school that is exclusively a distance education school is
35.21 	exempt from clauses (3) and (5).

35.22 	Sec. 7. Minnesota Statutes 2004, section 141.25,
35.23 	subdivision 12, is amended to read:
35.24 		Subd. 12.Permanent records.  A school licensed under
35.25 	this chapter and located in Minnesota shall maintain a permanent
35.26 	record for each student for 50 years from the last date of the
35.27 	student's attendance.  A school licensed under this chapter and
35.28 	offering distance instruction to a student located in Minnesota
35.29 	shall maintain a permanent record for each Minnesota student for
35.30 	50 years from the last date of the student's attendance.
35.31 	Records include school transcripts, documents, and files
35.32 	containing student data about academic credits earned, courses
35.33 	completed, grades awarded, degrees awarded, and periods of
35.34 	attendance.  To preserve permanent records, a school shall
35.35 	submit a plan that meets the following requirements:
35.36 	(1) at least one copy of the records must be held in a
36.1 	secure, fireproof depository;
36.2 	(2) an appropriate official must be designated to provide a
36.3 	student with copies of records or a transcript upon request;
36.4 	(3) an alternative method, approved by the office,of
36.5 	complying with clauses (1) and (2) must be established if the
36.6 	school ceases to exist; and
36.7 	(4) a continuous surety bond must be filed with the office
36.8 	in an amount not to exceed $20,000 if the school has no binding
36.9 	agreement for preserving student records or a trust must be
36.10 	arranged if the school ceases to exist.

36.11 	Sec. 8. Minnesota Statutes 2004, section 141.251, is
36.12 	amended to read:
36.13 	141.251 LICENSE RENEWAL.
36.14 		Subdivision 1.Application. Application for renewal of a
36.15 	license must be made at least 30 60 days before expiration of
36.16 	the current license on a form provided by the office.  A renewal
36.17 	application shall be accompanied by a nonrefundable fee
36.18 	established by the office as provided in section 141.255that is
36.19 	sufficient to recover, but does not exceed, its the 
36.20 	administrative costs of the office.
36.21 		Subd. 2.Conditions. The office shall adopt rules
36.22 	establishing the conditions for renewal of a license.  The
36.23 	conditions shall permit two levels of renewal based on the
36.24 	record of the school.  A school that has demonstrated the
36.25 	quality of its program and operation through longevity and
36.26 	performance in the state may renew its license based on a
36.27 	relaxed standard of scrutiny.  A school that has been in
36.28 	operation in Minnesota for a limited period of time or that has
36.29 	not performed adequately on performance indicators shall renew
36.30 	its license based on a strict standard of scrutiny.  The office
36.31 	shall specify minimum longevity standards and performance
36.32 	indicators that must be met before a school may be permitted to
36.33 	operate under the relaxed standard of scrutiny.  The performance
36.34 	indicators used in this determination shall include, but not be
36.35 	limited to:  degree granting status, regional or national
36.36 	accreditation, loan default rates, placement rate of graduates,
37.1 	student withdrawal rates, audit results, student complaints, and
37.2 	school status with the United States Department of Education.
37.3 	Schools that meet the requirements established in rule shall be
37.4 	required to submit a full relicensure report once every four
37.5 	years, and in the interim years will be exempt from the
37.6 	requirements of section 141.25, subdivision 3, clauses (4), (5),
37.7 	and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and
37.8 	4880.2100, subpart 4.

37.9 	Sec. 9. [141.255] FEES.
37.10 		Subdivision 1.Initial licensure fee. The office
37.11 	processing fee for an initial licensure application is:
37.12 	(1) $1,500 for a school that will offer no more than one
37.13 	program during its first year of operation;
37.14 	(2) $2,000 for a school that will offer two or more
37.15 	nondegree level programs during its first year of operation; and 
37.16 	(3) $2,500 for a school that will offer two or more degree
37.17 	level programs during its first year of operation.
37.18 		Subd. 2.Renewal licensure fee; late fee. (a) The office
37.19 	processing fee for a renewal licensure application is:
37.20 	(1) for a category A school, as determined by the office,
37.21 	the fee is $865 if the school offers one program or $1,150 if
37.22 	the school offers two or more programs; and 
37.23 	(2) for a category B or C school, as determined by the
37.24 	office, the fee is $430 if the school offers one program or $575
37.25 	if the school offers two or more programs.
37.26 	(b) If a license renewal application is not received by the
37.27 	office by the close of business at least 60 days before the
37.28 	expiration of the current license, a late fee of $250 per day
37.29 	shall be assessed.
37.30 		Subd. 3.Degree level addition fee. The office
37.31 	processing fee for adding a degree level to an existing program
37.32 	is $2,000 per program.
37.33 		Subd. 4.Program addition fee. The office processing fee
37.34 	for adding a program that represents a significant departure in
37.35 	the objectives, content, or method of delivery of programs that
37.36 	are currently offered by the school is $500 per program.
38.1 		Subd. 5.Visit or consulting fee. If the office
38.2 	determines that a fact-finding visit or outside consultant is
38.3 	necessary to review or evaluate any new or revised program, the
38.4 	office shall be reimbursed for the expenses incurred related to
38.5 	the review as follows:
38.6 	(1) $300 for the team base fee or for a paper review
38.7 	conducted by a consultant if the office determines that a
38.8 	fact-finding visit is not required;
38.9 	(2) $300 for each day or part thereof on site per team
38.10 	member; and 
38.11 	(3) the actual cost of customary meals, lodging, and
38.12 	related travel expenses incurred by team members.
38.13 		Subd. 6.Modification fee. The fee for modification of
38.14 	any existing program is $100 and is due if there is:
38.15 	(1) an increase or decrease of 25 percent or more, from the
38.16 	original date of program approval, in clock hours, credit hours,
38.17 	or calendar length of an existing program;
38.18 	(2) a change in academic measurement from clock hours to
38.19 	credit hours or vice versa; or 
38.20 	(3) an addition or alteration of courses that represent a
38.21 	25 percent change or more in the objectives, content, or methods
38.22 	of delivery.
38.23 		Subd. 7.Solicitor permit fee. The solicitor permit fee
38.24 	is $350 and must be paid annually.
38.25 		Subd. 8.Multiple location fee. Schools wishing to
38.26 	operate at multiple locations must pay:
38.27 	(1) $250 per location, for two to five locations; and 
38.28 	(2) $50 per location, for six or more locations.
38.29 		Subd. 9.Student transcript fee. The fee for a student
38.30 	transcript requested from a closed school whose records are held
38.31 	by the office is $10, with a maximum of five transcripts per
38.32 	request.
38.33 		Subd. 10.Public office documents; copies. The office
38.34 	shall establish rates for copies of any public office document.

38.35 	Sec. 10. Minnesota Statutes 2004, section 141.26,
38.36 	subdivision 5, is amended to read:
39.1 		Subd. 5.Fee.  The initial and renewal application for
39.2 	each permit shall be accompanied by a nonrefundable fee as
39.3 	established by the office under section 141.255.

39.4 	Sec. 11. Minnesota Statutes 2004, section 141.271, is
39.5 	amended by adding a subdivision to read:
39.6 		Subd. 1b.Short-term programs. Licensed schools
39.7 	conducting programs not exceeding 40 hours in length shall not
39.8 	be required to make a full refund once the programs have
39.9 	commenced and shall be allowed to prorate any refund based on
39.10 	the actual length of the program as stated in the school catalog
39.11 	or advertisements and the number of hours attended by the
39.12 	student.

39.13 	Sec. 12. Minnesota Statutes 2004, section 141.271,
39.14 	subdivision 4, is amended to read:
39.15 		Subd. 4.Resident schools.  When a student has been
39.16 	accepted by a school offering a resident program and gives
39.17 	written notice of cancellation, or the school has actual notice
39.18 	of a student's nonattendance after the start of the period of
39.19 	instruction for which the student has been charged, but before
39.20 	completion of 75 percent of the period of instruction, the
39.21 	amount charged for tuition, fees, and all other charges shall be
39.22 	prorated based on number of days in the term as a portion of the
39.23 	total charges for tuition, fees, and all other charges.  An
39.24 	additional 25 percent of the total cost of the period of
39.25 	instruction may be added, but shall not exceed $100.  After
39.26 	completion of 75 percent of the period of instruction for which
39.27 	the student has been charged, no refunds are required.

39.28 	Sec. 13. Minnesota Statutes 2004, section 141.271,
39.29 	subdivision 7, is amended to read:
39.30 		Subd. 7.Equipment and supplies.  The fair market retail
39.31 	price, if separately stated in the catalog and contract or
39.32 	enrollment agreement, of equipment or supplies furnished to the
39.33 	student, which the student fails to return in condition suitable
39.34 	for resale, and which may reasonably be resold,within ten
39.35 	business days following cancellation may be retained by the
39.36 	school and may be deducted from the total cost for tuition, fees
40.1 	and all other charges when computing refunds.
40.2 	An overstatement of the fair market retail price of any
40.3 	equipment or supplies furnished the student shall be considered
40.4 	inconsistent with this provision.

40.5 	Sec. 14. Minnesota Statutes 2004, section 141.271,
40.6 	subdivision 10, is amended to read:
40.7 		Subd. 10.Cancellation occurrence.  Written notice of
40.8 	cancellation shall take place on the date the letter of
40.9 	cancellation is postmarked or, in the cases where the notice is
40.10 	hand carried, it shall occur on the date the notice is delivered
40.11 	to the school. If a student has not attended classes for a
40.12 	period of 21 consecutive days, the student is considered to have
40.13 	withdrawn from school for all purposes as of the student's last
40.14 	documented date of attendance.

40.15 	Sec. 15. Minnesota Statutes 2004, section 141.271, is
40.16 	amended by adding a subdivision to read:
40.17 		Subd. 14.Closed school. In the event a school closes
40.18 	for any reason during a term and interrupts and terminates
40.19 	classes during that term, all tuition for the term shall be
40.20 	refunded to the students or the appropriate state or federal
40.21 	agency or private lender that had provided any funding for the
40.22 	term and any outstanding obligation of the student for the term
40.23 	is canceled.

40.24 	Sec. 16. Minnesota Statutes 2004, section 141.28,
40.25 	subdivision 1, is amended to read:
40.26 		Subdivision 1.Not to advertise state approval.  Schools,
40.27 	agents of schools, and solicitors may not advertise or represent
40.28 	in writing or orally that such school is approved or accredited
40.29 	by the state of Minnesota, except that any school, agent, or
40.30 	solicitor may advertise that the school and solicitor have been
40.31 	duly licensed by the state.using the following language:
40.32 	"(Name of school) is licensed as a private career school with
40.33 	the Minnesota Higher Education Services Office.  Licensure is
40.34 	not an endorsement of the institution.  Credits earned at the
40.35 	institution may not transfer to all other institutions.  The
40.36 	educational programs may not meet the needs of every student or
41.1 	employer." 

41.2 	Sec. 17. Minnesota Statutes 2004, section 141.28, is
41.3 	amended by adding a subdivision to read:
41.4 		Subd. 6.Financial aid payments. (a) All schools must
41.5 	collect, assess, and distribute funds received from loans or
41.6 	other financial aid as provided in this subdivision.
41.7 	(b) Student loans or other financial aid funds received
41.8 	from federal, state, or local governments or administered in
41.9 	accordance with federal student financial assistance programs
41.10 	under title IV of the Higher Education Act of 1965, as amended,
41.11 	United States Code, title 20, chapter 28, must be collected and
41.12 	applied as provided by applicable federal, state, or local law
41.13 	or regulation.
41.14 	(c) Student loans or other financial aid assistance
41.15 	received from a bank, finance or credit card company, or other
41.16 	private lender must be collected or disbursed as provided in
41.17 	paragraphs (d) and (e).
41.18 	(d) Loans or other financial aid payments for amounts
41.19 	greater than $3,000 must be disbursed:
41.20 	(1) in two equal disbursements, if the course or term
41.21 	length is less than six months.  The loan or payment amounts may
41.22 	be disbursed no earlier than the first day the student attends
41.23 	class with the remainder to be disbursed halfway through the
41.24 	class or term;
41.25 	(2) in three equal disbursements, if the course or term
41.26 	length is more than six months, but less than 12 months.  The
41.27 	loan or payment amounts may be disbursed no earlier than the
41.28 	first day the student attends class, one-third of the way
41.29 	through the class or term, and two-thirds of the way through the
41.30 	class or term; or 
41.31 	(3) in four equal disbursements, if the course or term
41.32 	length is greater than 12 months.  The loan or payment amounts
41.33 	may be disbursed no earlier than the first day a student attends
41.34 	class, one-quarter of the way through the class or term, halfway
41.35 	through the class or term, and three-fourths of the way through
41.36 	the class or term.
42.1 	(e) Loans or other financial aid payments for amounts less
42.2 	than $3,000 may be disbursed as a single disbursement on the
42.3 	first day a student attends class, regardless of course length.
42.4 	(f) No school may enter into a contract or agreement with,
42.5 	or receive any money from, a bank, finance or credit card
42.6 	company, or other private lender, unless the private lender
42.7 	follows the requirements for disbursements provided in
42.8 	paragraphs (d) and (e).

42.9 	Sec. 18. Minnesota Statutes 2004, section 141.29,
42.10 	subdivision 3, is amended to read:
42.11 		Subd. 3.Powers and duties.  The office shall have (in
42.12 	addition to the powers and duties now vested therein by law) the
42.13 	following powers and duties:
42.14 	(a) To negotiate and enter into interstate reciprocity
42.15 	agreements with similar agencies in other states, if in the
42.16 	judgment of the office such agreements are or will be helpful in
42.17 	effectuating the purposes of Laws 1973, Chapter 714;
42.18 	(b) To grant conditional school license for periods of less
42.19 	than one year if in the judgment of the office correctable
42.20 	deficiencies exist at the time of application and when refusal
42.21 	to issue school license would adversely affect currently
42.22 	enrolled students;
42.23 	(c) The office may upon its own motion, and shall upon the
42.24 	verified complaint in writing of any person setting forth fact
42.25 	which, if proved, would constitute grounds for refusal or
42.26 	revocation under Laws 1973, Chapter 714, investigate the actions
42.27 	of any applicant or any person or persons holding or claiming to
42.28 	hold a license or permit.  However, before proceeding to a
42.29 	hearing on the question of whether a license or permit shall be
42.30 	refused, revoked or suspended for any cause enumerated in
42.31 	subdivision 1, the office may shall grant a reasonable time to
42.32 	the holder of or applicant for a license or permit to correct
42.33 	the situation.  If within such time the situation is corrected
42.34 	and the school is in compliance with the provisions of this
42.35 	chapter, no further action leading to refusal, revocation, or
42.36 	suspension shall be taken.

43.1 	Sec. 19. Minnesota Statutes 2004, section 141.30, is
43.2 	amended to read:
43.3 	141.30 INSPECTION.
43.4 	(a) The office or a delegate may inspect the instructional
43.5 	books and records, classrooms, dormitories, tools, equipment and
43.6 	classes of any school or applicant for license at any reasonable
43.7 	time.  The office may require the submission of a certified
43.8 	public audit, or if there is no such audit available the office
43.9 	or a delegate may inspect the financial books and records of the
43.10 	school.  In no event shall such financial information be used by
43.11 	the office to regulate or set the tuition or fees charged by the
43.12 	school.
43.13 	(b) Data obtained from an inspection of the financial
43.14 	records of a school or submitted to the office as part of a
43.15 	license application or renewal are nonpublic data as defined in
43.16 	section 13.02, subdivision 9.  Data obtained from inspections
43.17 	may be disclosed to other members of the office, to law
43.18 	enforcement officials, or in connection with a legal or
43.19 	administrative proceeding commenced to enforce a requirement of
43.20 	law.

43.21 	Sec. 20. Minnesota Statutes 2004, section 141.35, is
43.22 	amended to read:
43.23 	141.35 EXEMPTIONS.
43.24 	Sections 141.21 to 141.35 shall not apply to the following:
43.25 	(1) public postsecondary institutions;
43.26 	(2) private postsecondary institutions registered under
43.27 	sections 136A.61 to 136A.71 that are nonprofit, or that are for
43.28 	profit and registered under sections 136A.61 to 136A.71 as of
43.29 	December 31, 1998, or are approved to offer exclusively
43.30 	baccalaureate or postbaccalaureate programs;
43.31 	(3) schools of nursing accredited by the state Board of
43.32 	Nursing or an equivalent public board of another state or
43.33 	foreign country;
43.34 	(4) private schools complying with the requirements of
43.35 	section 120A.22, subdivision 4;
43.36 	(5) courses taught to students in a valid apprenticeship
44.1 	program taught by or required by a trade union;
44.2 	(6) schools exclusively engaged in training physically or
44.3 	mentally handicapped persons for the state of Minnesota;
44.4 	(7) schools licensed by boards authorized under Minnesota
44.5 	law to issue licenses;
44.6 	(8) schools and educational programs, or training programs,
44.7 	contracted for by persons, firms, corporations, government
44.8 	agencies, or associations, for the training of their own
44.9 	employees, for which no fee is charged the employee;
44.10 	(9) schools engaged exclusively in the teaching of purely
44.11 	avocational, recreational, or remedial subjects as determined by
44.12 	the office;
44.13 	(10) driver training schools and instructors as defined in
44.14 	section 171.33, subdivisions 1 and 2;
44.15 	(11) classes, courses, or programs conducted by a bona fide
44.16 	trade, professional, or fraternal organization, solely for that
44.17 	organization's membership;
44.18 	(12) programs in the fine arts provided by organizations
44.19 	exempt from taxation under section 290.05 and registered with
44.20 	the attorney general under chapter 309.  For the purposes of
44.21 	this clause, "fine arts" means activities resulting in artistic
44.22 	creation or artistic performance of works of the imagination
44.23 	which are engaged in for the primary purpose of creative
44.24 	expression rather than commercial sale or employment.  In making
44.25 	this determination the office may seek the advice and
44.26 	recommendation of the Minnesota Board of the Arts;
44.27 	(13) classes, courses, or programs intended to fulfill the
44.28 	continuing education requirements for licensure or certification
44.29 	in a profession, that have been approved by a legislatively or
44.30 	judicially established board or agency responsible for
44.31 	regulating the practice of the profession, and that are offered
44.32 	primarily exclusively to an individual practicing the
44.33 	profession;
44.34 	(14) classes, courses, or programs intended to prepare
44.35 	students to sit for undergraduate, graduate, postgraduate, or
44.36 	occupational licensing and occupational entrance examinations;
45.1 	(15) classes, courses, or programs providing 16 or fewer
45.2 	clock hours of instruction that are not part of the curriculum
45.3 	for an occupation or entry level employment;
45.4 	(16) classes, courses, or programs providing instruction in
45.5 	personal development, modeling, or acting;
45.6 	(17) training or instructional programs, in which one
45.7 	instructor teaches an individual student, that are not part of
45.8 	the curriculum for an occupation or are not intended to prepare
45.9 	a person for entry level employment; and
45.10 	(18) schools with no physical presence in Minnesota, as
45.11 	determined by the office,engaged exclusively in offering
45.12 	distance instruction that are located in and regulated by other
45.13 	states or jurisdictions.

45.14 	ARTICLE 4
45.15 	FACILITIES AUTHORITY MERGER

45.16 	Section 1. FACILITIES AUTHORITY; MERGER.
 45.17 	The authority, duties, and unexpended balance of any funds
45.18 	collected pursuant to Minnesota Statutes, section 136A.29,
45.19 	subdivision 12, of the Minnesota Higher Education Facilities
45.20 	Authority are transferred to the Higher Education Services
45.21 	Office.  Minnesota Statutes, section 15.039, applies to the
45.22 	transfer of responsibilities under this section.

45.23 	Sec. 2. REVISOR INSTRUCTION.
 45.24 	The revisor of statutes shall prepare a bill for
45.25 	introduction in the 2006 regular legislative session making any
45.26 	technical changes to Minnesota Statutes and Minnesota Rules made
45.27 	necessary by section 1.

45.28 	Sec. 3. REPEALER.
 45.29 	Minnesota Statutes 2004, sections 136A.25 and 136A.26, are
45.30 	repealed.

45.31 	Sec. 4. EFFECTIVE DATE.
 45.32 	Sections 1 to 3 are effective July 1, 2005.