1.1 	A bill for an act
1.2 	relating to higher education; providing funding for
1.3 	the University of Minnesota, the Minnesota State
1.4 	Colleges and Universities, the Higher Education
1.5 	Services Office, and the Mayo Medical Foundation;
1.6 	providing for the mission of state universities;
1.7 	regulating the marketing of credit cards to students;
1.8 	regulating the responsibilities of and changing the
1.9 	name of the Higher Education Services Office;
1.10 	regulating the state grant program and other financial
1.11 	aid programs; providing benefits for students entering
1.12 	active military service; providing assistance for
1.13 	low-income students to increase college awareness;
1.14 	regulating the selection of regents of the University
1.15 	of Minnesota; regulating the Minnesota college savings
1.16 	program; providing assistance to nursing students;
1.17 	creating a task force on postsecondary funding;
1.18 	creating a Rochester higher education development
1.19 	committee; regulating private career schools;
1.20 	appropriating money; amending Minnesota Statutes 2004,
1.21 	sections 135A.052, subdivision 1; 136A.01, subdivision
1.22 	2; 136A.031, subdivisions 2, 3, 5; 136A.121,
1.23 	subdivisions 2, 6, 9, 13, by adding subdivisions;
1.24 	136A.125, subdivision 2; 136A.1701, by adding
1.25 	subdivisions; 136F.02, subdivision 1; 136F.04,
1.26 	subdivision 4; 136G.03, subdivisions 3, 21a, 22, 32;
1.27 	136G.05, subdivision 8; 136G.09, subdivisions 11, 12;
1.28 	136G.11, subdivisions 1, 3, 13, by adding a
1.29 	subdivision; 136G.13, subdivisions 1, 5; 136G.14;
1.30 	137.0245, subdivision 3; 141.21, by adding a
1.31 	subdivision; 141.25, subdivisions 3, 5, 8, 9, 12;
1.32 	141.251; 141.26, subdivision 5; 141.271, subdivisions
1.33 	4, 7, 10, by adding subdivisions; 141.28, subdivision
1.34 	1, by adding a subdivision; 141.29, subdivision 3;
1.35 	141.30; 141.35; 299A.45, subdivisions 1, 4; proposing
1.36 	coding for new law in Minnesota Statutes, chapters
1.37 	135A; 136A; 137; 141; 144; 583; repealing Minnesota
1.38 	Statutes 2004, sections 136A.011; 136A.031,
1.39 	subdivision 1; Laws 1986, chapter 398, article 1,
1.40 	section 18, as amended; Minnesota Rules, parts
1.41 	4815.0100; 4815.0110; 4815.0120; 4815.0130; 4815.0140;
1.42 	4815.0150; 4815.0160; 4830.8100; 4830.8110; 4830.8120;
1.43 	4830.8130; 4830.8140; 4830.8150.
1.44 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1 	ARTICLE 1
2.2 	HIGHER EDUCATION APPROPRIATIONS

2.3 	Section 1. HIGHER EDUCATION APPROPRIATIONS.
 2.4 	The sums in the columns marked "APPROPRIATIONS" are added
2.5 	to, or, if shown in parentheses, are subtracted from the
2.6 	appropriations to the specified agencies in 2005 S.F. No. 1879,
2.7 	article 5, if enacted.  The appropriations are from the general
2.8 	fund, unless another fund is named, and are available for the
2.9 	fiscal year indicated for each purpose.  The figures "2006" and
2.10 	"2007," where used in this article, mean that the additions to
2.11 	or subtractions from the appropriations listed under them are
2.12 	for the fiscal year ending June 30, 2006, or June 30, 2007,
2.13 	respectively.  The "first year" is fiscal year 2006.  The
2.14 	"second year" is fiscal year 2007.  The "biennium" is fiscal
2.15 	years 2006 and 2007.
2.16 	SUMMARY BY FUND
2.17 	2006          2007           TOTAL
2.18 	General           ($   25,640,000)$  106,706,000 $   81,066,000
2.19 	SUMMARY BY AGENCY - ALL FUNDS
2.20 	2006          2007           TOTAL
2.21 	Higher Education
2.22 	Services Office         3,818,000      1,007,000      4,825,000
2.23 	Board of Trustees
2.24 	of the Minnesota
2.25 	State Colleges and
2.26 	Universities          (35,020,000)    29,780,000     (5,240,000)
2.27 	Board of Regents
2.28 	of the University
2.29 	of Minnesota            5,467,000     75,764,000     81,231,000
2.30 	Commissioner
2.31 	of Health                  95,000        155,000        250,000
2.32 	APPROPRIATIONS
2.33 	                                       Available for the Year
2.34 	                                           Ending June 30
2.35 	                                          2006         2007

2.36 	Sec. 2. HIGHER EDUCATION
2.37 	SERVICES OFFICE
 2.38 		Subdivision 1.Total
2.39 	Appropriation                     $    3,818,000 $    1,007,000
2.40 	The amounts that may be spent from this
2.41 	appropriation for each purpose are
2.42 	specified in the following subdivisions.
2.43 		Subd. 2.State Grants
3.1 	Notwithstanding 2005 S.F. No. 1879,
3.2 	article 5, section 2, subdivision 2, if
3.3 	enacted, the living and miscellaneous
3.4 	expense allowance is set at $5,280 in
3.5 	each year.
3.6 		Subd. 3.Child Care Grants              125,000        125,000
3.7 		Subd. 4.Intervention for College
3.8 	Attendance Program                       500,000        500,000
3.9 	For the purpose of new Minnesota
3.10 	Statutes, section 136A.861.  No more
3.11 	than $50,000 of this appropriation in
3.12 	each year may be used for
3.13 	administrative expenses.  This
3.14 	appropriation is added to the agency's
3.15 	permanent budget base.
3.16 		Subd. 5.United Family
3.17 	Medicine Residency                       360,000        360,000
3.18 	For a grant to the United Family
3.19 	Medicine residency program.  This
3.20 	appropriation shall be used to support
3.21 	18 resident physicians each year in
3.22 	family practice at United Family
3.23 	Medicine residency programs and shall
3.24 	prepare doctors to practice family care
3.25 	medicine in underserved rural and urban
3.26 	areas of the state.  It is intended
3.27 	that this program will improve health
3.28 	care in underserved communities,
3.29 	provide affordable access to
3.30 	appropriate medical care, and manage
3.31 	the treatment of patients in a more
3.32 	cost-effective manner.
3.33 		Subd. 6.Rochester Higher
3.34 	Education                              2,500,000          -0-
3.35 	(a) $200,000 is for the Rochester
3.36 	Higher Education Development Committee
3.37 	to carry out its planning activities.
3.38 	This is a onetime appropriation.
3.39 	(b) $2,300,000 is for a onetime
3.40 	appropriation that must be deposited
3.41 	into the Rochester higher education
3.42 	development account.  With the approval
3.43 	of the Higher Education Services
3.44 	Office, money in this account may be
3.45 	used to: (1) provide additional
3.46 	planning and development funds, if
3.47 	needed; (2) provide initial funding for
3.48 	academic program development; and (3)
3.49 	provide funding related to academic
3.50 	facilities, if needed. The
3.51 	appropriation under this paragraph is
3.52 	available until June 30, 2009.
3.53 		Subd. 7.Agency Administration          333,000         22,000
3.54 	Of this appropriation, $15,000 each
3.55 	year is for grants to increase
3.56 	campus-community collaboration and
3.57 	service learning statewide.  For each
3.58 	$1 in state funding, grant recipients
3.59 	must contribute $2 in campus or
3.60 	community-based support.
4.1 	Of this appropriation, $310,000 in the
4.2 	first year is for the Higher Education
4.3 	Services Office to upgrade computer
4.4 	program application software related to
4.5 	state grant awards.  This appropriation
4.6 	does not cancel but is available until
4.7 	expended.  This is a onetime
4.8 	appropriation and is not added to the
4.9 	agency's base.
4.10 	Of this appropriation, $8,000 in the
4.11 	first year and $7,000 in the second
4.12 	year is for increased dues for the
4.13 	Midwestern Higher Education Compact.
4.14 	This appropriation is ongoing and
4.15 	$15,000 is added to the agency's base.
4.16 		Subd. 8.Balance Forward
4.17 	A balance in the first year under this
4.18 	section does not cancel, but is
4.19 	available for the second year.
4.20 		Subd. 9.Transfers
4.21 	Notwithstanding 2005 S.F. No. 1879,
4.22 	article 5, section 2, subdivision 13,
4.23 	if enacted, the higher education
4.24 	services office may transfer
4.25 	unencumbered balances from the
4.26 	appropriations in this section and in
4.27 	2005 S.F. No. 1879, article 5, section
4.28 	2, if enacted, to the state grant
4.29 	appropriation, the child care grants
4.30 	appropriation, and the interstate
4.31 	tuition reciprocity appropriation.
4.32 		Subd. 10.Reporting
4.33 	Notwithstanding 2005 S.F. No. 1879,
4.34 	article 5, section 2, subdivision 14,
4.35 	if enacted, the higher education
4.36 	services office shall evaluate and
4.37 	report quarterly on state financial aid
4.38 	expenditures and unexpended balances to
4.39 	the chairs of the higher education
4.40 	finance committees of the senate and
4.41 	house of representatives and the
4.42 	commissioner of finance.  By November 1
4.43 	and February 15, the services office
4.44 	shall provide updated state grant
4.45 	spending projections taking into
4.46 	account the most current and projected
4.47 	enrollment and tuition and fee
4.48 	information, economic conditions, and
4.49 	other relevant factors.

4.50 	Sec. 3. BOARD OF TRUSTEES OF THE
4.51 	MINNESOTA STATE COLLEGES AND UNIVERSITIES
 4.52 		Subdivision 1.Total
4.53 	Appropriation                        (35,020,000)    29,780,000
4.54 	The amounts that may be spent from this
4.55 	appropriation for each purpose are
4.56 	specified in the following subdivision.
4.57 		Subd. 2.Estimated Expenditures
4.58 	and Appropriations
4.59 	Notwithstanding 2005 S.F. No. 1879,
5.1 	article 5, section 3, subdivision 2, if
5.2 	enacted, the legislature estimates that
5.3 	instructional expenditures will be
5.4 	$547,942,000 in the first year and
5.5 	$553,354,000 in the second year.  The
5.6 	legislature estimates that
5.7 	noninstructional expenditures will be
5.8 	$59,532,000 in the first year and
5.9 	$60,120,000 in the second year.
5.10 	This appropriation includes funding for
5.11 	the recurring enrollment adjustment and
5.12 	money to strengthen and expand the
5.13 	Minnesota online program, increase the
5.14 	capacity for training nurses and
5.15 	teachers, provide for the management
5.16 	education needs of farm and small
5.17 	business owners, provide services and
5.18 	outreach to underserved populations,
5.19 	provide needed repair and replacement
5.20 	of facilities, and encourage and reward
5.21 	excellent performance by faculty or
5.22 	staff.
5.23 	The Board of Trustees of the Minnesota
5.24 	State Colleges and Universities may not
5.25 	in the 2005-2006 and 2006-2007 academic
5.26 	years increase tuition more than four
5.27 	percent above the level for the
5.28 	previous academic year.

5.29 	Sec. 4. BOARD OF REGENTS OF THE
5.30 	UNIVERSITY OF MINNESOTA
 5.31 		Subdivision 1.Total
5.32 	Appropriation                          5,467,000     75,764,000
5.33 	The amounts that may be spent from this
5.34 	appropriation for each purpose are
5.35 	specified in the following subdivisions.
5.36 		Subd. 2.Operations and
5.37 	Maintenance
5.38 	5,467,000     75,764,000
5.39 	Estimated Expenditures
5.40 	and Appropriations
5.41 	Notwithstanding 2005 S.F. No. 1879,
5.42 	article 5, section 4, subdivision 2, if
5.43 	enacted, the legislature estimates that
5.44 	instructional expenditures will be
5.45 	$303,539,000 in the first year and
5.46 	$318,209,000 in the second year.  The
5.47 	legislature estimates that
5.48 	noninstructional expenditures will be
5.49 	$292,805,000 the first year and
5.50 	$306,956,000 in the second year.
5.51 	This appropriation includes funding for
5.52 	the recurring enrollment adjustment and
5.53 	the following initiatives:  Biosciences
5.54 	for a Healthy Society to advance the
5.55 	university's expertise and to increase
5.56 	the university's competitiveness in
5.57 	leveraging new funding from federal and
5.58 	private sources; Preparing Students for
5.59 	the 21st Century to enhance the ability
5.60 	of the university to attract and retain
5.61 	exceptional students; competitive
6.1 	compensation to enable the university
6.2 	to attract and retain quality faculty
6.3 	members; research support to provide
6.4 	resources for the university to
6.5 	maintain a competitive advantage in
6.6 	emerging and ongoing research
6.7 	initiatives; and 21st Century
6.8 	Technology to support enhancement to
6.9 	major university systems.
6.10 	This appropriation includes $4,000,000
6.11 	for outreach services to historically
6.12 	underserved students.
6.13 	This appropriation includes $68,000 in
6.14 	the first year and $67,000 in the
6.15 	second year for the information
6.16 	exchange program in the Minnesota
6.17 	Institute for Sustainable Agriculture.
6.18 	$135,000 is added to the university's
6.19 	base.

6.20 	Sec. 5. COMMISSIONER OF HEALTH           95,000        155,000
 6.21 	To the commissioner of health to
6.22 	implement new Minnesota Statutes,
6.23 	section 144.1498.  The funding base for
6.24 	this program is $219,000 in fiscal year
6.25 	2008 and $280,000 in fiscal year 2009.

6.26 	ARTICLE 2
6.27 	RELATED PROVISIONS

6.28 	Section 1. Minnesota Statutes 2004, section 135A.052,
6.29 	subdivision 1, is amended to read:
6.30 		Subdivision 1.Statement of missions.  The legislature
6.31 	recognizes each type of public postsecondary institution to have
6.32 	a distinctive mission within the overall provision of public
6.33 	higher education in the state and a responsibility to cooperate
6.34 	with each other.  These missions are as follows:
6.35 	(1) the technical colleges shall offer vocational training
6.36 	and education to prepare students for skilled occupations that
6.37 	do not require a baccalaureate degree;
6.38 	(2) the community colleges shall offer lower division
6.39 	instruction in academic programs, occupational programs in which
6.40 	all credits earned will be accepted for transfer to a
6.41 	baccalaureate degree in the same field of study, and remedial
6.42 	studies, for students transferring to baccalaureate institutions
6.43 	and for those seeking associate degrees;
6.44 	(3) consolidated community technical colleges shall offer
6.45 	the same types of instruction, programs, certificates, diplomas,
6.46 	and degrees as the technical colleges and community colleges
7.1 	offer;
7.2 	(4) the state universities shall offer undergraduate and
7.3 	graduate instruction through the master's applied doctoral 
7.4 	degree, including specialist certificates, in the liberal arts
7.5 	and sciences and professional education; and
7.6 	(5) the University of Minnesota shall offer undergraduate,
7.7 	graduate, and professional instruction through the doctoral
7.8 	degree, and shall be the primary state supported academic agency
7.9 	for research and extension services.
7.10 	It is part of the mission of each system that within the
7.11 	system's resources the system's governing board and chancellor
7.12 	or president shall endeavor to:
7.13 	(a) prevent the waste or unnecessary spending of public
7.14 	money;
7.15 	(b) use innovative fiscal and human resource practices to
7.16 	manage the state's resources and operate the system as
7.17 	efficiently as possible;
7.18 	(c) coordinate the system's activities wherever appropriate
7.19 	with the activities of the other system and governmental
7.20 	agencies;
7.21 	(d) use technology where appropriate to increase system
7.22 	productivity, improve customer service, increase public access
7.23 	to information about the system, and increase public
7.24 	participation in the business of the system;
7.25 	(e) utilize constructive and cooperative labor-management
7.26 	practices to the extent otherwise required by chapters 43A and
7.27 	179A; and
7.28 	(f) recommend to the legislature appropriate changes in law
7.29 	necessary to carry out the mission of the system.
7.30 	
EFFECTIVE DATE. This section is effective the day
7.31 	following final enactment.

7.32 	Sec. 2. [135A.145] SALE OF STUDENT INFORMATION; MARKETING
7.33 	CREDIT CARDS TO STUDENTS.
7.34 		Subdivision 1.Prohibited practices. No public or
7.35 	private postsecondary educational institution in this state,
7.36 	including its agents, employees, student or alumni
8.1 	organizations, or affiliates, may:
8.2 	(1) sell, give, or otherwise transfer to any card issuer
8.3 	the name, address, telephone number, or other contact
8.4 	information of a student at the postsecondary educational
8.5 	institution without the student's consent; or 
8.6 	(2) enter into any agreement to market credit cards to
8.7 	students at a postsecondary educational institution.
8.8 	For purposes of this section, the terms "credit," "credit
8.9 	card," and "card issuer" have the meanings given them in the
8.10 	Truth in Lending Act, United States Code, title 15, section 1602.
8.11 		Subd. 2.Violations. The attorney general may seek the
8.12 	penalties and remedies available under section 8.31 against any
8.13 	person who violates this section.

8.14 	Sec. 3. [135A.165] DEAF STUDENTS; TUITION WAIVER.
8.15 	(a) For the purpose of this section, a "deaf person" means
8.16 	an individual with a hearing loss of such severity that the
8.17 	individual must depend primarily on visual communication, such
8.18 	as writing, lip reading, manual communication, and gestures.
8.19 	(b) A deaf person, who is a resident student as defined in
8.20 	section 136A.101, subdivision 8, is entitled to the waiver of
8.21 	tuition and fees remaining after deducting any federal or state
8.22 	grants or other public or private grants made to the person for
8.23 	the purpose of paying the tuition and fees at a Minnesota state
8.24 	college or university or the University of Minnesota.  A deaf
8.25 	person must receive either a federal Pell grant or a state grant
8.26 	under section 136A.121 for a term to receive a waiver for that
8.27 	term.

8.28 	Sec. 4. [135A.175] CAMPUS ACCESS ASSURANCE.
8.29 	The Board of Trustees of the Minnesota State Colleges and
8.30 	Universities and the Board of Regents of the University of
8.31 	Minnesota shall maintain access to campuses and students for
8.32 	purposes of military recruiting by the armed forces of the
8.33 	United States that is at least equal in quality and scope to the
8.34 	access to campuses and students that is provided to any other
8.35 	employer.

8.36 	Sec. 5. [135A.53] RESIDENT TUITION.
9.1 	(a) A student shall qualify for a resident tuition rate or
9.2 	its equivalent at state universities and colleges, including the
9.3 	University of Minnesota, if the student meets all of the
9.4 	following requirements:
9.5 	(1) high school attendance within the state for three or
9.6 	more years;
9.7 	(2) graduation from a state high school or attainment
9.8 	within the state of the equivalent of high school graduation;
9.9 	and 
9.10 	(3) registration as an entering student at, or current
9.11 	enrollment in, a public institution of higher education.
9.12 	(b) This section is in addition to any other statute, rule,
9.13 	or higher education institution regulation or policy providing
9.14 	eligibility for a resident tuition rate or its equivalent to a
9.15 	student.

9.16 	EFFECTIVE DATE. This section is effective the day
9.17 	following final enactment and applies to tuition for school
9.18 	terms commencing on or after that date.

9.19 	Sec. 6. Minnesota Statutes 2004, section 136A.01,
9.20 	subdivision 2, is amended to read:
9.21 		Subd. 2.Responsibilities.  The Higher Education Services
9.22 	Office is responsible for:
9.23 	(1) necessary state level administration of financial aid
9.24 	programs, including accounting, auditing, and disbursing state
9.25 	and federal financial aid funds, and reporting on financial aid
9.26 	programs to the governor and the legislature;
9.27 	(2) approval, registration, licensing, and financial aid
9.28 	eligibility of private collegiate and career schools, under
9.29 	sections 136A.61 to 136A.71 and chapter 141;
9.30 	(3) administering the Telecommunications Council under Laws
9.31 	1993, First Special Session chapter 2, article 5, section 2,the
9.32 	Learning Network of Minnesota, and the Statewide Library Task
9.33 	Force;
9.34 	(4) negotiating and administering reciprocity agreements;
9.35 	(5) publishing and distributing financial aid information
9.36 	and materials, and other information and materials under section
10.1 	136A.87, to students and parents;
10.2 	(6) collecting and maintaining student enrollment and
10.3 	financial aid data;
10.4 	(7) administering the federal programs that affect students
10.5 	and institutions on a statewide basis; and
10.6 	(8) prescribing policies, procedures, and rules under
10.7 	chapter 14 necessary to administer the programs under its
10.8 	supervision.

10.9 	Sec. 7. Minnesota Statutes 2004, section 136A.031,
10.10 	subdivision 2, is amended to read:
10.11 		Subd. 2.Higher education advisory council.  A Higher
10.12 	Education Advisory Council (HEAC) is established.  The HEAC is
10.13 	composed of the president of the University of Minnesota or
10.14 	designee; the chancellor of the Minnesota State Colleges and
10.15 	Universities or designee; the commissioner of education; the
10.16 	president of the Private College Council; a representative from
10.17 	the Minnesota Association of Private Postsecondary Schools 
10.18 	Career College Association; and a member appointed by the
10.19 	governor.  The HEAC shall (1) bring to the attention of the
10.20 	Higher Education Services Council Office any matters that the
10.21 	HEAC deems necessary, and (2) review and comment upon matters
10.22 	before the council.  The council shall refer all proposals to
10.23 	the HEAC before submitting recommendations to the governor and
10.24 	the legislature.  The council shall provide time for a report
10.25 	from the HEAC at each meeting of the council.

10.26 	Sec. 8. Minnesota Statutes 2004, section 136A.031,
10.27 	subdivision 3, is amended to read:
10.28 		Subd. 3.Student advisory council.  A Student Advisory
10.29 	Council (SAC) to the Higher Education Services Council Office is
10.30 	established.  The members of SAC shall include:  the chair of
10.31 	the University of Minnesota student senate; the state chair of
10.32 	the Minnesota State University Student Association; the
10.33 	president of the Minnesota State College Student Association and
10.34 	an officer of the Minnesota State College Student Association,
10.35 	one in a community college course of study and one in a
10.36 	technical college course of study; the president of the
11.1 	Minnesota Association of Private College Students; and a student
11.2 	who is enrolled in a private vocational school, to be appointed
11.3 	by the Minnesota Association of Private Postsecondary Schools 
11.4 	Career College Association.  A member may be represented by a
11.5 	student designee who attends an institution from the same system
11.6 	that the absent member represents.  The SAC shall select one of
11.7 	its members to serve as chair.
11.8 	The Higher Education Services Council Office shall inform
11.9 	the SAC of all matters related to student issues under
11.10 	consideration and shall refer all proposals to the SAC before
11.11 	taking action or sending the proposals to the governor or
11.12 	legislature.  The SAC shall report to the Higher Education
11.13 	Services Council Office quarterly and at other times that the
11.14 	SAC considers desirable.  The SAC shall determine its meeting
11.15 	times, but it shall also meet with the council office within 30
11.16 	days after the director's request for a meeting.
11.17 	The SAC shall:
11.18 	(1) bring to the attention of the Higher Education Services
11.19 	Council Office any matter that the SAC believes needs the
11.20 	attention of the council office;
11.21 	(2) make recommendations to the Higher Education Services
11.22 	Council Office as it finds appropriate;
11.23 	(3) appoint student members to the Higher Education
11.24 	Services Council Office advisory groups as provided in
11.25 	subdivision 4; and
11.26 	(4) provide any reasonable assistance to the council office.

11.27 	Sec. 9. Minnesota Statutes 2004, section 136A.031,
11.28 	subdivision 5, is amended to read:
11.29 		Subd. 5.Expiration.  Notwithstanding section 15.059,
11.30 	subdivision 5, the advisory groups established in this section
11.31 	expire on June 30, 2005 2007.

11.32 	Sec. 10. Minnesota Statutes 2004, section 136A.121,
11.33 	subdivision 2, is amended to read:
11.34 		Subd. 2.Eligibility for grants.  An applicant is
11.35 	eligible to be considered for a grant, regardless of the
11.36 	applicant's sex, creed, race, color, national origin, or
12.1 	ancestry, under sections 136A.095 to 136A.131 if the office
12.2 	finds that the applicant:
12.3 	(1) is a resident of the state of Minnesota;
12.4 	(2) is a graduate of a secondary school or its equivalent,
12.5 	or is 17 years of age or over, and has met all requirements for
12.6 	admission as a student to an eligible college or technical
12.7 	college of choice as defined in sections 136A.095 to 136A.131;
12.8 	(3) has met the financial need criteria established in
12.9 	Minnesota Rules;
12.10 	(4) is not in default, as defined by the office, of any
12.11 	federal or state student educational loan; and
12.12 	(5) is not more than 30 days in arrears for any in
12.13 	court-ordered child support payments owed to a that is collected
12.14 	or enforced by the public agency authority responsible for child
12.15 	support enforcement or, if the applicant is more than 30 days in
12.16 	arrears in court-ordered child support that is collected or
12.17 	enforced by the public authority responsible for child support
12.18 	enforcement, but is complying with a written payment
12.19 	agreement under section 518.553or order for arrearages. An
12.20 	agreement must provide for a repayment of arrearages at no less
12.21 	than 20 percent per month of the amount of the monthly child
12.22 	support obligation or no less than $30 per month if there is no
12.23 	current monthly child support obligation.  Compliance means that
12.24 	payments are made by the payment date.
12.25 	The director and the commissioner of human services shall
12.26 	develop procedures to implement clause (5).

12.27 	Sec. 11. Minnesota Statutes 2004, section 136A.121,
12.28 	subdivision 6, is amended to read:
12.29 		Subd. 6.Cost of attendance.  (a) The recognized cost of
12.30 	attendance consists of allowances specified in law for living
12.31 	and miscellaneous expenses, and an allowance for tuition and
12.32 	fees equal to the lesser of the average actual tuition and fees
12.33 	charged by the institution, or the tuition and fee maximums
12.34 	established in law.
12.35 	(b) For a student registering for less than full time, the
12.36 	office shall prorate the cost of attendance to the actual number
13.1 	of credits for which the student is enrolled.
13.2 	The recognized cost of attendance for a student who is
13.3 	confined to a Minnesota correctional institution shall consist
13.4 	of the tuition and fee component in paragraph (a), with no
13.5 	allowance for living and miscellaneous expenses.
13.6 	For the purpose of this subdivision, "fees" include only
13.7 	those fees that are mandatory and charged to full-time resident
13.8 	students attending the institution. Fees do not include charges
13.9 	for tools, equipment, computers, or other similar materials
13.10 	where the student retains ownership.  Fees include charges for
13.11 	these materials if the institution retains ownership.  Fees do
13.12 	not include optional or punitive fees.

13.13 	Sec. 12. Minnesota Statutes 2004, section 136A.121, is
13.14 	amended by adding a subdivision to read:
13.15 		Subd. 7a.Surplus appropriation. If the amount
13.16 	appropriated is determined by the office to be more than
13.17 	sufficient to fund projected grant demand in the second year of
13.18 	the biennium, the office may increase the living and
13.19 	miscellaneous expense allowance in the second year of the
13.20 	biennium to the extent of the excess.  The adjustment may be
13.21 	made one or more times.  In making the determination that there
13.22 	is more than sufficient funds, the office shall balance the need
13.23 	for sufficient resources to meet the projected demand for grants
13.24 	with the goal of fully allocating the appropriation for state
13.25 	grants.

13.26 	Sec. 13. Minnesota Statutes 2004, section 136A.121,
13.27 	subdivision 9, is amended to read:
13.28 		Subd. 9.Awards.  An undergraduate student who meets the
13.29 	office's requirements is eligible to apply for and receive a
13.30 	grant in any year of undergraduate study unless the student has
13.31 	obtained a baccalaureate degree or previously has been enrolled
13.32 	full time or the equivalent for eight semesters or the
13.33 	equivalent, excluding courses taken from a Minnesota school or
13.34 	postsecondary institution which is not participating in the
13.35 	state grant program and from which a student transferred no
13.36 	credit. A student who withdraws from enrollment for active
14.1 	military service is entitled to an additional semester or the
14.2 	equivalent of grant eligibility.A student enrolled in a
14.3 	two-year program at a four-year institution is only eligible for
14.4 	the tuition and fee maximums established by law for two-year
14.5 	institutions.

14.6 	Sec. 14. Minnesota Statutes 2004, section 136A.121,
14.7 	subdivision 13, is amended to read:
14.8 		Subd. 13.Deadline.  The deadline for the office to
14.9 	accept applications for state grants for a term is 14 30 days
14.10 	after the start of that term.
14.11 	
EFFECTIVE DATE. This section is effective the day
14.12 	following final enactment and is retroactive to July 1, 2003.
14.13 	An applicant who missed the 14-day deadline previously in effect
14.14 	between July 1, 2003, and June 30, 2005, but who met the 30-day
14.15 	deadline, has until September 1, 2005, to reapply.  Retroactive
14.16 	awards under this section must be made on a first come, first
14.17 	served funds available basis.

14.18 	Sec. 15. Minnesota Statutes 2004, section 136A.121, is
14.19 	amended by adding a subdivision to read:
14.20 		Subd. 19.Data. An eligible institution must provide to
14.21 	the office aggregate and distributional data on student
14.22 	enrollment, financial aid, financial, and other aggregate and
14.23 	other distributional data as determined by the director, to
14.24 	enable the office to carry out its responsibilities under
14.25 	chapters 136A and 141.

14.26 	Sec. 16. Minnesota Statutes 2004, section 136A.125,
14.27 	subdivision 2, is amended to read:
14.28 		Subd. 2.Eligible students. (a) An applicant is eligible
14.29 	for a child care grant if the applicant:
14.30 	(1) is a resident of the state of Minnesota;
14.31 	(2) has a child 12 years of age or younger, or 14 years of
14.32 	age or younger who is handicapped as defined in section 125A.02,
14.33 	and who is receiving or will receive care on a regular basis
14.34 	from a licensed or legal, nonlicensed caregiver;
14.35 	(3) is income eligible as determined by the office's
14.36 	policies and rules, but is not a recipient of assistance from
15.1 	the Minnesota family investment program;
15.2 	(4) has not earned a baccalaureate degree and has been
15.3 	enrolled full time less than eight semesters or the equivalent;
15.4 	(5) is pursuing a nonsectarian program or course of study
15.5 	that applies to an undergraduate degree, diploma, or
15.6 	certificate;
15.7 	(6) is enrolled at least half time in an eligible
15.8 	institution; and
15.9 	(7) is in good academic standing and making satisfactory
15.10 	academic progress.
15.11 	(b) A student who withdraws from enrollment for active
15.12 	military service is entitled to an additional semester or the
15.13 	equivalent of grant eligibility.

15.14 	Sec. 17. Minnesota Statutes 2004, section 136A.1701, is
15.15 	amended by adding a subdivision to read:
15.16 		Subd. 11.Data. An eligible institution must provide to
15.17 	the office aggregate and distributional data on student
15.18 	enrollment, financial aid, financial, and other aggregate and
15.19 	distributional data on data as determined by the director, to
15.20 	enable the office to carry out its responsibilities under
15.21 	chapters 136A and 141.

15.22 	Sec. 18. Minnesota Statutes 2004, section 136A.1701, is
15.23 	amended by adding a subdivision to read:
15.24 		Subd. 12.Eligible student. "Eligible student" means a
15.25 	student who is a Minnesota resident who is enrolled or accepted
15.26 	for enrollment at an eligible school in Minnesota or in another
15.27 	state or province.  Non-Minnesota residents are eligible
15.28 	students if they are enrolled or accepted for enrollment in a
15.29 	minimum of one course of at least 30 days in length during the
15.30 	academic year that requires physical attendance at an eligible
15.31 	school located in Minnesota.  Non-Minnesota resident students
15.32 	enrolled exclusively during the academic year in correspondence
15.33 	courses or courses offered over the Internet are not eligible
15.34 	students.  Non-Minnesota resident students not physically
15.35 	attending classes in Minnesota due to enrollment in a study
15.36 	abroad program for 12 months or less are eligible students.
16.1 	Non-Minnesota residents enrolled in study abroad programs
16.2 	exceeding 12 months are not eligible students.  For purposes of
16.3 	this section, an "eligible student" must also meet the
16.4 	eligibility requirements of section 136A.15, subdivision 8.

16.5 	Sec. 19. [136A.1703] INCOME-CONTINGENT LOANS.
16.6 	The office shall administer an income-contingent loan
16.7 	repayment program to assist graduates of Minnesota schools in
16.8 	medicine, dentistry, pharmacy, chiropractic medicine, public
16.9 	health, and veterinary medicine, and Minnesota residents
16.10 	graduating from optometry and osteopathy programs.  Applicant
16.11 	data collected by the office for this program may be disclosed
16.12 	to a consumer credit reporting agency under the same conditions
16.13 	as those that apply to the supplemental loan program under
16.14 	section 136A.162.  No new applicants may be accepted after June
16.15 	30, 1995.

16.16 	Sec. 20. [136A.1785] LOAN CAPITAL FUND.
16.17 	The office may deposit and hold assets derived from the
16.18 	operation of its student loan programs authorized by this
16.19 	chapter in a fund known as the loan capital fund.  Assets in the
16.20 	loan capital fund are available to the office solely for
16.21 	carrying out the purposes and terms of sections 136A.15 to
16.22 	136A.1702, including, but not limited to, making student loans
16.23 	authorized by this chapter, paying administrative expenses
16.24 	associated with the operation of its student loan programs,
16.25 	repurchasing defaulted student loans, and paying expenses in
16.26 	connection with the issuance of revenue bonds authorized under
16.27 	this chapter.  Assets in the loan capital fund may be invested
16.28 	as provided in sections 11A.24 and 136A.16, subdivision 8.  All
16.29 	interest and earnings from the investment of the loan capital
16.30 	fund inure to the benefit of the fund and are deposited into the
16.31 	fund.

16.32 	Sec. 21. [136A.861] INTERVENTION FOR COLLEGE ATTENDANCE
16.33 	PROGRAM GRANTS.
16.34 		Subdivision 1.Grants. The director of the Higher
16.35 	Education Services Office shall award grants to foster
16.36 	postsecondary attendance by providing outreach services to
17.1 	historically underserved groups of elementary and secondary
17.2 	students.  Grants must be awarded to programs that provide
17.3 	precollege services, including, but not limited to:
17.4 	(1) academic counseling;
17.5 	(2) mentoring;
17.6 	(3) fostering and improving parental involvement in
17.7 	planning for and facilitating a college education;
17.8 	(4) services for students with English as a second
17.9 	language;
17.10 	(5) academic enrichment activities;
17.11 	(6) tutoring;
17.12 	(7) career awareness and exploration;
17.13 	(8) orientation to college life;
17.14 	(9) assistance with high school course selection and
17.15 	information about college admission requirements;
17.16 	(10) financial aid counseling; and 
17.17 	(11) summer academic enrichment programs.
17.18 	Services may be provided by postsecondary institutions, school
17.19 	districts, businesses, foundations, professional organizations,
17.20 	community-based organizations, or others deemed appropriate by
17.21 	the director.
17.22 		Subd. 2.Eligible students. Eligible students include
17.23 	elementary and secondary students who meet one or more of the
17.24 	following criteria:
17.25 	(1) are counted under section 1124(c) of the Elementary and
17.26 	Secondary Education Act of 1965 (Title I);
17.27 	(2) are eligible for free or reduced-price lunch under the
17.28 	National School Lunch Act;
17.29 	(3) receive assistance under the Temporary Assistance for
17.30 	Needy Families Law (Title I of the Personal Responsibility and
17.31 	Work Opportunity Reconciliation Act of 1996); or 
17.32 	(4) are a member of a group traditionally underrepresented
17.33 	in higher education.
17.34 		Subd. 3.Application process. The director of the Higher
17.35 	Education Services Office shall develop a grant application
17.36 	process.  The director shall attempt to distribute grants in a
18.1 	manner that ensures that eligible students throughout the state
18.2 	have access to precollege services.
18.3 	The grant application must include, at a minimum, the
18.4 	following information:
18.5 	(1) a description of the characteristics of the students to
18.6 	be served;
18.7 	(2) a description of the services to be provided and a
18.8 	timeline for implementation of the activities;
18.9 	(3) a description of how the services provided will foster
18.10 	postsecondary attendance;
18.11 	(4) a description of how the services will be evaluated to
18.12 	determine whether the program goals were met; and 
18.13 	(5) other information as identified by the director.
18.14 	Grant recipients must specify both program and student outcome
18.15 	goals, and performance measures for each goal.
18.16 	Priority shall be given to collaborative efforts between two or
18.17 	more organizations.
18.18 		Subd. 4.Match required. Applicants are required to
18.19 	match the grant amount dollar-for-dollar.  The match may be in
18.20 	cash or an in-kind contribution.
18.21 		Subd. 5.Review committee. The director must establish
18.22 	and convene a grant selection committee to review applications
18.23 	and award grants.  The members of the committee may include
18.24 	representatives of postsecondary institutions, elementary and
18.25 	secondary education, organizations providing precollege outreach
18.26 	services, and others deemed appropriate by the director.
18.27 		Subd. 6.Program evaluation. Each grant recipient must
18.28 	annually submit a report to the Higher Education Services Office
18.29 	delineating its program and student outcome goals, and
18.30 	activities implemented to achieve the stated outcomes.  The
18.31 	goals must be clearly stated and measurable.  Grant recipients
18.32 	are required to collect, analyze, and report on participation
18.33 	and outcome data that enable the office to verify that the
18.34 	program goals were met.  The office shall maintain:
18.35 	(1) information about successful precollege program
18.36 	activities for dissemination to individuals throughout the state
19.1 	interested in adopting or replicating successful program
19.2 	practices; and 
19.3 	(2) data on the success of the funded projects in
19.4 	increasing the high school graduation and college participation
19.5 	rates of students served by the grant recipients.  The office
19.6 	may convene meetings of the grant recipients, as needed, to
19.7 	discuss issues pertaining to the implementation of precollege
19.8 	services.
19.9 		Subd. 7.Report. By January 15 of each odd-numbered
19.10 	year, the office shall submit a report to the committees in the
19.11 	legislature with jurisdiction over higher education finance
19.12 	regarding the grant recipients and their activities.  The report
19.13 	shall include information about the students served, the
19.14 	organizations providing services, program activities, program
19.15 	goals and outcomes, and program revenue sources and funding
19.16 	levels.

19.17 	Sec. 22. Minnesota Statutes 2004, section 136F.02,
19.18 	subdivision 1, is amended to read:
19.19 		Subdivision 1.Membership.  The board consists of 15 18 
19.20 	members appointed by the governor with the advice and consent of
19.21 	the senate. At least one member of the board shall have
19.22 	experience in and represent business and at least one member
19.23 	shall have experience in and represent organized labor.At
19.24 	least one member of the board must be a resident of each
19.25 	congressional district, except that congressional districts
19.26 	containing all or part of 17 or more counties shall be split in
19.27 	approximately half geographically along county lines and one
19.28 	member must be a resident of each half.  Three members must be
19.29 	students who are enrolled at least half time in a degree,
19.30 	diploma, or certificate program or have graduated from an
19.31 	institution governed by the board within one year of the date of
19.32 	appointment.  The student members shall include:  one member
19.33 	from a community college, one member from a state university,
19.34 	and one member from a technical college.  The remaining members
19.35 	must be appointed to represent the state at large.
19.36 	
EFFECTIVE DATE. This section is effective the day
20.1 	following final enactment.  Of the three members added to the
20.2 	board by this section, one shall be appointed for an original
20.3 	two-year term, one for a four-year term, and one for a six-year
20.4 	term.  The governor shall determine which term applies to an
20.5 	appointment.  After the original terms, all succeeding terms
20.6 	shall be six years.  If there is not a member representing
20.7 	business and labor respectively, as provided by this section,
20.8 	the governor shall make those appointments at the first
20.9 	opportunity to do so.

20.10 	Sec. 23. Minnesota Statutes 2004, section 136F.04,
20.11 	subdivision 4, is amended to read:
20.12 		Subd. 4.Recommendations.  Each student association shall
20.13 	recommend at least two and not more than four candidates for its
20.14 	student member.  By January 2 April 15 of the year in which its
20.15 	members' term expires, each student association shall submit its
20.16 	recommendations to the governor.  The governor is not bound by
20.17 	these recommendations.

20.18 	Sec. 24. Minnesota Statutes 2004, section 136G.03,
20.19 	subdivision 3, is amended to read:
20.20 		Subd. 3.Account owner.  "Account owner" means a person
20.21 	who enters into a participation agreement and is entitled
20.22 	to select or change conduct transactions on the account,
20.23 	including selecting and changing the beneficiary of an account
20.24 	or to receive and receiving distributions from the account for
20.25 	other than payment of qualified higher education expenses.

20.26 	Sec. 25. Minnesota Statutes 2004, section 136G.03,
20.27 	subdivision 21a, is amended to read:
20.28 		Subd. 21a.Minor trust account.  "Minor trust account"
20.29 	means a Uniform Gift to Minors Act account,or a Uniform
20.30 	Transfers to Minors Act account, or a trust instrument naming a
20.31 	minor person as beneficiary,created and operating under the
20.32 	laws of Minnesota or another state.

20.33 	Sec. 26. Minnesota Statutes 2004, section 136G.03,
20.34 	subdivision 22, is amended to read:
20.35 		Subd. 22.Nonqualified distribution.  "Nonqualified
20.36 	distribution" means a distribution made from an account other
21.1 	than (1) a qualified distribution; or (2) a distribution due to
21.2 	the death or disability of, or scholarship to, or attendance at
21.3 	a United States military academy by,a beneficiary.

21.4 	Sec. 27. Minnesota Statutes 2004, section 136G.03,
21.5 	subdivision 32, is amended to read:
21.6 		Subd. 32.Scholarship.  "Scholarship" means a
21.7 	scholarship,or educational assistance allowance, or payment
21.8 	under section 529(b)(3)(C) of the Internal Revenue Code.

21.9 	Sec. 28. Minnesota Statutes 2004, section 136G.05,
21.10 	subdivision 8, is amended to read:
21.11 		Subd. 8.Administration.  The director shall administer
21.12 	the program, including accepting and processing applications,
21.13 	maintaining account records, making payments, making matching
21.14 	grants under section 136G.11, and undertaking any other
21.15 	necessary tasks to administer the program.  The office may
21.16 	contract with one or more third parties to carry out some or all
21.17 	of these administrative duties, including promotion providing
21.18 	incentives and marketing of the program.  The office and the
21.19 	board may jointly contract with third-party providers, if the
21.20 	office and board determine that it is desirable to contract with
21.21 	the same entity or entities for administration and investment
21.22 	management.

21.23 	Sec. 29. Minnesota Statutes 2004, section 136G.09,
21.24 	subdivision 11, is amended to read:
21.25 		Subd. 11.Effect of plan changes on participation
21.26 	agreement.  Amendments to sections 136G.01 to 136G.13
21.27 	automatically amend the participation agreement.  Any amendments
21.28 	to the operating procedures and policies of the plan shall
21.29 	automatically amend the participation agreement 30 days after
21.30 	adoption by the office or the board.

21.31 	Sec. 30. Minnesota Statutes 2004, section 136G.09,
21.32 	subdivision 12, is amended to read:
21.33 		Subd. 12.Special account to hold plan assets in trust.
 21.34 	All assets of the plan, including contributions to accounts and
21.35 	matching grant accounts and earnings, are held in trust for the
21.36 	exclusive benefit of account owners and beneficiaries.  Assets
22.1 	must be held in a separate account in the state treasury to be
22.2 	known as the Minnesota college savings plan account or in
22.3 	accounts with the third party provider selected pursuant to
22.4 	section 136G.05, subdivision 8.  Plan assets are not subject to
22.5 	claims by creditors of the state, are not part of the general
22.6 	fund, and are not subject to appropriation by the state.
22.7 	Payments from the Minnesota college savings plan account shall
22.8 	be made under sections 136G.01 to 136G.13.

22.9 	Sec. 31. Minnesota Statutes 2004, section 136G.11,
22.10 	subdivision 1, is amended to read:
22.11 		Subdivision 1.Matching grant qualification.  By June 30
22.12 	of each year, a state matching grant must be added to each
22.13 	account established under the program if the following
22.14 	conditions are met:
22.15 	(1) the contributor applies, in writing in a form
22.16 	prescribed by the director, for a matching grant;
22.17 	(2) a minimum contribution of $200 was made during the
22.18 	preceding calendar year; and 
22.19 	(3) the beneficiary's family meets Minnesota college
22.20 	savings plan residency requirements; and 
22.21 	(4) the family income of the beneficiary did not exceed
22.22 	$80,000.

22.23 	Sec. 32. Minnesota Statutes 2004, section 136G.11,
22.24 	subdivision 3, is amended to read:
22.25 		Subd. 3.Residency requirement.  (a) If the beneficiary
22.26 	is under age 25, the beneficiary's parents or legal guardians
22.27 	must be Minnesota residents to qualify for a matching grant.  If
22.28 	the beneficiary is age 25 or older, the beneficiary must be a
22.29 	Minnesota resident to qualify for a matching grant.
22.30 	(b) To meet the residency requirements, the parent or legal
22.31 	guardian of beneficiaries under age 25 must have filed a
22.32 	Minnesota individual income tax return as a Minnesota resident
22.33 	and claimed the beneficiary as a dependent on the parent or
22.34 	legal guardian's federal tax return for the calendar year in
22.35 	which contributions were made. If the beneficiary's parents are
22.36 	divorced, the parent or legal guardian claiming the beneficiary
23.1 	as a dependent on the federal individual income tax return must
23.2 	be a Minnesota resident.For beneficiaries age 25 or older, the
23.3 	beneficiary, and a spouse, if any, must have filed a Minnesota
23.4 	and a federal individual income tax return as a Minnesota
23.5 	resident for the calendar year in which contributions were made.
23.6 	(c) A parent of beneficiaries under age 25 and
23.7 	beneficiaries age 25 or older who did not reside in Minnesota in
23.8 	the calendar year in which contributions were made are not
23.9 	eligible for a matching grant.

23.10 	Sec. 33. Minnesota Statutes 2004, section 136G.11, is
23.11 	amended by adding a subdivision to read:
23.12 		Subd. 3a.Family income. (a) For purposes of this
23.13 	section, "family income" means:
23.14 	(1) if the beneficiary is under age 25, the combined
23.15 	adjusted gross income of the beneficiary's parents or legal
23.16 	guardians as reported on the federal tax return or returns for
23.17 	the calendar year in which contributions were made.  If the
23.18 	beneficiary's parents or legal guardians are divorced, the
23.19 	income of the parent claiming the beneficiary as a dependent on
23.20 	the federal individual income tax return and the income of that
23.21 	parent's spouse, if any, is used to determine family income; or 
23.22 	(2) if the beneficiary is age 25 or older, the combined
23.23 	adjusted gross income of the beneficiary and spouse, if any.
23.24 	(b) For a parent or legal guardian of beneficiaries under
23.25 	age 25 and for beneficiaries age 25 or older who resided in
23.26 	Minnesota and filed a federal individual income tax return, the
23.27 	matching grant must be based on family income from the calendar
23.28 	year in which contributions were made.

23.29 	Sec. 34. Minnesota Statutes 2004, section 136G.11,
23.30 	subdivision 13, is amended to read:
23.31 		Subd. 13.Forfeiture of matching grants.  (a) Matching
23.32 	grants are forfeited if:
23.33 	(1) the account owner transfers the total account balance
23.34 	of an account to another account or to another qualified tuition
23.35 	program;
23.36 	(2) the beneficiary receives a full tuition scholarship or
24.1 	admission to is attending a United States service academy;
24.2 	(3) the beneficiary dies or becomes disabled;
24.3 	(4) the account owner changes the beneficiary of the
24.4 	account; or
24.5 	(5) the account owner closes the account with a
24.6 	nonqualified withdrawal.
24.7 	(b) Matching grants must be proportionally forfeited if:
24.8 	(1) the account owner transfers a portion of an account to
24.9 	another account or to another qualified tuition program;
24.10 	(2) the beneficiary receives a scholarship covering a
24.11 	portion of qualified higher education expenses; or
24.12 	(3) the account owner makes a partial nonqualified
24.13 	withdrawal.
24.14 	(c) If the account owner makes a misrepresentation in a
24.15 	participation agreement or an application for a matching grant
24.16 	that results in a matching grant, the matching grant associated
24.17 	with the misrepresentation is forfeited.  The office and the
24.18 	board must instruct the plan administrator as to the amount to
24.19 	be forfeited from the matching grant account.  The office and
24.20 	the board must withdraw the matching grant or the proportion of
24.21 	the matching grant that is related to the misrepresentation.

24.22 	Sec. 35. Minnesota Statutes 2004, section 136G.13,
24.23 	subdivision 1, is amended to read:
24.24 		Subdivision 1.Qualified distribution methods.  (a)
24.25 	Qualified distributions may be made:
24.26 	(1) directly to participating eligible educational
24.27 	institutions on behalf of the beneficiary; or 
24.28 	(2) in the form of a check payable to both the beneficiary
24.29 	and the eligible educational institution; or 
24.30 	(3) directly to the account owner or beneficiary if the
24.31 	account owner or beneficiary has already paid qualified higher
24.32 	education expenses.
24.33 	(b) Qualified distributions must be withdrawn
24.34 	proportionally from contributions and earnings in an account
24.35 	owner's account on the date of distribution as provided in
24.36 	section 529 of the Internal Revenue Code.

25.1 	Sec. 36. Minnesota Statutes 2004, section 136G.13,
25.2 	subdivision 5, is amended to read:
25.3 		Subd. 5.Distributions due to death or disability of, or
25.4 	scholarship to, or attendance at a united states military
25.5 	academy by,a beneficiary.  An account owner may request a
25.6 	distribution due to the death or disability of, or scholarship
25.7 	to, or attendance at a United States military academy by,a
25.8 	beneficiary from an account by submitting a completed request to
25.9 	the plan.  Prior to distribution, the account owner shall
25.10 	certify the reason for the distribution and provide written
25.11 	confirmation from a third party that the beneficiary has died,
25.12 	become disabled, or received a scholarship for attendance at an
25.13 	eligible educational institution, or is attending a United
25.14 	States military academy.  The plan must not consider a request
25.15 	to make a distribution until a third-party written confirmation
25.16 	is received by the plan.  For purposes of this subdivision, a
25.17 	third-party written confirmation consists of the following:
25.18 	(1) for death of the beneficiary, a certified copy of the
25.19 	beneficiary's death record;
25.20 	(2) for disability of the beneficiary, a certification by a
25.21 	physician who is a doctor of medicine or osteopathy stating that
25.22 	the doctor is legally authorized to practice in a state of the
25.23 	United States and that the beneficiary is unable to attend any
25.24 	eligible educational institution because of an injury or illness
25.25 	that is expected to continue indefinitely or result in death.
25.26 	Certification must be on a form approved by the plan; or 
25.27 	(3) for a scholarship award to the beneficiary, a letter
25.28 	from the grantor of the scholarship or from the eligible
25.29 	educational institution receiving or administering the
25.30 	scholarship, that identifies the beneficiary by name and Social
25.31 	Security number or taxpayer identification number as the
25.32 	recipient of the scholarship and states the amount of the
25.33 	scholarship, the period of time or number of credits or units to
25.34 	which it applies, the date of the scholarship, and, if
25.35 	applicable, the eligible educational institution to which the
25.36 	scholarship is to be applied; or 
26.1 	(4) for attendance by the beneficiary at a United States
26.2 	military academy, a letter from the military academy indicating
26.3 	the beneficiary's enrollment and attendance.

26.4 	Sec. 37. Minnesota Statutes 2004, section 136G.14, is
26.5 	amended to read:
26.6 	136G.14 MINOR TRUST ACCOUNTS.
26.7 	(a) This section applies to a plan account in which funds
26.8 	of a minor trust account are invested.
26.9 	(b) The account owner may not be changed to any person
26.10 	other than a successor custodian or the beneficiary unless a
26.11 	court order directing the change of ownership is provided to the
26.12 	plan administrator.  The custodian must sign all forms and
26.13 	requests submitted to the plan administrator in the custodian's
26.14 	representative capacity.  The custodian must notify the plan
26.15 	administrator in writing when the beneficiary becomes legally
26.16 	entitled to be the account owner.  An account owner under this
26.17 	section may not select a contingent account owner.
26.18 	(c) The beneficiary of an account under this section may
26.19 	not be changed.  If the beneficiary dies, assets in a plan
26.20 	account become the property of the beneficiary's estate.  Funds
26.21 	in an account must not be transferred or rolled over to another
26.22 	account owner or to an account for another beneficiary.  A
26.23 	nonqualified distribution from an account, or a distribution due
26.24 	to the disability or scholarship award to the beneficiary, or
26.25 	made on account of the beneficiary's attendance at a United
26.26 	States military academy,must be used for the benefit of the
26.27 	beneficiary.

26.28 	Sec. 38. Minnesota Statutes 2004, section 137.0245,
26.29 	subdivision 3, is amended to read:
26.30 		Subd. 3.Duties. (a) The advisory council shall:
26.31 	(1) develop, in consultation with current and former
26.32 	regents and the administration of the University of Minnesota, a
26.33 	statement of the selection criteria to be applied and a
26.34 	description of the responsibilities and duties of a regent, and
26.35 	shall distribute this to potential candidates; and 
26.36 	(2) for each position on the board, identify and recruit
27.1 	qualified candidates for the Board of Regents, based on the
27.2 	background and experience of the candidates, and their potential
27.3 	for discharging the responsibilities of a member of the Board of
27.4 	Regents. The selection criteria must not include a limitation
27.5 	on the number of terms an individual may serve on the Board of
27.6 	Regents; and 
27.7 	(3) report to the joint committee established under section
27.8 	137.0246 on the membership needs of the board in terms of
27.9 	individual skills and characteristics.  Individual skills relate
27.10 	to training and experience in fields such as finance, higher
27.11 	education, labor, and management.  Individual characteristics
27.12 	relate to qualities such as gender, race, and geographic
27.13 	location of residence.
27.14 	(b) The selection criteria developed under paragraph (a),
27.15 	clause (1), must include a criterion that regents represent
27.16 	diversity in geography; gender; race; occupation, including
27.17 	business and labor; and experience.

27.18 	Sec. 39. [137.0246] REGENT SELECTION; LEGISLATURE.
27.19 	(a) By February 15 of each odd-numbered year, or at a date
27.20 	agreed to by concurrent resolution, a joint legislative
27.21 	committee shall meet to recommend nominees for regent of the
27.22 	University of Minnesota to be presented to a joint convention of
27.23 	the legislature.  The joint legislative committee consists of 20
27.24 	legislator members.  Ten members shall be appointed by the
27.25 	speaker of the house.  Ten members shall be appointed by the
27.26 	Subcommittee on Committees of the Committee on Rules and
27.27 	Administration from the senate.  An equal number of members from
27.28 	the majority and minority party shall be appointed from each
27.29 	house.  The members appointed from the minority party must be
27.30 	appointed from among those recommended by the minority leader.
27.31 	The chairs of the education policy committees and of the higher
27.32 	education budget divisions and the ranking minority member of
27.33 	those committees and divisions must be appointed.  A majority of
27.34 	the members from each house is a quorum of the joint committee.
27.35 	(b) The joint committee shall determine the number of
27.36 	persons, and the person or persons to be recommended for each
28.1 	open seat.
28.2 	(c) The joint convention must meet on or before March 7 of
28.3 	that same odd-numbered year.

28.4 	Sec. 40. [144.1498] NURSING LOW-INCOME LOAN REPAYMENT.
28.5 		Subdivision 1.Definition. For purposes of this section,
28.6 	"qualifying educational loans" means government, commercial, and
28.7 	foundation loans for actual costs paid for tuition, reasonable
28.8 	education expenses, and reasonable living expenses related to
28.9 	the graduate or undergraduate education of a licensed practical
28.10 	nurse or registered nurse.
28.11 		Subd. 2.Creation of account; loan repayment program. A
28.12 	low-income nursing education account is created in the general
28.13 	fund.  The commissioner of health shall use money from the
28.14 	account to establish a loan repayment program for licensed
28.15 	practical or registered nurses who agree to practice in a
28.16 	Minnesota nursing home or work in a position in Minnesota as a
28.17 	nurse educator.  Appropriations made to the account do not
28.18 	cancel and are available until expended.
28.19 		Subd. 3.Eligibility. (a) To be eligible to apply to
28.20 	participate in the loan repayment program, an individual must:
28.21 	(1) be a resident of Minnesota;
28.22 	(2) currently be attending a program leading to a degree in
28.23 	practical or registered nursing or a graduate nursing degree in
28.24 	a public or private postsecondary education institution located
28.25 	in Minnesota; and 
28.26 	(3) submit an application to the commissioner of health.
28.27 	(b) An applicant selected to participate must sign a
28.28 	contract to agree to serve a minimum three-year, full-time
28.29 	service obligation in a position or place of employment
28.30 	described in subdivision 2.  The service must begin no later
28.31 	than March 31 following completion of required training.  If
28.32 	fewer applications are submitted by nursing students than there
28.33 	are participant slots available, the commissioner may consider
28.34 	applications submitted by nursing program graduates who are
28.35 	licensed or registered nurses or nurses who are nurse
28.36 	educators.  Nurses selected for loan repayment assistance must
29.1 	comply with this section.
29.2 		Subd. 4.Loan repayment. The commissioner of health may
29.3 	accept applicants each year for participation in the loan
29.4 	repayment program, within the limits of available funding.
29.5 	Applicants are responsible for securing their own loans.  The
29.6 	commissioner shall select participants in a priority based upon
29.7 	lowest family income, followed in order of ascending family
29.8 	income.  Family income may be determined in the same manner as
29.9 	for state grants under section 136A.121 or in another manner the
29.10 	commissioner determines fairly represents family income.  The
29.11 	commissioner shall give preference to applicants closest to
29.12 	completing their training.  For each year that a participant
29.13 	meets the service obligation required under subdivision 3, up to
29.14 	a maximum of four years, the commissioner shall make annual
29.15 	disbursements directly to the participant equivalent to 15
29.16 	percent of the average educational debt for indebted nursing
29.17 	school graduates in the year closest to the applicant's
29.18 	selection for which information is available or the balance of
29.19 	the qualifying educational loans, whichever is less.  Before
29.20 	receiving loan repayment disbursements and as requested, the
29.21 	participant must complete and return to the commissioner an
29.22 	affidavit of practice form provided by the commissioner
29.23 	verifying that the participant is practicing as required under
29.24 	subdivision 3.  The participant must provide the commissioner
29.25 	with verification that the full amount of loan repayment
29.26 	disbursement received by the participant has been applied toward
29.27 	the designated loans.  After each disbursement, verification
29.28 	must be received by the commissioner and approved before the
29.29 	next loan repayment disbursement is made.  Participants remain
29.30 	eligible for loan repayment as long as they practice as required
29.31 	under subdivision 3.
29.32 		Subd. 5.Penalty for nonfulfillment. If a participant
29.33 	does not fulfill the service commitment under subdivision 3, the
29.34 	commissioner of health shall collect from the participant 100
29.35 	percent of any payments made for qualified educational loans and
29.36 	interest at a rate established according to section 270.75.  The
30.1 	commissioner shall deposit the money collected in the low-income
30.2 	nursing education account established under subdivision 2.
30.3 		Subd. 6.Suspension or waiver of obligation. Payment or
30.4 	service obligations cancel in the event of a participant's
30.5 	death.  The commissioner of health may waive or suspend payment
30.6 	or service obligations in cases of total and permanent
30.7 	disability or long-term temporary disability lasting for more
30.8 	than two years.  The commissioner shall evaluate all other
30.9 	requests for suspension or waivers on a case-by-case basis and
30.10 	may grant a waiver of all or part of the money owed as a result
30.11 	of a nonfulfillment penalty if emergency circumstances prevented
30.12 	fulfillment of the required service commitment.

30.13 	Sec. 41. Minnesota Statutes 2004, section 299A.45,
30.14 	subdivision 1, is amended to read:
30.15 		Subdivision 1.Eligibility.  Following certification
30.16 	under section 299A.44 and compliance with this section and rules
30.17 	of the commissioner of public safety and the higher education
30.18 	services office, dependent children less than 23 years of age
30.19 	and the surviving spouse of a public safety officer killed in
30.20 	the line of duty on or after January 1, 1973, are eligible to
30.21 	receive educational benefits under this section.  To qualify for
30.22 	an award, they must be enrolled in undergraduate degree or
30.23 	certificate programs after June 30, 1990, at an eligible
30.24 	Minnesota institution as provided in section 136A.101,
30.25 	subdivision 4. A student who withdraws from enrollment for
30.26 	active military service is entitled to an additional semester or
30.27 	the equivalent of grant eligibility.Persons who have received
30.28 	a baccalaureate degree or have been enrolled full time or the
30.29 	equivalent of ten semesters or the equivalent, whichever occurs
30.30 	first, are no longer eligible.

30.31 	Sec. 42. Minnesota Statutes 2004, section 299A.45,
30.32 	subdivision 4, is amended to read:
30.33 		Subd. 4.Renewal.  Each award must be given for one
30.34 	academic year and is renewable for a maximum of eight semesters
30.35 	or the equivalent. A student who withdraws from enrollment for
30.36 	active military service is entitled to an additional semester or
31.1 	the equivalent of grant eligibility.An award must not be given
31.2 	to a dependent child who is 23 years of age or older on the
31.3 	first day of the academic year.

31.4 	Sec. 43. [583.215] EXPIRATION.
31.5 	Sections 336.9-601, subsections (h) and (i); 550.365;
31.6 	559.209; 582.039; and 583.20 to 583.32, expire June 30, 2009.

31.7 	Sec. 44. APPLICATION OF ELIGIBILITY.
 31.8 	The additional semester or the equivalent of grant
31.9 	eligibility under sections 13, 16, 41, and 42 applies to any
31.10 	student who withdrew from enrollment in a postsecondary
31.11 	institution after December 31, 2002, for enrollment for active
31.12 	military service as defined in Minnesota Statutes, section
31.13 	190.05, subdivision 5b or 5c.

31.14 	Sec. 45. ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY
31.15 	FUNDING.
 31.16 	The Higher Education Services Office shall convene an
31.17 	advisory task force to study the current postsecondary funding
31.18 	policy under Minnesota Statutes, sections 135A.01 to 135A.034.
31.19 	The task force must include a legislative fiscal analysis staff
31.20 	member from the senate assigned to the senate higher education
31.21 	finance division, a legislative fiscal analysis staff member
31.22 	assigned to the house Higher Education Finance Committee, the
31.23 	chief financial officers of the University of Minnesota and the
31.24 	Minnesota State Colleges and Universities, and the commissioner
31.25 	of finance, or their designees.  The task force may include
31.26 	other members as selected by the Higher Education Services
31.27 	Office.  The task force must study and make specific
31.28 	recommendations on alternatives to the methods currently used by
31.29 	the postsecondary systems to implement the provisions of
31.30 	Minnesota Statutes, section 135A.031, subdivision 4.  The task
31.31 	force must submit its recommendations to the legislature and the
31.32 	governor by January 15, 2006.  The task force expires on June
31.33 	30, 2007.

31.34 	Sec. 46. RECIPROCITY NEGOTIATIONS.
 31.35 	The Higher Education Services Office must, as soon as
31.36 	possible, enter into negotiations with the appropriate officials
32.1 	of the state of Wisconsin concerning higher education
32.2 	reciprocity.  The office must attempt to negotiate an agreement
32.3 	that would result in Wisconsin resident students attending
32.4 	Minnesota public higher education institutions paying no less
32.5 	than Minnesota resident students attending those institutions.
32.6 	The office must report the results of the negotiations to the
32.7 	legislature by November 1, 2005.

32.8 	Sec. 47. REVISOR INSTRUCTION.
 32.9 	The revisor of statutes shall change the terms "HESO" and
32.10 	"Higher Education Services Office" to "Minnesota Office of
32.11 	Higher Education" wherever in Minnesota Statutes and Minnesota
32.12 	Rules the terms appear.

32.13 	Sec. 48. REPEALER.
 32.14 	(a) Minnesota Statutes 2004, sections 136A.011 and
32.15 	136A.031, subdivision 1, are repealed.
32.16 	(b) Laws 1986, chapter 398, article 1, section 18, as
32.17 	amended, is repealed.
32.18 	(c) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120;
32.19 	4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100;
32.20 	4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are
32.21 	repealed.

32.22 	ARTICLE 3
32.23 	ROCHESTER HIGHER EDUCATION

32.24 	Section 1. ROCHESTER HIGHER EDUCATION DEVELOPMENT
32.25 	COMMITTEE.
 32.26 		Subdivision 1.Establishment. The Rochester Higher
32.27 	Education Development Committee is established to research and
32.28 	make recommendations to the governor and legislature on the
32.29 	creation of mission-driven postsecondary educational programs or
32.30 	institutions in the Rochester area that meet the educational
32.31 	needs of the region and the state and that capitalize on the
32.32 	unique opportunities for educational partnerships presented in
32.33 	the Rochester area.
32.34 		Subd. 2.Membership. The committee is composed of 11
32.35 	members, to be appointed by the governor, as follows:
32.36 	(1) a trustee of the Minnesota State Colleges and
33.1 	Universities, or the trustee's designee;
33.2 	(2) a regent of the University of Minnesota, or the
33.3 	regent's designee;
33.4 	(3) six persons from the Rochester area representing
33.5 	business, health and medical sciences, and technology;
33.6 	(4) the commissioner of finance, or the commissioner's
33.7 	designee;
33.8 	(5) one person who by training or experience has special
33.9 	expertise in postsecondary finance and planning; and 
33.10 	(6) one person who by training or experience has special
33.11 	expertise in postsecondary academic planning and programming.
33.12 	Before the first meeting of the committee, the governor
33.13 	shall select one person from the committee who shall serve as
33.14 	chair.
33.15 		Subd. 3.Compensation and removal. Appointments to the
33.16 	committee are not subject to Minnesota Statutes, section 15.0597.
33.17 	Members of the committee are not entitled to reimbursement under
33.18 	Minnesota Statutes, section 15.059, subdivision 6.  Members may
33.19 	be removed and vacancies filled pursuant to Minnesota Statutes,
33.20 	section 15.059, subdivision 4.  The director of the Higher
33.21 	Education Services Office may provide administrative support to
33.22 	the committee.
33.23 		Subd. 4.Duties. (a) The committee shall develop a
33.24 	recommendation for establishment and implementation of expanded
33.25 	higher education programs or institutions in Rochester.  The
33.26 	committee's report must include recommendations on:
33.27 	(1) the mission and focus of the programs or institutions;
33.28 	(2) the nature of undergraduate and graduate programs to be
33.29 	offered;
33.30 	(3) site and facility needs;
33.31 	(4) funding sources and opportunities;
33.32 	(5) operational needs;
33.33 	(6) alliances or other types of cooperative arrangements
33.34 	with public and private institutions;
33.35 	(7) governance structures; and 
33.36 	(8) mechanisms to ensure that the expanded programs are
34.1 	aligned with the unique needs and opportunities of the Rochester
34.2 	area and that programs take advantage of opportunities presented
34.3 	by regional business and industry.
34.4 	(b) If the committee recommends any programmatic changes
34.5 	that result in institutional realignments, the committee must
34.6 	consult with the representatives of affected employees and
34.7 	address the continuation of collective bargaining and
34.8 	contractual rights and benefits, including accumulated sick
34.9 	leave, vacation time, seniority, time to tenure, separation or
34.10 	retirement benefits, and pension plan coverage.
34.11 	(c) The committee must consider specifically whether
34.12 	expansion of the University of Minnesota in Rochester is the
34.13 	most appropriate method of meeting the region's needs.
34.14 	(d) The committee may also research and provide
34.15 	recommendations on sites for the facilities and programs.  The
34.16 	committee shall recommend any changes to Minnesota law required
34.17 	to implement recommendations of the committee.
34.18 		Subd. 5.Report. The committee must issue a report with
34.19 	recommendations to the governor and the legislature by January
34.20 	15, 2006.
34.21 		Subd. 6.Sunset. The committee expires on December 31,
34.22 	2007.

34.23 	Sec. 2. ROCHESTER HIGHER EDUCATION DEVELOPMENT ACCOUNT.
 34.24 	A Rochester higher education development account is created
34.25 	in the state treasury in the special revenue fund.  Money in
34.26 	this account is appropriated to the Higher Education Services
34.27 	Office for allocation to the committee established in section 1,
34.28 	subdivision 1, and the implementation activities outlined in
34.29 	article 1, section 2, subdivision 6, paragraph (b).  The office
34.30 	shall serve as fiscal agent for the committee established in
34.31 	section 1.

34.32 	Sec. 3. EFFECTIVE DATE.
 34.33 	This article is effective the day following final enactment.

34.34 	ARTICLE 4
34.35 	PRIVATE CAREER SCHOOLS

34.36 	Section 1. Minnesota Statutes 2004, section 141.21, is
35.1 	amended by adding a subdivision to read:
35.2 		Subd. 6a.Multiple location. "Multiple location" means
35.3 	any site where classes or administrative services are provided
35.4 	to students and which has a street address that is different
35.5 	than the street address found on the school's private career
35.6 	school license.

35.7 	Sec. 2. Minnesota Statutes 2004, section 141.25,
35.8 	subdivision 3, is amended to read:
35.9 		Subd. 3.Application.  Application for a license shall be
35.10 	on forms prepared and furnished by the office, and shall include
35.11 	the following and other information as the office may require:
35.12 	(1) the title or name of the school, ownership and
35.13 	controlling officers, members, managing employees, and director;
35.14 	(2) the specific programs which will be offered and the
35.15 	specific purposes of the instruction;
35.16 	(3) the place or places where the instruction will be
35.17 	given;
35.18 	(4) a listing of the equipment available for instruction in
35.19 	each program;
35.20 	(5) the maximum enrollment to be accommodated with
35.21 	equipment available in each specified program;
35.22 	(6) the qualifications of instructors and supervisors in
35.23 	each specified program;
35.24 	(7) a current balance sheet, income statement, and adequate
35.25 	supporting documentation, prepared and certified by an
35.26 	independent public accountant or CPA;
35.27 	(8) copies of all media advertising and promotional
35.28 	literature and brochures or electronic display currently used or
35.29 	reasonably expected to be used by the school;
35.30 	(9) copies of all Minnesota enrollment agreement forms and
35.31 	contract forms and all enrollment agreement forms and contract
35.32 	forms used in Minnesota; and
35.33 	(10) gross income earned in the preceding year from student
35.34 	tuition, fees, and other required institutional charges, unless
35.35 	the school files with the office a surety bond equal to at least
35.36 	$50,000 $250,000 as described in subdivision 5.

36.1 	Sec. 3. Minnesota Statutes 2004, section 141.25,
36.2 	subdivision 5, is amended to read:
36.3 		Subd. 5.Bond.  (a) No license shall be issued to any
36.4 	school which maintains, conducts, solicits for, or advertises
36.5 	within the state of Minnesota any program, unless the applicant
36.6 	files with the office a continuous corporate surety bond written
36.7 	by a company authorized to do business in Minnesota conditioned
36.8 	upon the faithful performance of all contracts and agreements
36.9 	with students made by the applicant.
36.10 	(b) The amount of the surety bond shall be ten percent of
36.11 	the preceding year's gross income from student tuition, fees,
36.12 	and other required institutional charges, but in no event less
36.13 	than $10,000 nor greater than $50,000 $250,000, except that a
36.14 	school may deposit a greater amount at its own discretion.  A
36.15 	school in each annual application for licensure must compute the
36.16 	amount of the surety bond and verify that the amount of the
36.17 	surety bond complies with this subdivision, unless the school
36.18 	maintains a surety bond equal to at least $50,000 $250,000.  A
36.19 	school that operates at two or more locations may combine gross
36.20 	income from student tuition, fees, and other required
36.21 	institutional charges for all locations for the purpose of
36.22 	determining the annual surety bond requirement.  The gross
36.23 	tuition and fees used to determine the amount of the surety bond
36.24 	required for a school having a license for the sole purpose of
36.25 	recruiting students in Minnesota shall be only that paid to the
36.26 	school by the students recruited from Minnesota.
36.27 	(c) The bond shall run to the state of Minnesota and to any
36.28 	person who may have a cause of action against the applicant
36.29 	arising at any time after the bond is filed and before it is
36.30 	canceled for breach of any contract or agreement made by the
36.31 	applicant with any student.  The aggregate liability of the
36.32 	surety for all breaches of the conditions of the bond shall not
36.33 	exceed the principal sum deposited by the school under paragraph
36.34 	(b).  The surety of any bond may cancel it upon giving 60 days'
36.35 	notice in writing to the office and shall be relieved of
36.36 	liability for any breach of condition occurring after the
37.1 	effective date of cancellation.
37.2 	(d) In lieu of bond, the applicant may deposit with the
37.3 	commissioner of finance a sum equal to the amount of the
37.4 	required surety bond in cash, or securities as may be legally
37.5 	purchased by savings banks or for trust funds in an aggregate
37.6 	market value equal to the amount of the required surety bond.
37.7 	(e) Failure of a school to post and maintain the required
37.8 	surety bond or deposit under paragraph (d) may result in denial,
37.9 	suspension, or revocation of the school's license.

37.10 	Sec. 4. Minnesota Statutes 2004, section 141.25,
37.11 	subdivision 8, is amended to read:
37.12 		Subd. 8.Fees and terms of license.  An application for
37.13 	an initial license under sections 141.21 to 141.35 shall be
37.14 	accompanied by a nonrefundable application fee established by
37.15 	the office as provided in section 141.255that is sufficient to
37.16 	recover, but not exceed, its the administrative costs of the
37.17 	office.
37.18 	All licenses shall expire one year from the date issued by
37.19 	the office, except as provided in section 141.251.

37.20 	Sec. 5. Minnesota Statutes 2004, section 141.25,
37.21 	subdivision 9, is amended to read:
37.22 		Subd. 9.Catalog, brochure, or electronic display.
 37.23 	Before a license is issued to a school, the school shall furnish
37.24 	to the office a catalog, brochure, or electronic display
37.25 	including:
37.26 	(1) identifying data, such as volume number and date of
37.27 	publication;
37.28 	(2) name and address of the school and its governing body
37.29 	and officials;
37.30 	(3) a calendar of the school showing legal holidays,
37.31 	beginning and ending dates of each course quarter, term, or
37.32 	semester, and other important dates;
37.33 	(4) the school policy and regulations on enrollment
37.34 	including dates and specific entrance requirements for each
37.35 	program;
37.36 	(5) the school policy and regulations about leave,
38.1 	absences, class cuts, make-up work, tardiness, and interruptions
38.2 	for unsatisfactory attendance;
38.3 	(6) the school policy and regulations about standards of
38.4 	progress for the student including the grading system of the
38.5 	school, the minimum grades considered satisfactory, conditions
38.6 	for interruption for unsatisfactory grades or progress, a
38.7 	description of any probationary period allowed by the school,
38.8 	and conditions of reentrance for those dismissed for
38.9 	unsatisfactory progress;
38.10 	(7) the school policy and regulations about student conduct
38.11 	and conditions for dismissal for unsatisfactory conduct;
38.12 	(8) a detailed schedule of fees, charges for tuition,
38.13 	books, supplies, tools, student activities, laboratory fees,
38.14 	service charges, rentals, deposits, and all other charges;
38.15 	(9) the school policy and regulations, including an
38.16 	explanation of section 141.271, about refunding tuition, fees,
38.17 	and other charges if the student does not enter the program,
38.18 	withdraws from the program, or the program is discontinued;
38.19 	(10) a description of the available facilities and
38.20 	equipment;
38.21 	(11) a course outline syllabus for each course offered
38.22 	showing course objectives, subjects or units in the course, type
38.23 	of work or skill to be learned, and approximate time, hours, or
38.24 	credits to be spent on each subject or unit;
38.25 	(12) the school policy and regulations about granting
38.26 	credit for previous education and preparation;
38.27 	(13) a procedure for investigating and resolving student
38.28 	complaints; and
38.29 	(14) the name and address of the Minnesota Higher Education
38.30 	Services Office.
38.31 	A school that is exclusively a distance education school is
38.32 	exempt from clauses (3) and (5).

38.33 	Sec. 6. Minnesota Statutes 2004, section 141.25,
38.34 	subdivision 12, is amended to read:
38.35 		Subd. 12.Permanent records.  A school licensed under
38.36 	this chapter and located in Minnesota shall maintain a permanent
39.1 	record for each student for 50 years from the last date of the
39.2 	student's attendance.  A school licensed under this chapter and
39.3 	offering distance instruction to a student located in Minnesota
39.4 	shall maintain a permanent record for each Minnesota student for
39.5 	50 years from the last date of the student's attendance.
39.6 	Records include school transcripts, documents, and files
39.7 	containing student data about academic credits earned, courses
39.8 	completed, grades awarded, degrees awarded, and periods of
39.9 	attendance.  To preserve permanent records, a school shall
39.10 	submit a plan that meets the following requirements:
39.11 	(1) at least one copy of the records must be held in a
39.12 	secure, fireproof depository;
39.13 	(2) an appropriate official must be designated to provide a
39.14 	student with copies of records or a transcript upon request;
39.15 	(3) an alternative method, approved by the office,of
39.16 	complying with clauses (1) and (2) must be established if the
39.17 	school ceases to exist; and
39.18 	(4) a continuous surety bond must be filed with the office
39.19 	in an amount not to exceed $20,000 if the school has no binding
39.20 	agreement for preserving student records or a trust must be
39.21 	arranged if the school ceases to exist.

39.22 	Sec. 7. Minnesota Statutes 2004, section 141.251, is
39.23 	amended to read:
39.24 	141.251 LICENSE RENEWAL.
39.25 		Subdivision 1.Application. Application for renewal of a
39.26 	license must be made at least 30 60 days before expiration of
39.27 	the current license on a form provided by the office.  A renewal
39.28 	application shall be accompanied by a nonrefundable fee
39.29 	established by the office as provided in section 141.255that is
39.30 	sufficient to recover, but does not exceed, its the 
39.31 	administrative costs of the office.
39.32 		Subd. 2.Conditions. The office shall adopt rules
39.33 	establishing the conditions for renewal of a license.  The
39.34 	conditions shall permit two levels of renewal based on the
39.35 	record of the school.  A school that has demonstrated the
39.36 	quality of its program and operation through longevity and
40.1 	performance in the state may renew its license based on a
40.2 	relaxed standard of scrutiny.  A school that has been in
40.3 	operation in Minnesota for a limited period of time or that has
40.4 	not performed adequately on performance indicators shall renew
40.5 	its license based on a strict standard of scrutiny.  The office
40.6 	shall specify minimum longevity standards and performance
40.7 	indicators that must be met before a school may be permitted to
40.8 	operate under the relaxed standard of scrutiny.  The performance
40.9 	indicators used in this determination shall include, but not be
40.10 	limited to:  degree granting status, regional or national
40.11 	accreditation, loan default rates, placement rate of graduates,
40.12 	student withdrawal rates, audit results, student complaints, and
40.13 	school status with the United States Department of Education.
40.14 	Schools that meet the requirements established in rule shall be
40.15 	required to submit a full relicensure report once every four
40.16 	years, and in the interim years will be exempt from the
40.17 	requirements of section 141.25, subdivision 3, clauses (4), (5),
40.18 	and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and
40.19 	4880.2100, subpart 4.

40.20 	Sec. 8. [141.255] FEES.
40.21 		Subdivision 1.Initial licensure fee. The office
40.22 	processing fee for an initial licensure application is:
40.23 	(1) $1,500 for a school that will offer no more than one
40.24 	program during its first year of operation;
40.25 	(2) $2,000 for a school that will offer two or more
40.26 	nondegree level programs during its first year of operation; and 
40.27 	(3) $2,500 for a school that will offer two or more degree
40.28 	level programs during its first year of operation.
40.29 		Subd. 2.Renewal licensure fee; late fee. (a) The office
40.30 	processing fee for a renewal licensure application is:
40.31 	(1) for a category A school, as determined by the office,
40.32 	the fee is $865 if the school offers one program or $1,150 if
40.33 	the school offers two or more programs; and 
40.34 	(2) for a category B or C school, as determined by the
40.35 	office, the fee is $430 if the school offers one program or $575
40.36 	if the school offers two or more programs.
41.1 	(b) If a license renewal application is not received by the
41.2 	office by the close of business at least 60 days before the
41.3 	expiration of the current license, a late fee of $100 per
41.4 	business day shall be assessed.
41.5 		Subd. 3.Degree level addition fee. The office
41.6 	processing fee for adding a degree level to an existing program
41.7 	is $2,000 per program.
41.8 		Subd. 4.Program addition fee. The office processing fee
41.9 	for adding a program that represents a significant departure in
41.10 	the objectives, content, or method of delivery of programs that
41.11 	are currently offered by the school is $500 per program.
41.12 		Subd. 5.Visit or consulting fee. If the office
41.13 	determines that a fact-finding visit or outside consultant is
41.14 	necessary to review or evaluate any new or revised program, the
41.15 	office shall be reimbursed for the expenses incurred related to
41.16 	the review as follows:
41.17 	(1) $300 for the team base fee or for a paper review
41.18 	conducted by a consultant if the office determines that a
41.19 	fact-finding visit is not required;
41.20 	(2) $300 for each day or part thereof on site per team
41.21 	member; and 
41.22 	(3) the actual cost of customary meals, lodging, and
41.23 	related travel expenses incurred by team members.
41.24 		Subd. 6.Modification fee. The fee for modification of
41.25 	any existing program is $100 and is due if there is:
41.26 	(1) an increase or decrease of 25 percent or more, from the
41.27 	original date of program approval, in clock hours, credit hours,
41.28 	or calendar length of an existing program;
41.29 	(2) a change in academic measurement from clock hours to
41.30 	credit hours or vice versa; or 
41.31 	(3) an addition or alteration of courses that represent a
41.32 	25 percent change or more in the objectives, content, or methods
41.33 	of delivery.
41.34 		Subd. 7.Solicitor permit fee. The solicitor permit fee
41.35 	is $350 and must be paid annually.
41.36 		Subd. 8.Multiple location fee. Schools wishing to
42.1 	operate at multiple locations must pay:
42.2 	(1) $250 per location, for two to five locations; and 
42.3 	(2) an additional $50 for each location over five.
42.4 		Subd. 9.Student transcript fee. The fee for a student
42.5 	transcript requested from a closed school whose records are held
42.6 	by the office is $10, with a maximum of five transcripts per
42.7 	request.

42.8 	Sec. 9. Minnesota Statutes 2004, section 141.26,
42.9 	subdivision 5, is amended to read:
42.10 		Subd. 5.Fee.  The initial and renewal application for
42.11 	each permit shall be accompanied by a nonrefundable fee as
42.12 	established by the office under section 141.255.

42.13 	Sec. 10. Minnesota Statutes 2004, section 141.271, is
42.14 	amended by adding a subdivision to read:
42.15 		Subd. 1b.Short-term programs. Licensed schools
42.16 	conducting programs not exceeding 40 hours in length shall not
42.17 	be required to make a full refund once a program has commenced
42.18 	and shall be allowed to prorate any refund based on the actual
42.19 	length of the program as stated in the school catalog or
42.20 	advertisements and the number of hours attended by the student.

42.21 	Sec. 11. Minnesota Statutes 2004, section 141.271,
42.22 	subdivision 4, is amended to read:
42.23 		Subd. 4.Resident schools.  When a student has been
42.24 	accepted by a school offering a resident program and gives
42.25 	written notice of cancellation, or the school has actual notice
42.26 	of a student's nonattendance after the start of the period of
42.27 	instruction for which the student has been charged, but before
42.28 	completion of 75 percent of the period of instruction, the
42.29 	amount charged for tuition, fees, and all other charges shall be
42.30 	prorated based on number of days in the term as a portion of the
42.31 	total charges for tuition, fees, and all other charges.  An
42.32 	additional 25 percent of the total cost of the period of
42.33 	instruction may be added, but shall not exceed $100.  After
42.34 	completion of 75 percent of the period of instruction for which
42.35 	the student has been charged, no refunds are required.

42.36 	Sec. 12. Minnesota Statutes 2004, section 141.271,
43.1 	subdivision 7, is amended to read:
43.2 		Subd. 7.Equipment and supplies.  The fair market retail
43.3 	price, if separately stated in the catalog and contract or
43.4 	enrollment agreement, of equipment or supplies furnished to the
43.5 	student, which the student fails to return in condition suitable
43.6 	for resale, and which may reasonably be resold,within ten
43.7 	business days following cancellation may be retained by the
43.8 	school and may be deducted from the total cost for tuition, fees
43.9 	and all other charges when computing refunds.
43.10 	An overstatement of the fair market retail price of any
43.11 	equipment or supplies furnished the student shall be considered
43.12 	inconsistent with this provision.

43.13 	Sec. 13. Minnesota Statutes 2004, section 141.271,
43.14 	subdivision 10, is amended to read:
43.15 		Subd. 10.Cancellation occurrence.  Written notice of
43.16 	cancellation shall take place on the date the letter of
43.17 	cancellation is postmarked or, in the cases where the notice is
43.18 	hand carried, it shall occur on the date the notice is delivered
43.19 	to the school. If a student has not attended classes for a
43.20 	period of 21 consecutive days, the student is considered to have
43.21 	withdrawn from school for all purposes as of the student's last
43.22 	documented date of attendance.

43.23 	Sec. 14. Minnesota Statutes 2004, section 141.271, is
43.24 	amended by adding a subdivision to read:
43.25 		Subd. 14.Closed school. In the event a school closes
43.26 	for any reason during a term and interrupts and terminates
43.27 	classes during that term, all tuition for the term shall be
43.28 	refunded to the students or the appropriate state or federal
43.29 	agency or private lender that provided any funding for the term
43.30 	and any outstanding obligation of the student for the term is
43.31 	canceled.

43.32 	Sec. 15. Minnesota Statutes 2004, section 141.28,
43.33 	subdivision 1, is amended to read:
43.34 		Subdivision 1.Not to advertise state approval.  Schools,
43.35 	agents of schools, and solicitors may not advertise or represent
43.36 	in writing or orally that such school is approved or accredited
44.1 	by the state of Minnesota, except that any school, agent, or
44.2 	solicitor may advertise that the school and solicitor have been
44.3 	duly licensed by the state.using the following language:
44.4 	"(Name of school) is licensed as a private career school with
44.5 	the Minnesota Higher Education Services Office.  Licensure is
44.6 	not an endorsement of the institution.  Credits earned at the
44.7 	institution may not transfer to all other institutions.  The
44.8 	educational programs may not meet the needs of every student or
44.9 	employer." 

44.10 	Sec. 16. Minnesota Statutes 2004, section 141.28, is
44.11 	amended by adding a subdivision to read:
44.12 		Subd. 6.Financial aid payments. (a) All schools must
44.13 	collect, assess, and distribute funds received from loans or
44.14 	other financial aid as provided in this subdivision.
44.15 	(b) Student loans or other financial aid funds received
44.16 	from federal, state, or local governments or administered in
44.17 	accordance with federal student financial assistance programs
44.18 	under title IV of the Higher Education Act of 1965, as amended,
44.19 	United States Code, title 20, chapter 28, must be collected and
44.20 	applied as provided by applicable federal, state, or local law
44.21 	or regulation.
44.22 	(c) Student loans or other financial aid assistance
44.23 	received from a bank, finance or credit card company, or other
44.24 	private lender must be collected or disbursed as provided in
44.25 	paragraphs (d) and (e).
44.26 	(d) Loans or other financial aid payments for amounts
44.27 	greater than $3,000 must be disbursed:
44.28 	(1) in two equal disbursements, if the course or term
44.29 	length is less than six months.  The loan or payment amounts may
44.30 	be disbursed no earlier than the first day the student attends
44.31 	class with the remainder to be disbursed halfway through the
44.32 	class or term;
44.33 	(2) in three equal disbursements, if the course or term
44.34 	length is more than six months, but less than 12 months.  The
44.35 	loan or payment amounts may be disbursed no earlier than the
44.36 	first day the student attends class, one-third of the way
45.1 	through the class or term, and two-thirds of the way through the
45.2 	class or term; or 
45.3 	(3) in four equal disbursements, if the course or term
45.4 	length is greater than 12 months.  The loan or payment amounts
45.5 	may be disbursed no earlier than the first day a student attends
45.6 	class, one-quarter of the way through the class or term, halfway
45.7 	through the class or term, and three-fourths of the way through
45.8 	the class or term.
45.9 	(e) Loans or other financial aid payments for amounts less
45.10 	than $3,000 may be disbursed as a single disbursement on the
45.11 	first day a student attends class, regardless of course length.
45.12 	(f) No school may enter into a contract or agreement with,
45.13 	or receive any money from, a bank, finance or credit card
45.14 	company, or other private lender, unless the private lender
45.15 	follows the requirements for disbursements provided in
45.16 	paragraphs (d) and (e).

45.17 	Sec. 17. Minnesota Statutes 2004, section 141.29,
45.18 	subdivision 3, is amended to read:
45.19 		Subd. 3.Powers and duties.  The office shall have (in
45.20 	addition to the powers and duties now vested therein by law) the
45.21 	following powers and duties:
45.22 	(a) To negotiate and enter into interstate reciprocity
45.23 	agreements with similar agencies in other states, if in the
45.24 	judgment of the office such agreements are or will be helpful in
45.25 	effectuating the purposes of Laws 1973, Chapter 714;
45.26 	(b) To grant conditional school license for periods of less
45.27 	than one year if in the judgment of the office correctable
45.28 	deficiencies exist at the time of application and when refusal
45.29 	to issue school license would adversely affect currently
45.30 	enrolled students;
45.31 	(c) The office may upon its own motion, and shall upon the
45.32 	verified complaint in writing of any person setting forth fact
45.33 	which, if proved, would constitute grounds for refusal or
45.34 	revocation under Laws 1973, Chapter 714, investigate the actions
45.35 	of any applicant or any person or persons holding or claiming to
45.36 	hold a license or permit.  However, before proceeding to a
46.1 	hearing on the question of whether a license or permit shall be
46.2 	refused, revoked or suspended for any cause enumerated in
46.3 	subdivision 1, the office may shall grant a reasonable time to
46.4 	the holder of or applicant for a license or permit to correct
46.5 	the situation.  If within such time the situation is corrected
46.6 	and the school is in compliance with the provisions of this
46.7 	chapter, no further action leading to refusal, revocation, or
46.8 	suspension shall be taken.

46.9 	Sec. 18. Minnesota Statutes 2004, section 141.30, is
46.10 	amended to read:
46.11 	141.30 INSPECTION.
46.12 	(a) The office or a delegate may inspect the instructional
46.13 	books and records, classrooms, dormitories, tools, equipment and
46.14 	classes of any school or applicant for license at any reasonable
46.15 	time.  The office may require the submission of a certified
46.16 	public audit, or if there is no such audit available the office
46.17 	or a delegate may inspect the financial books and records of the
46.18 	school.  In no event shall such financial information be used by
46.19 	the office to regulate or set the tuition or fees charged by the
46.20 	school.
46.21 	(b) Data obtained from an inspection of the financial
46.22 	records of a school or submitted to the office as part of a
46.23 	license application or renewal are nonpublic data as defined in
46.24 	section 13.02, subdivision 9.  Data obtained from inspections
46.25 	may be disclosed to other members of the office, to law
46.26 	enforcement officials, or in connection with a legal or
46.27 	administrative proceeding commenced to enforce a requirement of
46.28 	law.

46.29 	Sec. 19. Minnesota Statutes 2004, section 141.35, is
46.30 	amended to read:
46.31 	141.35 EXEMPTIONS.
46.32 	Sections 141.21 to 141.35 shall not apply to the following:
46.33 	(1) public postsecondary institutions;
46.34 	(2) private postsecondary institutions registered under
46.35 	sections 136A.61 to 136A.71 that are nonprofit, or that are for
46.36 	profit and registered under sections 136A.61 to 136A.71 as of
47.1 	December 31, 1998, or are approved to offer exclusively
47.2 	baccalaureate or postbaccalaureate programs;
47.3 	(3) schools of nursing accredited by the state Board of
47.4 	Nursing or an equivalent public board of another state or
47.5 	foreign country;
47.6 	(4) private schools complying with the requirements of
47.7 	section 120A.22, subdivision 4;
47.8 	(5) courses taught to students in a valid apprenticeship
47.9 	program taught by or required by a trade union;
47.10 	(6) schools exclusively engaged in training physically or
47.11 	mentally handicapped persons for the state of Minnesota;
47.12 	(7) schools licensed by boards authorized under Minnesota
47.13 	law to issue licenses;
47.14 	(8) schools and educational programs, or training programs,
47.15 	contracted for by persons, firms, corporations, government
47.16 	agencies, or associations, for the training of their own
47.17 	employees, for which no fee is charged the employee;
47.18 	(9) schools engaged exclusively in the teaching of purely
47.19 	avocational, recreational, or remedial subjects as determined by
47.20 	the office;
47.21 	(10) driver training schools and instructors as defined in
47.22 	section 171.33, subdivisions 1 and 2;
47.23 	(11) classes, courses, or programs conducted by a bona fide
47.24 	trade, professional, or fraternal organization, solely for that
47.25 	organization's membership;
47.26 	(12) programs in the fine arts provided by organizations
47.27 	exempt from taxation under section 290.05 and registered with
47.28 	the attorney general under chapter 309.  For the purposes of
47.29 	this clause, "fine arts" means activities resulting in artistic
47.30 	creation or artistic performance of works of the imagination
47.31 	which are engaged in for the primary purpose of creative
47.32 	expression rather than commercial sale or employment.  In making
47.33 	this determination the office may seek the advice and
47.34 	recommendation of the Minnesota Board of the Arts;
47.35 	(13) classes, courses, or programs intended to fulfill the
47.36 	continuing education requirements for licensure or certification
48.1 	in a profession, that have been approved by a legislatively or
48.2 	judicially established board or agency responsible for
48.3 	regulating the practice of the profession, and that are offered
48.4 	primarily exclusively to an individual practicing the
48.5 	profession;
48.6 	(14) classes, courses, or programs intended to prepare
48.7 	students to sit for undergraduate, graduate, postgraduate, or
48.8 	occupational licensing and occupational entrance examinations;
48.9 	(15) classes, courses, or programs providing 16 or fewer
48.10 	clock hours of instruction that are not part of the curriculum
48.11 	for an occupation or entry level employment;
48.12 	(16) classes, courses, or programs providing instruction in
48.13 	personal development, modeling, or acting;
48.14 	(17) training or instructional programs, in which one
48.15 	instructor teaches an individual student, that are not part of
48.16 	the curriculum for an occupation or are not intended to prepare
48.17 	a person for entry level employment; and
48.18 	(18) schools with no physical presence in Minnesota, as
48.19 	determined by the office,engaged exclusively in offering
48.20 	distance instruction that are located in and regulated by other
48.21 	states or jurisdictions.

48.22 	Sec. 20. POSTSECONDARY PRIVATE SCHOOL REGULATION.
 48.23 	The director of the Higher Education Services Office must
48.24 	convene a group to study regulation of private postsecondary
48.25 	schools subject to regulation under Minnesota Statutes, chapters
48.26 	136A and 141.  The purpose of the study is to determine the
48.27 	appropriate level of regulation for the various types of private
48.28 	postsecondary schools.  The study group must, at a minimum,
48.29 	include representatives from the Minnesota Private College
48.30 	Council, the Minnesota Career College Association, and staff of
48.31 	the higher education finance divisions and committees of the
48.32 	house of representatives and the senate.  The director must make
48.33 	recommendations accompanied with legislation to implement those
48.34 	recommendations to the chairs of the legislative committees and
48.35 	divisions with primary jurisdiction over higher education
48.36 	finance by January 15, 2006.