SF 3120

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/02/2025 09:44 a.m.

A bill for an act
relating to higher education; establishing a statewide children's savings account
program for higher education; establishing local partner design and implementation
grants; requiring a report; requiring rulemaking; appropriating money; amending
Minnesota Statutes 2024, section 136G.03, subdivision 1, by adding subdivisions;
proposing coding for new law in Minnesota Statutes, chapter 136G.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 136G.03, subdivision 1, is amended to read:

Subdivision 1.

General.

For purposes of sections 136G.01 to deleted text begin 136G.14 deleted text end new text begin 136G.16 new text end , the
following terms have the meanings given.

Sec. 2.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 6a. new text end

new text begin Children's higher education investment account. new text end

new text begin "Children's higher education
investment account" means the account established in the special revenue fund under section
136G.15, subdivision 7.
new text end

Sec. 3.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 12a. new text end

new text begin Eligible child. new text end

new text begin "Eligible child" means a current Minnesota resident under 18
years of age, born on or after July 1, 2026.
new text end

Sec. 4.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 17a. new text end

new text begin Low-income households. new text end

new text begin "Low-income households" means households
where children or households are identified by the commissioner or by other means as
low-income for purposes of the program.
new text end

Sec. 5.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 21b. new text end

new text begin MinneKIDS account. new text end

new text begin "MinneKIDS account" means an account created by
the commissioner in which designated money for an eligible child is held.
new text end

Sec. 6.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 21c. new text end

new text begin MinneKIDS affiliate. new text end

new text begin "MinneKIDS affiliate" means an entity designated
by the commissioner to receive grant money under section 136G.16 or contribute to
MinneKIDS accounts under section 136G.15.
new text end

Sec. 7.

Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 32a. new text end

new text begin Seed deposit. new text end

new text begin "Seed deposit" means a financial contribution into a MinneKIDS
account of an eligible child under section 136G.15, subdivision 3, paragraphs (a) and (b).
new text end

Sec. 8.

new text begin [136G.15] MINNESOTA KIDS INVESTMENT AND DEVELOPMENT
SCHOLARSHIP PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin MinneKIDS accounts. new text end

new text begin (a) The commissioner must create a MinneKIDS
account on behalf of an eligible child no more than 90 days after:
new text end

new text begin (1) receiving birth data for an eligible child from the Department of Health pursuant to
subdivision 4; or
new text end

new text begin (2) receiving a request from a parent or guardian of an eligible child that does not have
a MinneKIDS account.
new text end

new text begin (b) The commissioner must provide the parent or guardian a simple process for opting
the parent or guardian's eligible child out of the MinneKIDS account program. Within 30
days of receiving a request to opt an eligible child out of the MinneKIDS account program,
the commissioner must close the eligible child's MinneKIDS account and return any money
in the account to the children's higher education investment account.
new text end

new text begin (c) Only the commissioner, the plan administrator, a MinneKIDS affiliate, or other entity,
individual, or government approved by the commissioner may contribute money to an
eligible child's MinneKIDS account.
new text end

new text begin (d) Money deposited in a MinneKIDS account must be invested pursuant to section
136G.07.
new text end

new text begin (e) A MinneKIDS account established pursuant to this section, any seed deposit or
additional deposits, and any investment earnings will remain assets of and be owned by the
state until used for the payment of qualified higher education expenses at an eligible education
institution.
new text end

new text begin (f) The commissioner may accept for deposit into the children's higher education
investment account gifts, grants, awards, matching contributions, interest income, and
appropriations from individuals, businesses, state and local governmental entities, and
nonstate and third-party sources for the program on terms the commissioner deems advisable.
new text end

new text begin Subd. 2. new text end

new text begin Parent or guardian notification. new text end

new text begin (a) No more than 30 days after creating a
MinneKIDS account for an eligible child pursuant to subdivision 1, and then at least once
in each subsequent year until the MinneKIDS account is closed, the commissioner must
notify at least one parent or legal guardian of the eligible child about the program. The
notification must include information regarding all of the following:
new text end

new text begin (1) how the parent or legal guardian may opt the eligible child out of the program;
new text end

new text begin (2) how the parent or legal guardian may apply to be considered for the additional seed
deposit provided in subdivision 3, paragraph (b);
new text end

new text begin (3) the MinneKIDS account opened for the eligible child pursuant to paragraph (a), and
any deposit provided pursuant to subdivision 3;
new text end

new text begin (4) how the parent or legal guardian may view the balance of the eligible child's
MinneKIDS account;
new text end

new text begin (5) how the parent or legal guardian may establish and contribute to a separate Minnesota
college savings plan account;
new text end

new text begin (6) how the parent or legal guardian may link a MinneKIDS account to a separate
Minnesota college savings plan account;
new text end

new text begin (7) how the eligible child may qualify for additional deposits, as applicable;
new text end

new text begin (8) limitations on contributions to the MinneKIDS account pursuant to subdivision 1;
and
new text end

new text begin (9) ownership status of money held in a MinneKIDS account described in subdivision
1 and that the money in the account will be forfeited and returned to the program if the
eligible child does not use it before reaching 26 years of age.
new text end

new text begin (b) The commissioner must translate notifications and information regarding the program
established in this section into common languages spoken throughout Minnesota.
new text end

new text begin Subd. 3. new text end

new text begin Seed deposits; incentive deposits. new text end

new text begin (a) The commissioner must make a seed
deposit of $50 from the children's higher education investment account in each MinneKIDS
account created under subdivision 1.
new text end

new text begin (b) The commissioner must make an additional seed deposit of $50 from the children's
higher education investment account in each MinneKIDS account created under subdivision
1 on behalf of an eligible child that the commissioner identifies as being from a low-income
household.
new text end

new text begin (c) Subject to available money in the children's higher education investment account,
the commissioner may make additional deposits from the children's higher education
investment account into specific MinneKIDS accounts to encourage college saving and
participation in the program, including if a parent or guardian of an eligible child:
new text end

new text begin (1) engages with the MinneKIDS account by verifying receipt of information provided
under subdivision 2;
new text end

new text begin (2) links the MinneKIDS account with a separate Minnesota college plan savings account;
or
new text end

new text begin (3) engages with the MinneKIDS account or Minnesota college plan savings account
by other means approved by the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Provision of birth data. new text end

new text begin (a) No later than 90 days after a birth is registered
under section 144.215 for an eligible child, and notwithstanding section 144.225, subdivision
2, the commissioner of health must provide the commissioner with the following birth data
for each eligible child in a file format as defined by the commissioner:
new text end

new text begin (1) the eligible child's name and birth date;
new text end

new text begin (2) the name and contact information of each parent of the eligible child, including the
parent's street address;
new text end

new text begin (3) if provided to the Department of Health, the parent's mobile telephone number and
email address;
new text end

new text begin (4) amended birth record information of an eligible child to assist the commissioner in
verifying a legal name change of an eligible child; and
new text end

new text begin (5) any other information the commissioner requests as necessary for administering this
section.
new text end

new text begin (b) Except data that is classified as confidential pursuant to section 144.225, subdivision
2, this subdivision does not apply to data that is classified as not public data as defined in
section 13.02, subdivision 8a, or that is sealed by court order.
new text end

new text begin (c) Any birth data provided to the commissioner under this section is private data on
individuals as defined in section 13.02, subdivision 12.
new text end

new text begin Subd. 5. new text end

new text begin Disbursements. new text end

new text begin (a) Money in a MinneKIDS account designated for an eligible
child, including any investment earnings, must be used for the purpose of providing awards
for qualified higher education expenses associated with the attendance of the eligible child
at an eligible educational institution.
new text end

new text begin (b) Notwithstanding anything to the contrary in this section, "qualified higher education
expenses" must not include any tuition or other expenses in connection with enrollment or
attendance at an elementary or secondary public, private, or religious school.
new text end

new text begin (c) The commissioner must make a distribution directly to an eligible educational
institution on behalf of the beneficiary when the beneficiary:
new text end

new text begin (1) requests a distribution from the MinneKIDS account;
new text end

new text begin (2) self-certifies that the beneficiary is enrolled at an eligible educational institution; and
new text end

new text begin (3) self-certifies that the beneficiary has resided in the state of Minnesota for at least
one year immediately preceding the payment of qualified higher education expenses on the
beneficiary's behalf.
new text end

new text begin (d) If the beneficiary requests a distribution pursuant to paragraph (c), but has no account
balance with the eligible educational institution, then the eligible educational institution
must distribute money received on the beneficiary's behalf pursuant to this subdivision
directly to the beneficiary for the purpose of paying the beneficiary's qualified higher
education expenses.
new text end

new text begin Subd. 6. new text end

new text begin Account closures; forfeiture. new text end

new text begin (a) The money in a MinneKIDS account must
remain invested pursuant to section 136G.07 until the earlier of the date:
new text end

new text begin (1) the beneficiary of a MinneKIDS account requests a distribution pursuant to
subdivision 5; or
new text end

new text begin (2) the account is closed pursuant to paragraph (b).
new text end

new text begin (b) If the beneficiary has not used all or any portion of the money in the beneficiary's
MinneKIDS account for a qualified higher education expense for any reason, including
death or disability of the beneficiary, by the time the beneficiary has achieved 26 years of
age, then:
new text end

new text begin (1) the beneficiary's MinneKIDS account must be closed; and
new text end

new text begin (2) the money in the beneficiary's MinneKIDS account must be forfeited and deposited
into the children's higher education investment account.
new text end

new text begin (c) The commissioner must contact the beneficiary of a MinneKIDS account 60 days
prior to closing the beneficiary's MinneKIDS account pursuant to paragraph (b) and provide
an opportunity for the beneficiary to appeal the closing of the MinneKIDS account.
new text end

new text begin (d) If the beneficiary does not appeal the closing of a MinneKIDS account within 45
days of receiving notice under paragraph (c), then the commissioner may close the
beneficiary's MinneKIDS account and return the money to the children's higher education
investment account.
new text end

new text begin (e) Money, less applicable penalties, collected pursuant to section 529 of the Internal
Revenue Code not used within the time period described in paragraph (b) must revert to the
children's higher education investment account after the payment of any amount determined
to be due to the federal government as a result of the reversion.
new text end

new text begin (f) If an eligible child is opted out of the program, all money in the eligible child's
MinneKIDS account, including any investment earnings, is forfeited and must be deposited
into the children's higher education investment account in a timely manner and the eligible
child's MinneKIDS account must be closed.
new text end

new text begin Subd. 7. new text end

new text begin Account established; appropriation. new text end

new text begin A children's higher education investment
account is created in the special revenue fund in the state treasury. Money in the account,
including appropriations and transfers made to the account and forfeited MinneKIDS account
balances returned to the account, is appropriated to the commissioner for the purposes
specified in this section. Money remaining in the account at the end of a fiscal year is not
canceled to the general fund but remains available until expended.
new text end

Sec. 9.

new text begin [136G.16] MINNEKIDS LOCAL PARTNER GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A MinneKIDS local partner grant program is established
under the supervision of the Office of Higher Education. The program makes money available
to eligible entities to encourage college readiness, saving for college, and participation in
the MinneKIDS account program. The commissioner must develop policies and adopt rules
as necessary to implement and administer the program.
new text end

new text begin Subd. 2. new text end

new text begin Eligible entities. new text end

new text begin (a) A local government, Tribal government, philanthropic
entity, or a nonprofit organization is eligible to receive a grant under this section and to be
designated by the commissioner as a MinneKIDS affiliate.
new text end

new text begin (b) The commissioner may award a grant to an eligible entity to:
new text end

new text begin (1) design a new local MinneKIDS outreach and education program; or
new text end

new text begin (2) implement an established MinneKIDS outreach and education program.
new text end

new text begin (c) The commissioner may designate an eligible entity as a MinneKIDS affiliate for the
purpose of allowing the MinneKIDS affiliate to make contributions to MinneKIDS accounts.
new text end

new text begin Subd. 3. new text end

new text begin Design grants. new text end

new text begin (a) To receive a design grant, an eligible entity must:
new text end

new text begin (1) not have a local college savings or MinneKIDS account program in operation;
new text end

new text begin (2) seek the grant to establish a local college savings program that primarily targets
children from birth to age 25;
new text end

new text begin (3) develop a plan to supplement money received under this chapter from nonstate
sources; and
new text end

new text begin (4) specify in the entity's application that the proposed local college savings program
has the capacity to align or integrate the local program with the statewide MinneKIDS
program.
new text end

new text begin (b) Design grant awards must be used for convening, planning, engagement, outreach,
marketing, staff for local coordination, and other programmatic expenses.
new text end

new text begin Subd. 4. new text end

new text begin Implementation grants. new text end

new text begin (a) To receive an implementation grant, an eligible
entity must:
new text end

new text begin (1) have previously received a MinneKIDS design grant or have a local college savings
account program in operation that primarily targets children from birth to age 25;
new text end

new text begin (2) have a one-to-one local match of money from nonstate sources with the grants applied
for under this section to support the entity's program; and
new text end

new text begin (3) specify in the entity's application that the proposed local college savings program
has the capacity to align or integrate with the statewide MinneKIDS program.
new text end

new text begin (b) Implementation grant awards must be used for convening, planning, engagement,
outreach, marketing, staff for local coordination, additional deposits in MinneKIDS accounts,
and other programmatic expenses.
new text end

new text begin Subd. 5. new text end

new text begin Outreach and technical support. new text end

new text begin (a) The commissioner must provide outreach
to potential grantees to review, score, and select grantees, and to oversee and evaluate grant
implementation.
new text end

new text begin (b) The commissioner must give outreach priority to underrepresented regions of the
state that are not already served by a local college savings program.
new text end

new text begin (c) The commissioner must provide technical assistance to applicants that includes but
is not limited to:
new text end

new text begin (1) developing a toolkit for eligible entities seeking to be designated as a MinneKIDS
affiliate;
new text end

new text begin (2) assisting eligible entities that are not offering a local college savings program in
developing an application to receive a grant; and
new text end

new text begin (3) other activities to advance the program as determined by the commissioner.
new text end

new text begin (d) The commissioner and grantee must follow grant management requirements outlined
in section 16B.97 and other applicable grant compliance requirements outlined in state
statutes.
new text end

new text begin Subd. 6. new text end

new text begin Priorities. new text end

new text begin (a) The commissioner must consider the following when distributing
grants to eligible entities:
new text end

new text begin (1) the amount of available money under the MinneKIDS local partner grant program;
new text end

new text begin (2) the number of children that each eligible entity intends to serve under the proposed
or existing local college savings program; and
new text end

new text begin (3) the percentage of low-income families residing in the community served by the
proposed or existing local college savings program.
new text end

new text begin (b) The commissioner must consider geographic diversity in awarding grants under this
section, including by awarding approximately 50 percent of the total grant award amounts
to eligible entities that serve Tribal nations and communities outside of the seven-county
metropolitan area of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington
Counties.
new text end

new text begin (c) The commissioner must give grant priority to local college savings programs that
align with the following criteria:
new text end

new text begin (1) local college savings programs that serve, or propose to serve, a community or
geographic area with an average median income that is lower than statewide median income;
new text end

new text begin (2) local college savings programs that serve, or propose to serve, a community or
geographic area with an average college attendance rate that is lower than the average college
attendance rate statewide;
new text end

new text begin (3) existing local college savings programs that demonstrate a high total amount of
money saved for college in connection with the program;
new text end

new text begin (4) existing local college savings programs that hold a high number of outreach events
to encourage family and community contributions to college savings accounts;
new text end

new text begin (5) an eligible entity with a demonstrated ability to sustain and potentially expand the
entity's program;
new text end

new text begin (6) an eligible entity that has existing partnerships with schools and community
organizations;
new text end

new text begin (7) an eligible entity that secures a high amount of money through local budget
commitments, philanthropy, or other nonstate money sources; and
new text end

new text begin (8) other priorities or criteria determined by the commissioner.
new text end

Sec. 10. new text begin MINNEKIDS PROGRAM REPORT REQUIRED.
new text end

new text begin (a) By February 15, 2028, the commissioner of the Office of Higher Education must
report information regarding the implementation of the program established in Minnesota
Statutes, section 136G.15, to the chairs and ranking minority members of the legislative
committees having jurisdiction over higher education. The report must include but not be
limited to:
new text end

new text begin (1) detailed program expenditure information;
new text end

new text begin (2) the number of accounts opened;
new text end

new text begin (3) the number of state and nonstate contributions made to accounts;
new text end

new text begin (4) information about how parents were notified about the program;
new text end

new text begin (5) a description of the commissioner's marketing of the program;
new text end

new text begin (6) a description of the commissioner's efforts and success in aligning or integrating
with the Minnesota 529 college savings plan established by Minnesota Statutes, section
136G.01; and
new text end

new text begin (7) recommendations for improving the MinneKIDS program.
new text end

new text begin (b) By February 15, 2028, the commissioner of the Office of Higher Education must
report information regarding the implementation of the program established in Minnesota
Statutes, section 136G.16, to the chairs and ranking minority members of the legislative
committees having jurisdiction over higher education. The report must include but not be
limited to:
new text end

new text begin (1) a list of eligible entities provided grants pursuant to Minnesota Statutes, section
136G.16, and the entities' progress and successes;
new text end

new text begin (2) detailed program expenditure information;
new text end

new text begin (3) a description of the success in soliciting nonstate money to support the program and
the program's growth or sustainability;
new text end

new text begin (4) a description of how MinneKIDS affiliate grantees are or anticipate aligning or
integrating with the program established by Minnesota Statutes, section 136G.15; and
new text end

new text begin (5) recommendations for improving the MinneKIDS local partner grant program
established by Minnesota Statutes, section 136G.16.
new text end

Sec. 11. new text begin APPROPRIATIONS.
new text end

new text begin (a) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
general fund to the commissioner of the Office of Higher Education for the MinneKIDS
program under Minnesota Statutes, sections 136G.15 and 136G.16.
new text end

new text begin (b) Of the amounts appropriated in paragraph (a):
new text end

new text begin (1) $....... in fiscal year 2026 and $....... in fiscal year 2027 are for transfer to the children's
higher education investment account in the special revenue fund for deposit into eligible
children's MinneKIDS accounts under Minnesota Statutes, section 136G.15; and
new text end

new text begin (2) $....... in fiscal year 2026 and $....... in fiscal year 2027 are for the MinneKIDS local
partner grant program under Minnesota Statutes, section 136G.16.
new text end