SF 3248

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/04/2025 09:28 a.m.

A bill for an act
relating to higher education; establishing a participation fee on certain growth of
certain assets of colleges and universities; establishing an account in the special
revenue fund; amending Minnesota Statutes 2024, section 136A.121, by adding
subdivisions; proposing coding for new law in Minnesota Statutes, chapter 136A.

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

Section 1.

Minnesota Statutes 2024, section 136A.121, is amended by adding a subdivision
to read:

new text begin Subd. 12b. new text end

new text begin State grant participation fee compliance. new text end

new text begin To be eligible for student aid
under this section, an eligible institution must pay any fees required under section 136A.1212.
new text end

Sec. 2.

Minnesota Statutes 2024, section 136A.121, is amended by adding a subdivision
to read:

new text begin Subd. 22. new text end

new text begin Higher education assets growth account. new text end

new text begin The higher education assets growth
account is created in the special revenue fund in the state treasury. Unless otherwise
appropriated, money in the account is appropriated to the commissioner for the state grant
program under this section. Earnings, such as interest, dividends, and any other earnings
arising from the assets of the account, are credited to the account. 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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [136A.1212] STATE GRANT PROGRAM PARTICIPATION FEE BASED
ON ASSETS GROWTH OF COLLEGES AND UNIVERSITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Applicable educational institution" means an eligible institution under section
136A.103:
new text end

new text begin (1) with total assets at any time during a taxable year in excess of $100,000,000;
new text end

new text begin (2) having at least 500 tuition-paying students during the preceding taxable year; and
new text end

new text begin (3) having more than 50 percent of tuition-paying students located in Minnesota.
new text end

new text begin (c) "Asset growth" means the positive difference between the value of assets at the close
of the current taxable year and the value of assets at the close of the immediately preceding
taxable year.
new text end

new text begin (d) "Assets" means assets not used directly in carrying out an applicable educational
institution's exempt purpose, as provided by Code of Federal Regulations, title 26, section
4968-1(b)(5)(2020).
new text end

new text begin (e) "Per-student assets" means the value of an applicable educational institution's assets
at the close of the current taxable year divided by the number of tuition-paying students at
the close of the current taxable year.
new text end

new text begin (f) "Related organization" has the meaning given in section 4968(d)(2) of the Internal
Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Participation fee. new text end

new text begin (a) To be eligible to receive student aid under section
136A.121, an applicable educational institution must pay a fee equal to a percentage of the
asset growth of the applicable educational institution, calculated according to the percentages
in subdivision 3.
new text end

new text begin (b) An eligible institution must pay the fee required by this section by May 30 to receive
student aid under section 136A.121 in the next academic year.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of fee. new text end

new text begin The fee required under subdivision 2 is calculated as follows:
new text end

new text begin (1) for per-student assets over $74,999 but not over $150,000, 15 percent;
new text end

new text begin (2) for per-student assets over $150,000 but not over $250,000, 20 percent; and
new text end

new text begin (3) for per-student assets over $250,000, 25 percent.
new text end

new text begin Subd. 4. new text end

new text begin Other provisions apply. new text end

new text begin (a) For purposes of subdivision 1, paragraph (b),
clauses (1) and (2), the provisions of section 4968(b)(2) of the Internal Revenue Code apply.
new text end

new text begin (b) Assets of related organizations of eligible institutions are treated as assets of the
eligible institution, except assets not intended or available for use or benefit of the eligible
institution are excluded from the calculation of per-student endowment growth differential
unless the related organization is controlled by the eligible institution or is an organization
described in section 509(a)(3) of the Internal Revenue Code.
new text end

new text begin Subd. 5. new text end

new text begin Payment of fee. new text end

new text begin An applicable educational institution must report the fee on a
form prescribed by the commissioner and must pay the fee in a form and manner prescribed
by the commissioner.
new text end

new text begin Subd. 6. new text end

new text begin Deposit of revenues; account established. new text end

new text begin The commissioner must deposit
the revenues derived from the fee imposed by this section in the higher education endowment
growth account in the special revenue fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2025, and for student financial aid for the 2026-2027 academic year.
new text end