HF 2229

as introduced - 89th Legislature (2015 - 2016) Posted on 03/10/2016 05:17pm

A bill for an act
relating to higher education; increasing the amount and availability of the state
grant; allowing a student loan refundable credit; appropriating money for tuition
relief; appropriating money for the student loan refinancing program; amending
Minnesota Statutes 2014, section 136A.101, subdivision 5a; proposing coding
for new law in Minnesota Statutes, chapter 290.

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

Section 1.

Minnesota Statutes 2014, section 136A.101, subdivision 5a, is amended to
read:

Subd. 5a.

Assigned family responsibility.

"Assigned family responsibility" means
the amount of a family's contribution to a student's cost of attendance, as determined by a
federal need analysis. For dependent students, the assigned family responsibility is deleted text begin 96 deleted text end new text begin 75
new text end percent of the parental contribution. For independent students with dependents other than
a spouse, the assigned family responsibility is deleted text begin 86 deleted text end new text begin 70 new text end percent of the student contribution.
For independent students without dependents other than a spouse, the assigned family
responsibility is deleted text begin 50 deleted text end new text begin 34 new text end percent of the student contribution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 2.

new text begin [290.0684] STUDENT LOAN CREDIT.
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) "Eligible individual" means an individual who has one or more qualified
education loans related to an undergraduate or graduate degree program at a postsecondary
educational institution.
new text end

new text begin (c) "Modified adjusted gross income" has the meaning given in section 221(b)(2)(C)
of the Internal Revenue Code.
new text end

new text begin (d) "Postsecondary educational institution" means a postsecondary institution that is
located in this state and is eligible for state student aid under section 136A.103.
new text end

new text begin (e) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual
or the eligible individual's spouse.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed; limitation. new text end

new text begin (a) An eligible individual or the parent of an
eligible individual is allowed a credit against the tax due under this chapter.
new text end

new text begin (b) The credit for an eligible individual equals the lesser of:
new text end

new text begin (1) the amount the eligible individual paid during the taxable year to pay principal
and interest on qualified education loans; or
new text end

new text begin (2) the maximum credit as determined under paragraph (d).
new text end

new text begin (c) The credit for the parent of an eligible individual equals the lesser of:
new text end

new text begin (1) the amount the parent of the eligible individual paid during the taxable year to
pay principal and interest on qualified education loans of the eligible individual; or
new text end

new text begin (2) the maximum credit as determined under paragraph (d), less the amount of credit
allowed to the eligible individual under paragraph (b).
new text end

new text begin (d) The maximum credit is $5,000, subject to the income-based phaseout provided in
this paragraph. For married couples filing joint returns, the maximum credit is reduced
by $1 for every $6 of modified adjusted gross income in excess of $130,000. For all
other filers, the maximum credit is reduced by $1 for every $3 of modified adjusted gross
income in excess of $65,000. In no case is the maximum credit less than zero.
new text end

new text begin (e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that an individual is eligible
to receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general 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, 2014.
new text end

Sec. 3. new text begin MINNESOTA STATE COLLEGES AND UNIVERSITIES; TUITION
FREEZE.
new text end

new text begin (a) $42,300,000 is appropriated in fiscal year 2016 and $85,500,000 is appropriated in
fiscal year 2017 to the Board of Trustees of the Minnesota State Colleges and Universities
for student tuition relief. The Board of Trustees may not set the tuition rate in any
undergraduate degree-granting program for the 2015-2016 and 2016-2017 academic years
at a rate greater than the 2014-2015 academic year rate. The student tuition relief may not
be offset by increases in mandatory fees, charges, or other assessments to the student.
new text end

new text begin (b) To the extent that the appropriations under this section are insufficient, the Board
of Trustees shall fund the remainder of the student tuition relief through reductions in
costs associated with central administration of the system and executive administration of
individual campuses, or through reallocation of nonstate funds. Tuition relief may not be
funded through reduction in any program or service that directly impacts students.
new text end

Sec. 4. new text begin UNIVERSITY OF MINNESOTA; TUITION FREEZE.
new text end

new text begin (a) $19,350,000 is appropriated in fiscal year 2016 and $39,330,000 is appropriated
in fiscal year 2017 to the Board of Regents of the University of Minnesota for student
tuition relief. The Board of Regents is requested to maintain the Minnesota resident
undergraduate and graduate tuition rates for the 2015-2016 and 2016-2017 academic years
at the 2014-2015 academic year rate, and is also requested to not offset the tuition relief by
increases in mandatory fees, charges, or other assessments to the student.
new text end

new text begin (b) To the extent that the appropriations under this section are insufficient, the
Board of Regents is requested to fund the remainder of the student tuition relief through
reductions in costs associated with central administration of the university and executive
administration of individual campuses, or through reallocation of nonstate funds. The
Board of Regents is requested to not fund tuition relief through reduction in any program
or service that directly impacts students.
new text end

Sec. 5. new text begin STATE GRANT TUITION CAPS; LIVING AND MISCELLANEOUS
EXPENSE ALLOWANCE.
new text end

new text begin (a) For the purposes of the state grant program under Minnesota Statutes, section
136A.121, for the biennium ending June 30, 2017, the tuition maximum is $13,000 each
fiscal year of the biennium for students in four-year programs and $5,808 each fiscal year
of the biennium for students in two-year programs.
new text end

new text begin (b) The living and miscellaneous expense allowance for the state grant program
under Minnesota Statutes, section 136A.121, for the biennium ending June 30, 2017, is set
at $9,000 for fiscal year 2016 and $9,000 for fiscal year 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 6. new text begin APPROPRIATION; STUDENT LOAN REFINANCING PROGRAM.
new text end

new text begin (a) $5,000,000 in fiscal year 2016 and $5,000,000 in fiscal year 2017 are
appropriated from the general fund to the commissioner of higher education to provide
additional funding for the pilot refinancing student loan program authorized under
Minnesota Statutes, section 136A.1704. The commissioner shall use the appropriation
under this section to reduce the interest rate on the refinancing loans issued under the pilot
refinancing student loan program. This appropriation is available until expended.
new text end

new text begin (b) The commissioner shall report to the legislative committees with jurisdiction
over higher education policy and finance by February 15, 2016, on the use of the additional
funding under this section. The commissioner shall demonstrate how the money is being
used to offer refinancing loans at a lower interest rate than would otherwise be possible
without the additional funding.
new text end