HF 2671

as introduced - 90th Legislature (2017 - 2018) Posted on 05/16/2017 09:41am

A bill for an act
relating to higher education; automatically funding public higher education systems
from a general fund balance if the legislature does not fulfill its postsecondary
funding policy; amending Minnesota Statutes 2016, sections 16A.152, subdivisions
1b, 2, by adding a subdivision; 135A.01.

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

Section 1.

Minnesota Statutes 2016, section 16A.152, subdivision 1b, is amended to read:

Subd. 1b.

Budget reserve level.

(a) The commissioner of management and budget shall
calculate the budget reserve level by multiplying the current biennium's general fund
nondedicated revenues and the most recent budget reserve percentage under subdivision 8.

(b) If, on the basis of a November forecast of general fund revenues and expenditures,
the commissioner of management and budget determines that there will be a positive
unrestricted general fund balance at the close of the biennium and that the provisions of
subdivision 2, clauses (1), (2), (3), (4), new text begin and new text end (5) deleted text begin , and (6) deleted text end are satisfied, the commissioner shall
transfer to the budget reserve account in the general fund the amount necessary to increase
the budget reserve to the budget reserve level determined under paragraph (a). The amount
of the transfer authorized in this paragraph shall not exceed 33 percent of the positive
unrestricted general fund balance determined in the forecast.

Sec. 2.

Minnesota Statutes 2016, section 16A.152, subdivision 2, is amended to read:

Subd. 2.

Additional revenues; priority.

(a) If on the basis of a forecast of general fund
revenues and expenditures, the commissioner of management and budget determines that
there will be a positive unrestricted budgetary general fund balance at the close of the
biennium, the commissioner of management and budget must allocate money to the following
accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches
$350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches
$1,596,522,000;

(3) the amount necessary to increase the aid payment schedule for school district aids
and credits payments in section 127A.45 to not more than 90 percent rounded to the nearest
tenth of a percent without exceeding the amount available and with any remaining funds
deposited in the budget reserve; deleted text begin and
deleted text end

(4) the amount necessary to restore all or a portion of the net aid reductions under section
127A.441 and to reduce the property tax revenue recognition shift under section 123B.75,
subdivision 5, by the same amount deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) if, in the last biennium, the legislature did not provide at least 67 percent of the
instructional costs to public postsecondary institutions, in compliance with the funding
policy in section 135A.01, subdivision 1, the commissioner must transfer up to 25 percent
of the unrestricted budgetary general fund balance to the Board of Trustees of the Minnesota
State Colleges and Universities and the Board of Regents of the University of Minnesota.
The amounts transferred by the commissioner, combined with the amounts appropriated by
the legislature, must not exceed the 67 percent funding target. When transferring money,
the commissioner must allocate the funds to the two boards in proportion to the respective
differences between money appropriated by the legislature for the system and the 67 percent
funding target. The Board of Trustees is required, and the Board of Regents is requested,
to use the money transferred in this paragraph to reduce undergraduate tuition.
new text end

(b) The amounts necessary to meet the requirements of this section are appropriated
from the general fund within two weeks after the forecast is released or, in the case of
transfers under paragraph (a), clauses (3) deleted text begin and deleted text end new text begin , new text end (4) new text begin , and (5) new text end , as necessary to meet the
appropriations schedules otherwise established in statute.

(c) The commissioner of management and budget shall certify the total dollar amount
of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education.
The commissioner of education shall increase the aid payment percentage and reduce the
property tax shift percentage by these amounts and apply those reductions to the current
fiscal year and thereafter.

Sec. 3.

Minnesota Statutes 2016, section 16A.152, is amended by adding a subdivision to
read:

new text begin Subd. 9. new text end

new text begin Higher education reserve account. new text end

new text begin (a) A higher education reserve account is
created in the general fund in the state treasury.
new text end

new text begin (b) The higher education reserve account may be used when a negative budgetary balance
is projected. Funds in the account may only be appropriated to the Board of Trustees of the
Minnesota State Colleges and Universities or the Board of Regents of the University of
Minnesota.
new text end

new text begin (c) The funding target for this account is 15 percent of the combined appropriations to
the Board of Trustees of the Minnesota State Colleges and Universities and the Board of
Regents of the University of Minnesota in the previous biennium.
new text end

Sec. 4.

Minnesota Statutes 2016, section 135A.01, is amended to read:

135A.01 FUNDING POLICY.

new text begin Subdivision 1. new text end

new text begin State share of higher education funding. new text end

It is the policy of the legislature
to provide stable funding for public postsecondary institutions and that the state and students
share the cost of public postsecondary education. The legislature intends to provide at least
67 percent of the deleted text begin combined revenue from tuition, the university fee at the University of
Minnesota, and state general fund appropriations deleted text end new text begin total instructional services costs new text end to public
postsecondary institutions. It is also the policy of the legislature that the budgetary process
serves to support high quality public postsecondary education.

new text begin Subd. 2. new text end

new text begin Calculation of instructional services costs. new text end

new text begin The total instructional services
costs shall be calculated in the following manner:
new text end

new text begin (1) determine the student enrollment, for each program category, for the fiscal year
before the fiscal year for which the appropriation is to be made;
new text end

new text begin (2) multiply the student enrollment by the average cost of instruction per student in each
program category; and
new text end

new text begin (3) add the resulting products.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of student enrollment. new text end

new text begin Student enrollment shall be the full-year
equivalent enrollment in each program category in the fiscal year before the fiscal year for
which the appropriations are being made. Student enrollment shall include students enrolled
in courses that award credit or otherwise satisfy any of the requirements of an academic
program.
new text end

new text begin Subd. 4. new text end

new text begin Calculation of the average cost of instruction. new text end

new text begin (a) The average cost of
instruction shall be determined by program categories. Program categories are delineated
by the cost of the program and level of instruction and student enrollment in each category.
new text end

new text begin (b) The average cost of instruction within a program category shall include direct
instructional costs and other costs necessary to provide instruction, such as facilities,
administration, and support. The average cost of instruction shall include only those costs
attributable to academic programs.
new text end

new text begin (c) Every biennium each board must submit the average cost of instruction for each
instructional category as necessary to determine appropriations as part of the biennial budget
proposal submitted under section 135A.031, subdivision 7.
new text end