HF 2864

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/13/2023 10:12am

A bill for an act
relating to education; establishing a statewide children's savings account program
for higher education and business training; establishing local partner start-up and
expansion grants; requiring a report; appropriating money; proposing coding for
new law as Minnesota Statutes, chapter 119C.

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

Section 1.

new text begin [119C.01] MINNESOTA KIDS INVESTMENT AND DEVELOPMENT
SAVINGS (MINNEKIDS) ACT; CITATION.
new text end

new text begin Sections 119C.01 to 119C.08 may be cited as the "Minnesota Kids Investment and
Development Savings (MinneKIDS) Act."
new text end

Sec. 2.

new text begin [119C.02] DEFINITIONS.
new text end

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

new text begin (b) "Account" means a designated savings account at a financial institution selected by
the program administrator.
new text end

new text begin (c) "Beneficiary" has the same meaning as "designated beneficiary," as provided in
section 529(e)(1) of the Internal Revenue Code.
new text end

new text begin (d) "Business education program" means a noninstitution of higher education program
that supports residents in pursuing a job or ownership in a business, entrepreneurship,
cooperative ownership, or another type of business program as defined by the program
administrator. This includes but is not limited to the Eligible Training Provider List required
under the Workforce Innovation Opportunity Act.
new text end

new text begin (e) "Fund" means the Minnesota Kids Investment and Development Savings Program
fund established according to section 119C.08.
new text end

new text begin (f) "Institution of higher education" has the same meaning as "eligible educational
institution," as provided in section 529(e)(5) of the Internal Revenue Code.
new text end

new text begin (g) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, if
it is determined by the program administrator that amendments are consistent with the
purposes of this chapter.
new text end

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

new text begin (i) "Participant" means a parent or legal guardian of an eligible child, a parent or legal
guardian of a child under section 119C.03, or any private individual or entity who contributes
monies to the program.
new text end

new text begin (j) "Program" means the Minnesota Kids Investment and Development Savings Program
established under this chapter.
new text end

new text begin (k) "Program administrator" means a statewide youth funding intermediary according
to section 119C.06.
new text end

new text begin (l) "Qualified higher education expenses" means the expenses of attendance at an
institution of higher education, as provided in section 529(e)(3) of the Internal Revenue
Code. Notwithstanding section 529(c)(7) of the Internal Revenue Code, qualified higher
education expenses must not include any tuition expenses in connection with enrollment or
attendance at an elementary or secondary public, private, or religious school.
new text end

new text begin (m) "Seed deposit" means an initial financial contribution into an account for a child
born on or after July 1, 2024.
new text end

Sec. 3.

new text begin [119C.03] STATEWIDE MINNEKIDS PROGRAM ESTABLISHED;
ELIGIBILITY, SEED DEPOSITS; ENROLLMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Seed deposits. new text end

new text begin (a) An eligible child born on or after July 1, 2024, who
is a Minnesota resident at the time of kindergarten entry, must receive a $50 seed deposit.
new text end

new text begin (b) An eligible child born on or after July 1, 2024, who is a Minnesota resident at the
time of kindergarten entry, and is identified by the program administrator as being from a
low-income household, must receive a $100 seed deposit.
new text end

new text begin (c) The Department of Education must provide the program administrator with school
directory-level information in a file format as defined by the program administrator no later
than 90 days after October 1 of each year of which a child described in paragraph (a) or (b)
enters kindergarten. The school directory-level data must include but not be limited to the
child's name and birth date, the name and contact information of each parent or guardian
of the child, the parent or guardian's street or email address, if available, and the child's
school. No more than 90 days after receiving the school directory-level data from the
Department of Education, the program administrator must notify each parent or guardian
of each eligible child about the program. The notification must include:
new text end

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

new text begin (2) the subaccount opened for the child; and
new text end

new text begin (3) how a parent or guardian may make deposits into the subaccount for family
contributions.
new text end

new text begin (d) The program administrator must provide seed deposits within 90 days of the birth
of a child using publicly available birth records.
new text end

new text begin (e) The program administrator must provide a balance statement to a child's parent or
legal guardian with the amount of funds in the subaccount.
new text end

new text begin (f) The program administrator may periodically inform a child's parent or legal guardian
of account earnings designated for the child, information on how a parent or guardian may
make deposits into the subaccount for family contributions, and information on contribution
matching opportunities.
new text end

new text begin (g) The program administrator must translate notifications and information provided
under paragraphs (c), (e), and (f) into common languages spoken throughout Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Accounts. new text end

new text begin Upon appropriation by the legislature, the program administrator
must select a financial institution to administer the accounts and subaccounts, must establish
one or more accounts, and must make a seed deposit from the fund into a subaccount
established within an account in an amount determined by the program administrator. A
seed deposit under subdivision 1, paragraphs (a) and (b), must be designated for a particular
child for whom the program administrator receives publicly available birth record data under
subdivision 1, paragraph (d), if no parent or legal guardian has opted that child out of the
program. Monies in a subaccount designated for a child, including any investment earnings
attributed to the amount of the child's seed deposit since the date of the deposit, as calculated
by the program administrator, must be used for the purpose of providing awards for qualified
higher education expenses associated with the child's attendance at an eligible institution
of higher education or to a business education program.
new text end

new text begin Subd. 3. new text end

new text begin Payment to institution or program. new text end

new text begin Upon receiving documentation of a child's
enrollment as a student at an institution of higher education or a business education program,
the program administrator must make a payment to that institution or business education
program in the amount of the seed deposit designated for the child under subdivision 1,
paragraphs (a) and (b), plus any investment earnings attributed to that amount since the date
of the deposit, as calculated by the program administrator, for qualified higher education
expenses associated with the child's attendance at that institution or business education
program.
new text end

new text begin Subd. 4. new text end

new text begin Participation incentives. new text end

new text begin Subject to available monies in the fund, the program
administrator may provide additional incentives from the fund for children participating in
the program, including if a parent or guardian of a child engages with the subaccount by
verifying receipt of information provided under subdivision 1, paragraph (c), deposits funds
into the subaccount using family contributions, or engages with the subaccount by other
means approved by the program administrator.
new text end

new text begin Subd. 5. new text end

new text begin Enrollment; eligibility. new text end

new text begin (a) Subject to available funding, a resident of Minnesota
who is a parent or legal guardian of a child who meets the criteria in paragraph (b) may
apply to the program administrator to enroll the child into the program and receive a seed
deposit. Subject to available funding, the enrollee may be eligible for any incentives described
in subdivision 4, as applicable.
new text end

new text begin (b) A child is eligible for enrollment under paragraph (a) if the child is a current
Minnesota resident under 18 years of age who was either:
new text end

new text begin (1) a Minnesota resident who was born on or after July 1, 2024; or
new text end

new text begin (2) not a Minnesota resident at the time of program launch but was born on or after July
1, 2024.
new text end

new text begin Subd. 6. new text end

new text begin Account forfeiture; appeal. new text end

new text begin (a) If a beneficiary does not use any or all of the
funds intended for the beneficiary in an account for a qualified higher education or a business
education program expense for any reason, including death or disability of the beneficiary,
before the beneficiary turns 26 years of age, all contributions made for the beneficiary into
the account and any earnings from those funds must be forfeited and deposited into the fund
for the program and used for other beneficiaries.
new text end

new text begin (b) Notwithstanding paragraph (a), subject to available funding, the program administrator
may establish an appeal process to allow a beneficiary to use monies designated for the
beneficiary in an account after the beneficiary turns 26 years of age.
new text end

new text begin (c) All contributions made into an account for a child who has opted out of the program
under subdivision 1, including any investment earnings attributed to the amount of the
child's seed deposit since the date of the deposit, as calculated by the program administrator,
must be forfeited and deposited into the fund for the program and used for other beneficiaries
in a timely manner.
new text end

Sec. 4.

new text begin [119C.04] MINNEKIDS OPERATING DATE AND OPERATIONS.
new text end

new text begin (a) Subject to available funding, the program must be implemented no later than July 1,
2024. The program administrator may establish an implementation timeline for the program
based on available funding. If the program administrator does not secure adequate funds to
implement the program by July 1, 2024, program implementation may be delayed while
the program administrator makes good faith efforts to launch the program. The program
administrator may accept 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 program administrator deems
advisable.
new text end

new text begin (b) Before the program is implemented and throughout the program's operation, the
program administrator must seek alignment and integration with other entities operating an
existing local children's savings account program and may make program revisions to best
administer the program in alignment or integration with the existing local children's savings
account programs.
new text end

Sec. 5.

new text begin [119C.05] MINNEKIDS LOCAL PARTNER GRANT PROGRAM
ESTABLISHED.
new text end

new text begin Subdivision 1. new text end

new text begin Eligible entities. new text end

new text begin (a) The program administrator must implement and
administer the MinneKIDS Local Partner Grant Program to a qualifying entity, including
local governments, Tribal governments, philanthropic entities, and nonprofit organizations.
new text end

new text begin (b) The program administrator must award a grant to a qualifying entity for the purposes
of supplying funding to:
new text end

new text begin (1) start up a new local child savings account program; or
new text end

new text begin (2) expand an existing local child savings account program.
new text end

new text begin Subd. 2. new text end

new text begin Start-up grants. new text end

new text begin (a) To receive a start-up grant, a qualifying entity must:
new text end

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

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

new text begin (3) develop a plan to supplement funding received under this chapter to provide continued
financial support for its proposed program; and
new text end

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

new text begin (b) Start-up grant awards must be used for convening, planning, engagement, outreach,
marketing, staff for local coordination, additional deposits, and other programmatic expenses.
Fifty percent of the total grant amount must be focused on local programs in greater
Minnesota and Tribal nations. Fifty percent of the total grant amount must be focused on
local programs in the Twin Cities.
new text end

new text begin Subd. 3. new text end

new text begin Expansion grants. new text end

new text begin (a) To receive an expansion grant, a qualifying entity must:
new text end

new text begin (1) have a local child 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 monies with the grants applied for under this chapter
to support its program; and
new text end

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

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

new text begin Subd. 4. new text end

new text begin Administration of MinneKIDS Local Partner Grant Program. new text end

new text begin (a) The
program administrator must adopt, as necessary, application procedures, forms, administrative
guidelines, and other requirements for the purposes of implementing and administering the
MinneKIDS Local Partner Grant Program.
new text end

new text begin (b) The program administrator must provide outreach to potential grantees to review,
score, and select grantees, and to oversee and evaluate grant implementation. The program
administrator must give outreach priority to underrepresented regions of the state that are
not already offering a local child savings account program.
new text end

new text begin (c) The program administrator must provide technical assistance to applicants that
includes but is not limited to developing a toolkit for qualifying entities seeking to
successfully launch a new local child savings account program, assisting qualifying entities
that are not offering a local child savings account program in developing an application to
receive a grant, and other activities to advance the program as determined by the program
administrator.
new text end

new text begin (d) The program administrator must encourage potential applicants to use the technical
assistance made available by the program administrator to develop program plans.
new text end

new text begin (e) The program administrator must distribute grants to qualifying entities based on the
number of eligible entities under this section, the amount of available funding under the
MinneKIDS Local Partner Grant Program, the number of children that each participating
entity intends to serve under the program, and the percentage of low-income families residing
in the community served by each participating entity. The minimum amount of each grant
award to a participating entity must be $100,000.
new text end

new text begin Subd. 5. new text end

new text begin MinneKIDS local partner grant priorities for start-up and expansion. new text end

new text begin The
program administrator must give grant priority to a qualifying entity meeting the
qualifications in subdivision 2 or 3 based upon:
new text end

new text begin (1) data showing lower than average median incomes of families living in the local
program's geographic region;
new text end

new text begin (2) data showing lower than average college attendance rates for students in the local
program's geographic region;
new text end

new text begin (3) a plan that demonstrates a higher total amount of funds saved for the local program;
new text end

new text begin (4) a higher number of outreach events demonstrated by the applicant in its application
to encourage family and community contributions to child savings accounts;
new text end

new text begin (5) demonstrated ability to sustain and potentially expand its program;
new text end

new text begin (6) existing partnerships with schools and community organizations to execute the
program plan;
new text end

new text begin (7) a higher amount of funding secured through local budget commitments, philanthropy,
or other nonstate funding sources; and
new text end

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

Sec. 6.

new text begin [119C.06] PROGRAM ADMINISTRATOR; YOUTHPRISE.
new text end

new text begin The Department of Education must contract with Youthprise as the program administrator
for the MinneKIDS program.
new text end

Sec. 7.

new text begin [119C.07] REPORTING REQUIREMENTS.
new text end

new text begin (a) By February 15, 2026, the program administrator must report information pertaining
to the first year of the program's implementation to the commissioner of education and the
chairs and ranking minority members of the legislative committees having jurisdiction over
kindergarten through grade 12 education and 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 subaccounts opened;
new text end

new text begin (3) the number of state and nonstate contributions made to subaccounts;
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 program administrator's marketing of the program;
new text end

new text begin (6) a description of the program administrator's efforts and success in:
new text end

new text begin (i) soliciting philanthropic or nonstate money to support the program; and
new text end

new text begin (ii) aligning and integrating with existing local children's savings account programs; and
new text end

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

new text begin (b) By February 15, 2026, the program administrator must report information regarding
the MinneKIDS Local Partner Grant Program to the commissioner of the education and the
chairs and ranking minority members of the legislative committees having jurisdiction over
kindergarten through grade 12 education and higher education information.The report must
include but not be limited to:
new text end

new text begin (1) a list of start-up and expansion grantees and their 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
its growth or sustainability;
new text end

new text begin (4) a description of how local partner grantees are or anticipate aligning and integrating
with the statewide MinneKIDS program; and
new text end

new text begin (5) recommendations for improving the MinneKIDS Local Partner Grant Program.
new text end

Sec. 8.

new text begin [119C.08] MINNEKIDS FUND ESTABLISHED.
new text end

new text begin A MinneKIDS fund account is created in the special revenue fund in the state treasury.
Money in this account is appropriated to the commissioner for seed deposits under section
119C.03.
new text end

Sec. 9. new text begin APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sums indicated in this section are
appropriated from the general fund to the Department of Education for the fiscal years
designated.
new text end

new text begin Subd. 2. new text end

new text begin MinneKIDS. new text end

new text begin (a) For the MinneKIDS program under Minnesota Statutes,
sections 119C.01 to 119C.08:
new text end

	new text begin $ new text end	new text begin 3,570,740 new text end	new text begin ..... new text end	new text begin 2024 new text end
	new text begin $ new text end	new text begin 8,153,400 new text end	new text begin ..... new text end	new text begin 2025 new text end

new text begin (b) Of this amount, $3,000,000 in fiscal year 2024 is for local partner grants under
Minnesota Statutes, section 119C.05, of which $2,000,000 is for start-up grants and
$1,000,000 is for expansion grants, and $570,740 in fiscal year 2024 is for Youthprise for
program administrator services.
new text end

new text begin (c) Of this amount, $4,620,000 in fiscal year 2025 is for deposit in the MinneKIDS fund
account in the special revenue fund, and $3,533,400 in fiscal year 2025 is for local partner
grants and program administrator costs.
new text end

new text begin (d) Any balance in the first year does not cancel and is available in the second year.
new text end

new text begin (e) The base for fiscal year 2026 and later is $8,153,400.
new text end