HF 3392

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 05/07/2020 02:17pm

A bill for an act
relating to higher education; providing for policy changes for the Office of Higher
Education, including financial aid, institutional approval, and the Minnesota college
savings plan; establishing and increasing fees; requiring a report; amending
Minnesota Statutes 2018, sections 124D.09, subdivision 10a; 135A.15, subdivision
1a; 136A.01, subdivision 1; 136A.031, subdivision 3; 136A.103; 136A.121, by
adding a subdivision; 136A.125, subdivision 3; 136A.1275, subdivision 1;
136A.1701, subdivision 4; 136A.1791, subdivisions 1, 3; 136A.1795, subdivision
4; 136A.65, subdivisions 4, 7, 8; 136A.653, subdivision 1; 136A.657, subdivisions
1, 2, 3; 136A.658; 136A.675; 136A.69, subdivisions 1, 4, by adding a subdivision;
136A.824, subdivision 4, by adding a subdivision; 136A.827, subdivision 4;
136A.829, subdivision 1; 136A.833, subdivision 1; 136A.834, subdivisions 1, 2;
136G.01; 136G.03, subdivisions 8, 10, 11, 20, 31, by adding a subdivision;
136G.05, subdivisions 2, 5, 7; 136G.09, subdivisions 6, 8; 136G.11, subdivisions
11, 13; 136G.13; 136G.14; Minnesota Statutes 2019 Supplement, sections 136A.64,
subdivision 1; 136A.646; proposing coding for new law in Minnesota Statutes,
chapter 136A; repealing Minnesota Statutes 2018, sections 136G.03, subdivisions
4, 22; 136G.05, subdivision 6.

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

ARTICLE 1

OFFICE OF HIGHER EDUCATION

Section 1.

Minnesota Statutes 2018, section 124D.09, subdivision 10a, is amended to read:

Subd. 10a.

new text begin Statewide new text end concurrent enrollment deleted text begin participant survey deleted text end new text begin evaluation new text end .

deleted text begin (a)
Postsecondary institutions offering courses taught by the secondary teacher according to
subdivision 10, and are members in the National Alliance of Concurrent Enrollment
Partnerships (NACEP), must report all required NACEP evaluative survey results by
September 1 of each year to the commissioners of the Office of Higher Education and the
Department of Education. The commissioners must report by December 1 of each year to
the committees of the legislature having jurisdiction over early education through grade 12
education.
deleted text end

deleted text begin (b) Postsecondary institutions that have not adopted and implemented the NACEP
program standards and required evidence for accreditation, are required to conduct an annual
survey of concurrent enrolled students who successfully completed the course who are one
year out of high school, beginning with the high school graduating class of 2016. By
September 1 of each year, the postsecondary institutions must report the evaluative survey
results to the commissioners of the Office of Higher Education and the Department of
Education. The commissioner must report by December 1 of each year to the committees
of the legislature having jurisdiction over early education through grade 12 education. The
survey must include, at a minimum, the following student information:
deleted text end

deleted text begin (1) the participant's future education plans, including the highest degree or certification
planned;
deleted text end

deleted text begin (2) whether the participant is enrolled or plans to enroll in a Minnesota postsecondary
institution, either public or private;
deleted text end

deleted text begin (3) the number of credits accepted or denied by postsecondary institutions;
deleted text end

deleted text begin (4) the college or university attended;
deleted text end

deleted text begin (5) the participant's satisfaction level with the concurrent enrollment program;
deleted text end

deleted text begin (6) the participant's demographics, such as gender, parent education level, qualification
for free or reduced-price lunch in high school, Pell grant qualification, and ethnicity; and
deleted text end

deleted text begin (7) a place for participants to provide comments.
deleted text end

new text begin The Office of Higher Education and the Department of Education shall collaborate in
order to provide annual statewide evaluative information on concurrent enrollment programs
to the legislature. The commissioners of the Office of Higher Education and the Department
of Education, in consultation with stakeholders, including students and parents, must
determine what student demographics and outcomes data are appropriate to include in the
evaluation, and must use systems available to the office and department to minimize the
reporting burden on postsecondary institutions. The commissioners must report by December
1, 2021, and each year thereafter, to the committees of the legislature with jurisdiction over
early education through grade 12 and Minnesota State Colleges and Universities.
new text end

Sec. 2.

Minnesota Statutes 2018, section 135A.15, subdivision 1a, is amended to read:

Subd. 1a.

Sexual assault definition.

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

new text begin (b) "Incident" means one report of sexual assault to a postsecondary institution, regardless
of the number of complainants included in the report, the number of respondents included
in the report, and whether or not the identity of any party is known by the reporting
postsecondary institution. Incident encompasses all nonconsensual events included within
one report if multiple events have been identified.
new text end

new text begin (c) new text end "Sexual assault" means rape, sex offenses - fondling, sex offenses - incest, or sex
offenses - statutory rape as defined in Code of Federal Regulations, title 34, part 668, subpart
D, appendix A, as amended.

Sec. 3.

Minnesota Statutes 2018, section 136A.01, subdivision 1, is amended to read:

Subdivision 1.

Creation.

The Office new text begin of Higher Education, which may also be known
as the Minnesota Office of Higher Education, new text end is created with a commissioner appointed by
the governor with the advice and consent of the senate and serving at the pleasure of the
governor.

Sec. 4.

Minnesota Statutes 2018, section 136A.031, subdivision 3, is amended to read:

Subd. 3.

Student Advisory Council.

(a) A Student Advisory Council (SAC) to the
office is established. The members of SAC shall include: the chair of the University of
Minnesota student senate; the state chair of the Minnesota State University Student
Association; the president of the Minnesota State College Student Association and an officer
of the Minnesota State College Student Association, one in a community college course of
study and one in a technical college course of study; a student who is enrolled in a private
nonprofit postsecondary institution, to be elected by students enrolled in Minnesota Private
College Council institutions; deleted text begin and deleted text end a student who is enrolled in a private deleted text begin for-profit
postsecondary institution deleted text end new text begin career school new text end , to be elected by students enrolled in Minnesota
deleted text begin Career College Association institutions deleted text end new text begin private career schools; and a student who is enrolled
in a Minnesota tribal college, to be elected by students enrolled in Minnesota tribal colleges.
If students from the private career schools or tribal colleges do not elect a representative,
the commissioner must appoint a student representative new text end . If students from the Minnesota
Private College Council institutions do not elect a representative, the Minnesota Private
College Council must appoint the private nonprofit representative. deleted text begin If students from the
Minnesota Career College Association institutions do not elect a representative, the Minnesota
Career College Association must appoint the private for-profit representative. deleted text end A member
may be represented by a student designee who attends an institution from the same system
that the absent member represents. The SAC shall select one of its members to serve as
chair.

(b) The office shall inform the SAC of all matters related to student issues under
consideration. The SAC shall report to the office quarterly and at other times that the SAC
considers desirable. The SAC shall determine its meeting times, but it shall also meet with
the office within 30 days after the commissioner's request for a meeting.

(c) The SAC shall:

(1) bring to the attention of the office any matter that the SAC believes needs the attention
of the office;

(2) make recommendations to the office as it finds appropriate; and

(3) approve student appointments by the office for each advisory group as provided in
subdivision 4.

Sec. 5.

new text begin [136A.032] COMMUNITY AND COMMISSIONER PARTICIPATION IN
POSTSECONDARY EDUCATION OF AMERICAN INDIANS.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin (a) The term used in this section has the meaning given in
this subdivision.
new text end

new text begin (b) "Tribal Nations Education Committee" means the committee established through
tribal directive, for which the commissioner consults on matters related to American Indian
postsecondary education programs, policy, and all matters related to educating Minnesota's
American Indian postsecondary students. The membership of the Tribal Nations Education
Committee is determined by and at the sole discretion of the committee members, and
nothing in this section authorizes the commissioner to dictate committee membership.
new text end

new text begin Subd. 2. new text end

new text begin American Indian community involvement. new text end

new text begin The commissioner must provide
for the involvement of the Tribal Nations Education Committee, American Indian
postsecondary students, and representatives of community groups in the establishment of
programs, formation of policies, and all other matters related to the postsecondary education
of Minnesota's American Indian students.
new text end

new text begin Subd. 3. new text end

new text begin Consultation with the Tribal Nations Education Committee. new text end

new text begin (a) The
commissioner shall seek consultation with the Tribal Nations Education Committee regarding
programs, policies, and all other matters related to the postsecondary education of Minnesota's
American Indian students.
new text end

new text begin (b) Nothing in this subdivision prevents the commissioner from seeking consultation
with individual tribal nations.
new text end

Sec. 6.

new text begin [136A.096] FINANCIAL AID GOALS.
new text end

new text begin The legislature directs the commissioner of the Office of Higher Education, in
coordination with the Minnesota Department of Education and the Minnesota Association
of Secondary School Principals, to set an annual goal for the percentage of Minnesota's
high school seniors completing the Free Application for Federal Student Aid (FAFSA).
new text end

Sec. 7.

Minnesota Statutes 2018, section 136A.103, is amended to read:

136A.103 INSTITUTION ELIGIBILITY REQUIREMENTS.

(a) A postsecondary institution is eligible for state student aid under chapter 136A and
sections 197.791 and 299A.45, if the institution is located in this state and:

(1) is operated by this state or the Board of Regents of the University of Minnesota; or

(2) is operated privately and, as determined by the office, meets the requirements of
paragraph (b).

(b) A private institution must:

(1) maintain academic standards substantially equivalent to those of comparable
institutions operated in this state;

(2) be licensed or registered as a postsecondary institution by the office; deleted text begin and
deleted text end

new text begin (3) meet the additional security requirement under section 136A.646; and
new text end

deleted text begin (3) deleted text end new text begin (4) new text end (i) by July 1, 2010, participate in the federal Pell Grant program under Title IV
of the Higher Education Act of 1965, Public Law 89-329, as amended; or

(ii) if an institution was participating in state student aid programs as of June 30, 2010,
and the institution did not participate in the federal Pell Grant program by June 30, 2010,
the institution must require every student who enrolls to sign a disclosure form, provided
by the office, stating that the institution is not participating in the federal Pell Grant program.

(c) An institution that offers only graduate-level degrees or graduate-level nondegree
programs is an eligible institution if the institution is licensed or registered as a postsecondary
institution by the office.

(d) An eligible institution under paragraph (b), clause deleted text begin (3) deleted text end new text begin (4) new text end , item (ii), that changes
ownership as defined in section 136A.63, subdivision 2, must participate in the federal Pell
Grant program within four calendar years of the first ownership change to continue eligibility. new text begin
The office may terminate an institution's eligibility to participate in state student aid programs
under this paragraph if the institution fails to make substantive progress toward participation
in the federal Pell Grant program within the required four years.
new text end

(e) An institution that loses its eligibility for the federal Pell Grant program is not an
eligible institution new text begin and the office may terminate an institution's eligibility to participate in
state student aid programs effective the date of the loss of eligibility for the federal Pell
Grant program new text end .

(f) An institution must maintain adequate administrative and financial standards and
compliance with all state statutes, rules, and administrative policies related to state financial
aid programs. new text begin The office may terminate a postsecondary institution's eligibility to participate
in state student aid programs if the institution meets any of the following criteria:
new text end

new text begin (1) it violates a provision of Minnesota Statutes, Minnesota Rules, or administrative
policies governing student aid programs and fails to correct the violation and reimburse the
office for audit findings within the time frame specified in the audit report or other notice
furnished by the office;
new text end

new text begin (2) it has a consistent pattern of noncompliance with Minnesota Statutes, Minnesota
Rules, or administrative policies governing student aid programs as documented by the
office or lacks administrative capability to successfully administer student financial aid
programs on campus based on factors, including but not limited to:
new text end

new text begin (i) adequacy of financial aid staffing levels, experience, training, and turnover of key
financial aid staff;
new text end

new text begin (ii) adequate checks and balances in its system of internal controls;
new text end

new text begin (iii) maintenance of records required for programs; or
new text end

new text begin (iv) the ability to participate in the electronic processes used for program administration;
new text end

new text begin (3) it refuses to allow inspection of or provide information relating to financial aid records
after written request by the office;
new text end

new text begin (4) it has been administratively or judicially determined to have committed fraud or any
other material violation of law involving federal, state, or local government funds;
new text end

new text begin (5) it falsifies information or engages in misleading or deceptive practices involving the
administration of student financial aid programs;
new text end

new text begin (6) it no longer meets institutional eligibility criteria in this section or additional criteria
for state grant participation in Minnesota Rules, part 4830.0300; or
new text end

new text begin (7) it is terminated from participating in federal financial aid programs by the United
States Department of Education, if the termination was based on a violation of laws,
regulations, or participation agreements governing federal financial aid programs.
new text end

Sec. 8.

new text begin [136A.1041] TERMINATION PROCEDURE.
new text end

new text begin The office shall provide written notice of its intent to terminate an institution's eligibility
to participate in student financial aid programs if the institution meets any of the criteria
for termination in section 136A.103. The office shall send the institution written notification
of the termination, which is effective 90 days after the date of the written notification. The
90-day notice under this provision does not apply to termination under section 136A.103,
paragraph (e). The office shall also provide an institution an opportunity for a hearing under
chapter 14.
new text end

Sec. 9.

new text begin [136A.1042] REQUEST FOR HEARING.
new text end

new text begin An institution may request a hearing under chapter 14 regarding its termination of
eligibility to participate in a student aid program. The request must be in writing and must
be received by the commissioner within 30 days after the date on the written notification
of termination sent by the office.
new text end

Sec. 10.

Minnesota Statutes 2018, section 136A.121, is amended by adding a subdivision
to read:

new text begin Subd. 21. new text end

new text begin Institutional prohibition. new text end

new text begin An institution receiving financial aid under this
section must not suspend or withdraw a student from class attendance and resources during
a period of instruction due to an unpaid student account balance unless the student is eligible
for a full tuition and fee refund. A period of instruction for the purposes of this subdivision
means a new academic term that may be measured in semesters, trimesters, quarters, interim
terms, mini terms, or one or more modules so that a student who begins attendance in that
new academic term incurs additional tuition and fee charges beyond any outstanding student
account balance due to the institution for prior completed terms of enrollment. An institution
that measures a program in clock hours and that includes language in the enrollment contract
between it and the student to only charge tuition by payment period, is also covered by this
subdivision.
new text end

Sec. 11.

Minnesota Statutes 2018, section 136A.125, subdivision 3, is amended to read:

Subd. 3.

Eligible institution.

A Minnesota public postsecondary institution, a Minnesota
private, baccalaureate deleted text begin degree granting deleted text end new text begin degree-granting new text end college or university, deleted text begin or deleted text end a Minnesota
nonprofit two-year vocational technical school granting associate degrees new text begin , or a Minnesota
postsecondary institution offering only graduate or professional degrees new text end is eligible to receive
child care funds from the office and disburse them to eligible students.

Sec. 12.

Minnesota Statutes 2018, section 136A.1275, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

(a) The commissioner of the Office of Higher Education
must establish a grant program for student teaching stipends for low-income students enrolled
in a Professional Educator Licensing and Standards Board-approved teacher preparation
program who intend to teach in a shortage area after graduating and receiving their teaching
license or belong to an underrepresented racial or ethnic group.

(b) "Shortage area" means a license field or economic development region within
Minnesota defined as a shortage area by the deleted text begin Department of Education deleted text end new text begin Professional Educator
Licensing and Standards Board in coordination with the commissioner new text end using data collected
for the teacher supply and demand report under section deleted text begin 127A.05, subdivision 6, or other
surveys conducted by the Department of Education that provide indicators for teacher supply
and demand deleted text end new text begin 122A.091, subdivision 5 new text end .

Sec. 13.

Minnesota Statutes 2018, section 136A.1701, subdivision 4, is amended to read:

Subd. 4.

Terms and conditions of loans.

(a) The office may loan money upon such
terms and conditions as the office may prescribe.

(b) The maximum loan amount to students deleted text begin enrolled in a bachelor's degree program,
postbaccalaureate, or graduate program deleted text end must be determined annually by the office. deleted text begin For all
other eligible students, the principal amount of the loan must not exceed $7,500 per grade
level. deleted text end new text begin Loan limits are defined based on the type of program enrollment, such as a certificate,
an associate's degree, a bachelor's degree, or a graduate program. new text end The aggregate principal
amount of all loans made subject to this paragraph to a student as an undergraduate and
graduate student must not exceed $140,000. The amount of the loan must not exceed the
cost of attendance as determined by the eligible institution less all other financial aid,
including PLUS loans or other similar parent loans borrowed on the student's behalf. deleted text begin The
cumulative SELF loan debt must not exceed the borrowing maximums in paragraph (c).
deleted text end

(c) deleted text begin (1) deleted text end The cumulative borrowing maximums must be determined annually by the office
deleted text begin for students enrolled in a bachelor's degree program or postbaccalaureate program deleted text end new text begin and are
defined based on program enrollment new text end . In determining the cumulative borrowing maximums,
the office shall, among other considerations, take into consideration the maximum SELF
loan amount, student financing needs, funding capacity for the SELF program, delinquency
and default loss management, and current financial market conditions.

deleted text begin (2) For all other eligible students, the cumulative borrowing maximums are:
deleted text end

deleted text begin (i) grade level 1, $7,500;
deleted text end

deleted text begin (ii) grade level 2, $15,000;
deleted text end

deleted text begin (iii) grade level 3, $22,500;
deleted text end

deleted text begin (iv) grade level 4, $30,000; and
deleted text end

deleted text begin (v) grade level 5, $37,500.
deleted text end

Sec. 14.

Minnesota Statutes 2018, section 136A.1791, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The terms used in this section have the meanings given
them in this subdivision.

(b) "Qualified educational loan" means a government, commercial, or foundation loan
for actual costs paid for tuition and reasonable educational and living expenses related to a
teacher's preparation or further education.

(c) "School district" means an independent school district, special school district,
intermediate district, education district, special education cooperative, service cooperative,
a cooperative center for vocational education, or a charter school located in Minnesota.

(d) "Teacher" means an individual holding a teaching license issued by the Professional
Educator Licensing and Standards Board who is employed by a school district to provide
classroom instruction.

(e) "Teacher shortage area" means:

(1) the licensure fields and economic development regions reported by the deleted text begin commissioner
of education deleted text end new text begin Professional Educator Licensing and Standards Board in coordination with the
commissioner new text end as experiencing a teacher shortage; and

(2) economic development regions where there is a shortage of licensed teachers who
reflect the racial or ethnic diversity of students in the region as reported by the deleted text begin commissioner
of education deleted text end new text begin Professional Educator Licensing and Standards Board in coordination with the
commissioner new text end .

(f) "Commissioner" means the commissioner of the Office of Higher Education unless
indicated otherwise.

Sec. 15.

Minnesota Statutes 2018, section 136A.1791, subdivision 3, is amended to read:

Subd. 3.

Use of report on teacher shortage areas.

deleted text begin The commissioner of education
shall use deleted text end new text begin Using data collected for new text end the teacher supply and demand report to the legislature
deleted text begin to deleted text end new text begin under section 122A.091, subdivision 5, the Professional Educator Licensing and Standards
Board shall new text end identify the licensure fields and economic development regions in Minnesota
experiencing a teacher shortage.

Sec. 16.

Minnesota Statutes 2018, section 136A.1795, subdivision 4, is amended to read:

Subd. 4.

Loan forgiveness.

(a) The commissioner may select deleted text begin a maximum of five deleted text end new text begin eligible new text end
applicants each year for participation in the loan forgiveness program, within the limits of
available funding. Applicants are responsible for securing their own qualified educational
loans.

(b) The commissioner must select participants based on their suitability for practice
serving the designated rural area, as indicated by experience or training. The commissioner
must give preference to applicants closest to completing their training.

(c) The commissioner must make annual disbursements directly to the participant of
$15,000 or the balance of the participant's qualifying educational loans, whichever is less,
for each year that a participant meets the service obligation required under subdivision 3,
paragraph (b), up to a maximum of five years.

(d) Before receiving loan repayment disbursements and as requested, the participant
must complete and return to the commissioner a confirmation of practice form provided by
the commissioner verifying that the participant is practicing as required under subdivision
2, paragraph (a). The participant must provide the commissioner with verification that the
full amount of loan repayment disbursement received by the participant has been applied
toward the designated loans. After each disbursement, verification must be received by the
commissioner and approved before the next loan repayment disbursement is made.

(e) Participants who move their practice remain eligible for loan repayment as long as
they practice as required under subdivision 2, paragraph (a).

Sec. 17.

Minnesota Statutes 2019 Supplement, section 136A.64, subdivision 1, is amended
to read:

Subdivision 1.

Schools to provide information.

As a basis for registration, schools
shall provide the office with such information as the office needs to determine the nature
and activities of the school, including but not limited to the following which shall be
accompanied by an affidavit attesting to its accuracy and truthfulness:

(1) articles of incorporation, constitution, bylaws, or other operating documents;

(2) a duly adopted statement of the school's mission and goals;

(3) evidence of current school or program licenses granted by departments or agencies
of any state;

(4) deleted text begin a fiscal balance sheet on an accrual basis, or a certified audit of the immediate past
fiscal year including any management letters provided by the independent auditor or, if the
school is a public institution outside Minnesota, an income statement for the immediate past
fiscal year deleted text end new text begin compliance audits and audited financial statements that meet the requirements
of Code of Federal Regulations, title 34, section 668.23; United States Code, title 20, chapter
28, section 1094; Code of Federal Regulations, title 2, subpart A, part 200, subpart F, under
200.501 and 200.503; and United States Code, title 31, chapter 75 new text end ;

(5) all current promotional and recruitment materials and advertisements; deleted text begin and
deleted text end

(6) the current school catalog and, if not contained in the catalog:

(i) the members of the board of trustees or directors, if any;

(ii) the current institutional officers;

(iii) current full-time and part-time faculty with degrees held or applicable experience;

(iv) a description of all school facilities;

(v) a description of all current course offerings;

(vi) all requirements for satisfactory completion of courses, programs, and degrees;

(vii) the school's policy about freedom or limitation of expression and inquiry;

(viii) a current schedule of fees, charges for tuition, required supplies, student activities,
housing, and all other standard charges;

(ix) the school's policy about refunds and adjustments;

(x) the school's policy about granting credit for prior education, training, and experience;

(xi) the school's policies about student admission, evaluation, suspension, and dismissal;
and

(xii) the school's disclosure to students on the student complaint process under section
136A.672 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (7) requested information to calculate the financial and nonfinancial metrics under section
136A.675.
new text end

Sec. 18.

Minnesota Statutes 2019 Supplement, section 136A.646, is amended to read:

136A.646 ADDITIONAL SECURITY.

(a) New deleted text begin schools deleted text end new text begin institutions new text end that have been granted conditional approval for degrees or
names to allow them the opportunity to apply for and receive accreditation under section
136A.65, subdivision 7, shall provide a surety bond in a sum equal to ten percent of the net
revenue from tuition and fees in the registered institution's prior fiscal year, but in no case
shall the bond be less than $10,000.

(b) Any registered institution that is notified by the United States Department of Education
that it has fallen below minimum financial standards and that its continued participation in
Title IV will be conditioned upon its satisfying either the Zone Alternative, Code of Federal
Regulations, title 34, section 668.175, paragraph (f), or a Letter of Credit Alternative, Code
of Federal Regulations, title 34, section 668.175, paragraph (c), shall provide deleted text begin a deleted text end new text begin an annual new text end
surety bond in a sum equal to deleted text begin the "letter of credit" required by the United States Department
of Education in the Letter of Credit Alternative, but in no event shall such bond be less than
$10,000 nor more than $250,000. If the letter of credit required by the United States
Department of Education is higher than ten percent of the Title IV, Higher Education Act
program funds received by the institution during its most recently completed fiscal year,
the office shall reduce the office's surety requirement to represent ten percent of the Title
IV, Higher Education Act program funds received by the institution during its most recently
completed fiscal year, subject to the minimum and maximum in this paragraph deleted text end new text begin ten percent
of the net tuition revenue from tuition and fees received from students in Minnesota enrolled
in the school's previous fiscal year new text end .

new text begin (c) If the office determines that any registered institution does not meet the financial
resource criteria under section 136A.65, subdivision 4, paragraph (a), clause (2), or
determines that any registered institution is vulnerable to a precipitous closure under section
136A.675, the office may:
new text end

new text begin (1) require an increased surety bond in the amount necessary to cover the costs under
paragraph (f);
new text end

new text begin (2) prohibit a registered institution from accepting tuition and fee payments made through
cash, alternative loans, or the equivalent prior to the add/drop period of the current period
of instruction; or
new text end

new text begin (3) prohibit a registered institution from enrolling new students.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end In lieu of a bond, the applicant may deposit with the commissioner of management
and budget:

(1) a sum equal to the amount of the required surety bond in cash;

(2) securities, as may be legally purchased by savings banks or for trust funds, in an
aggregate market value equal to the amount of the required surety bond; or

(3) an irrevocable letter of credit issued by a financial institution to the amount of the
required surety bond.

deleted text begin (d) deleted text end new text begin (e) new text end The surety of any bond may cancel it upon giving 60 days' notice in writing to
the office and shall be relieved of liability for any breach of condition occurring after the
effective date of cancellation.

deleted text begin (e) deleted text end new text begin (f) new text end In the event of a school closure, the additional security deleted text begin must first be used deleted text end new text begin funds
must be given priority in the following order:
new text end

new text begin (1) new text end to destroy any private educational data under section 13.32 left at a physical campus
in Minnesota after all other governmental agencies have recovered or retrieved records
under their record retention policies deleted text begin . Any remaining funds must then be used deleted text end new text begin ;
new text end

new text begin (2) to reimburse state student aid under this chapter and sections 197.791 and 299A.45;
new text end

new text begin (3) new text end to reimburse new text begin cash payments made by or on behalf of a student for new text end tuition and fee
costs to students that were enrolled at the time of the closure or had withdrawn in the previous
deleted text begin 120 deleted text end new text begin 180 new text end calendar days but did not graduate deleted text begin . Priority for refunds will be given to students
in the following order: deleted text end new text begin ;
new text end

deleted text begin (1) cash payments made by the student or on behalf of a student;
deleted text end

deleted text begin (2) deleted text end new text begin (4) to reimburse new text end private student loans deleted text begin ; and deleted text end new text begin used by or on behalf of a student for
tuition and fee costs to students who were enrolled at the time of the closure or had withdrawn
in the previous 180 calendar days but did not graduate;
new text end

deleted text begin (3) deleted text end new text begin (5) to reimburse new text end Veteran Administration education benefits that are not restored by
the Veteran Administration deleted text begin . If there are additional security funds remaining, the additional
security funds may be used to cover deleted text end new text begin and that were used by or on behalf of a student for
tuition and fee costs to students that were enrolled at the time of the closure or had withdrawn
in the previous 180 calendar days but did not graduate;
new text end

new text begin (6) to reimburse tuition and fee costs for coursework that did not transfer to a new
institution unless the costs were paid for with Title IV, Higher Education Act program funds
that are dischargeable through cancellation or discharge; and
new text end

new text begin (7) to reimburse new text end any administrative costs incurred by the office related to the closure of
the school.

new text begin (g) In the event any registered institution is unable to meet the additional surety
requirement, the office may grant the registered institution conditional approval under
section 136A.65, subdivision 7, subject to the state financial aid program restrictions under
section 136A.65, subdivision 8, paragraph (d), and a restriction that prohibits the enrollment
of new or prospective students.
new text end

Sec. 19.

Minnesota Statutes 2018, section 136A.65, subdivision 4, is amended to read:

Subd. 4.

Criteria for approval.

(a) A school applying to be registered and to have its
degree or degrees and name approved must substantially meet the following criteria:

(1) the school has an organizational framework with administrative and teaching personnel
to provide the educational programs offered;

(2) the school has financial resources sufficient to meet the school's financial obligations,
including refunding tuition and other charges consistent with its stated policy if the institution
is dissolved, or if claims for refunds are made, to provide service to the students as promised,
and to provide educational programs leading to degrees as offered;

(3) the school operates in conformity with generally accepted accounting principles
according to the type of school;

(4) the school provides an educational program leading to the degree it offers;

(5) the school provides appropriate and accessible library, laboratory, and other physical
facilities to support the educational program offered;

(6) the school has a policy on freedom or limitation of expression and inquiry for faculty
and students which is published or available on request;

(7) the school uses only publications and advertisements which are truthful and do not
give any false, fraudulent, deceptive, inaccurate, or misleading impressions about the school,
its personnel, programs, services, or occupational opportunities for its graduates for promotion
and student recruitment;

(8) the school's compensated recruiting agents who are operating in Minnesota identify
themselves as agents of the school when talking to or corresponding with students and
prospective students;

(9) the school provides information to students and prospective students concerning:

(i) comprehensive and accurate policies relating to student admission, evaluation,
suspension, and dismissal;

(ii) clear and accurate policies relating to granting credit for prior education, training,
and experience and for courses offered by the school;

(iii) current schedules of fees, charges for tuition, required supplies, student activities,
housing, and all other standard charges;

(iv) policies regarding refunds and adjustments for withdrawal or modification of
enrollment status; and

(v) procedures and standards used for selection of recipients and the terms of payment
and repayment for any financial aid program; deleted text begin and
deleted text end

(10) the school must not withhold a student's official transcript because the student is
in arrears or in default on any loan issued by the school to the student if the loan qualifies
as an institutional loan under United States Code, title 11, section 523(a)(8)(b) deleted text begin . deleted text end new text begin ;
new text end

new text begin (11) the school has a process to receive and act on student complaints; and
new text end

new text begin (12) the school has cooperated with the office in the screening, inquiry, monitoring, and
contingency planning and notification process under section 136A.675.
new text end

(b) An application for degree approval must also include:

(i) title of degree and formal recognition awarded;

(ii) location where such degree will be offered;

(iii) proposed implementation date of the degree;

(iv) admissions requirements for the degree;

(v) length of the degree;

(vi) projected enrollment for a period of five years;

(vii) the curriculum required for the degree, including course syllabi or outlines;

(viii) statement of academic and administrative mechanisms planned for monitoring the
quality of the proposed degree;

(ix) statement of satisfaction of professional licensure criteria, if applicable;

(x) documentation of the availability of clinical, internship, externship, or practicum
sites, if applicable; and

(xi) statement of how the degree fulfills the institution's mission and goals, complements
existing degrees, and contributes to the school's viability.

Sec. 20.

Minnesota Statutes 2018, section 136A.65, subdivision 7, is amended to read:

Subd. 7.

Conditional approval.

(a) The office may grant a school a one-year conditional
approval for a degree or use of a term in its name if doing so would be in the best interests
of currently enrolled students or prospective students. Conditional approval of a degree or
use of a term under this paragraph must not exceed a period of three years.

(b) The office may grant new schools new text begin physically located in Minnesota new text end and new text begin new new text end programs
a one-year conditional approval for degrees or use of a term in its name to allow the school
the opportunity to apply for and receive accreditation as required in subdivision 1a.
Conditional approval of a school or program under this paragraph must not exceed a period
of five years. A new school or program granted conditional approval may be allowed to
continue in order to complete an accreditation process upon terms and conditions the office
determines.

(c) The office may grant a registered school a one-year conditional approval for degrees
or use of a term in its name to allow the school the opportunity to apply for and receive
accreditation as required in subdivision 1a if the school's accrediting agency is no longer
recognized by the United States Department of Education for purposes of eligibility to
participate in Title IV federal financial aid programs. The office must not grant conditional
approvals under this paragraph to a school for a period of more than five years.

(d) The office may grant a registered school a one-year conditional approval for degrees
or use of a term in its name to allow the school to change to a different accrediting agency
recognized by the United States Department of Education for purposes of eligibility to
participate in Title IV federal financial aid programs. The office must not grant conditional
approvals under this paragraph to a school for a period of more than five years.

Sec. 21.

Minnesota Statutes 2018, section 136A.65, subdivision 8, is amended to read:

Subd. 8.

Disapproval of registration new text begin ; new text end appeal.

(a) new text begin By giving written notice and reasons
to the school, new text end the office may deleted text begin refuse to renew, deleted text end new text begin :
new text end

new text begin (1) new text end revoke, deleted text begin or deleted text end suspend new text begin , or refuse to renew new text end registration deleted text begin , deleted text end new text begin ;
new text end

new text begin (2) refuse new text end approval of a school's degree deleted text begin , or deleted text end new text begin ; and
new text end

new text begin (3) refuse approval of new text end use of a regulated term in its name deleted text begin by giving written notice and
reasons to the school deleted text end .

(b) Reasons for revocation or suspension of registration or approval may be for one or
more of the following reasons:

(1) violating the provisions of sections 136A.61 to 136A.71;

(2) providing false, misleading, or incomplete information to the office;

(3) presenting information about the school which is false, fraudulent, misleading,
deceptive, or inaccurate in a material respect to students or prospective students; deleted text begin or
deleted text end

(4) refusing to allow reasonable inspection or to supply reasonable information after a
written request by the office has been received deleted text begin . deleted text end new text begin ;
new text end

new text begin (5) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence,
untrustworthiness, or financial irresponsibility, in the conduct of business in this state or
elsewhere;
new text end

new text begin (6) having been administratively determined by the commissioner or judicially determined
to have committed fraud or any other material violation of law involving federal, state, or
local government funds;
new text end

new text begin (7) failing to have enrollment within the last two years at the school;
new text end

new text begin (8) failing to have any enrollment within two years of a program's approval;
new text end

new text begin (9) failing to provide the additional surety required under section 136A.646; or
new text end

new text begin (10) the office has determined the school is vulnerable to closure under section 136A.675.
new text end

(c) Any order refusing, revoking, or suspending a school's registration, approval of a
school's degree, or use of a regulated term in the school's name is appealable in accordance
with chapter 14. The request must be in writing and made to the office within 30 days of
the date the school is notified of the action of the office. If a school has been operating and
its registration has been revoked, suspended, or refused by the office, the order is not effective
until the final determination of the appeal, unless immediate effect is ordered by the court.

new text begin (d) If the office issues an order refusing, revoking, or suspending a school's registration,
approval of a school's degree, or use of a regulated term in the school's name or issues an
order granting conditional approval due to a school's failure to meet the risk analysis
requirements under section 136A.675, the office may take the following actions for the
administration of state student aid under this chapter and sections 197.791 and 299A.45:
new text end

new text begin (1) withhold payment of state student aid;
new text end

new text begin (2) oversee the transfer of state student aid to the school to ensure payment of state
student aid in excess of tuition and fees to students;
new text end

new text begin (3) require the return of any advance state student aid payments made to the school;
new text end

new text begin (4) require documentation of the proper use of state student aid payments, including
proof of payment of state student aid in excess of tuition and fees; and
new text end

new text begin (5) issue payments of state financial aid directly to a student.
new text end

Sec. 22.

Minnesota Statutes 2018, section 136A.653, subdivision 1, is amended to read:

Subdivision 1.

Application.

A school that seeks an exemption under this section from
the provisions of sections 136A.61 to 136A.71 must apply to the office to establish that the
school meets the requirements of an exemption. An exemption expires two years from the
date of approval or when a school adds a new program or makes a modification equal to or
greater than 25 percent to an existing educational program. If a school is reapplying for an
exemption, the application must be submitted to the office 90 days before the current
exemption expires. new text begin This exemption shall not extend to any school that uses any publication
or advertisement that is not truthful and gives any false, fraudulent, deceptive, inaccurate,
or misleading impressions about the school or its personnel, programs, services, or
occupational opportunities for graduates for promotion and student recruitment.
new text end

Sec. 23.

Minnesota Statutes 2018, section 136A.657, subdivision 1, is amended to read:

Subdivision 1.

Exemption.

deleted text begin Any deleted text end new text begin (a) A program is exempt from the provisions of sections
136A.61 to 136A.71 if it is:
new text end

new text begin (1) offered by a new text end school or any department or branch of a school deleted text begin (a) which deleted text end new text begin that new text end is
substantially owned, operated new text begin , new text end or supported by a bona fide church or religious organization;
deleted text begin (b) whose programs are
deleted text end

new text begin (2) new text end primarily designed for, aimed at and attended by persons who sincerely hold or seek
to learn the particular religious faith or beliefs of that church or religious organization; and

deleted text begin (c) whose programs are deleted text end new text begin (3) new text end primarily intended to prepare its students to become ministers
of, to enter into some other vocation closely related to, or to conduct their lives in consonance
with, the particular faith of that church or religious organization deleted text begin , is exempt from the
provisions of sections 136A.61 to 136A.834 deleted text end .

new text begin (b) A school or a department or branch of a school is exempt from the provisions of
sections 136A.61 to 136A.71 if all of its programs are exempt under paragraph (a).
new text end

Sec. 24.

Minnesota Statutes 2018, section 136A.657, subdivision 2, is amended to read:

Subd. 2.

Limitation.

new text begin (a) new text end This exemption shall not extend to any new text begin program or new text end school or
to any department or branch of a school deleted text begin which deleted text end new text begin that new text end through advertisements or solicitations
represents to any students or prospective students that the school, its aims, goals, missions
or purposes or its programs are different from those described in subdivision 1.

new text begin (b) new text end This exemption shall not extend to any school deleted text begin which deleted text end new text begin that new text end represents to any student
or prospective student that the major purpose of its programs is to new text begin :
new text end

new text begin (1) new text end prepare the student for a vocation not closely related to that particular religious faith deleted text begin , deleted text end new text begin ; new text end
or deleted text begin to
deleted text end

new text begin (2) new text end provide the student with a general educational program recognized by other schools
or the broader educational, business or social community as being substantially equivalent
to the educational programs offered by schools or departments or branches of schools deleted text begin which deleted text end new text begin
that new text end are not exempt from sections 136A.61 to 136A.71, and rules adopted pursuant thereto.

new text begin (c) This exemption shall not extend to any school that uses any publication or
advertisement that is not truthful and gives any false, fraudulent, deceptive, inaccurate, or
misleading impressions about the school; its personnel, programs, or services; or occupational
opportunities for its graduates for promotion and student recruitment.
new text end

Sec. 25.

Minnesota Statutes 2018, section 136A.657, subdivision 3, is amended to read:

Subd. 3.

Scope.

Nothing in sections 136A.61 to deleted text begin 136A.834 deleted text end new text begin 136A.71 new text end , or the rules adopted
pursuant thereto, shall be interpreted as permitting the office to determine the truth or falsity
of any particular set of religious beliefs.

Sec. 26.

Minnesota Statutes 2018, section 136A.658, is amended to read:

136A.658 EXEMPTION; STATE AUTHORIZATION RECIPROCITY
AGREEMENT SCHOOLS.

(a) The office may participate in an interstate reciprocity agreement regarding
postsecondary distance education if it determines that participation is in the best interest of
Minnesota postsecondary students.

(b) If the office decides to participate in an interstate reciprocity agreement, an institution
that meets the following requirements is exempt from the provisions of sections 136A.61
to 136A.71:

(1) the institution is situated in a state which is also participating in the interstate
reciprocity agreement;

(2) the institution has been approved to participate in the interstate reciprocity agreement
by the institution's home state and other entities with oversight of the interstate reciprocity
agreement; and

(3) the institution has elected to participate in and operate in compliance with the terms
of the interstate reciprocity agreement.

new text begin (c) If the office participates in an interstate reciprocity agreement and the office is
responsible for the administration of that interstate reciprocity agreement, which may include
the approval of applications for membership of in-state institutions to participate in the
interstate reciprocity agreement, the office shall collect reasonable fees sufficient to recover,
but not exceed, its costs to administer the interstate reciprocity agreement. The office
processing fees for approving an in-state institution application shall be as follows:
new text end

new text begin (1) $750 for institutions with fewer than 2,500 full-time enrollment;
new text end

new text begin (2) $3,000 for institutions with 2,501 to 20,000 full-time enrollment; and
new text end

new text begin (3) $7,500 for institutions with greater than 20,001 full-time enrollment.
new text end

new text begin Full-time enrollment is established using the previous year's full-time enrollment as
established in the United States Department of Education Integrated Postsecondary Education
Data System.
new text end

Sec. 27.

Minnesota Statutes 2018, section 136A.675, is amended to read:

136A.675 RISK ANALYSIS.

new text begin (a) new text end The office shall develop deleted text begin a set of deleted text end new text begin and apply new text end financial and deleted text begin programmatic evaluation
metrics deleted text end new text begin nonfinancial measures as a basis of comparison and trends new text end to new text begin evaluate and new text end aid in
the detection of deleted text begin the failure or potential failure of deleted text end a school new text begin that may not be financially or
administratively responsible and thereby at risk of a precipitous closure. A school may be
vulnerable to a precipitous closure if:
new text end

new text begin (1) the school is unable new text end to meet the standards established under sections 136A.61 to
136A.71 deleted text begin . These metrics shall include indicators of financial stability, changes in the senior
management or the financial aid and senior administrative staff of an institution, changes
in enrollment, changes in program offerings, and changes in faculty staffing patterns. deleted text end new text begin ; or
new text end

new text begin (2) the office determines, through the systematic evaluation process in paragraph (d),
that the failure to meet one or more of those standards represents a risk of a precipitous
closure.
new text end

new text begin (b) new text end The development of financial standards shall use industry standards as deleted text begin benchmarks.
The development of the nonfinancial standards shall include a measure of trends and dramatic
changes in trends or practice deleted text end new text begin guidance to develop financial and nonfinancial indicators new text end .

new text begin (c) A school must notify the office within five business days if any of the following
occur:
new text end

new text begin (1) the school has defaulted on a debt payment and has not received a waiver of the
violation;
new text end

new text begin (2) the school's owner or owners withdraw equity and the school has a federal composite
score of less than 1.5 unless the withdrawal is a transfer between affiliated entities included
in a common composite score;
new text end

new text begin (3) the United States Department of Education requires a 25 percent or greater Letter of
Credit or Heightened Cash Monitoring 2;
new text end

new text begin (4) the school receives notification of probation, warning, show-cause, or loss of
institutional accreditation;
new text end

new text begin (5) the school's institutional accreditor loses federal recognition;
new text end

new text begin (6) the school violates the United States Department of Education's 90/10 requirement;
or
new text end

new text begin (7) the school receives notification that it has violated state authorization or licensing
requirements in a different state that may lead to or has led to the termination of the school's
ability to continue to provide educational programs or otherwise continue to operate in that
state.
new text end

new text begin (d) In the event the office receives notification under paragraph (c) or determines risk
of a precipitous closure from information collected under section 136A.64, 136A.65, or
136A.672, the office shall collect sufficient data to make a determination of whether a school
is vulnerable to a precipitous closure. If the office determines that a school is vulnerable to
a precipitous closure:
new text end

new text begin (1) the office shall provide the determination analysis to the school and request additional
context and information. The school may provide context and information to support a
sound business practice and plan to confirm financial health and manageable risk. The office
shall use the school's additional context and information to reevaluate whether the school
is vulnerable to closure;
new text end

new text begin (2) if the school does not respond to the office's request for additional context and
information in clause (1), the office may revoke, suspend, or refuse to renew registration,
approval of a school's degree, or use of a regulated term in its name, require additional
surety under section 136A.646, require information under section 136A.646, or initiate
alternative processes and communications with students enrolled at the school; and
new text end

new text begin (3) the office may use the reevaluated determination in the office's decision to revoke,
suspend, or refuse to renew registration, approval of a school's degree, or use of a regulated
term in its name or initiate alternative processes and communications with students enrolled
at the school.
new text end

new text begin (e) If the office determines a risk of a precipitous closure under paragraph (d), the office
may require the school to:
new text end

new text begin (1) conduct periodic monitoring and submit reports on the school's administrative and
financial responsibility;
new text end

new text begin (2) submit contingency plans such as teach-out plans or transfer pathways for students;
new text end

new text begin (3) provide additional surety under section 136A.646; and
new text end

new text begin (4) submit school closure information under section 136A.645.
new text end

new text begin (f) new text end The deleted text begin agency deleted text end new text begin office new text end must specify the deleted text begin metrics and standards for each area deleted text end new text begin measures
used for analyzing whether a school is vulnerable to closure new text end and new text begin annually new text end provide a copy
to each registered institution deleted text begin and post them on the agency website deleted text end .

new text begin (g) The office shall post a list of reviewed indicators and measures on the office's website. new text end
The deleted text begin agency deleted text end new text begin office new text end shall use regularly reported data submitted to the federal government or
other regulatory or accreditation agencies wherever possible. The agency may require more
frequent data reporting by an institution to ascertain whether the standards are being met.

Sec. 28.

Minnesota Statutes 2018, section 136A.69, subdivision 1, is amended to read:

Subdivision 1.

Registration fees.

(a) The office shall collect reasonable registration fees
that are sufficient to recover, but do not exceed, its costs of administering the registration
program. The office shall charge the fees listed in paragraphs (b) and (c) for new registrations.

(b) A new school offering no more than one degree at each level during its first year
must pay registration fees for each applicable level in the following amounts:

associate degree	$2,000
baccalaureate degree	$2,500
master's degree	$3,000
doctorate degree	$3,500

(c) A new school that will offer more than one degree per level during its first year must
pay registration fees in an amount equal to the fee for the first degree at each degree level
under paragraph (b), plus fees for each additional nondegree program or degree as follows:

nondegree program	$250
additional associate degree	$250
additional baccalaureate degree	$500
additional master's degree	$750
additional doctorate degree	$1,000

(d) The annual renewal registration fee is deleted text begin $1,200 deleted text end new text begin $2,000 new text end .

Sec. 29.

Minnesota Statutes 2018, section 136A.69, subdivision 4, is amended to read:

Subd. 4.

Visit or consulting fee.

If the office determines that a fact-finding visit or
outside consultant is necessary to review new text begin , investigate, new text end or evaluate any deleted text begin new or revised deleted text end degree
or nondegree program new text begin or the institution new text end , the office shall be reimbursed for the expenses
incurred related to the review as follows:

(1) $400 for the team base fee or for a paper review conducted by a consultant if the
office determines that a fact-finding visit is not required;

(2) $300 for each day or part thereof on site per team member; and

(3) the actual cost of customary meals, lodging, and related travel expenses incurred by
team members.

Sec. 30.

Minnesota Statutes 2018, section 136A.69, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Student complaint fee. new text end

new text begin The office shall be reimbursed for expenses necessary
to review or investigate any student complaint under section 136A.672 for any registered
institution that has more than five student complaints per annual registration period. The
office shall be reimbursed for the expenses incurred related to the review or investigation
of any complaint that exceeds the fifth complaint as follows:
new text end

new text begin (1) $500;
new text end

new text begin (2) $300 for each day or part thereof that requires a site visit per team member; and
new text end

new text begin (3) the actual cost of customary meals, lodging, and related travel expenses incurred by
team members.
new text end

Sec. 31.

Minnesota Statutes 2018, section 136A.824, subdivision 4, is amended to read:

Subd. 4.

Visit or consulting fee.

If the office determines that a fact-finding visit or
outside consultant is necessary to review new text begin , investigate, new text end or evaluate any new or revised program new text begin
or the private career school for statutory compliance new text end , the office shall be reimbursed for the
expenses incurred related to the review as follows:

(1) $400 for the team base fee or for a paper review conducted by a consultant if the
office determines that a fact-finding visit is not required;

(2) $300 for each day or part thereof on site per team member; and

(3) the actual cost of customary meals, lodging, and related travel expenses incurred by
team members.

Sec. 32.

Minnesota Statutes 2018, section 136A.824, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Student complaint fee. new text end

new text begin The office shall be reimbursed for expenses necessary
to review or investigate any student complaint under section 136A.8295 for any licensed
private career school that has more than five student complaints per annual licensure period.
The office shall be reimbursed for the expenses incurred related to the review or investigation
of any complaint that exceeds the fifth complaint as follows:
new text end

new text begin (1) $500;
new text end

new text begin (2) $300 for each day or part thereof that requires a site visit per team member; and
new text end

new text begin (3) the actual cost of customary meals, lodging, and related travel expenses incurred by
team members.
new text end

Sec. 33.

Minnesota Statutes 2018, section 136A.827, subdivision 4, is amended to read:

Subd. 4.

Proration.

When a student has been accepted by a private career school and
gives deleted text begin written deleted text end notice of cancellation after the program of instruction has begun, but before
completion of 75 percent of the program, the amount charged for tuition, fees and all other
charges shall be prorated based on the number of days in the term as a portion of the total
charges for tuition, fees and all other charges. An additional 25 percent of the total cost of
the program may be added but shall not exceed $100. After completion of 75 percent of the
program, no refunds are required. new text begin A notice of cancellation from a student under this
subdivision must be confirmed in writing by the private career school and mailed to the
student's last known address. The confirmation from the school must state that the school
has withdrawn the student from enrollment, and if this action was not the student's intent,
the student must contact the school.
new text end

Sec. 34.

Minnesota Statutes 2018, section 136A.829, subdivision 1, is amended to read:

Subdivision 1.

Grounds.

The office may, after notice and upon providing an opportunity
for a hearing, under chapter 14 if requested by the parties adversely affected, refuse to issue,
refuse to renew, revoke, or suspend a license or solicitor's permit for any of the following
grounds:

(1) violation of any provisions of sections 136A.821 to 136A.833 or any rule adopted
by the office;

(2) furnishing to the office false, misleading, or incomplete information;

(3) presenting to prospective students information relating to the private career school
that is false, fraudulent, deceptive, substantially inaccurate, or misleading;

(4) refusal to allow reasonable inspection or supply reasonable information after written
request by the office;

(5) new text begin using fraudulent, coercive, or dishonest practices, or demonstrating incompetence,
untrustworthiness, or financial irresponsibility, in the conduct of business in this state or
elsewhere;
new text end

new text begin (6) having been administratively determined by the commissioner or judicially determined
to have committed fraud or any other material violation of law involving federal, state, or
local government funds; or
new text end

new text begin (7) new text end the existence of any circumstance that would be grounds for the refusal of an initial
or renewal license under section 136A.822.

Sec. 35.

Minnesota Statutes 2018, section 136A.833, subdivision 1, is amended to read:

Subdivision 1.

Application for exemptions.

A school that seeks an exemption from the
provisions of sections 136A.822 to 136A.834 new text begin for the school and all of its programs or some
of its programs new text end must apply to the office to establish that the school meets the requirements
of an exemption. An exemption expires two years from the date of approval or when a
school adds a new program or makes a modification equal to or greater than 25 percent to
an existing educational program. If a school is reapplying for an exemption, the application
must be submitted to the office 90 days before the current exemption expires. new text begin This exemption
shall not extend to any school that uses any publication or advertisement that is not truthful
and gives any false, fraudulent, deceptive, inaccurate, or misleading impressions about the
school or its personnel, programs, services, or occupational opportunities for its graduates
for promotion and student recruitment.
new text end

Sec. 36.

Minnesota Statutes 2018, section 136A.834, subdivision 1, is amended to read:

Subdivision 1.

Exemption.

deleted text begin Any deleted text end new text begin (a) A program is exempt from the provisions of sections
136A.821 to 136A.832 if it is:
new text end

new text begin (1) offered by a new text end private career school or any department or branch of a private career
school deleted text begin :
deleted text end

deleted text begin (1) which deleted text end new text begin that new text end is substantially owned, operated, or supported by a bona fide church or
religious organization;

(2) deleted text begin whose programs are deleted text end primarily designed for, aimed at, and attended by persons who
sincerely hold or seek to learn the particular religious faith or beliefs of that church or
religious organization; and

(3) deleted text begin whose programs are deleted text end primarily intended to prepare its students to become ministers
of, to enter into some other vocation closely related to, or to conduct their lives in consonance
with the particular faith of that church or religious organization deleted text begin ,is exempt from the provisions
of sections 136A.821 to 136A.832 deleted text end .

new text begin (b) Any private career school or any department or branch of a private career school is
exempt from the provisions of sections 136A.821 to 136A.832 if all of its programs are
exempt under paragraph (a).
new text end

Sec. 37.

Minnesota Statutes 2018, section 136A.834, subdivision 2, is amended to read:

Subd. 2.

Limitations.

(a) An exemption shall not extend to any private career school,
department or branch of a private career school, or program of a private career school deleted text begin which deleted text end new text begin
that new text end through advertisements or solicitations represents to any students or prospective students
that the school, its aims, goals, missions, purposes, or programs are different from those
described in subdivision 1.

(b) An exemption shall not extend to any private career school deleted text begin which deleted text end new text begin or program that new text end
represents to any student or prospective student that the major purpose of its programs is
to:

(1) prepare the student for a vocation not closely related to that particular religious faith;
or

(2) provide the student with a general educational program recognized by other private
career schools or the broader educational, business, or social community as being
substantially equivalent to the educational programs offered by private career schools or
departments or branches of private career schools which are not religious in nature and are
not exempt from sections 136A.82 to 136A.834 and from rules adopted under sections
136A.82 to 136A.834.

new text begin (c) This exemption shall not extend to any school that uses any publication or
advertisement that is not truthful and gives any false, fraudulent, deceptive, inaccurate, or
misleading impressions about the school or its personnel, programs, services, or occupational
opportunities for graduates for promotion and student recruitment.
new text end

ARTICLE 2

MINNESOTA COLLEGE SAVINGS PLAN

Section 1.

Minnesota Statutes 2018, section 136G.01, is amended to read:

136G.01 PLAN ESTABLISHED.

A college savings plan known as new text begin " new text end the Minnesota college savings plan new text begin " or "the Minnesota
529 college savings plan" new text end is established. In establishing this plan, the legislature seeks to
encourage individuals to save for postsecondary education by:

(1) providing a qualified tuition plan under federal tax law; and

(2) encouraging individuals, foundations, and businesses to provide additional grants to
participating students.

Sec. 2.

Minnesota Statutes 2018, section 136G.03, subdivision 8, is amended to read:

Subd. 8.

Contribution.

"Contribution" means a payment directly allocated to an account
for the benefit of a beneficiary. For a rollover distribution, only the portion of the rollover
amount that constitutes investment in the account is treated as a contribution to the account. new text begin
For purposes of this chapter, "contribution" includes a recontribution that satisfies the
requirements of section 529(c)(3)(D) of the Internal Revenue Code.
new text end

Sec. 3.

Minnesota Statutes 2018, section 136G.03, subdivision 10, is amended to read:

Subd. 10.

Distribution.

"Distribution" means a disbursement from an account deleted text begin to the
account owner, the beneficiary, or the beneficiary's estate or to an eligible educational
institution deleted text end . Distribution does not include a change of beneficiary to a member of the family
of the prior beneficiary or a rollover distribution.

Sec. 4.

Minnesota Statutes 2018, section 136G.03, subdivision 11, is amended to read:

Subd. 11.

Dormant account.

"Dormant account" means an account that has not received
contributions for at least three consecutive years and the account statements deleted text begin mailed deleted text end new text begin sent new text end to
the account owner have been returned as undeliverable.

Sec. 5.

Minnesota Statutes 2018, section 136G.03, subdivision 20, is amended to read:

Subd. 20.

Maximum account balance limit.

"Maximum account balance limit" means
the amount established by the office under section 136G.09, subdivision 8, paragraph deleted text begin (d) deleted text end new text begin
(b) new text end .

Sec. 6.

Minnesota Statutes 2018, section 136G.03, subdivision 31, is amended to read:

Subd. 31.

new text begin Qualified new text end rollover distribution.

" new text begin Qualified new text end rollover distribution" means a
deleted text begin transfer of funds made:
deleted text end

deleted text begin (1) from one account to another account within 60 days of a distribution;
deleted text end

deleted text begin (2) from another qualified state tuition program to an account within 60 days of the
distribution; or
deleted text end

deleted text begin (3) to another qualified state tuition program from an account within 60 days of a
distribution.
deleted text end

deleted text begin When there is a change of beneficiary in a rollover distribution, the transfer of funds
must be made for the benefit of a new beneficiary who is a member of the family of the
prior beneficiary. A rollover distribution from one qualified tuition plan to another once
every 12 months without a change of beneficiary is permitted deleted text end new text begin distribution that qualifies as
a rollover under section 529(c)(3)(C) of the Internal Revenue Code new text end .

Sec. 7.

Minnesota Statutes 2018, section 136G.03, is amended by adding a subdivision to
read:

new text begin Subd. 33a. new text end

new text begin Taxable distribution. new text end

new text begin "Taxable distribution" means: (1) a distribution made
from an account other than a qualified distribution, the earnings on which are subject to one
or more federal taxes; or (2) a distribution subject to additional federal tax under section
529(c)(6) of the Internal Revenue Code.
new text end

Sec. 8.

Minnesota Statutes 2018, section 136G.05, subdivision 2, is amended to read:

Subd. 2.

Accounts-type plan.

The office must establish the plan and the plan must be
operated as an accounts-type plan that permits persons to save for qualified higher education
expenses deleted text begin incurred at any eligible educational institution, regardless of whether it is private
or public or whether it is located within or outside of the state deleted text end . A separate account must be
maintained for each beneficiary for whom contributions are made.

Sec. 9.

Minnesota Statutes 2018, section 136G.05, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Nonqualified distributions and deleted text end new text begin Forfeited new text end matching grants.

deleted text begin There cannot be
a nonqualified withdrawal of matching grant funds and deleted text end Any refund of new text begin a new text end matching deleted text begin grants deleted text end new text begin
grant forfeited under section 136G.11, subdivision 13, new text end must be returned to the deleted text begin plan deleted text end new text begin office new text end .

Sec. 10.

Minnesota Statutes 2018, section 136G.05, subdivision 7, is amended to read:

Subd. 7.

Marketing.

The commissioner shall make parents and other interested
individuals aware of the availability and advantages of the deleted text begin program deleted text end new text begin plan new text end as a way to save
for higher education costs.

Sec. 11.

Minnesota Statutes 2018, section 136G.09, subdivision 6, is amended to read:

Subd. 6.

Change of beneficiary.

Except as provided for minor trust accounts in section
136G.14, an account owner may change the beneficiary of an account to a member of the
family of the current beneficiary, at any time without penalty, if the change will not cause
the total account balance of all accounts held for the new beneficiary to exceed the maximum
account balance limit as provided in subdivision 8. A change of beneficiary other than as
permitted in this subdivision is treated as a deleted text begin nonqualified deleted text end new text begin taxable new text end distribution under section
136G.13, subdivision 3.

Sec. 12.

Minnesota Statutes 2018, section 136G.09, subdivision 8, is amended to read:

Subd. 8.

Maximum account balance limit.

(a) When a contribution is made, the total
account balance of all accounts held for the same beneficiary, including matching grant
accounts, must not exceed the maximum account balance limit as determined under this
subdivision.

(b) The office must establish a maximum account balance limit. The office must adjust
the maximum account balance limit, as necessary, or on January 1 of each year. The
maximum account balance limit must not exceed the amount permitted for the plan to qualify
as a qualified tuition program under section 529 of the Internal Revenue Code.

deleted text begin (c) If the total account balance of all accounts held for a single beneficiary reaches the
maximum account balance limit prior to the end of that calendar year, the beneficiary may
receive an applicable matching grant for that calendar year.
deleted text end

Sec. 13.

Minnesota Statutes 2018, section 136G.11, subdivision 11, is amended to read:

Subd. 11.

Ownership of matching grant funds.

The state retains ownership of all
matching grants and earnings on matching grants until a qualified distribution is made to a
beneficiary deleted text begin or deleted text end new text begin , an account owner, new text end an eligible educational institution new text begin , or any other third party
as requested by an account owner new text end .

Sec. 14.

Minnesota Statutes 2018, section 136G.11, subdivision 13, is amended to read:

Subd. 13.

Forfeiture of matching grants.

(a) Matching grants are forfeited if:

(1) the account owner transfers the total account balance of an account to another account
or to another qualified tuition program;

(2) deleted text begin the beneficiary receives a full tuition scholarship or is attending a United States
service academy deleted text end new text begin any of the exceptions under section 530(d)(4)(B)(i) to (iv) of the Internal
Revenue Code apply to the beneficiary, and the exceptions cover 100 percent of the
beneficiary's qualified higher education expenses new text end ;

(3) deleted text begin the beneficiary dies or becomes disabled;
deleted text end

deleted text begin (4) deleted text end the account owner changes the beneficiary of the account; deleted text begin or
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end the account owner closes the account with a deleted text begin nonqualified withdrawal. deleted text end new text begin taxable
distribution; or
new text end

new text begin (5) the account owner closes the account with a withdrawal for a qualified distribution
that would not have been a qualified distribution on December 31, 2010.
new text end

(b) Matching grants must be proportionally forfeited if:

(1) the account owner transfers a portion of an account to another account or to another
qualified tuition program;

(2) deleted text begin the beneficiary receives a scholarship covering a portion of qualified higher education
expenses deleted text end new text begin the account owner takes a partial taxable distribution new text end ; or

(3) the account owner makes a partial deleted text begin nonqualified deleted text end withdrawal new text begin for a qualified distribution
that would not have been a qualified distribution on December 31, 2010 new text end .

(c) If the account owner makes a misrepresentation in a participation agreement or an
application for a matching grant that results in a matching grant, the matching grant associated
with the misrepresentation is forfeited. The office and the board must instruct the plan
administrator as to the amount to be forfeited from the matching grant account. The office
and the board must withdraw the matching grant or the proportion of the matching grant
that is related to the misrepresentation.

Sec. 15.

Minnesota Statutes 2018, section 136G.13, is amended to read:

136G.13 ACCOUNT DISTRIBUTIONS.

Subdivision 1.

Qualified distribution methods.

(a) Qualified distributions may be
made:

(1) directly to participating eligible educational institutions on behalf of the beneficiary;

deleted text begin (2) in the form of a check payable to both the beneficiary and the eligible educational
institution; or
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end directly to the account owner or beneficiary deleted text begin if the account owner or beneficiary
has already paid qualified higher education expenses. deleted text end new text begin ; or
new text end

new text begin (3) to any other third party as requested by the account owner.
new text end

(b) Qualified distributions must be withdrawn proportionally from contributions and
earnings in an account owner's account on the date of distribution as provided in section
529 of the Internal Revenue Code.

Subd. 2.

Matching grant accounts.

deleted text begin Qualified distributions are based on the total account
balances in an account owner's account and matching grant account, if any, on the date of
distribution. Qualified distributions must be withdrawn proportionally from each account
based on the relative total account balance of each account to the total account balance for
both accounts. Amounts for matching grants and matching grant earnings must deleted text end deleted text begin only be
distributed for qualified higher education expenses. deleted text end new text begin Matching grant account funds may be
used as part or all of a distribution that was a qualified distribution on December 31, 2010.
new text end

Subd. 3.

deleted text begin Nonqualified deleted text end new text begin Taxable new text end distribution.

An account owner may request a
deleted text begin nonqualified deleted text end new text begin taxable new text end distribution from an account at any time. deleted text begin Nonqualified deleted text end new text begin Taxable new text end
distributions are based on the total account balances in an account owner's account and must
be withdrawn proportionally from contributions and earnings as provided in section 529 of
the Internal Revenue Code. deleted text begin The earnings portion of a nonqualified distribution is subject
to a federal additional tax pursuant to section 529 of the Internal Revenue Code. deleted text end For purposes
of this subdivision, "earnings portion" means the ratio of the earnings in the account to the
total account balance, immediately prior to the distribution, multiplied by the distribution.

Subd. 4.

Nonqualified distributions from matching grant accounts.

(a) If deleted text begin an account deleted text end new text begin
the new text end owner new text begin of an account that has a matching grant account new text end requests new text begin (1) a distribution that
would not have been a qualified distribution on December 31, 2010, or (2) new text end a deleted text begin nonqualified deleted text end new text begin
taxable new text end distribution deleted text begin from an account that has a matching grant account deleted text end , the total account
balance of the matching grant account, if any, is reduced.

(b) After the deleted text begin nonqualified deleted text end distribution new text begin in paragraph (a) new text end is withdrawn from the account
deleted text begin including any penalty as provided in subdivision 3 deleted text end , the account owner forfeits matching
grant amounts in the same proportion as the deleted text begin nonqualified deleted text end distribution is to the total account
balance of the account.

Subd. 5.

Distributions due to death or disability of, or scholarship to, or attendance
at a United States military academy by, a beneficiary.

An account owner may request a
distribution due to the death or disability of, or scholarship to, or attendance at a United
States military academy by, a beneficiary from an account by submitting a completed request
to the plan. deleted text begin Prior to distribution, the account owner shall certify the reason for the distribution
and provide written confirmation from a third party that the beneficiary has died, become
disabled, or received a scholarship for attendance at an eligible educational institution, or
is attending a United States military academy. The plan must not consider a request to make
a distribution until a third-party written confirmation is received by the plan. For purposes
of this subdivision, a third-party written confirmation consists of the following: deleted text end new text begin The plan
shall apprise the account owner that the account owner is responsible for obtaining and
retaining records and other documentation adequate to substantiate a distribution under this
section.
new text end

deleted text begin (1) for death of the beneficiary, a certified copy of the beneficiary's death record;
deleted text end

deleted text begin (2) for disability of the beneficiary, a certification by a physician who is a doctor of
medicine or osteopathic medicine stating that the doctor is legally authorized to practice in
a state of the United States and that the beneficiary is unable to attend any eligible educational
institution because of an injury or illness that is expected to continue indefinitely or result
in death. Certification must be on a form approved by the plan;
deleted text end

deleted text begin (3) for a scholarship award to the beneficiary, a letter from the grantor of the scholarship
or from the eligible educational institution receiving or administering the scholarship, that
identifies the beneficiary by name and Social Security number or taxpayer identification
number as the recipient of the scholarship and states the amount of the scholarship, the
period of time or number of credits or units to which it applies, the date of the scholarship,
and, if applicable, the eligible educational institution to which the scholarship is to be
applied; or
deleted text end

deleted text begin (4) for attendance by the beneficiary at a United States military academy, a letter from
the military academy indicating the beneficiary's enrollment and attendance.
deleted text end

Sec. 16.

Minnesota Statutes 2018, section 136G.14, is amended to read:

136G.14 MINOR TRUST ACCOUNTS.

(a) This section applies to a plan account in which funds of a minor trust account are
invested.

(b) The account owner may not be changed to any person other than a successor custodian
or the beneficiary unless a court order directing the change of ownership is provided to the
plan administrator. The custodian must sign all forms and requests submitted to the plan
administrator in the custodian's representative capacity. The custodian must notify the plan
administrator in writing when the beneficiary becomes legally entitled to be the account
owner. An account owner under this section may not select a contingent account owner.

(c) The beneficiary of an account under this section may not be changed. If the beneficiary
dies, assets in a plan account become the property of the beneficiary's estate. Funds in an
account must not be transferred or rolled over to another account owner or to an account
for another beneficiary. A deleted text begin nonqualified deleted text end new text begin taxable new text end distribution from an account, or a distribution
deleted text begin due to the disability or scholarship award to the beneficiary, or made on account of the
beneficiary's attendance at a United States military academy deleted text end new text begin that qualifies as an exception
under section 530(d)(4)(B)(ii) to (iv) of the Internal Revenue Code new text end , must be used for the
benefit of the beneficiary.

new text begin (d) Funds in an account for a beneficiary under this section may be rolled over into an
ABLE account under section 529A of the Internal Revenue Code, subject to the limits and
requirements of section 529A of the Internal Revenue Code.
new text end

Sec. 17. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, sections 136G.03, subdivisions 4 and 22; and 136G.05,
subdivision 6, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: H3392-1

136G.03 DEFINITIONS.

Subd. 4.

Adjusted gross income.

"Adjusted gross income" means adjusted gross income as defined in section 62 of the Internal Revenue Code.

Subd. 22.

Nonqualified distribution.

"Nonqualified distribution" means a distribution made from an account other than (1) a qualified distribution; or (2) a distribution due to the death or disability of, or scholarship to, or attendance at a United States military academy by, a beneficiary.

136G.05 MINNESOTA OFFICE OF HIGHER EDUCATION.

Subd. 6.

Three-year period for withdrawal of grants.

A matching grant deposited in a matching grant account based on account owner contributions during calendar years 2001 to 2010 under section 136G.11 may not be withdrawn within three years of the establishment of the account of the beneficiary. In calculating the three-year period, the period held in another account is included, if the account includes a rollover from another account under section 529(c)(3)(C) of the Internal Revenue Code.