Minnesota Legislature
SF 1511
1st Unofficial Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to higher education; appropriating money for 1.3 higher education and related purposes to the higher 1.4 education services office, board of trustees of the 1.5 Minnesota state colleges and universities, board of 1.6 regents of the University of Minnesota, and the Mayo 1.7 Medical Foundation, with certain conditions; 1.8 authorizing revenue bonds; making changes to financial 1.9 aid programs, the higher education services office, 1.10 and the Minnesota state colleges and universities; 1.11 adding students to the regent candidate advisory 1.12 council; amending Minnesota Statutes 2002, sections 1.13 41D.01, subdivision 4; 93.22, subdivision 2; 124D.42, 1.14 subdivision 3; 135A.14, by adding a subdivision; 1.15 136A.03; 136A.031, subdivisions 2, 5; 136A.08, 1.16 subdivision 3; 136A.101, subdivision 5a; 136A.121, 1.17 subdivisions 6, 7, 9, 9a, 13; 136A.1211; 136A.125, 1.18 subdivision 2; 136A.171; 136A.29, subdivision 9; 1.19 136A.69; 136F.12; 136F.40, subdivision 2; 136F.45, 1.20 subdivisions 1, 2; 136F.581, subdivisions 1, 2; 1.21 136F.59, subdivision 3; 136F.60, subdivision 3; 1.22 136G.01; 136G.03, subdivision 31, by adding 1.23 subdivisions; 136G.05, subdivisions 4, 5, 10; 136G.09, 1.24 subdivisions 1, 2, 6, 7, 8, 9; 136G.11, subdivisions 1.25 1, 2, 3, 9, 13; 136G.13, subdivisions 1, 3; 137.0245, 1.26 subdivision 2; 299A.45, subdivision 2; proposing 1.27 coding for new law in Minnesota Statutes, chapters 1.28 135A; 136F; 136G; 137; repealing Minnesota Statutes 1.29 2002, sections 15A.081, subdivision 7b; 17.985; 1.30 93.223, subdivision 2; 93.2235, subdivision 2; 1.31 124D.95; 136A.011; 136A.031, subdivisions 1, 3, 4; 1.32 136A.07; 136A.124; 136F.13; 136F.56; 136F.582; 1.33 136F.59, subdivision 2; 136G.03, subdivision 25. 1.34 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.35 ARTICLE 1 1.36 APPROPRIATIONS 1.37 Section 1. [HIGHER EDUCATION APPROPRIATIONS.] 1.38 The sums in the columns marked "APPROPRIATIONS" are 1.39 appropriated from the general fund, or other named fund, to the 2.1 agencies and for the purposes specified in this article. The 2.2 listing of an amount under the figure "2004" or "2005" in this 2.3 article indicates that the amount is appropriated to be 2.4 available for the fiscal year ending June 30, 2004, or June 30, 2.5 2005, respectively. "The first year" is fiscal year 2004. "The 2.6 second year" is fiscal year 2005. "The biennium" is fiscal 2.7 years 2004 and 2005. 2.8 SUMMARY BY FUND 2.9 2004 2005 TOTAL 2.10 General $1,296,742,000 $1,301,970,000 $2,598,712,000 2.11 Health Care 2.12 Access 2,157,000 2,157,000 4,314,000 2.13 SUMMARY BY AGENCY - ALL FUNDS 2.14 2004 2005 TOTAL 2.15 Higher Education Services Office 2.16 177,102,000 192,734,000 369,836,000 2.17 Board of Trustees of the Minnesota 2.18 State Colleges and Universities 2.19 567,381,000 554,194,000 1,121,575,000 2.20 Board of Regents of the University 2.21 of Minnesota 2.22 552,941,000 555,724,000 1,108,665,000 2.23 Mayo Medical Foundation 2.24 1,475,000 1,475,000 2,950,000 2.25 APPROPRIATIONS 2.26 Available for the Year 2.27 Ending June 30 2.28 2004 2005 2.29 Sec. 2. HIGHER EDUCATION 2.30 SERVICES OFFICE 2.31 Subdivision 1. Total 2.32 Appropriation $ 177,102,000 $ 192,734,000 2.33 The amounts that may be spent from this 2.34 appropriation for each purpose are 2.35 specified in the following subdivisions. 2.36 Notwithstanding Minnesota Statutes, 2.37 section 136A.1211, savings in the state 2.38 grant program in fiscal years 2004 and 2.39 2005 resulting from any increases in 2.40 the maximum federal grant must be used 2.41 as provided in this section. 2.42 Subd. 2. State Grants 142,675,000 158,307,000 2.43 If the appropriation in this 2.44 subdivision for either year is 3.1 insufficient, the appropriation for the 3.2 other year is available for it. 3.3 For the biennium, the private 3.4 institution tuition maximum shall be 3.5 $8,983 in the first year and $8,983 in 3.6 the second year for four-year 3.7 institutions and $6,913 in the first 3.8 year and $6,913 in the second year for 3.9 two-year institutions. 3.10 This appropriation contains money to 3.11 set the living and miscellaneous 3.12 expense allowance at $5,405 in each 3.13 year. 3.14 The appropriation contains money to 3.15 provide educational benefits to 3.16 dependent children under age 23 and the 3.17 spouses of public safety officers 3.18 killed in the line of duty pursuant to 3.19 Minnesota Statutes 2002, section 3.20 299A.45. 3.21 Subd. 3. Interstate Tuition 3.22 Reciprocity 3,600,000 3,600,000 3.23 If the appropriation in this 3.24 subdivision for either year is 3.25 insufficient, the appropriation for the 3.26 other year is available to meet 3.27 reciprocity contract obligations. 3.28 Subd. 4. State Work Study 12,444,000 12,444,000 3.29 Subd. 5. Child Care Grants 4,743,000 4,743,000 3.30 Subd. 6. Minitex 4,381,000 4,381,000 3.31 Subd. 7. MnLINK 450,000 450,000 3.32 The base appropriation for MnLINK 3.33 operations is $400,000 each year in 3.34 fiscal years 2006 and 2007. 3.35 Any unexpended funds from the 3.36 appropriation in Laws 1997, chapter 3.37 183, article 1, section 2, subdivision 3.38 8, shall cancel on June 30, 2005. 3.39 Subd. 8. Learning Network 3.40 of Minnesota 4,829,000 4,829,000 3.41 Subd. 9. Minnesota College 3.42 Savings Plan 1,120,000 1,120,000 3.43 Subd. 10. Income Contingent 3.44 Loans 3.45 The higher education services office 3.46 shall administer an income-contingent 3.47 loan repayment program to assist 3.48 graduates of Minnesota schools in 3.49 medicine, dentistry, pharmacy, 3.50 chiropractic medicine, public health, 3.51 and veterinary medicine, and Minnesota 3.52 residents graduating from optometry and 3.53 osteopathy programs. Applicant data 3.54 collected by the office for this 3.55 program may be disclosed to a consumer 3.56 credit reporting agency under the same 4.1 conditions as those that apply to the 4.2 supplemental loan program under 4.3 Minnesota Statutes, section 136A.162. 4.4 No new applicants may be accepted after 4.5 June 30, 1995. 4.6 Subd. 11. Agency 4.7 Administration 2,860,000 2,860,000 4.8 Subd. 12. Balances Forward 4.9 A balance in the first year under this 4.10 section does not cancel, but is 4.11 available for the second year. 4.12 Subd. 13. Transfers 4.13 The higher education services office 4.14 may transfer unencumbered balances from 4.15 the appropriations in this section to 4.16 the state grant appropriation, the 4.17 interstate tuition reciprocity 4.18 appropriation, the child care 4.19 appropriation, and the state work study 4.20 appropriation. 4.21 Subd. 14. Reporting 4.22 The higher education services office 4.23 shall collect data monthly from 4.24 institutions disbursing state financial 4.25 aid. The data collected shall include, 4.26 but is not limited to, expenditures by 4.27 type to date and unexpended balances. 4.28 The higher education services office 4.29 shall evaluate and report monthly on 4.30 state financial aid expenditures and 4.31 unexpended balances to the chairs of 4.32 the higher education finance committees 4.33 of the senate and house of 4.34 representatives and the commissioner of 4.35 finance. By July 15, December 15, 4.36 February 15, and April 15, the services 4.37 office shall provide updated state 4.38 grant spending projections taking into 4.39 account the most current and projected 4.40 enrollment and tuition and fee 4.41 information, economic conditions, and 4.42 other relevant factors. Before 4.43 submitting state grant spending 4.44 projections, the office shall meet and 4.45 consult with representatives of public 4.46 and private postsecondary education, 4.47 the department of finance, governor's 4.48 office, legislative staff, and 4.49 financial aid administrators. The 4.50 institutions are encouraged to provide 4.51 tuition information to the higher 4.52 education services office no later than 4.53 July 1 of each year. 4.54 Sec. 3. BOARD OF TRUSTEES OF THE 4.55 MINNESOTA STATE COLLEGES AND UNIVERSITIES 4.56 Subdivision 1. Total 4.57 Appropriation 567,381,000 554,194,000 4.58 The amounts that may be spent from this 4.59 appropriation for each purpose are 4.60 specified in the following subdivisions. 5.1 The legislature intends that state 5.2 appropriations be used to strengthen 5.3 and support education of students. To 5.4 this end, all money appropriated in 5.5 this section, except that in direct 5.6 support of system office activities, 5.7 shall be allocated by the board 5.8 directly to the colleges and 5.9 universities. 5.10 The legislature intends that the office 5.11 of the chancellor must reduce its 5.12 expenditures during the biennium ending 5.13 June 30, 2005, in at least the same 5.14 proportion as the reduction in the 5.15 allocation of state appropriations to 5.16 MnSCU institutions. 5.17 Subd. 2. Operations and 5.18 Maintenance 564,381,000 551,194,000 5.19 Estimated Expenditures 5.20 and Appropriations 5.21 The legislature estimates that 5.22 instructional expenditures will be 5.23 $758,713,000 in the first year and 5.24 $738,933,000 in the second year. The 5.25 legislature estimates that 5.26 noninstructional expenditures will be 5.27 $61,572,000 in the first year and 5.28 $61,572,000 in the second year. 5.29 During the biennium, neither the board 5.30 nor campuses shall plan or develop 5.31 doctoral level programs or degrees 5.32 until after they have received the 5.33 recommendation of the house and senate 5.34 committees on education, finance, and 5.35 ways and means. 5.36 During the biennium, technical and 5.37 consolidated colleges shall make use of 5.38 instructional advisory committees 5.39 consisting of employers, students, and 5.40 instructors. The instructional 5.41 advisory committee shall be consulted 5.42 when a technical program is proposed to 5.43 be created, modified, or eliminated. 5.44 If a decision is made to eliminate a 5.45 program, a college shall adequately 5.46 notify students and make plans to 5.47 assist students affected by the closure. 5.48 The board must publish an 5.49 Internet-based student manual that 5.50 identifies and describes how general 5.51 education courses at two-year MnSCU 5.52 institutions transfer to state 5.53 universities within the Minnesota state 5.54 colleges and universities system. 5.55 In each year, the board of trustees 5.56 shall increase the percentage of the 5.57 total general fund expenditures for 5.58 direct instruction and academic 5.59 support, as reported in the federal 5.60 Integrated Postsecondary Education Data 5.61 System (IPEDS). 5.62 By February 15 of each year, the board 6.1 of trustees shall report to the higher 6.2 education finance committees of the 6.3 legislature the percentage of total 6.4 general fund expenditures spent on 6.5 direct instruction and on academic 6.6 support during the previous fiscal year 6.7 by institution and for the system as a 6.8 whole. 6.9 The board may waive tuition for 6.10 eligible Southwest Asia veterans, as 6.11 provided in Minnesota Statutes, section 6.12 136F.28. 6.13 Subd. 3. Health Education 3,000,000 3,000,000 6.14 This appropriation is for health 6.15 education to meet the health care needs 6.16 of Minnesota by increasing nursing 6.17 graduates, recruiting nursing faculty, 6.18 and expanding the use of technology and 6.19 distance education in nursing and 6.20 allied healthcare. 6.21 Subd. 4. Accountability 6.22 The board shall continue to submit 6.23 reports as required by Laws 2001, First 6.24 Special Session chapter 1, article 1, 6.25 section 3, subdivision 3. 6.26 Subd. 5. Land Sales 6.27 Notwithstanding Minnesota Statutes 6.28 2002, sections 94.09 to 94.16, or any 6.29 other law to the contrary, in the 6.30 biennium ending June 30, 2005, the 6.31 board of trustees may sell surplus 6.32 state-owned land of an institution. 6.33 The board must deposit the net proceeds 6.34 of the sale in the account of the 6.35 institution from which the land was 6.36 sold. The board must report all land 6.37 sales under this subdivision to the 6.38 chairs of the higher education 6.39 committees in the house and the senate 6.40 by January 1, 2006. 6.41 Sec. 4. BOARD OF REGENTS OF THE 6.42 UNIVERSITY OF MINNESOTA 6.43 Subdivision 1. Total 6.44 Appropriation 552,941,000 555,724,000 6.45 The amounts that may be spent from this 6.46 appropriation for each purpose are 6.47 specified in the following subdivisions. 6.48 Subd. 2. Operations and 6.49 Maintenance 486,300,000 489,083,000 6.50 Estimated Expenditures 6.51 and Appropriations 6.52 The legislature estimates that 6.53 instructional expenditures will be 6.54 $370,547,000 in the first year and 6.55 $374,676,000 in the second year. The 6.56 legislature estimates that 6.57 noninstructional expenditures will be 6.58 $240,209,000 the first year and 7.1 $240,619,000 in the second year. 7.2 Subd. 3. Health Care Access Fund 2,157,000 2,157,000 7.3 This appropriation is from the health 7.4 care access fund for primary care 7.5 education initiatives. 7.6 Subd. 4. Special 7.7 Appropriation 64,484,000 64,484,000 7.8 The board may transfer amounts in this 7.9 subdivision to the operations and 7.10 maintenance appropriations in 7.11 subdivision 2. 7.12 (a) Agriculture and Extension Service 7.13 51,518,000 51,518,000 7.14 This appropriation is for the 7.15 Agricultural Experiment Station, 7.16 Minnesota Extension Service. 7.17 The university must continue to provide 7.18 support for the rapid agricultural 7.19 response fund, and sustainable and 7.20 organic agriculture initiatives 7.21 including, but not limited to, the 7.22 alternative swine systems program. 7.23 Any salary increases granted by the 7.24 university to personnel paid from the 7.25 Minnesota Extension appropriation must 7.26 not result in a reduction of the county 7.27 responsibility for the salary payments. 7.28 During the biennium, the university 7.29 shall maintain an advisory council 7.30 system for each experiment station. 7.31 The advisory councils must be broadly 7.32 representative of the range in size and 7.33 income distribution of farms and 7.34 agribusinesses and must not 7.35 disproportionately represent those from 7.36 the upper half of the size and income 7.37 distributions. 7.38 (b) Health Sciences 7.39 5,016,000 5,016,000 7.40 This appropriation is for the rural 7.41 physicians associates program, the 7.42 Veterinary Diagnostic Laboratory, 7.43 health sciences research, dental care, 7.44 and the Biomedical Engineering Center. 7.45 (c) Institute of Technology 7.46 1,411,000 1,411,000 7.47 This appropriation is for the 7.48 Geological Survey and the Talented 7.49 Youth Mathematics Program. 7.50 (d) System Specials 7.51 6,539,000 6,539,000 7.52 This appropriation is for general 8.1 research, student loans matching money, 8.2 industrial relations education, Natural 8.3 Resources Research Institute, Center 8.4 for Urban and Regional Affairs, Bell 8.5 Museum of Natural History, and the 8.6 Humphrey exhibit. 8.7 Subd. 5. Academic Health Center 8.8 The appropriation under Minnesota 8.9 Statutes, section 137.026, if enacted, 8.10 is anticipated to be $22,515,000 in the 8.11 first year and $22,403,000 in the 8.12 second year. 8.13 Subd. 6. Accountability 8.14 The board shall continue to submit 8.15 reports as required by Laws 2001, First 8.16 Special Session chapter 1, article 1, 8.17 section 4, subdivision 5, or a 8.18 comparable accountability report. 8.19 Sec. 5. MAYO MEDICAL FOUNDATION 8.20 Subdivision 1. Total 8.21 Appropriation 1,475,000 1,475,000 8.22 The amounts that may be spent from this 8.23 appropriation for each purpose are 8.24 specified in the following subdivisions. 8.25 If appropriations are insufficient to 8.26 cover the rates established in 8.27 subdivisions 2 and 3, the Mayo Medical 8.28 Foundation may evenly distribute the 8.29 funds received among students who are 8.30 Minnesota residents. 8.31 Subd. 2. Medical School 545,000 545,000 8.32 The state of Minnesota must pay a 8.33 capitation of $14,405 each year for 8.34 each student who is a resident of 8.35 Minnesota. The appropriation may be 8.36 transferred between years of the 8.37 biennium to accommodate enrollment 8.38 fluctuations. 8.39 The legislature intends that during the 8.40 biennium the Mayo foundation use the 8.41 capitation money to increase the number 8.42 of doctors practicing in rural areas in 8.43 need of doctors. 8.44 Subd. 3. Family Practice and 8.45 Graduate Residency Program 563,000 563,000 8.46 The state of Minnesota must pay a 8.47 capitation of $22,313 for 26 residents 8.48 each year and $44,627 for one resident 8.49 each year. 8.50 Subd. 4. St. Cloud Hospital-Mayo 8.51 Family Practice Residency Program 367,000 367,000 8.52 This appropriation is to the Mayo 8.53 foundation to support 12 resident 8.54 physicians each year in the St. Cloud 8.55 Hospital-Mayo Family Practice Residency 8.56 program. The program shall prepare 9.1 doctors to practice primary care 9.2 medicine in the rural areas of the 9.3 state. It is intended that this 9.4 program will improve health care in 9.5 rural communities, provide affordable 9.6 access to appropriate medical care, and 9.7 manage the treatment of patients in a 9.8 more cost-effective manner. 9.9 ARTICLE 2 9.10 RELATED PROVISIONS 9.11 Section 1. Minnesota Statutes 2002, section 41D.01, 9.12 subdivision 4, is amended to read: 9.13 Subd. 4. [EXPIRATION.] This section expires on June 9.14 30,20032008. 9.15 Sec. 2. Minnesota Statutes 2002, section 93.22, 9.16 subdivision 2, is amended to read: 9.17 Subd. 2. [TACONITE LEASE REVENUE.] Notwithstanding 9.18 subdivision 1, from July 1, 2001, to June 30, 2006, payments 9.19 made under state taconite leases shall be distributed as follows: 9.20(1)if the lands or minerals and mineral rights covered by 9.21 a lease are held by the state by virtue of a school, swamp, or 9.22 internal improvement land grant of Congress, payments made under 9.23 the lease shall be distributed annually on September 1 to the 9.24 school fund mineral lease suspense account created under section 9.25 93.223, subdivision 1; and. 9.26(2) if the lands or minerals and mineral rights covered by9.27a lease are held by the state by virtue of a university land9.28grant of Congress, payments made under the lease shall be9.29distributed annually on September 1 to the university mineral9.30lease suspense account created under section 93.223, subdivision9.312.9.32 Sec. 3. Minnesota Statutes 2002, section 124D.42, 9.33 subdivision 3, is amended to read: 9.34 Subd. 3. [POSTSERVICE BENEFIT.] (a) Each eligible 9.35 organization must agree to provide to every participant who 9.36 fulfills the terms of a contract under subdivision 2, a 9.37 nontransferable postservice benefit. The benefit must be not 9.38 less than $4,725 per year of full-time service or prorated for 9.39 part-time service or for partial service of at least 900 hours. 10.1 Upon signing a contract under subdivision 2, each eligible 10.2 organization must deposit funds to cover the full amount of 10.3 postservice benefits obligated, except for national education 10.4 awards that are deposited in the national service trust fund. 10.5 Funds encumbered in fiscal years 1994 and 1995 for postservice 10.6 benefits must be available until the participants for whom the 10.7 funds were encumbered are no longer eligible to draw benefits. 10.8 (b) Nothing in this subdivision prevents a grantee 10.9 organization from using funds from nonfederal or nonstate 10.10 sources to increase the value of postservice benefits above the 10.11 value described in paragraph (a). 10.12 (c)The higher education services office must establish an10.13account for depositing funds for postservice benefits received10.14from eligible organizations. If a participant does not complete10.15the term of service or, upon successful completion of the10.16program, does not use a postservice benefit according to10.17subdivision 4 within seven years, the amount of the postservice10.18benefit must be refunded to the eligible organization or, at the10.19organization's discretion, dedicated to another eligible10.20participant. Interest earned on funds deposited in the10.21postservice benefit account is appropriated to the higher10.22education services office for the costs of administering the10.23postservice benefits accounts.10.24(d)The state must provide an additional postservice 10.25 benefit to any participant who successfully completes the 10.26 program. The benefit must be a credit of five points to be 10.27 added to the competitive open rating of a participant who 10.28 obtains a passing grade on a civil service examination under 10.29 chapter 43A. The benefit is available for five years after 10.30 completing the community service. 10.31 Sec. 4. Minnesota Statutes 2002, section 135A.14, is 10.32 amended by adding a subdivision to read: 10.33 Subd. 6a. [MENINGITIS INFORMATION.] Each public and 10.34 private postsecondary institution shall provide information on 10.35 the risks of meningococcal disease and on the availability and 10.36 effectiveness of any vaccine to each individual who is a 11.1 first-time enrollee and who resides in on-campus student 11.2 housing. The institution may provide the information in an 11.3 electronic format. The institution must consult with the 11.4 department of health on the preparation of the informational 11.5 materials provided under this subdivision. 11.6 Sec. 5. [135A.157] [PENALTIES FOR RIOTING.] 11.7 A student in a postsecondary institution who is convicted 11.8 of riot under section 609.71 is not eligible for a state grant 11.9 award under section 136A.121 following conviction and must pay 11.10 the highest applicable tuition rate, including the nonresident 11.11 tuition rate, to attend a public postsecondary institution in 11.12 any subsequent enrollment periods. 11.13 Sec. 6. Minnesota Statutes 2002, section 136A.03, is 11.14 amended to read: 11.15 136A.03 [EXECUTIVE OFFICERS; EMPLOYEES.] 11.16 The office of higher education shall be under the 11.17 administrative control of the director. The director of the 11.18higher education servicesoffice shall possess the powers and 11.19 perform the duties asprescribed by the higher education11.20services council and shallprovided in this chapter. The 11.21 director shall be appointed by the governor with the advice and 11.22 consent of the senate and serve in the unclassified service of 11.23 the state civil service. The director, or the director's 11.24 designated representative, on behalf of the office is authorized 11.25 to sign contracts and execute all instruments necessary or 11.26 appropriate to carry out the purposes of sections 136A.01 to 11.27 136A.178 for the office. The salary of the director shall be 11.28 establishedby the higher education services councilaccording 11.29 to section 15A.0815. The director shall be a person qualified 11.30 by training or experience in the field of higher education or in 11.31 financial aid administration. The director may appoint other 11.32 professional employees who shall serve in the unclassified 11.33 service of the state civil service. All other employees shall 11.34 be in the classified civil service. 11.35 An officer or professional employee in the unclassified 11.36 service as provided in this section is a person who has studied 12.1 higher education or a related field at the graduate level or has 12.2 similar experience and who is qualified for a career in 12.3 financial aid and other aspects of higher education and for 12.4 activities in keeping with the planning and administrative 12.5 responsibilities of the office and who is appointed to assume 12.6 responsibility for administration of educational programs or 12.7 research in matters of higher education. 12.8 Sec. 7. Minnesota Statutes 2002, section 136A.031, 12.9 subdivision 2, is amended to read: 12.10 Subd. 2. [HIGHER EDUCATION ADVISORY COUNCIL.] A higher 12.11 education advisory council (HEAC) is established. The HEAC is 12.12 composed of the director of the office of higher education, who 12.13 shall serve as chair; the presidentand the senior12.14vice-president for academic affairsof the University of 12.15 Minnesota or designee; the chancellor of the Minnesota state 12.16 colleges and universities or designee;the associate12.17vice-chancellors of the state universities, community colleges,12.18and technical colleges;the commissioner of children, families, 12.19 and learning; the president of the private college council; and 12.20 a representative from the Minnesota association of private 12.21 post-secondary schools. The HEAC shall also be composed of the 12.22 following members who shall be appointed by the governor: three 12.23 citizen members, representing urban, rural, and regional areas 12.24 of the state, who are qualified by training or experience in the 12.25 fields of higher education, job skills training, and business; 12.26 and six student members, one representing the University of 12.27 Minnesota, three representing the Minnesota state colleges and 12.28 universities, one student representing four-year universities, 12.29 one student representing two-year community colleges, and one 12.30 student representing two-year technical colleges, one private 12.31 college student, and one private vocational school student. The 12.32 term of citizen members is five years. The term of student 12.33 members is two years. The HEAC shall (1) bring to the attention 12.34 of thehigher education services councilgovernor any matters 12.35 that the HEAC deems necessary, and (2) review and comment upon 12.36 mattersbefore the councilas requested.The council shall13.1refer all proposals to the HEAC before submitting13.2recommendations to the governor and the legislature. The13.3council shall provide time for a report from the HEAC at each13.4meeting of the council.13.5 Sec. 8. Minnesota Statutes 2002, section 136A.031, 13.6 subdivision 5, is amended to read: 13.7 Subd. 5. [EXPIRATION.] Notwithstanding section 15.059, 13.8 subdivision5a5, the advisorygroupsgroup established in this 13.9 sectionexpireexpires on June 30,20032005. 13.10 Sec. 9. Minnesota Statutes 2002, section 136A.08, 13.11 subdivision 3, is amended to read: 13.12 Subd. 3. [WISCONSIN.] A higher education reciprocity 13.13 agreement with the state of Wisconsin may include provision for 13.14 the transfer of funds between Minnesota and Wisconsinprovided13.15that an income tax reciprocity agreement between Minnesota and13.16Wisconsin is in effect for the period of time included under the13.17higher education reciprocity agreement. If this provision is 13.18 included, the amount of funds to be transferred shall be 13.19 determined according to a formula which is mutually acceptable 13.20 to the office and a duly designated agency representing 13.21 Wisconsin. The formula shall recognize differences in tuition 13.22 rates between the two states and the number of students 13.23 attending institutions in each state under the agreement. Any 13.24 payments to Minnesota by Wisconsin shall be deposited by the 13.25 office in the general fund of the state treasury. The amount 13.26 required for the payments shall be certified by the director of 13.27 the office to the commissioner of finance annually. 13.28 Sec. 10. Minnesota Statutes 2002, section 136A.101, 13.29 subdivision 5a, is amended to read: 13.30 Subd. 5a. [ASSIGNED FAMILY RESPONSIBILITY.] "Assigned 13.31 family responsibility" means the amount of a family contribution 13.32 to a student's cost of attendance, as determined by a federal 13.33 need analysis, except that, beginning for the 1998-1999 academic13.34year,up to $25,000 in savings and other assets shall be 13.35 subtracted from the federal calculation of net worth before 13.36 determining the contribution. For dependent students, the 14.1 assigned family responsibility is the parental contribution. 14.2 For independent students with dependents other than a spouse, 14.3 the assigned family responsibility is the student contribution. 14.4 For independent students without dependents other than a spouse, 14.5 the assigned family responsibility is 80 percent of the student 14.6 contribution.Beginning in fiscal year 2002,The assigned 14.7 family responsibility for all independent students is reduced an 14.8 additional ten percent. 14.9 Sec. 11. Minnesota Statutes 2002, section 136A.121, 14.10 subdivision 6, is amended to read: 14.11 Subd. 6. [COST OF ATTENDANCE.] (a) The recognized cost of 14.12 attendance consists of allowances specified in law for living 14.13 and miscellaneous expenses, and an allowance for tuition and 14.14 fees equal to the lesser of the actual tuition and fees charged 14.15 by the institution, or theprivate institutiontuition and fee 14.16 maximums established in law. 14.17 (b)For the purpose of paragraph (a), the private14.18institution tuition and fee maximum for two- and four-year,14.19private, residential, liberal arts, degree-granting colleges and14.20universities must be the same.14.21(c)For a student registering for less than full time, the 14.22 office shall prorate the living and miscellaneous expense 14.23 allowance to the actual number of credits for which the student 14.24 is enrolled. 14.25 The recognized cost of attendance for a student who is 14.26 confined to a Minnesota correctional institution shall consist 14.27 of the tuition and fee component in paragraph (a), with no 14.28 allowance for living and miscellaneous expenses. 14.29 Sec. 12. Minnesota Statutes 2002, section 136A.121, 14.30 subdivision 7, is amended to read: 14.31 Subd. 7. [INSUFFICIENT APPROPRIATION.] (a) If the amount 14.32 appropriated is determined by the office to be insufficient to 14.33 make full awards to applicants under subdivision 5,before any14.34award for that year has been disbursed, awards must be reduced14.35 the office shall reduce awards by: 14.36 (1) prorating awards for summer academic terms; 15.1 (2) adding a surcharge to the applicant's assigned family 15.2 responsibility, as defined in section 136A.101, subdivision 5a; 15.3 and 15.4(2)(3) adding a percentage increase in the applicant's 15.5 assigned student responsibility, as defined in subdivision 5. 15.6 The office may establish an award cutoff deadline, if 15.7 necessary. If a grant for a summer term is prorated under this 15.8 section, credits earned during the term do not count toward the 15.9 student's enrollment limit under subdivision 9. 15.10 Sec. 13. Minnesota Statutes 2002, section 136A.121, 15.11 subdivision 9, is amended to read: 15.12 Subd. 9. [AWARDS.] An undergraduate student who meets the 15.13 office's requirements is eligible to apply for and receive a 15.14 grant in any year of undergraduate study unless the student has 15.15 obtained a baccalaureate degree or previously has been enrolled 15.16 full time or the equivalent forteneight semesters or the 15.17 equivalent, excluding courses taken from a Minnesota school or 15.18 post-secondary institution which is not participating in the 15.19 state grant program and from which a student transferred no 15.20 credit. A student enrolled in a two-year program at a four-year 15.21 institution is only eligible for the tuition and fee maximums 15.22 established by law for two-year institutions. 15.23 Sec. 14. Minnesota Statutes 2002, section 136A.121, 15.24 subdivision 9a, is amended to read: 15.25 Subd. 9a. [FULL-YEAR GRANTS.] Students may receive state 15.26 grants for four consecutive quarters or three consecutive 15.27 semesters during the course of a single fiscal year. In 15.28 calculating a state grant for the fourth quarter or third 15.29 semester, the office must use the same calculation as it would 15.30 for any other term, except that the calculation must subtract 15.31 any Pell grant for which a student would be eligible even if the 15.32 student has exhausted the Pell grant for that fiscal year. 15.33 Sec. 15. Minnesota Statutes 2002, section 136A.121, 15.34 subdivision 13, is amended to read: 15.35 Subd. 13. [DEADLINE.] The office shall accept applications 15.36 for state grants until October 15 for awards for the first 16.1 semester or equivalent enrollment period and until February 15 16.2and may establish a deadline for the acceptance of applications16.3that is later than February 15for awards for the second 16.4 semester or equivalent enrollment period of each academic year. 16.5 A student who applies for state grant funds after the first 16.6 semester or the equivalent of the academic year may not receive 16.7 retroactive funding for the entire academic year. 16.8 Sec. 16. Minnesota Statutes 2002, section 136A.1211, is 16.9 amended to read: 16.10 136A.1211 [USE OF STATE GRANT SAVINGS.] 16.11 Savings in the state grant program resulting from an 16.12 increase in the maximum federal Pell grant from the anticipated 16.13 level of$3,125$4,050 shall be used by the office to increase 16.14 the living and miscellaneous expense allowance. 16.15 Sec. 17. Minnesota Statutes 2002, section 136A.125, 16.16 subdivision 2, is amended to read: 16.17 Subd. 2. [ELIGIBLE STUDENTS.] An applicant is eligible for 16.18 a child care grant if the applicant: 16.19 (1) is a resident of the state of Minnesota; 16.20 (2) has a child 12 years of age or younger, or 14 years of 16.21 age or younger who is handicapped as defined in section 125A.02, 16.22 and who is receiving or will receive care on a regular basis 16.23 from a licensed or legal, nonlicensed caregiver; 16.24 (3) is income eligible as determined by the office's 16.25 policies and rules, but is not a recipient of assistance from 16.26 the Minnesota family investment program; 16.27 (4) has not earned a baccalaureate degree and has been 16.28 enrolled full time less thanteneight semesters or the 16.29 equivalent; 16.30 (5) is pursuing a nonsectarian program or course of study 16.31 that applies to an undergraduate degree, diploma, or 16.32 certificate; 16.33 (6) is enrolled at least half time in an eligible 16.34 institution; and 16.35 (7) is in good academic standing and making satisfactory 16.36 academic progress. 17.1 Sec. 18. Minnesota Statutes 2002, section 136A.171, is 17.2 amended to read: 17.3 136A.171 [REVENUE BONDS; ISSUANCE; PROCEEDS.] 17.4 The higher education services office may issue revenue 17.5 bonds to obtain funds for loans made in accordance with the 17.6 provisions of this chapter. The aggregate amount of revenue 17.7 bonds, issued directly by the office, outstanding at any one 17.8 time, not including refunded bonds or otherwise defeased or 17.9 discharged bonds, shall not exceed$550,000,000$850,000,000. 17.10 Proceeds from the issuance of bonds may be held and invested by 17.11 the office pending disbursement in the form of loans. All 17.12 interest and profits from the investments shall inure to the 17.13 benefit of the office and shall be available to the office for 17.14 the same purposes as the proceeds from the sale of revenue bonds 17.15 including, but not limited to, costs incurred in administering 17.16 loans under this chapter and loan reserve funds. 17.17 Sec. 19. Minnesota Statutes 2002, section 136A.29, 17.18 subdivision 9, is amended to read: 17.19 Subd. 9. The authority is authorized and empowered to 17.20 issue revenue bonds whose aggregate principal amount at any time 17.21 shall not exceed$650,000,000$800,000,000 and to issue notes, 17.22 bond anticipation notes, and revenue refunding bonds of the 17.23 authority under the provisions of sections 136A.25 to 136A.42, 17.24 to provide funds for acquiring, constructing, reconstructing, 17.25 enlarging, remodeling, renovating, improving, furnishing, or 17.26 equipping one or more projects or parts thereof. 17.27 Sec. 20. Minnesota Statutes 2002, section 136A.69, is 17.28 amended to read: 17.29 136A.69 [FEES.] 17.30 The office shall collect reasonable registration fees that 17.31 are sufficient to recover, but do not exceed, its costs of 17.32 administering the registration program. The office shall charge 17.33 $1,100 for initial registration fees and $950 for annual renewal 17.34 fees. 17.35 Sec. 21. Minnesota Statutes 2002, section 136F.12, is 17.36 amended to read: 18.1 136F.12 [FOND DU LAC CAMPUS.] 18.2 Subdivision 1. [UNIQUE MISSIONS.] The Fond du Lac campus 18.3 has a unique mission among two-year colleges to serve the lower 18.4 division general education needs in Carlton and south St. Louis 18.5 counties, and the education needs of American Indians throughout 18.6 the state and especially in northern Minnesota. The campus has 18.7 a further unique mission to provide programs in support of its 18.8 federal land grant status. Accordingly, while the college is 18.9 governed by the board of trustees, its governance is 18.10 accomplished in conjunction with the board of directors of Fond 18.11 du Lac tribal college. 18.12 Subd. 2. [SELECTED PROGRAMS.] Notwithstanding section 18.13 135A.052, subdivision 1, to better meet the education needs of 18.14 Minnesota's American Indian students, and in furtherance of the 18.15 unique missions provided in subdivision 1, Fond du Lac tribal 18.16 and community college may offer a baccalaureate program in 18.17 elementary education, as approved by the board of trustees of 18.18 the Minnesota state colleges and universities, and the board of 18.19 directors of Fond du Lac tribal and community college. 18.20 Subd. 3. [BARGAINING UNIT ASSIGNMENT.] Notwithstanding 18.21 section 179A.10, subdivision 2, the state university 18.22 instructional unit shall include faculty who teach upper 18.23 division courses at the Fond du Lac tribal and community college. 18.24 Sec. 22. Minnesota Statutes 2002, section 136F.40, 18.25 subdivision 2, is amended to read: 18.26 Subd. 2. [CONTRACTS.] (a) The board may enter into a 18.27 contract with the chancellor, a vice-chancellor, or a president, 18.28 containing terms and conditions of employment. The terms of the 18.29 contract must be authorized under a plan approved under section 18.30 43A.18, subdivision 3a. 18.31 (b) Notwithstanding section 43A.17, subdivision 11, or 18.32 other law to the contrary, a contract under this section may 18.33 provide a liquidated salary amount or other compensation if a 18.34 contract is terminated by the board prior to its expiration. 18.35 (c) Notwithstanding section 356.24 or other law to the 18.36 contrary, a contract under this section may contain a deferred 19.1 compensation plan made in conformance with section 457(f) of the 19.2 Internal Revenue Code. 19.3 Sec. 23. Minnesota Statutes 2002, section 136F.45, 19.4 subdivision 1, is amended to read: 19.5 Subdivision 1. [PURCHASE.] (a) At the request of an 19.6 employee, the board may negotiate and purchase an individual 19.7annuity contractcustodial account under section 403(b)(7) of 19.8 the Internal Revenue Code, for an employee for retirement or 19.9 other purposes from a company licensed to do business in 19.10 Minnesota, and may allocate a portion of the compensation 19.11 otherwise payable to the employee as salary for the purpose of 19.12 paying the entirepremiumcontribution due or to become due 19.13 under thecontractaccount. The allocation shall be made in a 19.14 manner that will qualify theannuity premiumscustodial account 19.15 contributions, ora portionportions thereof, for the benefit 19.16 afforded under section 403(b)(7) of the current federal Internal 19.17 Revenue Code or any equivalent provision of subsequent federal 19.18 income tax law. The employee shall own thecontractaccount and 19.19 the employee's rights thereunder shall be nonforfeitable except 19.20 for failure to paypremiumscontributions. 19.21 (b) At its discretion, and in the same manner provided in 19.22 paragraph (a), the board may negotiate and purchase individual 19.23 custodial accounts under section 403(b)(7) of the Internal 19.24 Revenue Code, for employees of the higher education services 19.25 office as defined in section 136A.03. Participation under this 19.26 paragraph must be in accordance with any applicable federal law. 19.27 Sec. 24. Minnesota Statutes 2002, section 136F.45, 19.28 subdivision 2, is amended to read: 19.29 Subd. 2. [DEPOSITS; PAYMENT.] All amounts so allocated 19.30 shall be deposited in anannuityaccount established by the 19.31 board. Payment ofannuity premiumscustodial account 19.32 contributions shall be made when due or in accordance with the 19.33 salary agreement entered into between the employee and the 19.34 board. The money in theannuityaccount is not subject to the 19.35 budget, allotment, and incumbrance system provided for in 19.36 chapter 16A. 20.1 Sec. 25. Minnesota Statutes 2002, section 136F.581, 20.2 subdivision 1, is amended to read: 20.3 Subdivision 1. [CONDITIONSAUTHORITY FOR PURCHASES AND 20.4 CONTRACTS.] The board and the colleges and universities are 20.5 subject to the provisions of section 471.345. In addition to 20.6 the contracting authority under this chapter, the board of 20.7 trustees may utilize any contracting options available to the 20.8 commissioner of administration under chapters 16A, 16B, 16C, or 20.9 any other contract option available under state law. 20.10 Sec. 26. Minnesota Statutes 2002, section 136F.581, 20.11 subdivision 2, is amended to read: 20.12 Subd. 2. [POLICIES AND PROCEDURES.] The board shall 20.13 develop policies, and each college and university shall develop20.14procedures,for purchases and contracts that are consistent with 20.15 the authority granted in subdivision 1. The policies and 20.16 procedures shall be developed through the system and campus 20.17 labor management committees and shall include provisions 20.18 requiring the system and campuses to determine that they cannot 20.19 use available staff before contracting with additional outside 20.20 consultants or services. In addition, each college and 20.21 university, in consultation with thesystemoffice of the 20.22 chancellor, shall develop procedures for those purchases and 20.23 contracts that can be accomplished by a college and university 20.24 without board approval. The board policies must allow each 20.25 college and university the local authority to enter into 20.26 contracts for construction projects of up to $250,000 and to 20.27 make other purchases of up to $50,000, without receiving board 20.28 approval. The board may allow a college or university local 20.29 authority to make purchases over $50,000 without receiving board 20.30 approval. 20.31 Sec. 27. Minnesota Statutes 2002, section 136F.59, 20.32 subdivision 3, is amended to read: 20.33 Subd. 3. [OFFICE OF TECHNOLOGY.] Thesystemoffice of the 20.34 chancellor and the campuses shall cooperate with the office of 20.35 technology in its responsibility to coordinate information and 20.36 communications technology development throughout the state.The21.1system and campuses shall consult with the office of technology21.2throughout any efforts to plan or implement information and21.3communication systems to ensure that the systems are effective,21.4efficient, and, where appropriate, compatible with other state21.5systems.21.6 Sec. 28. Minnesota Statutes 2002, section 136F.60, 21.7 subdivision 3, is amended to read: 21.8 Subd. 3. [EASEMENTS.] (a) The board may grant permanent or 21.9 temporary easements over, under, or across any land under its 21.10 jurisdiction for reasonable purposes determined by the board as 21.11 provided in paragraphs (b) and (c). 21.12 (b) The board may grant a revocable easement or permit 21.13 under this paragraph. An easement or permit is revocable by 21.14 written notice given by the board if at any time its continuance 21.15 will conflict with a public use of the land over, under, or upon 21.16 which it is granted, or for any other reason. The notice must 21.17 be in writing and is effective 90 days after the notice is sent 21.18 by certified mail to the last known address of the holder of 21.19 record of the easement. If the address of the holder of the 21.20 easement or permit is not known, it expires 90 days after the 21.21 notice is recorded in the office of the county recorder of the 21.22 county in which the land is located. Upon revocation of an 21.23 easement or permit, the board may allow a reasonable time to 21.24 vacate the premises affected. 21.25 (c) State land subject to an easement or permit granted by 21.26 the board remains subject to sale or lease, and the sale or 21.27 lease does not revoke the permit or easement granted. 21.28 Sec. 29. [136F.65] [ACCEPTANCE OF FEDERAL MONEY.] 21.29 The board of trustees is hereby designated the state agency 21.30 empowered to accept any and all money provided for or made 21.31 available to this state by the United States of America or any 21.32 department or agency thereof for the construction and equipping 21.33 of any building for university or college purposes in accordance 21.34 with the provisions of federal law and any rules or regulations 21.35 promulgated thereunder and are further authorized to do any and 21.36 all things required of this state by such federal law and the 22.1 rules and regulations promulgated thereunder in order to obtain 22.2 such federal money. 22.3 Sec. 30. Minnesota Statutes 2002, section 136G.01, is 22.4 amended to read: 22.5 136G.01 [PLAN ESTABLISHED.] 22.6 A college savings plan known as the Minnesota college 22.7 savings plan is established. In establishing this plan, the 22.8 legislature seeks to encourage individuals to save for 22.9 post-secondary education by: 22.10 (1) providing a qualifiedstatetuition plan under federal 22.11 tax law; 22.12 (2) providing matching grants for contributions to the 22.13 program by low- and middle-income families; and 22.14 (3) by encouraging individuals, foundations, and businesses 22.15 to provide additional grants to participating students. 22.16 Sec. 31. Minnesota Statutes 2002, section 136G.03, is 22.17 amended by adding a subdivision to read: 22.18 Subd. 4a. [APPLICATION.] "Application" means the form 22.19 executed by a prospective account owner to enter into a 22.20 participation agreement and open an account in the plan. The 22.21 application incorporates by reference the participation 22.22 agreement. 22.23 Sec. 32. Minnesota Statutes 2002, section 136G.03, is 22.24 amended by adding a subdivision to read: 22.25 Subd. 21a. [MINOR TRUST ACCOUNT.] "Minor trust account" 22.26 means a Uniform Gift to Minors Act account, a Uniform Transfers 22.27 to Minors Act account, or a trust instrument naming a minor 22.28 person as beneficiary, created and operating under the laws of 22.29 Minnesota or another state. 22.30 Sec. 33. Minnesota Statutes 2002, section 136G.03, 22.31 subdivision 31, is amended to read: 22.32 Subd. 31. [ROLLOVER DISTRIBUTION.] "Rollover distribution" 22.33 means a transfer of funds made: 22.34 (1) from one account to another account within 60 days of a 22.35 distribution; 22.36 (2) from another qualified state tuition program to an 23.1 account within 60 days of the distribution; or 23.2 (3) to another qualified state tuition program from an 23.3 account within 60 days of a distribution. 23.4EachWhen there is a change of beneficiary in a rollover 23.5 distribution, the transfer of funds must be made for the benefit 23.6 of a new beneficiary who is a member of the family of the prior 23.7 beneficiary. A rollover distribution is permitted from one 23.8 qualified tuition plan to another once every 12 months without a 23.9 change of beneficiary. 23.10 Sec. 34. Minnesota Statutes 2002, section 136G.05, 23.11 subdivision 4, is amended to read: 23.12 Subd. 4. [PLAN TO COMPLY WITH FEDERAL LAW.] The director 23.13 shall ensure that the plan meets the requirements for a 23.14 qualifiedstatetuition program under section 529(b)(1)(A)(ii) 23.15 of the Internal Revenue Code. The director may request a 23.16 private letter ruling or rulings from the Internal Revenue 23.17 Service or take any other steps to ensure that the plan 23.18 qualifies under section 529 of the Internal Revenue Code or 23.19 other relevant provisions of federal law. 23.20 Sec. 35. Minnesota Statutes 2002, section 136G.05, 23.21 subdivision 5, is amended to read: 23.22 Subd. 5. [MINIMUM PENALTYNONQUALIFIED DISTRIBUTIONS AND 23.23 MATCHING GRANTS.]In establishing the terms of the program, the23.24office must provide that refunds of amounts in an account are23.25subject to a minimum penalty, as required by section 529(b)(3)23.26of the Internal Revenue Code. If the refunds or payments are23.27not used for qualified higher education expenses of the23.28designated beneficiary, this penalty must equal, at least, the23.29proportionate amount of any matching grants deposited in the23.30account under section 136G.11 and the investment return on the23.31grants, plus an additional penalty that meets the requirement of23.32federal law.There cannot be a nonqualified withdrawal of 23.33 matching grant funds and any refund of matching grants must be 23.34 returned to the plan. 23.35 Sec. 36. Minnesota Statutes 2002, section 136G.05, 23.36 subdivision 10, is amended to read: 24.1 Subd. 10. [DATA.] Account owner data, account data, and 24.2 data on beneficiaries of accounts are private data on 24.3 individuals or nonpublic data as defined in section 13.02, 24.4 except that the names and addresses of the beneficiaries of 24.5 accounts that receive matching grants are public. 24.6 Sec. 37. Minnesota Statutes 2002, section 136G.09, 24.7 subdivision 1, is amended to read: 24.8 Subdivision 1. [CONTRIBUTIONS TO AN ACCOUNT.] A person may 24.9 make contributions to an account on behalf of a beneficiary. 24.10 Contributions to an account made by persons other than the 24.11 account owner become the property of the account owner. A 24.12 person does not acquire an interest in an account by making 24.13 contributions to an account. Contributions to an account must 24.14 be made by check, money order,or other commercially acceptable 24.15 means as permitted by the United States Internal Revenue Service 24.16 and other applicable federal and state law andauthorized24.17 approved by the plan administrator in cooperation with the 24.18 office and the board. 24.19 Sec. 38. Minnesota Statutes 2002, section 136G.09, 24.20 subdivision 2, is amended to read: 24.21 Subd. 2. [AUTHORITY OF ACCOUNT OWNER.] Except as provided 24.22 for minor trust accounts in section 136G.14, an account owner is 24.23 the only person entitled to: 24.24 (1) select or change a beneficiary or a contingent account 24.25 owner; or 24.26 (2) request distributions or rollover distributions from an 24.27 account. 24.28 Sec. 39. Minnesota Statutes 2002, section 136G.09, 24.29 subdivision 6, is amended to read: 24.30 Subd. 6. [CHANGE OF BENEFICIARY.] Except as provided for 24.31 minor trust accounts in section 136G.14, an account owner may 24.32 change the beneficiary of an account to a member of the family 24.33 of the current beneficiary, at any time without penalty, if the 24.34 change will not cause the total account balance of all accounts 24.35 held for the new beneficiary to exceed the maximum account 24.36 balance limit as provided in subdivision 8. A change of 25.1 beneficiary other than as permitted in this subdivision is 25.2 treated as a nonqualified distribution under section 136G.13, 25.3 subdivision 3. 25.4 Sec. 40. Minnesota Statutes 2002, section 136G.09, 25.5 subdivision 7, is amended to read: 25.6 Subd. 7. [CHANGE OF ACCOUNT OWNERSHIP.] Except as provided 25.7 for minor trust accounts in section 136G.14, an account owner 25.8 may transfer ownership of an account to another person eligible 25.9 to be an account owner. All transfers of ownership are absolute 25.10 and irrevocable. 25.11 Sec. 41. Minnesota Statutes 2002, section 136G.09, 25.12 subdivision 8, is amended to read: 25.13 Subd. 8. [MAXIMUM ACCOUNT BALANCE LIMIT.] (a) When a 25.14 contribution is made, the total account balance of all accounts 25.15 held for the same beneficiary, including matching grant 25.16 accounts, must not exceed the maximum account balance limit as 25.17 determined under this subdivision. 25.18 (b)The maximum account balance limit is reduced for25.19withdrawals from any account for the same beneficiary that are25.20qualified distributions, distributions due to the death or25.21disability of the beneficiary, or distributions due to the25.22beneficiary receiving a scholarship. Subsequent contributions25.23must not be made to replenish an account if the contribution25.24results in the total account balance of all accounts held for25.25the beneficiary to exceed the reduced maximum account balance25.26limit. Any subsequent contributions must be rejected. A25.27subsequent contribution accepted in error must be returned to25.28the account owner plus any earnings on the contribution less any25.29applicable penalties.25.30(c) The maximum account balance limit is not reduced for a25.31nonqualified distribution or a rollover distribution. When such25.32distributions are taken, subsequent contributions may be made to25.33replenish an account up to the maximum account balance limit.25.34(d)The office must establish a maximum account balance 25.35 limit. The office must adjust the maximum account balance 25.36 limit, as necessary, or on January 1 of each year. The maximum 26.1 account balance limit must not exceed the amount permitted for 26.2 the plan to qualify as a qualified state tuition program under 26.3 section 529 of the Internal Revenue Code. For calendar years 26.420022004 and20032005, the maximum account balance is 26.5 $235,000. 26.6 (e) If the total account balance of all accounts held for a 26.7 single beneficiary reaches the maximum account balance limit 26.8 prior to the end of that calendar year, the beneficiary may 26.9 receive an applicable matching grant for that calendar year. 26.10 Sec. 42. Minnesota Statutes 2002, section 136G.09, 26.11 subdivision 9, is amended to read: 26.12 Subd. 9. [EXCESS CONTRIBUTIONS AND BALANCES.] A 26.13 contribution to any account for a beneficiary must be rejected 26.14 if the contribution would cause the total account balance of all 26.15 accounts held for the same beneficiary, including the matching 26.16 grant account, to exceed the maximum account balance limit under 26.17 section 529 of the Internal Revenue Code as established by the 26.18 office.If a contribution under this subdivision is accepted in26.19error, the contribution must be returned to the account owner26.20plus any earnings thereon, less applicable penalties. A payment26.21of an excess contribution to the account owner may be a26.22nonqualified distribution subject to a penalty.26.23 Sec. 43. Minnesota Statutes 2002, section 136G.11, 26.24 subdivision 1, is amended to read: 26.25 Subdivision 1. [MATCHING GRANT QUALIFICATION.] ByMarch26.261June 30 of each year, a state matching grant must be added to 26.27 each account established under the program if the following 26.28 conditions are met: 26.29 (1) the contributor applies, in writing in a form 26.30 prescribed by the director, for a matching grant; 26.31 (2) a minimum contribution of $200 was made during the 26.32 preceding calendar year; and 26.33 (3) the family income of the beneficiary did not exceed 26.34 $80,000. 26.35 Sec. 44. Minnesota Statutes 2002, section 136G.11, 26.36 subdivision 2, is amended to read: 27.1 Subd. 2. [FAMILY INCOME.] (a) For purposes of this 27.2 section, "family income" means: 27.3 (1) if the beneficiary is under age 25, the combined 27.4 adjusted gross income of the beneficiary's parents or legal 27.5 guardians as reported on the federal tax return or returns for 27.6 themost recently available taxcalendar year in which 27.7 contributions were made. If the beneficiary's parents are 27.8 divorced, the income of the parent claiming the beneficiary as a 27.9 dependent on the federal individual income tax return and the 27.10 income of that parent's spouse, if any, is used to determine 27.11 family income; or 27.12 (2) if the beneficiary is age 25 or older, the combined 27.13 adjusted gross income of the beneficiary and spouse, if any. 27.14 (b) For a parent or legal guardian of beneficiaries under 27.15 age 25 and for beneficiaries age 25 or older who resided in 27.16 Minnesota and filed a federal individual income tax returntwo27.17years prior to the year in which the matching grant is awarded,27.18the matching grant must be based on family income from Internal27.19Revenue Service tax data on file with the Minnesota department27.20of revenue.27.21(c) Parents or legal guardians of beneficiaries under age27.2225 and beneficiaries age 25 or older who did not reside in27.23Minnesota two years prior to the year in which the matching27.24grant is awarded must provide a signed copy of their federal27.25individual income tax return to the office, regardless of who27.26the account owner is, in order to be considered for a matching27.27grant, the matching grant must be based on family income from 27.28 the calendar year in which contributions were made. 27.29 Sec. 45. Minnesota Statutes 2002, section 136G.11, 27.30 subdivision 3, is amended to read: 27.31 Subd. 3. [RESIDENCY REQUIREMENT.] (a) If the beneficiary 27.32 is under age 25, the beneficiary's parents or legal guardians 27.33 must be Minnesota residents to qualify for a matching grant. If 27.34 the beneficiary is age 25 or older, the beneficiary must be a 27.35 Minnesota resident to qualify for a matching grant. 27.36 (b) To meet the residency requirements, the parent or legal 28.1 guardian of beneficiaries under age 25 must have filed a 28.2 Minnesota individual income tax return as a Minnesota resident,28.3claimingand claimed the beneficiary as a dependent, two years28.4prior to the year in which the matching grant is awardedon the 28.5 federal tax return of the parent or legal guardian for the 28.6 calendar year in which contributions were made. For 28.7 beneficiaries age 25 or older, the beneficiary, and a spouse, if 28.8 any, must have filed a Minnesota and a federal individual income 28.9 tax return as a Minnesota residenttwo years prior to the year28.10in which the matching grant is awardedfor the calendar year in 28.11 which contributions were made. 28.12 (c) A parent of beneficiaries under age 25 and 28.13 beneficiaries age 25 or older who did not reside in Minnesota 28.14two years prior to the year in which the matching grant is28.15awarded must establish Minnesota residency through the issuance28.16of a Minnesota driver's license or identification cardin the 28.17 calendar year in which contributions were made are not eligible 28.18 for a matching grant. 28.19 Sec. 46. Minnesota Statutes 2002, section 136G.11, 28.20 subdivision 9, is amended to read: 28.21 Subd. 9. [ANNUAL APPLICATION.] An account owner must 28.22 submit an application form for a matching grant on an annual 28.23 basis. The application must be postmarked byDecember 31May 1 28.24 of the yearpreceding the awarding of thein which the matching 28.25 grant would be awarded if the applicant qualifies for a matching 28.26 grant. 28.27 Sec. 47. Minnesota Statutes 2002, section 136G.11, 28.28 subdivision 13, is amended to read: 28.29 Subd. 13. [FORFEITURE OF MATCHING GRANTS.] (a) Matching 28.30 grants are forfeited if: 28.31 (1) the account owner transfers the total account balance 28.32 of an account to another account or to another qualifiedstate28.33 tuition program; 28.34 (2) the beneficiary receives a full tuition scholarship or 28.35 admission to a United States service academy; 28.36 (3) the beneficiary dies or becomes disabled; 29.1 (4) the account owner changes the beneficiary of the 29.2 account; or 29.3 (5) the account owner closes the account with a 29.4 nonqualified withdrawal. 29.5 (b) Matching grants must be proportionally forfeited if: 29.6 (1) the account owner transfers a portion of an account to 29.7 another account or to another qualifiedstatetuition program; 29.8 (2) the beneficiary receives a scholarship covering a 29.9 portion of qualified higher education expenses; or 29.10 (3) the account owner makes a partial nonqualified 29.11 withdrawal. 29.12 (c) If the account owner makes a misrepresentation in a 29.13 participation agreement or an application for a matching grant 29.14 that results in a matching grant, the matching grant associated 29.15 with the misrepresentation is forfeited. The office and the 29.16 board must instruct the plan administrator as to the amount to 29.17 be forfeited from the matching grant account. The office and 29.18 the board must withdraw the matching grant or the proportion of 29.19 the matching grant that is related to the misrepresentation. 29.20 Sec. 48. Minnesota Statutes 2002, section 136G.13, 29.21 subdivision 1, is amended to read: 29.22 Subdivision 1. [QUALIFIED DISTRIBUTION METHODS.] (a) 29.23 Qualified distributions may be made: 29.24 (1) directly to participating eligible educational 29.25 institutions on behalf of the beneficiary; or 29.26 (2) in the form of a check payable to both the beneficiary 29.27 and the eligible educational institution; or. 29.28(3) to an account owner with a receipt verifying the29.29payment of qualified higher education expenses.29.30 (b)When administratively feasible, distributions may be29.31made when the account owner and beneficiary certify prior to the29.32distribution that the distribution will be expended for29.33qualified higher education expenses a reasonable time after the29.34distribution. The plan administrator may retain a penalty on29.35the earnings portion of the nonqualified distribution until29.36payment of qualified higher education expenses are30.1substantiated. A payment receipt showing payment for qualified30.2higher education expenses must be submitted to the program30.3administrator within 30 days of distribution.30.4(c)Qualified distributions must be withdrawn 30.5 proportionally from contributions and earnings in an account 30.6 owner's account on the date of distribution as provided in 30.7 section 529 of the Internal Revenue Code. 30.8 Sec. 49. Minnesota Statutes 2002, section 136G.13, 30.9 subdivision 3, is amended to read: 30.10 Subd. 3. [NONQUALIFIED DISTRIBUTION.] An account owner may 30.11 request a nonqualified distribution from an account at any 30.12 time. Nonqualified distributions are based on the total account 30.13 balances in an account owner's account and must be withdrawn 30.14 proportionally from contributions and earnings as provided in 30.15 section 529 of the Internal Revenue Code. The earnings portion 30.16 of a nonqualified distribution is subject toa penaltya federal 30.17 additional tax pursuant to section 529 of the Internal Revenue 30.18 Code. For purposes of this subdivision, "earnings portion" 30.19 means the ratio of the earnings in the account to the total 30.20 account balance, immediately prior to the distribution, 30.21 multiplied by the distribution.The penalty must be withheld30.22from the total amount of any distribution.30.23 Sec. 50. [136G.14] [MINOR TRUST ACCOUNTS.] 30.24 (a) This section applies to a plan account in which funds 30.25 of a minor trust account are invested. 30.26 (b) The account owner may not be changed to any person 30.27 other than a successor custodian or the beneficiary unless a 30.28 court order directing the change of ownership is provided to the 30.29 plan administrator. The custodian must sign all forms and 30.30 requests submitted to the plan administrator in the custodian's 30.31 representative capacity. The custodian must notify the plan 30.32 administrator in writing when the beneficiary becomes legally 30.33 entitled to be the account owner. An account owner under this 30.34 section may not select a contingent account owner. 30.35 (c) The beneficiary of an account under this section may 30.36 not be changed. If the beneficiary dies, assets in a plan 31.1 account become the property of the beneficiary's estate. Funds 31.2 in an account must not be transferred or rolled over to another 31.3 account owner or to an account for another beneficiary. A 31.4 nonqualified distribution from an account, or a distribution due 31.5 to the disability or scholarship award to the beneficiary, must 31.6 be used for the benefit of the beneficiary. 31.7 Sec. 51. Minnesota Statutes 2002, section 137.0245, 31.8 subdivision 2, is amended to read: 31.9 Subd. 2. [MEMBERSHIP.] The regent candidate advisory 31.10 council shall consist of 24 members. Twelve members shall be 31.11 appointed by the subcommittee on committees of the committee on 31.12 rules and administration of the senate. Twelve members shall be 31.13 appointed by the speaker of the house of representatives. Each 31.14 appointing authority must appoint one member who is a student 31.15 enrolled in a degree program at the University of Minnesota at 31.16 the time of appointment. No more than one-third of the members 31.17 appointed by each appointing authority may be current or former 31.18 legislators. No more than two-thirds of the members appointed 31.19 by each appointing authority may belong to the same political 31.20 party; however, political activity or affiliation is not 31.21 required for the appointment of any member. Geographical 31.22 representation must be taken into consideration when making 31.23 appointments. Section 15.0575 shall govern the advisory 31.24 council, except that: 31.25 (1) the members shall be appointed to six-year terms with 31.26 one-third appointed each even-numbered year; and 31.27 (2) student members are appointed to two-year terms with 31.28 two students appointed each even-numbered year. 31.29 Sec. 52. [137.026] [APPROPRIATIONS; ACADEMIC HEALTH 31.30 CENTER.] 31.31 Money deposited in the academic health center special 31.32 revenue fund under section 297F.10 is annually appropriated to 31.33 the board of regents for the academic health center at the 31.34 University of Minnesota. 31.35 Sec. 53. Minnesota Statutes 2002, section 299A.45, 31.36 subdivision 2, is amended to read: 32.1 Subd. 2. [AWARD AMOUNT.] (a) The amount of the award 32.2 is the lesser of: 32.3 (1)for public institutions, the actual tuition and fees32.4charged by the institution; or32.5(2) for private institutions the lesser of (i)the actual 32.6 tuition and fees charged by the institution; or(ii) the highest32.7tuition and fees charged by a public institution in Minnesota32.8 (2) the tuition maximums established in law. 32.9 (b) An award under this subdivision must not affect a 32.10 recipient's eligibility for a state grant under section 136A.121. 32.11 Sec. 54. [LEARN AND EARN PROGRAM; POSTSECONDARY 32.12 OPPORTUNITIES ACCOUNT.] 32.13 The higher education services office shall maintain a 32.14 postsecondary opportunities account for students who earned 32.15 stipends and bonuses that were deposited in the account through 32.16 the learn and earn graduation achievement program under 32.17 Minnesota Statutes 2000, section 124D.32. A participating 32.18 student may, upon graduation from high school, use the funds 32.19 accumulated for the student toward the costs of attending a 32.20 Minnesota postsecondary institution or a career-training 32.21 program, including the costs of tuition, books, and lab fees. 32.22 Funds accumulated for a student must be available to the student 32.23 from the time a student graduates from high school until ten 32.24 years after the date the student entered the learn and earn 32.25 graduation achievement program. After ten years, the office 32.26 shall close the account and any remaining money in the account 32.27 must cancel to the general fund. 32.28 Sec. 55. [OPTIONAL STUDENT FEES.] 32.29 The board of trustees of the Minnesota state colleges and 32.30 universities must provide students with the opportunity to 32.31 affirmatively choose to pay any optional student fee used to 32.32 fund student groups. These optional fees must not be assessed 32.33 by requiring a student to opt out of the fee. The board of 32.34 regents of the University of Minnesota are requested to provide 32.35 all students with opportunity to affirmatively choose to pay any 32.36 optional student fee used to fund student groups and to not 33.1 require students to opt out of these fees. 33.2 Sec. 56. [SURVEY OF EDUCATION FACULTY.] 33.3 (a) The board of trustees of the Minnesota state colleges 33.4 and universities must evaluate the teaching experience of 33.5 faculty providing instruction to prepare teachers for licensure 33.6 in kindergarten through grade 12 education. The evaluation must 33.7 include a survey of all tenured and adjunct faculty at a state 33.8 university who provide instruction in a college of education or 33.9 any other college or division that prepares students for teacher 33.10 licensure. The survey must, at a minimum, address the following: 33.11 (1) the extent to which faculty are licensed to teach at 33.12 the kindergarten through grade 12 level in Minnesota; 33.13 (2) the extent to which faculty members are licensed in the 33.14 subject area or grade level in which they are providing 33.15 instruction; 33.16 (3) for licensed faculty, the date of their most recent 33.17 teaching experience in a kindergarten through grade 12 school 33.18 and the date of their most recent teaching experience in a 33.19 kindergarten through grade 12 school in the subject or grade 33.20 level in which they are providing instruction at a Minnesota 33.21 state colleges and universities institution. 33.22 (b) The board of regents of the University of Minnesota and 33.23 the private colleges in Minnesota that participate in the state 33.24 grant program under Minnesota Statutes, section 136A.121, that 33.25 provide instruction leading to kindergarten through grade 12 33.26 teacher licensure are requested to evaluate the kindergarten 33.27 through grade 12 teaching experience of faculty in their 33.28 colleges of education or other colleges, divisions, or 33.29 departments that provide instruction leading to licensure by 33.30 surveying tenured and adjunct faculty. The survey must include 33.31 the three issues in paragraph (a). 33.32 (c) By January 15, 2004, the board of trustees must, and 33.33 the board of regents and the private colleges are requested to, 33.34 report the results of this evaluation to the chairs of the 33.35 higher education and the education policy committees in the 33.36 senate and the house of representatives. 34.1 Sec. 57. [REVISOR'S INSTRUCTION.] 34.2 The revisor of statutes shall substitute the term "office 34.3 of higher education" for "higher education services office" 34.4 wherever the term appears in Minnesota Statutes and Minnesota 34.5 Rules. The revisor shall also make any grammatical changes 34.6 related to the changes in terms. 34.7 Sec. 58. [REPEALER.] 34.8 Minnesota Statutes 2002, sections 15A.081, subdivision 7b; 34.9 17.985; 93.223, subdivision 2; 93.2235, subdivision 2; 124D.95; 34.10 136A.011; 136A.031, subdivisions 1, 3, and 4; 136A.07; 136A.124; 34.11 136F.13; 136F.56; 136F.582; 136F.59, subdivision 2; and 136G.03, 34.12 subdivision 25, are repealed. 34.13 Sec. 59. [EFFECTIVE DATE.] 34.14 Sections 1, 4, 5, and 22 to 29 are effective the day 34.15 following final enactment.