SF 2265

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to higher education; providing funding for
the University of Minnesota, the Minnesota State
Colleges and Universities, the Higher Education
Services Office, and the Mayo Medical Foundation;
providing for the mission of state universities;
regulating the marketing of credit cards to students;
regulating the responsibilities of and changing the
name of the Higher Education Services Office;
regulating the state grant program and other financial
aid programs; providing benefits for students entering
active military service; providing assistance for
low-income students to increase college awareness;
regulating the selection of regents of the University
of Minnesota; regulating the Minnesota college savings
program; providing assistance to nursing students;
creating a task force on postsecondary funding;
creating a Rochester higher education development
committee; regulating private career schools;
appropriating money; amending Minnesota Statutes 2004,
sections 135A.052, subdivision 1; 136A.01, subdivision
2; 136A.031, subdivisions 2, 3, 5; 136A.121,
subdivisions 2, 6, 9, 13, by adding subdivisions;
136A.125, subdivision 2; 136A.1701, by adding
subdivisions; 136F.02, subdivision 1; 136F.04,
subdivision 4; 136G.03, subdivisions 3, 21a, 22, 32;
136G.05, subdivision 8; 136G.09, subdivisions 11, 12;
136G.11, subdivisions 1, 3, 13, by adding a
subdivision; 136G.13, subdivisions 1, 5; 136G.14;
137.0245, subdivision 3; 141.21, by adding a
subdivision; 141.25, subdivisions 3, 5, 8, 9, 12;
141.251; 141.26, subdivision 5; 141.271, subdivisions
4, 7, 10, by adding subdivisions; 141.28, subdivision
1, by adding a subdivision; 141.29, subdivision 3;
141.30; 141.35; 299A.45, subdivisions 1, 4; proposing
coding for new law in Minnesota Statutes, chapters
135A; 136A; 137; 141; 144; 583; repealing Minnesota
Statutes 2004, sections 136A.011; 136A.031,
subdivision 1; Laws 1986, chapter 398, article 1,
section 18, as amended; Minnesota Rules, parts
4815.0100; 4815.0110; 4815.0120; 4815.0130; 4815.0140;
4815.0150; 4815.0160; 4830.8100; 4830.8110; 4830.8120;
4830.8130; 4830.8140; 4830.8150.

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

ARTICLE 1

HIGHER EDUCATION APPROPRIATIONS

Section 1. new text begin HIGHER EDUCATION APPROPRIATIONS.
new text end

The sums in the columns marked "APPROPRIATIONS" are added
to, or, if shown in parentheses, are subtracted from the
appropriations to the specified agencies in 2005 S.F. No. 1879,
article 5, if enacted. The appropriations are from the general
fund, unless another fund is named, and are available for the
fiscal year indicated for each purpose. The figures "2006" and
"2007," where used in this article, mean that the additions to
or subtractions from the appropriations listed under them are
for the fiscal year ending June 30, 2006, or June 30, 2007,
respectively. The "first year" is fiscal year 2006. The
"second year" is fiscal year 2007. The "biennium" is fiscal
years 2006 and 2007.
SUMMARY BY FUND

2006 2007 TOTAL

General ($ 25,640,000)$ 106,706,000 $ 81,066,000
SUMMARY BY AGENCY - ALL FUNDS

2006 2007 TOTAL

Higher Education
Services Office 3,818,000 1,007,000 4,825,000

Board of Trustees
of the Minnesota
State Colleges and
Universities (35,020,000) 29,780,000 (5,240,000)

Board of Regents
of the University
of Minnesota 5,467,000 75,764,000 81,231,000

Commissioner
of Health 95,000 155,000 250,000

APPROPRIATIONS
Available for the Year
Ending June 30
2006 2007

Sec. 2. HIGHER EDUCATION
SERVICES OFFICE

Subdivision 1.

Total
Appropriation $ 3,818,000 $ 1,007,000

The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.

Subd. 2.

State Grants

Notwithstanding 2005 S.F. No. 1879,
article 5, section 2, subdivision 2, if
enacted, the living and miscellaneous
expense allowance is set at $5,280 in
each year.

Subd. 3.

Child Care Grants 125,000 125,000

Subd. 4.

Intervention for College
Attendance Program 500,000 500,000

For the purpose of new Minnesota
Statutes, section 136A.861. No more
than $50,000 of this appropriation in
each year may be used for
administrative expenses. This
appropriation is added to the agency's
permanent budget base.

Subd. 5.

United Family
Medicine Residency 360,000 360,000

For a grant to the United Family
Medicine residency program. This
appropriation shall be used to support
18 resident physicians each year in
family practice at United Family
Medicine residency programs and shall
prepare doctors to practice family care
medicine in underserved rural and urban
areas of the state. It is intended
that this program will improve health
care in underserved communities,
provide affordable access to
appropriate medical care, and manage
the treatment of patients in a more
cost-effective manner.

Subd. 6.

Rochester Higher
Education 2,500,000 -0-

(a) $200,000 is for the Rochester
Higher Education Development Committee
to carry out its planning activities.
This is a onetime appropriation.

(b) $2,300,000 is for a onetime
appropriation that must be deposited
into the Rochester higher education
development account. With the approval
of the Higher Education Services
Office, money in this account may be
used to: (1) provide additional
planning and development funds, if
needed; (2) provide initial funding for
academic program development; and (3)
provide funding related to academic
facilities, if needed. The
appropriation under this paragraph is
available until June 30, 2009.

Subd. 7.

Agency Administration 333,000 22,000

Of this appropriation, $15,000 each
year is for grants to increase
campus-community collaboration and
service learning statewide. For each
$1 in state funding, grant recipients
must contribute $2 in campus or
community-based support.

Of this appropriation, $310,000 in the
first year is for the Higher Education
Services Office to upgrade computer
program application software related to
state grant awards. This appropriation
does not cancel but is available until
expended. This is a onetime
appropriation and is not added to the
agency's base.

Of this appropriation, $8,000 in the
first year and $7,000 in the second
year is for increased dues for the
Midwestern Higher Education Compact.
This appropriation is ongoing and
$15,000 is added to the agency's base.

Subd. 8.

Balance Forward

A balance in the first year under this
section does not cancel, but is
available for the second year.

Subd. 9.

Transfers

Notwithstanding 2005 S.F. No. 1879,
article 5, section 2, subdivision 13,
if enacted, the higher education
services office may transfer
unencumbered balances from the
appropriations in this section and in
2005 S.F. No. 1879, article 5, section
2, if enacted, to the state grant
appropriation, the child care grants
appropriation, and the interstate
tuition reciprocity appropriation.

Subd. 10.

Reporting

Notwithstanding 2005 S.F. No. 1879,
article 5, section 2, subdivision 14,
if enacted, the higher education
services office shall evaluate and
report quarterly on state financial aid
expenditures and unexpended balances to
the chairs of the higher education
finance committees of the senate and
house of representatives and the
commissioner of finance. By November 1
and February 15, the services office
shall provide updated state grant
spending projections taking into
account the most current and projected
enrollment and tuition and fee
information, economic conditions, and
other relevant factors.

Sec. 3. BOARD OF TRUSTEES OF THE
MINNESOTA STATE COLLEGES AND UNIVERSITIES

Subdivision 1.

Total
Appropriation (35,020,000) 29,780,000

The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivision.

Subd. 2.

Estimated Expenditures
and Appropriations

Notwithstanding 2005 S.F. No. 1879,
article 5, section 3, subdivision 2, if
enacted, the legislature estimates that
instructional expenditures will be
$547,942,000 in the first year and
$553,354,000 in the second year. The
legislature estimates that
noninstructional expenditures will be
$59,532,000 in the first year and
$60,120,000 in the second year.

This appropriation includes funding for
the recurring enrollment adjustment and
money to strengthen and expand the
Minnesota online program, increase the
capacity for training nurses and
teachers, provide for the management
education needs of farm and small
business owners, provide services and
outreach to underserved populations,
provide needed repair and replacement
of facilities, and encourage and reward
excellent performance by faculty or
staff.

The Board of Trustees of the Minnesota
State Colleges and Universities may not
in the 2005-2006 and 2006-2007 academic
years increase tuition more than four
percent above the level for the
previous academic year.

Sec. 4. BOARD OF REGENTS OF THE
UNIVERSITY OF MINNESOTA

Subdivision 1.

Total
Appropriation 5,467,000 75,764,000

The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.

Subd. 2.

Operations and
Maintenance

5,467,000 75,764,000

Estimated Expenditures
and Appropriations

Notwithstanding 2005 S.F. No. 1879,
article 5, section 4, subdivision 2, if
enacted, the legislature estimates that
instructional expenditures will be
$303,539,000 in the first year and
$318,209,000 in the second year. The
legislature estimates that
noninstructional expenditures will be
$292,805,000 the first year and
$306,956,000 in the second year.

This appropriation includes funding for
the recurring enrollment adjustment and
the following initiatives: Biosciences
for a Healthy Society to advance the
university's expertise and to increase
the university's competitiveness in
leveraging new funding from federal and
private sources; Preparing Students for
the 21st Century to enhance the ability
of the university to attract and retain
exceptional students; competitive
compensation to enable the university
to attract and retain quality faculty
members; research support to provide
resources for the university to
maintain a competitive advantage in
emerging and ongoing research
initiatives; and 21st Century
Technology to support enhancement to
major university systems.

This appropriation includes $4,000,000
for outreach services to historically
underserved students.

This appropriation includes $68,000 in
the first year and $67,000 in the
second year for the information
exchange program in the Minnesota
Institute for Sustainable Agriculture.
$135,000 is added to the university's
base.

Sec. 5. COMMISSIONER OF HEALTH 95,000 155,000

To the commissioner of health to
implement new Minnesota Statutes,
section 144.1498. The funding base for
this program is $219,000 in fiscal year
2008 and $280,000 in fiscal year 2009.

ARTICLE 2

RELATED PROVISIONS

Section 1.

Minnesota Statutes 2004, section 135A.052,
subdivision 1, is amended to read:

Subdivision 1.

Statement of missions.

The legislature
recognizes each type of public postsecondary institution to have
a distinctive mission within the overall provision of public
higher education in the state and a responsibility to cooperate
with each other. These missions are as follows:

(1) the technical colleges shall offer vocational training
and education to prepare students for skilled occupations that
do not require a baccalaureate degree;

(2) the community colleges shall offer lower division
instruction in academic programs, occupational programs in which
all credits earned will be accepted for transfer to a
baccalaureate degree in the same field of study, and remedial
studies, for students transferring to baccalaureate institutions
and for those seeking associate degrees;

(3) consolidated community technical colleges shall offer
the same types of instruction, programs, certificates, diplomas,
and degrees as the technical colleges and community colleges
offer;

(4) the state universities shall offer undergraduate and
graduate instruction through the deleted text begin master's deleted text end new text begin applied doctoral
new text end degree, including specialist certificates, in the liberal arts
and sciences and professional education; and

(5) the University of Minnesota shall offer undergraduate,
graduate, and professional instruction through the doctoral
degree, and shall be the primary state supported academic agency
for research and extension services.

It is part of the mission of each system that within the
system's resources the system's governing board and chancellor
or president shall endeavor to:

(a) prevent the waste or unnecessary spending of public
money;

(b) use innovative fiscal and human resource practices to
manage the state's resources and operate the system as
efficiently as possible;

(c) coordinate the system's activities wherever appropriate
with the activities of the other system and governmental
agencies;

(d) use technology where appropriate to increase system
productivity, improve customer service, increase public access
to information about the system, and increase public
participation in the business of the system;

(e) utilize constructive and cooperative labor-management
practices to the extent otherwise required by chapters 43A and
179A; and

(f) recommend to the legislature appropriate changes in law
necessary to carry out the mission of the system.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment.
new text end

Sec. 2.

new text begin [135A.145] SALE OF STUDENT INFORMATION; MARKETING
CREDIT CARDS TO STUDENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Prohibited practices. new text end

new text begin No public or
private postsecondary educational institution in this state,
including its agents, employees, student or alumni
organizations, or affiliates, may:
new text end

new text begin (1) sell, give, or otherwise transfer to any card issuer
the name, address, telephone number, or other contact
information of a student at the postsecondary educational
institution without the student's consent; or
new text end

new text begin (2) enter into any agreement to market credit cards to
students at a postsecondary educational institution.
new text end

new text begin For purposes of this section, the terms "credit," "credit
card," and "card issuer" have the meanings given them in the
Truth in Lending Act, United States Code, title 15, section 1602.
new text end

new text begin Subd. 2. new text end

new text begin Violations. new text end

new text begin The attorney general may seek the
penalties and remedies available under section 8.31 against any
person who violates this section.
new text end

Sec. 3.

new text begin [135A.165] DEAF STUDENTS; TUITION WAIVER.
new text end

new text begin (a) For the purpose of this section, a "deaf person" means
an individual with a hearing loss of such severity that the
individual must depend primarily on visual communication, such
as writing, lip reading, manual communication, and gestures.
new text end

new text begin (b) A deaf person, who is a resident student as defined in
section 136A.101, subdivision 8, is entitled to the waiver of
tuition and fees remaining after deducting any federal or state
grants or other public or private grants made to the person for
the purpose of paying the tuition and fees at a Minnesota state
college or university or the University of Minnesota. A deaf
person must receive either a federal Pell grant or a state grant
under section 136A.121 for a term to receive a waiver for that
term.
new text end

Sec. 4.

new text begin [135A.175] CAMPUS ACCESS ASSURANCE.
new text end

new text begin The Board of Trustees of the Minnesota State Colleges and
Universities and the Board of Regents of the University of
Minnesota shall maintain access to campuses and students for
purposes of military recruiting by the armed forces of the
United States that is at least equal in quality and scope to the
access to campuses and students that is provided to any other
employer.
new text end

Sec. 5.

new text begin [135A.53] RESIDENT TUITION.
new text end

new text begin (a) A student shall qualify for a resident tuition rate or
its equivalent at state universities and colleges, including the
University of Minnesota, if the student meets all of the
following requirements:
new text end

new text begin (1) high school attendance within the state for three or
more years;
new text end

new text begin (2) graduation from a state high school or attainment
within the state of the equivalent of high school graduation;
and
new text end

new text begin (3) registration as an entering student at, or current
enrollment in, a public institution of higher education.
new text end

new text begin (b) This section is in addition to any other statute, rule,
or higher education institution regulation or policy providing
eligibility for a resident tuition rate or its equivalent to a
student.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and applies to tuition for school
terms commencing on or after that date.
new text end

Sec. 6.

Minnesota Statutes 2004, section 136A.01,
subdivision 2, is amended to read:

Subd. 2.

Responsibilities.

The Higher Education Services
Office is responsible for:

(1) necessary state level administration of financial aid
programs, including accounting, auditing, and disbursing state
and federal financial aid funds, and reporting on financial aid
programs to the governor and the legislature;

(2) approval, registration, licensing, and financial aid
eligibility of private collegiate and career schools, under
sections 136A.61 to 136A.71 and chapter 141;

(3) administering deleted text begin the Telecommunications Council under Laws
1993, First Special Session chapter 2, article 5, section 2, deleted text end the
Learning Network of Minnesota deleted text begin , and the Statewide Library Task
Force deleted text end ;

(4) negotiating and administering reciprocity agreements;

(5) publishing and distributing financial aid information
and materials, and other information and materials under section
136A.87, to students and parents;

(6) collecting and maintaining student enrollment and
financial aid data;

(7) administering the federal programs that affect students
and institutions on a statewide basis; and

(8) prescribing policies, procedures, and rules under
chapter 14 necessary to administer the programs under its
supervision.

Sec. 7.

Minnesota Statutes 2004, section 136A.031,
subdivision 2, is amended to read:

Subd. 2.

Higher education advisory council.

A Higher
Education Advisory Council (HEAC) is established. The HEAC is
composed of the president of the University of Minnesota or
designee; the chancellor of the Minnesota State Colleges and
Universities or designee; the commissioner of education; the
president of the Private College Council; a representative from
the Minnesota deleted text begin Association of Private Postsecondary Schools
deleted text end new text begin Career College Association new text end ; and a member appointed by the
governor. The HEAC shall deleted text begin (1) deleted text end bring to the attention of the
Higher Education Services deleted text begin Council deleted text end new text begin Office new text end any matters that the
HEAC deems necessary deleted text begin , and (2) review and comment upon matters
before the council. The council shall refer all proposals to
the HEAC before submitting recommendations to the governor and
the legislature. The council shall provide time for a report
from the HEAC at each meeting of the council deleted text end .

Sec. 8.

Minnesota Statutes 2004, section 136A.031,
subdivision 3, is amended to read:

Subd. 3.

Student advisory council.

A Student Advisory
Council (SAC) to the Higher Education Services deleted text begin Council deleted text end new text begin Office new text end 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; the president of the
Minnesota Association of Private College Students; and a student
who is enrolled in a private vocational school, to be appointed
by the Minnesota deleted text begin Association of Private Postsecondary Schools
deleted text end new text begin Career College Association new 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.

The Higher Education Services deleted text begin Council deleted text end new text begin Office new text end shall inform
the SAC of all matters related to student issues under
consideration and shall refer all proposals to the SAC before
taking action or sending the proposals to the governor or
legislature. The SAC shall report to the Higher Education
Services deleted text begin Council deleted text end new text begin Office new text end quarterly and at other times that the
SAC considers desirable. The SAC shall determine its meeting
times, but it shall also meet with the deleted text begin council deleted text end new text begin office new text end within 30
days after the director's request for a meeting.

The SAC shall:

(1) bring to the attention of the Higher Education Services
deleted text begin Council deleted text end new text begin Office new text end any matter that the SAC believes needs the
attention of the deleted text begin council deleted text end new text begin office new text end ;

(2) make recommendations to the Higher Education Services
deleted text begin Council deleted text end new text begin Office new text end as it finds appropriate;

(3) appoint student members to the Higher Education
Services deleted text begin Council deleted text end new text begin Office new text end advisory groups as provided in
subdivision 4; and

(4) provide any reasonable assistance to the deleted text begin council deleted text end new text begin office new text end .

Sec. 9.

Minnesota Statutes 2004, section 136A.031,
subdivision 5, is amended to read:

Subd. 5.

Expiration.

Notwithstanding section 15.059,
subdivision 5, the advisory groups established in this section
expire on June 30, deleted text begin 2005 deleted text end new text begin 2007 new text end .

Sec. 10.

Minnesota Statutes 2004, section 136A.121,
subdivision 2, is amended to read:

Subd. 2.

Eligibility for grants.

An applicant is
eligible to be considered for a grant, regardless of the
applicant's sex, creed, race, color, national origin, or
ancestry, under sections 136A.095 to 136A.131 if the office
finds that the applicant:

(1) is a resident of the state of Minnesota;

(2) is a graduate of a secondary school or its equivalent,
or is 17 years of age or over, and has met all requirements for
admission as a student to an eligible college or technical
college of choice as defined in sections 136A.095 to 136A.131;

(3) has met the financial need criteria established in
Minnesota Rules;

(4) is not in default, as defined by the office, of any
federal or state student educational loan; and

(5) is not more than 30 days in arrears deleted text begin for any deleted text end new text begin in
court-ordered new text end child support deleted text begin payments owed to a deleted text end new text begin that is collected
or enforced by the new text end public deleted text begin agency deleted text end new text begin authority new text end responsible for child
support enforcement or, if the applicant is more than 30 days in
arrears new text begin in court-ordered child support that is collected or
enforced by the public authority responsible for child support
enforcement new text end , new text begin but new text end is complying with a written payment
agreement new text begin under section 518.553 new text end or order for arrearages. deleted text begin An
agreement must provide for a repayment of arrearages at no less
than 20 percent per month of the amount of the monthly child
support obligation or no less than $30 per month if there is no
current monthly child support obligation. Compliance means that
payments are made by the payment date.
deleted text end

deleted text begin The director and the commissioner of human services shall
develop procedures to implement clause (5).
deleted text end

Sec. 11.

Minnesota Statutes 2004, section 136A.121,
subdivision 6, is amended to read:

Subd. 6.

Cost of attendance.

(a) The recognized cost of
attendance consists of allowances specified in law for living
and miscellaneous expenses, and an allowance for tuition and
fees equal to the lesser of the deleted text begin average deleted text end new text begin actual new text end tuition and fees
charged by the institution, or the tuition and fee maximums
established in law.

(b) For a student registering for less than full time, the
office shall prorate the cost of attendance to the actual number
of credits for which the student is enrolled.

The recognized cost of attendance for a student who is
confined to a Minnesota correctional institution shall consist
of the tuition and fee component in paragraph (a), with no
allowance for living and miscellaneous expenses.

For the purpose of this subdivision, "fees" include only
those fees that are mandatory and charged to deleted text begin full-time deleted text end resident
students attending the institution. new text begin Fees do not include charges
for tools, equipment, computers, or other similar materials
where the student retains ownership. Fees include charges for
these materials if the institution retains ownership. Fees do
not include optional or punitive fees.
new text end

Sec. 12.

Minnesota Statutes 2004, section 136A.121, is
amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Surplus appropriation. new text end

new text begin If the amount
appropriated is determined by the office to be more than
sufficient to fund projected grant demand in the second year of
the biennium, the office may increase the living and
miscellaneous expense allowance in the second year of the
biennium to the extent of the excess. The adjustment may be
made one or more times. In making the determination that there
is more than sufficient funds, the office shall balance the need
for sufficient resources to meet the projected demand for grants
with the goal of fully allocating the appropriation for state
grants.
new text end

Sec. 13.

Minnesota Statutes 2004, section 136A.121,
subdivision 9, is amended to read:

Subd. 9.

Awards.

An undergraduate student who meets the
office's requirements is eligible to apply for and receive a
grant in any year of undergraduate study unless the student has
obtained a baccalaureate degree or previously has been enrolled
full time or the equivalent for eight semesters or the
equivalent, excluding courses taken from a Minnesota school or
postsecondary institution which is not participating in the
state grant program and from which a student transferred no
credit. new text begin A student who withdraws from enrollment for active
military service is entitled to an additional semester or the
equivalent of grant eligibility. new text end A student enrolled in a
two-year program at a four-year institution is only eligible for
the tuition and fee maximums established by law for two-year
institutions.

Sec. 14.

Minnesota Statutes 2004, section 136A.121,
subdivision 13, is amended to read:

Subd. 13.

Deadline.

The deadline for the office to
accept applications for state grants for a term is deleted text begin 14 deleted text end new text begin 30 new text end days
after the start of that term.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and is retroactive to July 1, 2003.
An applicant who missed the 14-day deadline previously in effect
between July 1, 2003, and June 30, 2005, but who met the 30-day
deadline, has until September 1, 2005, to reapply. Retroactive
awards under this section must be made on a first come, first
served funds available basis.
new text end

Sec. 15.

Minnesota Statutes 2004, section 136A.121, is
amended by adding a subdivision to read:

new text begin Subd. 19. new text end

new text begin Data. new text end

new text begin An eligible institution must provide to
the office aggregate and distributional data on student
enrollment, financial aid, financial, and other aggregate and
other distributional data as determined by the director, to
enable the office to carry out its responsibilities under
chapters 136A and 141.
new text end

Sec. 16.

Minnesota Statutes 2004, section 136A.125,
subdivision 2, is amended to read:

Subd. 2.

Eligible students.

new text begin (a) new text end An applicant is eligible
for a child care grant if the applicant:

(1) is a resident of the state of Minnesota;

(2) has a child 12 years of age or younger, or 14 years of
age or younger who is handicapped as defined in section 125A.02,
and who is receiving or will receive care on a regular basis
from a licensed or legal, nonlicensed caregiver;

(3) is income eligible as determined by the office's
policies and rules, but is not a recipient of assistance from
the Minnesota family investment program;

(4) has not earned a baccalaureate degree and has been
enrolled full time less than eight semesters or the equivalent;

(5) is pursuing a nonsectarian program or course of study
that applies to an undergraduate degree, diploma, or
certificate;

(6) is enrolled at least half time in an eligible
institution; and

(7) is in good academic standing and making satisfactory
academic progress.

new text begin (b) A student who withdraws from enrollment for active
military service is entitled to an additional semester or the
equivalent of grant eligibility.
new text end

Sec. 17.

Minnesota Statutes 2004, section 136A.1701, is
amended by adding a subdivision to read:

new text begin Subd. 11. new text end

new text begin Data. new text end

new text begin An eligible institution must provide to
the office aggregate and distributional data on student
enrollment, financial aid, financial, and other aggregate and
distributional data on data as determined by the director, to
enable the office to carry out its responsibilities under
chapters 136A and 141.
new text end

Sec. 18.

Minnesota Statutes 2004, section 136A.1701, is
amended by adding a subdivision to read:

new text begin Subd. 12. new text end

new text begin Eligible student. new text end

new text begin "Eligible student" means a
student who is a Minnesota resident who is enrolled or accepted
for enrollment at an eligible school in Minnesota or in another
state or province. Non-Minnesota residents are eligible
students if they are enrolled or accepted for enrollment in a
minimum of one course of at least 30 days in length during the
academic year that requires physical attendance at an eligible
school located in Minnesota. Non-Minnesota resident students
enrolled exclusively during the academic year in correspondence
courses or courses offered over the Internet are not eligible
students. Non-Minnesota resident students not physically
attending classes in Minnesota due to enrollment in a study
abroad program for 12 months or less are eligible students.
Non-Minnesota residents enrolled in study abroad programs
exceeding 12 months are not eligible students. For purposes of
this section, an "eligible student" must also meet the
eligibility requirements of section 136A.15, subdivision 8.
new text end

Sec. 19.

new text begin [136A.1703] INCOME-CONTINGENT LOANS.
new text end

new text begin The office shall administer an income-contingent loan
repayment program to assist graduates of Minnesota schools in
medicine, dentistry, pharmacy, chiropractic medicine, public
health, and veterinary medicine, and Minnesota residents
graduating from optometry and osteopathy programs. Applicant
data collected by the office for this program may be disclosed
to a consumer credit reporting agency under the same conditions
as those that apply to the supplemental loan program under
section 136A.162. No new applicants may be accepted after June
30, 1995.
new text end

Sec. 20.

new text begin [136A.1785] LOAN CAPITAL FUND.
new text end

new text begin The office may deposit and hold assets derived from the
operation of its student loan programs authorized by this
chapter in a fund known as the loan capital fund. Assets in the
loan capital fund are available to the office solely for
carrying out the purposes and terms of sections 136A.15 to
136A.1702, including, but not limited to, making student loans
authorized by this chapter, paying administrative expenses
associated with the operation of its student loan programs,
repurchasing defaulted student loans, and paying expenses in
connection with the issuance of revenue bonds authorized under
this chapter. Assets in the loan capital fund may be invested
as provided in sections 11A.24 and 136A.16, subdivision 8. All
interest and earnings from the investment of the loan capital
fund inure to the benefit of the fund and are deposited into the
fund.
new text end

Sec. 21.

new text begin [136A.861] INTERVENTION FOR COLLEGE ATTENDANCE
PROGRAM GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Grants. new text end

new text begin The director of the Higher
Education Services Office shall award grants to foster
postsecondary attendance by providing outreach services to
historically underserved groups of elementary and secondary
students. Grants must be awarded to programs that provide
precollege services, including, but not limited to:
new text end

new text begin (1) academic counseling;
new text end

new text begin (2) mentoring;
new text end

new text begin (3) fostering and improving parental involvement in
planning for and facilitating a college education;
new text end

new text begin (4) services for students with English as a second
language;
new text end

new text begin (5) academic enrichment activities;
new text end

new text begin (6) tutoring;
new text end

new text begin (7) career awareness and exploration;
new text end

new text begin (8) orientation to college life;
new text end

new text begin (9) assistance with high school course selection and
information about college admission requirements;
new text end

new text begin (10) financial aid counseling; and
new text end

new text begin (11) summer academic enrichment programs.
new text end

new text begin Services may be provided by postsecondary institutions, school
districts, businesses, foundations, professional organizations,
community-based organizations, or others deemed appropriate by
the director.
new text end

new text begin Subd. 2. new text end

new text begin Eligible students. new text end

new text begin Eligible students include
elementary and secondary students who meet one or more of the
following criteria:
new text end

new text begin (1) are counted under section 1124(c) of the Elementary and
Secondary Education Act of 1965 (Title I);
new text end

new text begin (2) are eligible for free or reduced-price lunch under the
National School Lunch Act;
new text end

new text begin (3) receive assistance under the Temporary Assistance for
Needy Families Law (Title I of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996); or
new text end

new text begin (4) are a member of a group traditionally underrepresented
in higher education.
new text end

new text begin Subd. 3. new text end

new text begin Application process. new text end

new text begin The director of the Higher
Education Services Office shall develop a grant application
process. The director shall attempt to distribute grants in a
manner that ensures that eligible students throughout the state
have access to precollege services.
new text end

new text begin The grant application must include, at a minimum, the
following information:
new text end

new text begin (1) a description of the characteristics of the students to
be served;
new text end

new text begin (2) a description of the services to be provided and a
timeline for implementation of the activities;
new text end

new text begin (3) a description of how the services provided will foster
postsecondary attendance;
new text end

new text begin (4) a description of how the services will be evaluated to
determine whether the program goals were met; and
new text end

new text begin (5) other information as identified by the director.
new text end

new text begin Grant recipients must specify both program and student outcome
goals, and performance measures for each goal.
new text end

new text begin Priority shall be given to collaborative efforts between two or
more organizations.
new text end

new text begin Subd. 4. new text end

new text begin Match required. new text end

new text begin Applicants are required to
match the grant amount dollar-for-dollar. The match may be in
cash or an in-kind contribution.
new text end

new text begin Subd. 5. new text end

new text begin Review committee. new text end

new text begin The director must establish
and convene a grant selection committee to review applications
and award grants. The members of the committee may include
representatives of postsecondary institutions, elementary and
secondary education, organizations providing precollege outreach
services, and others deemed appropriate by the director.
new text end

new text begin Subd. 6. new text end

new text begin Program evaluation. new text end

new text begin Each grant recipient must
annually submit a report to the Higher Education Services Office
delineating its program and student outcome goals, and
activities implemented to achieve the stated outcomes. The
goals must be clearly stated and measurable. Grant recipients
are required to collect, analyze, and report on participation
and outcome data that enable the office to verify that the
program goals were met. The office shall maintain:
new text end

new text begin (1) information about successful precollege program
activities for dissemination to individuals throughout the state
interested in adopting or replicating successful program
practices; and
new text end

new text begin (2) data on the success of the funded projects in
increasing the high school graduation and college participation
rates of students served by the grant recipients. The office
may convene meetings of the grant recipients, as needed, to
discuss issues pertaining to the implementation of precollege
services.
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin By January 15 of each odd-numbered
year, the office shall submit a report to the committees in the
legislature with jurisdiction over higher education finance
regarding the grant recipients and their activities. The report
shall include information about the students served, the
organizations providing services, program activities, program
goals and outcomes, and program revenue sources and funding
levels.
new text end

Sec. 22.

Minnesota Statutes 2004, section 136F.02,
subdivision 1, is amended to read:

Subdivision 1.

Membership.

The board consists of deleted text begin 15 deleted text end new text begin 18
new text end members appointed by the governor with the advice and consent of
the senate. new text begin At least one member of the board shall have
experience in and represent business and at least one member
shall have experience in and represent organized labor. new text end At
least one member of the board must be a resident of each
congressional district new text begin , except that congressional districts
containing all or part of 17 or more counties shall be split in
approximately half geographically along county lines and one
member must be a resident of each half new text end . Three members must be
students who are enrolled at least half time in a degree,
diploma, or certificate program or have graduated from an
institution governed by the board within one year of the date of
appointment. The student members shall include: one member
from a community college, one member from a state university,
and one member from a technical college. The remaining members
must be appointed to represent the state at large.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment. Of the three members added to the
board by this section, one shall be appointed for an original
two-year term, one for a four-year term, and one for a six-year
term. The governor shall determine which term applies to an
appointment. After the original terms, all succeeding terms
shall be six years. If there is not a member representing
business and labor respectively, as provided by this section,
the governor shall make those appointments at the first
opportunity to do so.
new text end

Sec. 23.

Minnesota Statutes 2004, section 136F.04,
subdivision 4, is amended to read:

Subd. 4.

Recommendations.

Each student association shall
recommend at least two and not more than four candidates for its
student member. By deleted text begin January 2 deleted text end new text begin April 15 new text end of the year in which its
members' term expires, each student association shall submit its
recommendations to the governor. The governor is not bound by
these recommendations.

Sec. 24.

Minnesota Statutes 2004, section 136G.03,
subdivision 3, is amended to read:

Subd. 3.

Account owner.

"Account owner" means a person
who enters into a participation agreement and is entitled
to deleted text begin select or change deleted text end new text begin conduct transactions on the account,
including selecting and changing new text end the beneficiary of an account
deleted text begin or to receive deleted text end new text begin and receiving new text end distributions from the account deleted text begin for
other than payment of qualified higher education expenses deleted text end .

Sec. 25.

Minnesota Statutes 2004, section 136G.03,
subdivision 21a, is amended to read:

Subd. 21a.

Minor trust account.

"Minor trust account"
means a Uniform Gift to Minors Act account deleted text begin , deleted text end new text begin or new text end a Uniform
Transfers to Minors Act account deleted text begin , or a trust instrument naming a
minor person as beneficiary, deleted text end created and operating under the
laws of Minnesota or another state.

Sec. 26.

Minnesota Statutes 2004, section 136G.03,
subdivision 22, is amended to read:

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, new text begin or attendance at
a United States military academy by, new text end a beneficiary.

Sec. 27.

Minnesota Statutes 2004, section 136G.03,
subdivision 32, is amended to read:

Subd. 32.

Scholarship.

"Scholarship" means a
scholarship deleted text begin , deleted text end new text begin or educational assistance new text end allowance deleted text begin , or payment
under section 529(b)(3)(C) of the Internal Revenue Code deleted text end .

Sec. 28.

Minnesota Statutes 2004, section 136G.05,
subdivision 8, is amended to read:

Subd. 8.

Administration.

The director shall administer
the program, including accepting and processing applications,
maintaining account records, making payments, making matching
grants under section 136G.11, and undertaking any other
necessary tasks to administer the program. The office may
contract with one or more third parties to carry out some or all
of these administrative duties, including deleted text begin promotion deleted text end new text begin providing
incentives new text end and marketing deleted text begin of deleted text end the program. The office and the
board may jointly contract with third-party providers, if the
office and board determine that it is desirable to contract with
the same entity or entities for administration and investment
management.

Sec. 29.

Minnesota Statutes 2004, section 136G.09,
subdivision 11, is amended to read:

Subd. 11.

Effect of plan changes on participation
agreement.

Amendments to sections 136G.01 to 136G.13
automatically amend the participation agreement. Any amendments
to the operating procedures and policies of the plan shall
new text begin automatically new text end amend the participation agreement deleted text begin 30 days deleted text end after
adoption by the office or the board.

Sec. 30.

Minnesota Statutes 2004, section 136G.09,
subdivision 12, is amended to read:

Subd. 12.

Special account to hold plan assets in trust.

All assets of the plan, including contributions to accounts and
matching grant accounts and earnings, are held in trust for the
exclusive benefit of account owners and beneficiaries. Assets
must be held in a separate account in the state treasury to be
known as the Minnesota college savings plan account new text begin or in
accounts with the third party provider selected pursuant to
section 136G.05, subdivision 8 new text end . Plan assets are not subject to
claims by creditors of the state, are not part of the general
fund, and are not subject to appropriation by the state.
Payments from the Minnesota college savings plan account shall
be made under sections 136G.01 to 136G.13.

Sec. 31.

Minnesota Statutes 2004, section 136G.11,
subdivision 1, is amended to read:

Subdivision 1.

Matching grant qualification.

By June 30
of each year, a state matching grant must be added to each
account established under the program if the following
conditions are met:

(1) the contributor applies, in writing in a form
prescribed by the director, for a matching grant;

(2) a minimum contribution of $200 was made during the
preceding calendar year; deleted text begin and
deleted text end

(3) new text begin the beneficiary's family meets Minnesota college
savings plan residency requirements; and
new text end

new text begin (4) new text end the family income of the beneficiary did not exceed
$80,000.

Sec. 32.

Minnesota Statutes 2004, section 136G.11,
subdivision 3, is amended to read:

Subd. 3.

Residency requirement.

(a) If the beneficiary
is under age 25, the beneficiary's parents or legal guardians
must be Minnesota residents to qualify for a matching grant. If
the beneficiary is age 25 or older, the beneficiary must be a
Minnesota resident to qualify for a matching grant.

(b) To meet the residency requirements, the parent or legal
guardian of beneficiaries under age 25 must have filed a
Minnesota individual income tax return as a Minnesota resident
and claimed the beneficiary as a dependent on the parent or
legal guardian's federal tax return for the calendar year in
which contributions were made. new text begin If the beneficiary's parents are
divorced, the parent or legal guardian claiming the beneficiary
as a dependent on the federal individual income tax return must
be a Minnesota resident. new text end For beneficiaries age 25 or older, the
beneficiary, and a spouse, if any, must have filed a Minnesota
and a federal individual income tax return as a Minnesota
resident for the calendar year in which contributions were made.

(c) A parent of beneficiaries under age 25 and
beneficiaries age 25 or older who did not reside in Minnesota in
the calendar year in which contributions were made are not
eligible for a matching grant.

Sec. 33.

Minnesota Statutes 2004, section 136G.11, is
amended by adding a subdivision to read:

new text begin Subd. 3a. new text end

new text begin Family income. new text end

new text begin (a) For purposes of this
section, "family income" means:
new text end

new text begin (1) if the beneficiary is under age 25, the combined
adjusted gross income of the beneficiary's parents or legal
guardians as reported on the federal tax return or returns for
the calendar year in which contributions were made. If the
beneficiary's parents or legal guardians are divorced, the
income of the parent claiming the beneficiary as a dependent on
the federal individual income tax return and the income of that
parent's spouse, if any, is used to determine family income; or
new text end

new text begin (2) if the beneficiary is age 25 or older, the combined
adjusted gross income of the beneficiary and spouse, if any.
new text end

new text begin (b) For a parent or legal guardian of beneficiaries under
age 25 and for beneficiaries age 25 or older who resided in
Minnesota and filed a federal individual income tax return, the
matching grant must be based on family income from the calendar
year in which contributions were made.
new text end

Sec. 34.

Minnesota Statutes 2004, 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) the beneficiary receives a full tuition scholarship or
deleted text begin admission to deleted text end new text begin is attending new text end a United States service academy;

(3) the beneficiary dies or becomes disabled;

(4) the account owner changes the beneficiary of the
account; or

(5) the account owner closes the account with a
nonqualified withdrawal.

(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) the beneficiary receives a scholarship covering a
portion of qualified higher education expenses; or

(3) the account owner makes a partial nonqualified
withdrawal.

(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. 35.

Minnesota Statutes 2004, section 136G.13,
subdivision 1, is amended to read:

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 or
deleted text end

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

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

Sec. 36.

Minnesota Statutes 2004, section 136G.13,
subdivision 5, is amended to read:

Subd. 5.

Distributions due to death or disability of, or
scholarship to, new text begin or attendance at a united states military
academy by, new text end a beneficiary.

An account owner may request a
distribution due to the death or disability of, or scholarship
to, new text begin or attendance at a United States military academy by, new text end a
beneficiary from an account by submitting a completed request to
the plan. 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 new text begin , or is attending a United
States military academy new text end . 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:

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

(2) for disability of the beneficiary, a certification by a
physician who is a doctor of medicine or osteopathy 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 begin or
deleted text end

(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 new text begin ; or
new text end

new 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 new text end .

Sec. 37.

Minnesota Statutes 2004, 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
nonqualified distribution from an account, or a distribution due
to the disability or scholarship award to the beneficiary, new text begin or
made on account of the beneficiary's attendance at a United
States military academy, new text end must be used for the benefit of the
beneficiary.

Sec. 38.

Minnesota Statutes 2004, section 137.0245,
subdivision 3, is amended to read:

Subd. 3.

Duties.

new text begin (a) new text end The advisory council shall:

(1) develop, in consultation with current and former
regents and the administration of the University of Minnesota, a
statement of the selection criteria to be applied and a
description of the responsibilities and duties of a regent, and
shall distribute this to potential candidates; deleted text begin and
deleted text end

(2) for each position on the board, identify and recruit
qualified candidates for the Board of Regents, based on the
background and experience of the candidates, and their potential
for discharging the responsibilities of a member of the Board of
Regents. new text begin The selection criteria must not include a limitation
on the number of terms an individual may serve on the Board of
Regents; and
new text end

new text begin (3) report to the joint committee established under section
137.0246 on the membership needs of the board in terms of
individual skills and characteristics. Individual skills relate
to training and experience in fields such as finance, higher
education, labor, and management. Individual characteristics
relate to qualities such as gender, race, and geographic
location of residence.
new text end

new text begin (b) The selection criteria developed under paragraph (a),
clause (1), must include a criterion that regents represent
diversity in geography; gender; race; occupation, including
business and labor; and experience.
new text end

Sec. 39.

new text begin [137.0246] REGENT SELECTION; LEGISLATURE.
new text end

new text begin (a) By February 15 of each odd-numbered year, or at a date
agreed to by concurrent resolution, a joint legislative
committee shall meet to recommend nominees for regent of the
University of Minnesota to be presented to a joint convention of
the legislature. The joint legislative committee consists of 20
legislator members. Ten members shall be appointed by the
speaker of the house. Ten members shall be appointed by the
Subcommittee on Committees of the Committee on Rules and
Administration from the senate. An equal number of members from
the majority and minority party shall be appointed from each
house. The members appointed from the minority party must be
appointed from among those recommended by the minority leader.
The chairs of the education policy committees and of the higher
education budget divisions and the ranking minority member of
those committees and divisions must be appointed. A majority of
the members from each house is a quorum of the joint committee.
new text end

new text begin (b) The joint committee shall determine the number of
persons, and the person or persons to be recommended for each
open seat.
new text end

new text begin (c) The joint convention must meet on or before March 7 of
that same odd-numbered year.
new text end

Sec. 40.

new text begin [144.1498] NURSING LOW-INCOME LOAN REPAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section,
"qualifying educational loans" means government, commercial, and
foundation loans for actual costs paid for tuition, reasonable
education expenses, and reasonable living expenses related to
the graduate or undergraduate education of a licensed practical
nurse or registered nurse.
new text end

new text begin Subd. 2. new text end

new text begin Creation of account; loan repayment program. new text end

new text begin A
low-income nursing education account is created in the general
fund. The commissioner of health shall use money from the
account to establish a loan repayment program for licensed
practical or registered nurses who agree to practice in a
Minnesota nursing home or work in a position in Minnesota as a
nurse educator. Appropriations made to the account do not
cancel and are available until expended.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin (a) To be eligible to apply to
participate in the loan repayment program, an individual must:
new text end

new text begin (1) be a resident of Minnesota;
new text end

new text begin (2) currently be attending a program leading to a degree in
practical or registered nursing or a graduate nursing degree in
a public or private postsecondary education institution located
in Minnesota; and
new text end

new text begin (3) submit an application to the commissioner of health.
new text end

new text begin (b) An applicant selected to participate must sign a
contract to agree to serve a minimum three-year, full-time
service obligation in a position or place of employment
described in subdivision 2. The service must begin no later
than March 31 following completion of required training. If
fewer applications are submitted by nursing students than there
are participant slots available, the commissioner may consider
applications submitted by nursing program graduates who are
licensed or registered nurses or nurses who are nurse
educators. Nurses selected for loan repayment assistance must
comply with this section.
new text end

new text begin Subd. 4. new text end

new text begin Loan repayment. new text end

new text begin The commissioner of health may
accept applicants each year for participation in the loan
repayment program, within the limits of available funding.
Applicants are responsible for securing their own loans. The
commissioner shall select participants in a priority based upon
lowest family income, followed in order of ascending family
income. Family income may be determined in the same manner as
for state grants under section 136A.121 or in another manner the
commissioner determines fairly represents family income. The
commissioner shall give preference to applicants closest to
completing their training. For each year that a participant
meets the service obligation required under subdivision 3, up to
a maximum of four years, the commissioner shall make annual
disbursements directly to the participant equivalent to 15
percent of the average educational debt for indebted nursing
school graduates in the year closest to the applicant's
selection for which information is available or the balance of
the qualifying educational loans, whichever is less. Before
receiving loan repayment disbursements and as requested, the
participant must complete and return to the commissioner an
affidavit of practice form provided by the commissioner
verifying that the participant is practicing as required under
subdivision 3. 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. Participants remain
eligible for loan repayment as long as they practice as required
under subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Penalty for nonfulfillment. new text end

new text begin If a participant
does not fulfill the service commitment under subdivision 3, the
commissioner of health shall collect from the participant 100
percent of any payments made for qualified educational loans and
interest at a rate established according to section 270.75. The
commissioner shall deposit the money collected in the low-income
nursing education account established under subdivision 2.
new text end

new text begin Subd. 6. new text end

new text begin Suspension or waiver of obligation. new text end

new text begin Payment or
service obligations cancel in the event of a participant's
death. The commissioner of health may waive or suspend payment
or service obligations in cases of total and permanent
disability or long-term temporary disability lasting for more
than two years. The commissioner shall evaluate all other
requests for suspension or waivers on a case-by-case basis and
may grant a waiver of all or part of the money owed as a result
of a nonfulfillment penalty if emergency circumstances prevented
fulfillment of the required service commitment.
new text end

Sec. 41.

Minnesota Statutes 2004, section 299A.45,
subdivision 1, is amended to read:

Subdivision 1.

Eligibility.

Following certification
under section 299A.44 and compliance with this section and rules
of the commissioner of public safety and the higher education
services office, dependent children less than 23 years of age
and the surviving spouse of a public safety officer killed in
the line of duty on or after January 1, 1973, are eligible to
receive educational benefits under this section. To qualify for
an award, they must be enrolled in undergraduate degree or
certificate programs after June 30, 1990, at an eligible
Minnesota institution as provided in section 136A.101,
subdivision 4. new text begin A student who withdraws from enrollment for
active military service is entitled to an additional semester or
the equivalent of grant eligibility. new text end Persons who have received
a baccalaureate degree or have been enrolled full time or the
equivalent of ten semesters or the equivalent, whichever occurs
first, are no longer eligible.

Sec. 42.

Minnesota Statutes 2004, section 299A.45,
subdivision 4, is amended to read:

Subd. 4.

Renewal.

Each award must be given for one
academic year and is renewable for a maximum of eight semesters
or the equivalent. new text begin A student who withdraws from enrollment for
active military service is entitled to an additional semester or
the equivalent of grant eligibility. new text end An award must not be given
to a dependent child who is 23 years of age or older on the
first day of the academic year.

Sec. 43.

new text begin [583.215] EXPIRATION.
new text end

new text begin Sections 336.9-601, subsections (h) and (i); 550.365;
559.209; 582.039; and 583.20 to 583.32, expire June 30, 2009.
new text end

Sec. 44. new text begin APPLICATION OF ELIGIBILITY.
new text end

new text begin The additional semester or the equivalent of grant
eligibility under sections 13, 16, 41, and 42 applies to any
student who withdrew from enrollment in a postsecondary
institution after December 31, 2002, for enrollment for active
military service as defined in Minnesota Statutes, section
190.05, subdivision 5b or 5c.
new text end

Sec. 45. new text begin ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY
FUNDING.
new text end

new text begin The Higher Education Services Office shall convene an
advisory task force to study the current postsecondary funding
policy under Minnesota Statutes, sections 135A.01 to 135A.034.
The task force must include a legislative fiscal analysis staff
member from the senate assigned to the senate higher education
finance division, a legislative fiscal analysis staff member
assigned to the house Higher Education Finance Committee, the
chief financial officers of the University of Minnesota and the
Minnesota State Colleges and Universities, and the commissioner
of finance, or their designees. The task force may include
other members as selected by the Higher Education Services
Office. The task force must study and make specific
recommendations on alternatives to the methods currently used by
the postsecondary systems to implement the provisions of
Minnesota Statutes, section 135A.031, subdivision 4. The task
force must submit its recommendations to the legislature and the
governor by January 15, 2006. The task force expires on June
30, 2007.
new text end

Sec. 46. new text begin RECIPROCITY NEGOTIATIONS.
new text end

new text begin The Higher Education Services Office must, as soon as
possible, enter into negotiations with the appropriate officials
of the state of Wisconsin concerning higher education
reciprocity. The office must attempt to negotiate an agreement
that would result in Wisconsin resident students attending
Minnesota public higher education institutions paying no less
than Minnesota resident students attending those institutions.
The office must report the results of the negotiations to the
legislature by November 1, 2005.
new text end

Sec. 47. new text begin REVISOR INSTRUCTION.
new text end

new text begin The revisor of statutes shall change the terms "HESO" and
"Higher Education Services Office" to "Minnesota Office of
Higher Education" wherever in Minnesota Statutes and Minnesota
Rules the terms appear.
new text end

Sec. 48. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, sections 136A.011 and
136A.031, subdivision 1, are repealed.
new text end

new text begin (b) Laws 1986, chapter 398, article 1, section 18, as
amended, is repealed.
new text end

new text begin (c) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120;
4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100;
4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are
repealed.
new text end

ARTICLE 3

ROCHESTER HIGHER EDUCATION

Section 1. new text begin ROCHESTER HIGHER EDUCATION DEVELOPMENT
COMMITTEE.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Rochester Higher
Education Development Committee is established to research and
make recommendations to the governor and legislature on the
creation of mission-driven postsecondary educational programs or
institutions in the Rochester area that meet the educational
needs of the region and the state and that capitalize on the
unique opportunities for educational partnerships presented in
the Rochester area.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin The committee is composed of 11
members, to be appointed by the governor, as follows:
new text end

new text begin (1) a trustee of the Minnesota State Colleges and
Universities, or the trustee's designee;
new text end

new text begin (2) a regent of the University of Minnesota, or the
regent's designee;
new text end

new text begin (3) six persons from the Rochester area representing
business, health and medical sciences, and technology;
new text end

new text begin (4) the commissioner of finance, or the commissioner's
designee;
new text end

new text begin (5) one person who by training or experience has special
expertise in postsecondary finance and planning; and
new text end

new text begin (6) one person who by training or experience has special
expertise in postsecondary academic planning and programming.
new text end

new text begin Before the first meeting of the committee, the governor
shall select one person from the committee who shall serve as
chair.
new text end

new text begin Subd. 3. new text end

new text begin Compensation and removal. new text end

new text begin Appointments to the
committee are not subject to Minnesota Statutes, section 15.0597.
Members of the committee are not entitled to reimbursement under
Minnesota Statutes, section 15.059, subdivision 6. Members may
be removed and vacancies filled pursuant to Minnesota Statutes,
section 15.059, subdivision 4. The director of the Higher
Education Services Office may provide administrative support to
the committee.
new text end

new text begin Subd. 4. new text end

new text begin Duties. new text end

new text begin (a) The committee shall develop a
recommendation for establishment and implementation of expanded
higher education programs or institutions in Rochester. The
committee's report must include recommendations on:
new text end

new text begin (1) the mission and focus of the programs or institutions;
new text end

new text begin (2) the nature of undergraduate and graduate programs to be
offered;
new text end

new text begin (3) site and facility needs;
new text end

new text begin (4) funding sources and opportunities;
new text end

new text begin (5) operational needs;
new text end

new text begin (6) alliances or other types of cooperative arrangements
with public and private institutions;
new text end

new text begin (7) governance structures; and
new text end

new text begin (8) mechanisms to ensure that the expanded programs are
aligned with the unique needs and opportunities of the Rochester
area and that programs take advantage of opportunities presented
by regional business and industry.
new text end

new text begin (b) If the committee recommends any programmatic changes
that result in institutional realignments, the committee must
consult with the representatives of affected employees and
address the continuation of collective bargaining and
contractual rights and benefits, including accumulated sick
leave, vacation time, seniority, time to tenure, separation or
retirement benefits, and pension plan coverage.
new text end

new text begin (c) The committee must consider specifically whether
expansion of the University of Minnesota in Rochester is the
most appropriate method of meeting the region's needs.
new text end

new text begin (d) The committee may also research and provide
recommendations on sites for the facilities and programs. The
committee shall recommend any changes to Minnesota law required
to implement recommendations of the committee.
new text end

new text begin Subd. 5. new text end

new text begin Report. new text end

new text begin The committee must issue a report with
recommendations to the governor and the legislature by January
15, 2006.
new text end

new text begin Subd. 6. new text end

new text begin Sunset. new text end

new text begin The committee expires on December 31,
2007.
new text end

Sec. 2. new text begin ROCHESTER HIGHER EDUCATION DEVELOPMENT ACCOUNT.
new text end

new text begin A Rochester higher education development account is created
in the state treasury in the special revenue fund. Money in
this account is appropriated to the Higher Education Services
Office for allocation to the committee established in section 1,
subdivision 1, and the implementation activities outlined in
article 1, section 2, subdivision 6, paragraph (b). The office
shall serve as fiscal agent for the committee established in
section 1.
new text end

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 4

PRIVATE CAREER SCHOOLS

Section 1.

Minnesota Statutes 2004, section 141.21, is
amended by adding a subdivision to read:

new text begin Subd. 6a. new text end

new text begin Multiple location. new text end

new text begin "Multiple location" means
any site where classes or administrative services are provided
to students and which has a street address that is different
than the street address found on the school's private career
school license.
new text end

Sec. 2.

Minnesota Statutes 2004, section 141.25,
subdivision 3, is amended to read:

Subd. 3.

Application.

Application for a license shall be
on forms prepared and furnished by the office, and shall include
the following and other information as the office may require:

(1) the title or name of the school, ownership and
controlling officers, members, managing employees, and director;

(2) the specific programs which will be offered and the
specific purposes of the instruction;

(3) the place or places where the instruction will be
given;

(4) a listing of the equipment available for instruction in
each program;

(5) the maximum enrollment to be accommodated with
equipment available in each specified program;

(6) the qualifications of instructors and supervisors in
each specified program;

(7) a current balance sheet, income statement, and adequate
supporting documentation, prepared and certified by an
independent public accountant or CPA;

(8) copies of all media advertising and promotional
literature and brochures or electronic display currently used or
reasonably expected to be used by the school;

(9) copies of all Minnesota enrollment agreement forms and
contract forms and all enrollment agreement forms and contract
forms used in Minnesota; and

(10) gross income earned in the preceding year from student
tuition, fees, and other required institutional charges, unless
the school files with the office a surety bond equal to at least
deleted text begin $50,000 deleted text end new text begin $250,000 new text end as described in subdivision 5.

Sec. 3.

Minnesota Statutes 2004, section 141.25,
subdivision 5, is amended to read:

Subd. 5.

Bond.

(a) No license shall be issued to any
school which maintains, conducts, solicits for, or advertises
within the state of Minnesota any program, unless the applicant
files with the office a continuous corporate surety bond written
by a company authorized to do business in Minnesota conditioned
upon the faithful performance of all contracts and agreements
with students made by the applicant.

(b) The amount of the surety bond shall be ten percent of
the preceding year's gross income from student tuition, fees,
and other required institutional charges, but in no event less
than $10,000 nor greater than deleted text begin $50,000 deleted text end new text begin $250,000 new text end , except that a
school may deposit a greater amount at its own discretion. A
school in each annual application for licensure must compute the
amount of the surety bond and verify that the amount of the
surety bond complies with this subdivision, unless the school
maintains a surety bond equal to at least deleted text begin $50,000 deleted text end new text begin $250,000 new text end . A
school that operates at two or more locations may combine gross
income from student tuition, fees, and other required
institutional charges for all locations for the purpose of
determining the annual surety bond requirement. The gross
tuition and fees used to determine the amount of the surety bond
required for a school having a license for the sole purpose of
recruiting students in Minnesota shall be only that paid to the
school by the students recruited from Minnesota.

(c) The bond shall run to the state of Minnesota and to any
person who may have a cause of action against the applicant
arising at any time after the bond is filed and before it is
canceled for breach of any contract or agreement made by the
applicant with any student. The aggregate liability of the
surety for all breaches of the conditions of the bond shall not
exceed the principal sum deposited by the school under paragraph
(b). 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.

(d) In lieu of bond, the applicant may deposit with the
commissioner of finance a sum equal to the amount of the
required surety bond in cash, or 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.

(e) Failure of a school to post and maintain the required
surety bond or deposit under paragraph (d) may result in denial,
suspension, or revocation of the school's license.

Sec. 4.

Minnesota Statutes 2004, section 141.25,
subdivision 8, is amended to read:

Subd. 8.

Fees and terms of license.

An application for
an initial license under sections 141.21 to 141.35 shall be
accompanied by a nonrefundable application fee deleted text begin established by
the office deleted text end new text begin as provided in section 141.255 new text end that is sufficient to
recover, but not exceed, deleted text begin its deleted text end new text begin the new text end administrative costs new text begin of the
office new text end .

All licenses shall expire one year from the date issued by
the office, except as provided in section 141.251.

Sec. 5.

Minnesota Statutes 2004, section 141.25,
subdivision 9, is amended to read:

Subd. 9.

Catalog, brochure, or electronic display.

Before a license is issued to a school, the school shall furnish
to the office a catalog, brochure, or electronic display
including:

(1) identifying data, such as volume number and date of
publication;

(2) name and address of the school and its governing body
and officials;

(3) a calendar of the school showing legal holidays,
beginning and ending dates of each course quarter, term, or
semester, and other important dates;

(4) the school policy and regulations on enrollment
including dates and specific entrance requirements for each
program;

(5) the school policy and regulations about leave,
absences, class cuts, make-up work, tardiness, and interruptions
for unsatisfactory attendance;

(6) the school policy and regulations about standards of
progress for the student including the grading system of the
school, the minimum grades considered satisfactory, conditions
for interruption for unsatisfactory grades or progress, a
description of any probationary period allowed by the school,
and conditions of reentrance for those dismissed for
unsatisfactory progress;

(7) the school policy and regulations about student conduct
and conditions for dismissal for unsatisfactory conduct;

(8) a detailed schedule of fees, charges for tuition,
books, supplies, tools, student activities, laboratory fees,
service charges, rentals, deposits, and all other charges;

(9) the school policy and regulations, including an
explanation of section 141.271, about refunding tuition, fees,
and other charges if the student does not enter the program,
withdraws from the program, or the program is discontinued;

(10) a description of the available facilities and
equipment;

(11) a course outline new text begin syllabus new text end for each course offered
showing course objectives, subjects or units in the course, type
of work or skill to be learned, and approximate time, hours, or
credits to be spent on each subject or unit;

(12) the school policy and regulations about granting
credit for previous education and preparation;

(13) a procedure for investigating and resolving student
complaints; and

(14) the name and address of the Minnesota Higher Education
Services Office.

A school that is exclusively a distance education school is
exempt from clauses (3) and (5).

Sec. 6.

Minnesota Statutes 2004, section 141.25,
subdivision 12, is amended to read:

Subd. 12.

Permanent records.

A school licensed under
this chapter and located in Minnesota shall maintain a permanent
record for each student for 50 years from the last date of the
student's attendance. A school licensed under this chapter and
offering distance instruction to a student located in Minnesota
shall maintain a permanent record for each Minnesota student for
50 years from the last date of the student's attendance.
Records include school transcripts, documents, and files
containing student data about academic credits earned, courses
completed, grades awarded, degrees awarded, and periods of
attendance. To preserve permanent records, a school shall
submit a plan that meets the following requirements:

(1) at least one copy of the records must be held in a
secure new text begin , fireproof new text end depository;

(2) an appropriate official must be designated to provide a
student with copies of records or a transcript upon request;

(3) an alternative method new text begin , approved by the office, new text end of
complying with clauses (1) and (2) must be established if the
school ceases to exist; and

(4) a continuous surety bond must be filed with the office
in an amount not to exceed $20,000 if the school has no binding
agreement for preserving student records or a trust must be
arranged if the school ceases to exist.

Sec. 7.

Minnesota Statutes 2004, section 141.251, is
amended to read:

141.251 LICENSE RENEWAL.

Subdivision 1.

Application.

Application for renewal of a
license must be made at least deleted text begin 30 deleted text end new text begin 60 new text end days before expiration of
the current license on a form provided by the office. A renewal
application shall be accompanied by a nonrefundable fee
deleted text begin established by the office deleted text end new text begin as provided in section 141.255 new text end that is
sufficient to recover, but does not exceed, deleted text begin its deleted text end new text begin the
new text end administrative costs new text begin of the office new text end .

Subd. 2.

Conditions.

The office shall adopt rules
establishing the conditions for renewal of a license. The
conditions shall permit two levels of renewal based on the
record of the school. A school that has demonstrated the
quality of its program and operation through longevity and
performance in the state may renew its license based on a
relaxed standard of scrutiny. A school that has been in
operation in Minnesota for a limited period of time or that has
not performed adequately on performance indicators shall renew
its license based on a strict standard of scrutiny. The office
shall specify minimum longevity standards and performance
indicators that must be met before a school may be permitted to
operate under the relaxed standard of scrutiny. The performance
indicators used in this determination shall include, but not be
limited to: degree granting status, new text begin regional or new text end national
accreditation, loan default rates, placement rate of graduates,
student withdrawal rates, audit results, student complaints, and
school status with the United States Department of Education.
Schools that meet the requirements established in rule shall be
required to submit a full relicensure report once every four
years, and in the interim years will be exempt from the
requirements of section 141.25, subdivision 3, clauses (4), (5),
and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and
4880.2100, subpart 4.

Sec. 8.

new text begin [141.255] FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Initial licensure fee. new text end

new text begin The office
processing fee for an initial licensure application is:
new text end

new text begin (1) $1,500 for a school that will offer no more than one
program during its first year of operation;
new text end

new text begin (2) $2,000 for a school that will offer two or more
nondegree level programs during its first year of operation; and
new text end

new text begin (3) $2,500 for a school that will offer two or more degree
level programs during its first year of operation.
new text end

new text begin Subd. 2. new text end

new text begin Renewal licensure fee; late fee. new text end

new text begin (a) The office
processing fee for a renewal licensure application is:
new text end

new text begin (1) for a category A school, as determined by the office,
the fee is $865 if the school offers one program or $1,150 if
the school offers two or more programs; and
new text end

new text begin (2) for a category B or C school, as determined by the
office, the fee is $430 if the school offers one program or $575
if the school offers two or more programs.
new text end

new text begin (b) If a license renewal application is not received by the
office by the close of business at least 60 days before the
expiration of the current license, a late fee of $100 per
business day shall be assessed.
new text end

new text begin Subd. 3. new text end

new text begin Degree level addition fee. new text end

new text begin The office
processing fee for adding a degree level to an existing program
is $2,000 per program.
new text end

new text begin Subd. 4. new text end

new text begin Program addition fee. new text end

new text begin The office processing fee
for adding a program that represents a significant departure in
the objectives, content, or method of delivery of programs that
are currently offered by the school is $500 per program.
new text end

new text begin Subd. 5. new text end

new text begin Visit or consulting fee. new text end

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

new text begin (1) $300 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;
new text end

new text begin (2) $300 for each day or part thereof on site 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

new text begin Subd. 6. new text end

new text begin Modification fee. new text end

new text begin The fee for modification of
any existing program is $100 and is due if there is:
new text end

new text begin (1) an increase or decrease of 25 percent or more, from the
original date of program approval, in clock hours, credit hours,
or calendar length of an existing program;
new text end

new text begin (2) a change in academic measurement from clock hours to
credit hours or vice versa; or
new text end

new text begin (3) an addition or alteration of courses that represent a
25 percent change or more in the objectives, content, or methods
of delivery.
new text end

new text begin Subd. 7. new text end

new text begin Solicitor permit fee. new text end

new text begin The solicitor permit fee
is $350 and must be paid annually.
new text end

new text begin Subd. 8. new text end

new text begin Multiple location fee. new text end

new text begin Schools wishing to
operate at multiple locations must pay:
new text end

new text begin (1) $250 per location, for two to five locations; and
new text end

new text begin (2) an additional $50 for each location over five.
new text end

new text begin Subd. 9. new text end

new text begin Student transcript fee. new text end

new text begin The fee for a student
transcript requested from a closed school whose records are held
by the office is $10, with a maximum of five transcripts per
request.
new text end

Sec. 9.

Minnesota Statutes 2004, section 141.26,
subdivision 5, is amended to read:

Subd. 5.

Fee.

The initial and renewal application for
each permit shall be accompanied by a nonrefundable fee deleted text begin as
established by the office deleted text end new text begin under section 141.255 new text end .

Sec. 10.

Minnesota Statutes 2004, section 141.271, is
amended by adding a subdivision to read:

new text begin Subd. 1b. new text end

new text begin Short-term programs. new text end

new text begin Licensed schools
conducting programs not exceeding 40 hours in length shall not
be required to make a full refund once a program has commenced
and shall be allowed to prorate any refund based on the actual
length of the program as stated in the school catalog or
advertisements and the number of hours attended by the student.
new text end

Sec. 11.

Minnesota Statutes 2004, section 141.271,
subdivision 4, is amended to read:

Subd. 4.

Resident schools.

When a student has been
accepted by a school offering a resident program and gives
written notice of cancellation new text begin , or the school has actual notice
of a student's nonattendance new text end after the start of the period of
instruction for which the student has been charged, but before
completion of 75 percent of the period of instruction, the
amount charged for tuition, fees, and all other charges shall be
prorated new text begin based on number of days in the term new text end as a portion of the
total charges for tuition, fees, and all other charges. An
additional 25 percent of the total cost of the period of
instruction may be added, but shall not exceed $100. After
completion of 75 percent of the period of instruction for which
the student has been charged, no refunds are required.

Sec. 12.

Minnesota Statutes 2004, section 141.271,
subdivision 7, is amended to read:

Subd. 7.

Equipment and supplies.

The fair market retail
price, if separately stated in the catalog and contract or
enrollment agreement, of equipment or supplies furnished to the
student, which the student fails to return in condition suitable
for resale new text begin , and which may reasonably be resold, new text end within ten
business days following cancellation may be retained by the
school and may be deducted from the total cost for tuition, fees
and all other charges when computing refunds.

An overstatement of the fair market retail price of any
equipment or supplies furnished the student shall be considered
inconsistent with this provision.

Sec. 13.

Minnesota Statutes 2004, section 141.271,
subdivision 10, is amended to read:

Subd. 10.

Cancellation occurrence.

Written notice of
cancellation shall take place on the date the letter of
cancellation is postmarked or, in the cases where the notice is
hand carried, it shall occur on the date the notice is delivered
to the school. new text begin If a student has not attended classes for a
period of 21 consecutive days, the student is considered to have
withdrawn from school for all purposes as of the student's last
documented date of attendance.
new text end

Sec. 14.

Minnesota Statutes 2004, section 141.271, is
amended by adding a subdivision to read:

new text begin Subd. 14. new text end

new text begin Closed school. new text end

new text begin In the event a school closes
for any reason during a term and interrupts and terminates
classes during that term, all tuition for the term shall be
refunded to the students or the appropriate state or federal
agency or private lender that provided any funding for the term
and any outstanding obligation of the student for the term is
canceled.
new text end

Sec. 15.

Minnesota Statutes 2004, section 141.28,
subdivision 1, is amended to read:

Subdivision 1.

Not to advertise state approval.

Schools,
agents of schools, and solicitors may not advertise or represent
in writing or orally that such school is approved or accredited
by the state of Minnesota, except that any school, agent, or
solicitor may advertise that the school and solicitor have been
duly licensed by the state deleted text begin . deleted text end new text begin using the following language:
new text end

new text begin "(Name of school) is licensed as a private career school with
the Minnesota Higher Education Services Office. Licensure is
not an endorsement of the institution. Credits earned at the
institution may not transfer to all other institutions. The
educational programs may not meet the needs of every student or
employer."
new text end

Sec. 16.

Minnesota Statutes 2004, section 141.28, is
amended by adding a subdivision to read:

new text begin Subd. 6. new text end

new text begin Financial aid payments. new text end

new text begin (a) All schools must
collect, assess, and distribute funds received from loans or
other financial aid as provided in this subdivision.
new text end

new text begin (b) Student loans or other financial aid funds received
from federal, state, or local governments or administered in
accordance with federal student financial assistance programs
under title IV of the Higher Education Act of 1965, as amended,
United States Code, title 20, chapter 28, must be collected and
applied as provided by applicable federal, state, or local law
or regulation.
new text end

new text begin (c) Student loans or other financial aid assistance
received from a bank, finance or credit card company, or other
private lender must be collected or disbursed as provided in
paragraphs (d) and (e).
new text end

new text begin (d) Loans or other financial aid payments for amounts
greater than $3,000 must be disbursed:
new text end

new text begin (1) in two equal disbursements, if the course or term
length is less than six months. The loan or payment amounts may
be disbursed no earlier than the first day the student attends
class with the remainder to be disbursed halfway through the
class or term;
new text end

new text begin (2) in three equal disbursements, if the course or term
length is more than six months, but less than 12 months. The
loan or payment amounts may be disbursed no earlier than the
first day the student attends class, one-third of the way
through the class or term, and two-thirds of the way through the
class or term; or
new text end

new text begin (3) in four equal disbursements, if the course or term
length is greater than 12 months. The loan or payment amounts
may be disbursed no earlier than the first day a student attends
class, one-quarter of the way through the class or term, halfway
through the class or term, and three-fourths of the way through
the class or term.
new text end

new text begin (e) Loans or other financial aid payments for amounts less
than $3,000 may be disbursed as a single disbursement on the
first day a student attends class, regardless of course length.
new text end

new text begin (f) No school may enter into a contract or agreement with,
or receive any money from, a bank, finance or credit card
company, or other private lender, unless the private lender
follows the requirements for disbursements provided in
paragraphs (d) and (e).
new text end

Sec. 17.

Minnesota Statutes 2004, section 141.29,
subdivision 3, is amended to read:

Subd. 3.

Powers and duties.

The office shall have (in
addition to the powers and duties now vested therein by law) the
following powers and duties:

(a) To negotiate and enter into interstate reciprocity
agreements with similar agencies in other states, if in the
judgment of the office such agreements are or will be helpful in
effectuating the purposes of Laws 1973, Chapter 714;

(b) To grant conditional school license for periods of less
than one year if in the judgment of the office correctable
deficiencies exist at the time of application and when refusal
to issue school license would adversely affect currently
enrolled students;

(c) The office may upon its own motion, and shall upon the
verified complaint in writing of any person setting forth fact
which, if proved, would constitute grounds for refusal or
revocation under Laws 1973, Chapter 714, investigate the actions
of any applicant or any person or persons holding or claiming to
hold a license or permit. However, before proceeding to a
hearing on the question of whether a license or permit shall be
refused, revoked or suspended for any cause enumerated in
subdivision 1, the office deleted text begin may deleted text end new text begin shall new text end grant a reasonable time to
the holder of or applicant for a license or permit to correct
the situation. If within such time the situation is corrected
and the school is in compliance with the provisions of this
chapter, no further action leading to refusal, revocation, or
suspension shall be taken.

Sec. 18.

Minnesota Statutes 2004, section 141.30, is
amended to read:

141.30 INSPECTION.

(a) The office or a delegate may inspect the instructional
books and records, classrooms, dormitories, tools, equipment and
classes of any school or applicant for license at any reasonable
time. The office may require the submission of a certified
public audit, or if there is no such audit available the office
or a delegate may inspect the financial books and records of the
school. In no event shall such financial information be used by
the office to regulate or set the tuition or fees charged by the
school.

(b) Data obtained from an inspection of the financial
records of a school new text begin or submitted to the office as part of a
license application or renewal new text end are nonpublic data as defined in
section 13.02, subdivision 9. Data obtained from inspections
may be disclosed to other members of the office, to law
enforcement officials, or in connection with a legal or
administrative proceeding commenced to enforce a requirement of
law.

Sec. 19.

Minnesota Statutes 2004, section 141.35, is
amended to read:

141.35 EXEMPTIONS.

Sections 141.21 to 141.35 shall not apply to the following:

(1) public postsecondary institutions;

(2) private postsecondary institutions registered under
sections 136A.61 to 136A.71 that are nonprofit, or that are for
profit and registered under sections 136A.61 to 136A.71 as of
December 31, 1998, or are approved to offer exclusively
baccalaureate or postbaccalaureate programs;

(3) schools of nursing accredited by the state Board of
Nursing or an equivalent public board of another state or
foreign country;

(4) private schools complying with the requirements of
section 120A.22, subdivision 4;

(5) courses taught to students in a valid apprenticeship
program taught by or required by a trade union;

(6) schools exclusively engaged in training physically or
mentally handicapped persons for the state of Minnesota;

(7) schools licensed by boards authorized under Minnesota
law to issue licenses;

(8) schools and educational programs, or training programs,
contracted for by persons, firms, corporations, government
agencies, or associations, for the training of their own
employees, for which no fee is charged the employee;

(9) schools engaged exclusively in the teaching of purely
avocational, recreational, or remedial subjects as determined by
the office;

(10) driver training schools and instructors as defined in
section 171.33, subdivisions 1 and 2;

(11) classes, courses, or programs conducted by a bona fide
trade, professional, or fraternal organization, solely for that
organization's membership;

(12) programs in the fine arts provided by organizations
exempt from taxation under section 290.05 and registered with
the attorney general under chapter 309. For the purposes of
this clause, "fine arts" means activities resulting in artistic
creation or artistic performance of works of the imagination
which are engaged in for the primary purpose of creative
expression rather than commercial sale or employment. In making
this determination the office may seek the advice and
recommendation of the Minnesota Board of the Arts;

(13) classes, courses, or programs intended to fulfill the
continuing education requirements for licensure or certification
in a profession, that have been approved by a legislatively or
judicially established board or agency responsible for
regulating the practice of the profession, and that are offered
deleted text begin primarily deleted text end new text begin exclusively new text end to an individual practicing the
profession;

(14) classes, courses, or programs intended to prepare
students to sit for undergraduate, graduate, postgraduate, or
occupational licensing and occupational entrance examinations;

(15) classes, courses, or programs providing 16 or fewer
clock hours of instruction that are not part of the curriculum
for an occupation or entry level employment;

(16) classes, courses, or programs providing instruction in
personal development, modeling, or acting;

(17) training or instructional programs, in which one
instructor teaches an individual student, that are not part of
the curriculum for an occupation or are not intended to prepare
a person for entry level employment; and

(18) schools with no physical presence in Minnesota new text begin , as
determined by the office, new text end engaged exclusively in offering
distance instruction that are located in and regulated by other
states or jurisdictions.

Sec. 20. new text begin POSTSECONDARY PRIVATE SCHOOL REGULATION.
new text end

new text begin The director of the Higher Education Services Office must
convene a group to study regulation of private postsecondary
schools subject to regulation under Minnesota Statutes, chapters
136A and 141. The purpose of the study is to determine the
appropriate level of regulation for the various types of private
postsecondary schools. The study group must, at a minimum,
include representatives from the Minnesota Private College
Council, the Minnesota Career College Association, and staff of
the higher education finance divisions and committees of the
house of representatives and the senate. The director must make
recommendations accompanied with legislation to implement those
recommendations to the chairs of the legislative committees and
divisions with primary jurisdiction over higher education
finance by January 15, 2006.
new text end