SF 2343

1st Unofficial Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to education; appropriating money for 
  1.3             education and related purposes to the higher education 
  1.4             services office, board of trustees of the Minnesota 
  1.5             state colleges and universities, board of regents of 
  1.6             the University of Minnesota, and the Mayo medical 
  1.7             foundation, with certain conditions; establishing an 
  1.8             account in the state enterprise fund; authorizing 
  1.9             expenditures from the medical education endowment 
  1.10            fund; modifying appropriations for certain 
  1.11            enrollments; adjusting assigned family responsibility; 
  1.12            modifying grant provisions; establishing a grant 
  1.13            program for certain students; providing for 
  1.14            acquisition of certain facilities by the board of 
  1.15            trustees; clarifying tuition refund policy for certain 
  1.16            students; authorizing transfers from the tobacco use 
  1.17            prevention and local public health endowment fund; 
  1.18            deleting obsolete references; making various 
  1.19            clarifying and technical changes; establishing a 
  1.20            commission on University of Minnesota excellence; 
  1.21            amending Minnesota Statutes 2000, sections 62J.694, 
  1.22            subdivision 2, by adding a subdivision; 135A.031, 
  1.23            subdivision 2; 136A.08, subdivision 2; 136A.101, 
  1.24            subdivisions 5a, 8; 136A.121, subdivisions 6, 9; 
  1.25            136A.125, subdivisions 2, 4; 136A.241; 136A.242; 
  1.26            136A.243, subdivisions 1, 2, 3, 4, 9; 136A.244, 
  1.27            subdivisions 1, 4; 136A.245, subdivision 2, by adding 
  1.28            subdivisions; 136F.13, subdivision 1; 136F.60, 
  1.29            subdivision 2; 137.10; 144.395, subdivisions 1, 2; 
  1.30            169.966; 299A.45, subdivisions 1, 4; 354.094, 
  1.31            subdivision 2; 354.69; 356.24, subdivision 1; 
  1.32            proposing coding for new law in Minnesota Statutes, 
  1.33            chapters 16A; 136A; 136F; repealing Minnesota Statutes 
  1.34            2000, sections 16A.87; 135A.06, subdivision 1; 
  1.35            136F.13, subdivision 2; Laws 1986, chapter 398, 
  1.36            article 1, section 18; Laws 1994, chapter 643, section 
  1.37            66. 
  1.38  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.39                             ARTICLE 1 
  1.40                           APPROPRIATIONS 
  1.41  Section 1.  [HIGHER EDUCATION APPROPRIATIONS.] 
  2.1      The sums in the columns marked "APPROPRIATIONS" are 
  2.2   appropriated from the general fund, or other named fund, to the 
  2.3   agencies and for the purposes specified in this article.  The 
  2.4   listing of an amount under the figure "2002" or "2003" in this 
  2.5   article indicates that the amount is appropriated to be 
  2.6   available for the fiscal year ending June 30, 2002, or June 30, 
  2.7   2003, respectively.  "The first year" is fiscal year 2002.  "The 
  2.8   second year" is fiscal year 2003.  "The biennium" is fiscal 
  2.9   years 2002 and 2003. 
  2.10                          SUMMARY BY FUND
  2.11                            2002         2003      TOTAL
  2.12  General            $1,382,809,000 $1,450,344,000 $2,833,153,000
  2.13  Health Care 
  2.14  Access                  2,537,000      2,537,000      5,074,000
  2.15                   SUMMARY BY AGENCY - ALL FUNDS
  2.16                            2002         2003      TOTAL
  2.17  Higher Education Services
  2.18  Office                159,611,000    168,590,000    328,201,000
  2.19  Board of Trustees of the
  2.20  Minnesota State Colleges
  2.21  and Universities      601,194,000    634,273,000  1,235,467,000
  2.22  Board of Regents of the
  2.23  University of
  2.24  Minnesota             622,904,000    648,381,000  1,271,285,000
  2.25  Mayo Medical
  2.26  Foundation              1,637,000      1,637,000      3,274,000
  2.27                                             APPROPRIATIONS 
  2.28                                         Available for the Year 
  2.29                                             Ending June 30 
  2.30                                            2002         2003 
  2.31  Sec. 2.  HIGHER EDUCATION
  2.32  SERVICES OFFICE
  2.33  Subdivision 1.  Total
  2.34  Appropriation                        159,611,000    168,590,000
  2.35  The amounts that may be spent from this 
  2.36  appropriation for each purpose are 
  2.37  specified in the following subdivisions.
  2.38  $2,000,000 of the unencumbered balances 
  2.39  in the state grant program under 
  2.40  Minnesota Statutes, section 136A.121 at 
  2.41  the end of fiscal year 2001, does not 
  2.42  cancel but is transferred to the board 
  2.43  of trustees of the Minnesota state 
  2.44  colleges and universities and the board 
  2.45  of regents of the University of 
  2.46  Minnesota.  $1,000,000 must be 
  2.47  transferred to each board to distribute 
  2.48  to campuses for one-time library or 
  3.1   equipment purchases in fiscal year 2001.
  3.2   Notwithstanding Minnesota Statutes, 
  3.3   section 136A.1211, savings in the state 
  3.4   grant program in fiscal years 2002 and 
  3.5   2003 resulting from any increases in 
  3.6   the maximum federal grant from $3,300 
  3.7   up to $3,750 must be used as provided 
  3.8   in this section. 
  3.9   Subd. 2.  State Grants
  3.10      126,288,000       135,218,000
  3.11  If the appropriation in this 
  3.12  subdivision for either year is 
  3.13  insufficient, the appropriation for the 
  3.14  other year is available for it.  
  3.15  The legislature intends that the higher 
  3.16  education services office make full 
  3.17  grant awards in each year of the 
  3.18  biennium.  
  3.19  For the biennium, the private 
  3.20  institution tuition maximum shall be 
  3.21  $8,764 in the first year and $8,983 in 
  3.22  the second year for four-year 
  3.23  institutions and $6,744 in the first 
  3.24  year and $6,913 in the second year for 
  3.25  two-year institutions. 
  3.26  This appropriation contains money to 
  3.27  set the living and miscellaneous 
  3.28  expense allowance at $5,405 in each 
  3.29  year. 
  3.30  Notwithstanding Minnesota Statutes, 
  3.31  section 136A.1211, savings in the state 
  3.32  grant program in fiscal years 2002 and 
  3.33  2003 resulting from any increase in the 
  3.34  maximum federal grant over $3,750 or 
  3.35  from any other source must be used to 
  3.36  provide additional decreases in the 
  3.37  family responsibility for independent 
  3.38  students and to increase funding for 
  3.39  child care grants under Minnesota 
  3.40  Statutes, section 136A.125.  The higher 
  3.41  education services office may allocate 
  3.42  savings between the two purposes. 
  3.43  Subd. 3.  Interstate Tuition
  3.44  Reciprocity
  3.45       5,250,000      5,250,000
  3.46  If the appropriation in this 
  3.47  subdivision for either year is 
  3.48  insufficient, the appropriation for the 
  3.49  other year is available to meet 
  3.50  reciprocity contract obligations. 
  3.51  The higher education services office 
  3.52  must negotiate the reciprocity 
  3.53  agreements for remission of nonresident 
  3.54  tuition under Minnesota Statutes, 
  3.55  section 136A.08.  The agreements 
  3.56  negotiated under this subdivision must 
  3.57  reduce and minimize the obligation of 
  3.58  the participating states to make 
  3.59  general fund transfers for the tuition 
  4.1   reciprocity program.  The chancellor of 
  4.2   the Minnesota state colleges and 
  4.3   universities and the president of the 
  4.4   University of Minnesota or their 
  4.5   designees must participate in any 
  4.6   negotiations on the tuition reciprocity 
  4.7   agreements.  The higher education 
  4.8   services office must present the 
  4.9   agreements negotiated under this 
  4.10  subdivision to the higher education 
  4.11  finance committees of the legislature 
  4.12  for approval. 
  4.13  Subd. 4.  State Work Study
  4.14      12,444,000     12,444,000
  4.15  Subd. 5.  Minitex Library Program
  4.16       5,318,000      5,318,000
  4.17  Subd. 6.  Learning Network of Minnesota
  4.18       5,179,000      5,179,000
  4.19  Notwithstanding Minnesota Statutes, 
  4.20  section 16B.465, regional organizations 
  4.21  receiving grants under the learning 
  4.22  network may consider proposals from 
  4.23  competing providers. 
  4.24  Subd. 7.  Income Contingent Loans (GRIP)
  4.25  The higher education services office 
  4.26  shall administer an income contingent 
  4.27  loan repayment program to assist 
  4.28  graduates of Minnesota schools in 
  4.29  medicine, dentistry, pharmacy, 
  4.30  chiropractic medicine, public health, 
  4.31  and veterinary medicine, and Minnesota 
  4.32  residents graduating from optometry and 
  4.33  osteopathy programs.  Applicant data 
  4.34  collected by the higher education 
  4.35  services office for this program may be 
  4.36  disclosed to a consumer credit 
  4.37  reporting agency under the same 
  4.38  conditions as apply to the supplemental 
  4.39  loan program under Minnesota Statutes, 
  4.40  section 136A.162.  No new applicants 
  4.41  may be accepted after June 30, 1995.  
  4.42  Subd. 8.  Edvest 
  4.43       1,520,000      1,520,000 
  4.44  Subd. 9.  Agency Administration
  4.45       3,612,000      3,661,000
  4.46  This appropriation includes base 
  4.47  funding to foster post-secondary 
  4.48  attendance by providing outreach 
  4.49  services to historically underserved 
  4.50  groups of Minnesota elementary and 
  4.51  secondary students.  The office may 
  4.52  retain the entire appropriation or 
  4.53  contract with other agencies or 
  4.54  nonprofit organizations for specific 
  4.55  services in this effort.  Prior to 
  4.56  expending this appropriation, the 
  4.57  office shall prepare a spending plan 
  5.1   and submit it to the department of 
  5.2   finance for review. 
  5.3   This appropriation includes an increase 
  5.4   in the dues for the Midwest Higher 
  5.5   Education Compact. 
  5.6   Any appropriations remaining after 
  5.7   final benefits are paid to youthworks 
  5.8   grantees may be used for college early 
  5.9   intervention programs.  
  5.10  Subd. 10.  Balances Forward 
  5.11  An unencumbered balance in the first 
  5.12  year under a subdivision in this 
  5.13  section does not cancel but is 
  5.14  available for the second year. 
  5.15  Subd. 11.  Transfers 
  5.16  The higher education services office 
  5.17  may transfer unencumbered balances from 
  5.18  the appropriations in this section to 
  5.19  the state grant appropriation, the 
  5.20  interstate tuition reciprocity 
  5.21  appropriation, the child care 
  5.22  appropriation, and the state work-study 
  5.23  appropriation. 
  5.24  Sec. 3.  BOARD OF TRUSTEES OF THE
  5.25  MINNESOTA STATE COLLEGES AND UNIVERSITIES
  5.26  Subdivision 1.  Total
  5.27  Appropriation                       601,194,000    634,273,000
  5.28  The amounts that may be spent from this 
  5.29  appropriation for each purpose are 
  5.30  specified in the following subdivisions.
  5.31  The legislature intends that state 
  5.32  appropriations be used to strengthen 
  5.33  and support education of students.  To 
  5.34  this end, all money appropriated in 
  5.35  this section, except that in direct 
  5.36  support of system office activities, 
  5.37  shall be allocated by the board 
  5.38  directly to the colleges and 
  5.39  universities. 
  5.40  The legislature further intends that 
  5.41  colleges and universities have broad 
  5.42  discretion in spending in order for 
  5.43  each to meet its distinctive needs.  
  5.44  This appropriation includes money for a 
  5.45  grant to Minnesota state university, 
  5.46  Mankato, for the Talented Youth 
  5.47  Mathematics Program and to expand the 
  5.48  program in the second year to an 
  5.49  additional region. 
  5.50  Subd. 2.  Estimated Expenditures 
  5.51  and Appropriations
  5.52  The legislature estimates that 
  5.53  instructional expenditures will be 
  5.54  $795,413,000 in the first year and 
  5.55  $840,309,000 in the second year.  The 
  5.56  legislature estimates that 
  5.57  noninstructional expenditures will be 
  6.1   $70,919,000 in the first year and 
  6.2   $74,067,000 in the second year.  
  6.3   Subd. 3. Campus Allocation
  6.4   For fiscal years 2002 and 2003, the 
  6.5   board of trustees must allocate 
  6.6   appropriations as provided in this 
  6.7   subdivision.  The board must, within 
  6.8   the limits of appropriations under this 
  6.9   section, distribute to each campus: 
  6.10  (1) an amount equal to their 2001 base 
  6.11  adjusted for enrollment; 
  6.12  (2) an amount for inflation from the 
  6.13  funds designated for inflation so that 
  6.14  each institution's adjusted base under 
  6.15  clause (1) is increased by the same 
  6.16  inflation percentage; and 
  6.17  (3) all unallocated funding to 
  6.18  institutions according to the 
  6.19  allocation framework, including at 
  6.20  least $12,000,000 in the first year. 
  6.21  It is the intent of the legislature 
  6.22  that the board, within the limits of 
  6.23  appropriations, will implement the 
  6.24  allocation framework beginning in 
  6.25  fiscal year 2004. 
  6.26  The board of trustees of the Minnesota 
  6.27  state colleges and universities must 
  6.28  ensure that any reallocation of state 
  6.29  appropriations and expenditures 
  6.30  implemented for fiscal years 2002 and 
  6.31  2003 is shared by the MnSCU central 
  6.32  office in at least the same proportion 
  6.33  as expenditures for the MnSCU central 
  6.34  office are to total expenditures. 
  6.35  In each year of the biennium, the board 
  6.36  of trustees must increase the 
  6.37  percentage of the total general fund 
  6.38  expenditures for direct instruction and 
  6.39  academic support, as reported in the 
  6.40  federal Integrated Post Secondary 
  6.41  Education Data System.  By February 15 
  6.42  of each year, the board must report to 
  6.43  the higher education finance committees 
  6.44  of the legislature on the percentage of 
  6.45  total general fund expenditures for 
  6.46  each institution and for the system 
  6.47  spent on direct instruction and on 
  6.48  academic support during the previous 
  6.49  fiscal year. 
  6.50  During the biennium, neither the board 
  6.51  nor campuses shall plan or develop 
  6.52  doctoral level programs or degrees 
  6.53  until after they have received the 
  6.54  recommendation of the house and senate 
  6.55  committees on education, finance, and 
  6.56  ways and means. 
  6.57  During the biennium, technical and 
  6.58  consolidated colleges shall make use of 
  6.59  instructional advisory committees 
  6.60  consisting of employers, students, and 
  6.61  instructors.  The instructional 
  7.1   advisory committee shall be consulted 
  7.2   when a technical program is proposed to 
  7.3   be created, modified, or eliminated.  
  7.4   If a decision is made to eliminate a 
  7.5   program, a college shall adequately 
  7.6   notify students and make plans to 
  7.7   assist students affected by the closure.
  7.8   The board may waive tuition for 
  7.9   eligible Southwest Asia veterans, as 
  7.10  provided in Minnesota Statutes, section 
  7.11  136F.28. 
  7.12  Subd. 4.  Base Appropriations  
  7.13  For fiscal year 2003, there is a 
  7.14  one-time reduction of $13,500,000 in 
  7.15  the base appropriation for the 
  7.16  Minnesota state colleges and 
  7.17  universities. 
  7.18  Subd. 5.  Reserves 
  7.19  The Minnesota state colleges and 
  7.20  universities must not maintain a 
  7.21  central reserve in excess of $1,000,000 
  7.22  on an annual basis.  The board must 
  7.23  distribute, in fiscal year 2002, any 
  7.24  amount in the central reserve that 
  7.25  exceeds the annual limit at the close 
  7.26  of fiscal year 2001.  At least 
  7.27  $4,000,000 of excess reserves must be 
  7.28  distributed to campuses. Excess 
  7.29  reserves over $4,000,000 must be 
  7.30  distributed to the campuses as part of 
  7.31  a leveraged equipment purchase 
  7.32  program.  State funds expended to 
  7.33  purchase equipment under this program 
  7.34  must be matched dollar for dollar with 
  7.35  nonstate funds. 
  7.36  By December 1, 2002, the board of 
  7.37  trustees must adopt policies to clarify 
  7.38  the purposes of the central reserve and 
  7.39  under what general conditions it will 
  7.40  be used. 
  7.41  Subd. 6.  Central Office Services 
  7.42  During fiscal years 2002 and 2003, at 
  7.43  least $2,650,000 must be reallocated 
  7.44  from central office expenditures to the 
  7.45  campuses. 
  7.46  The board of trustees of the Minnesota 
  7.47  state colleges and universities, in 
  7.48  cooperation with the council of 
  7.49  presidents, must develop a plan to 
  7.50  increase autonomy for campuses and 
  7.51  accountability at the system level.  
  7.52  The plan must include the provision of 
  7.53  central office services in ways that 
  7.54  better reflect campus needs.  The plan 
  7.55  must consider the following: 
  7.56  (1) core central office services funded 
  7.57  through a nominal fee paid by all 
  7.58  campuses; 
  7.59  (2) an option for campuses to contract 
  7.60  for services from the central office; 
  8.1   (3) the streamlined delivery of 
  8.2   services to eliminate duplication at 
  8.3   the campus and central office; 
  8.4   (4) the impact of alternative service 
  8.5   delivery methods on various types of 
  8.6   campuses; and 
  8.7   (5) making central office services more 
  8.8   market-sensitive. 
  8.9   The board must present a plan to 
  8.10  restructure central office services to 
  8.11  the chairs of the higher education 
  8.12  finance committees of the legislature 
  8.13  by February 15, 2002. 
  8.14  Subd. 7.  Riverland Community College; 
  8.15  Austin. 
  8.16  The board, for Riverland community 
  8.17  college, may enter into a lease 
  8.18  agreement, for a term not to exceed 30 
  8.19  years, with the city of Austin for up 
  8.20  to five acres of land on the Austin 
  8.21  campus for construction of a joint-use 
  8.22  recreational facility by the city.  
  8.23  Siting and design of the facility must 
  8.24  be consistent with the college's master 
  8.25  plan and Minnesota state college and 
  8.26  universities building standards.  
  8.27  Riverland community college may 
  8.28  negotiate for use of the facility for 
  8.29  college purposes.  Land leased by the 
  8.30  board for this purpose must revert to 
  8.31  the state if it is no longer used to 
  8.32  provide a facility for the benefit of 
  8.33  the college and its students. 
  8.34  Subd. 8.  Administrative Offices
  8.35  Offices for campus administrators 
  8.36  should be located on a college campus 
  8.37  if office space is available.  The 
  8.38  board of trustees may waive the 
  8.39  requirements of this subdivision if the 
  8.40  chancellor provides justification that 
  8.41  improves access by the student body for 
  8.42  granting an exception. 
  8.43  Sec. 4.  BOARD OF REGENTS OF THE 
  8.44  UNIVERSITY OF MINNESOTA 
  8.45  Subdivision 1.  Total
  8.46  Appropriation                        622,904,000    648,381,000
  8.47  The amounts that may be spent from this 
  8.48  appropriation for each purpose are 
  8.49  specified in the following subdivisions.
  8.50  Subd. 2.  Estimated Expenditures 
  8.51  and Appropriations 
  8.52  The legislature estimates that 
  8.53  instructional expenditures will be 
  8.54  $479,373,000 in the first year and 
  8.55  $505,710,000 in the second year.  The 
  8.56  legislature estimates that 
  8.57  noninstructional expenditures will be 
  8.58  $227,381,000 in the first year and 
  8.59  $235,180,000 in the second year. 
  9.1   Subd. 3.  Operations and
  9.2   Maintenance                          546,973,000    572,320,000
  9.3   (a) Reallocation 
  9.4   The board of regents of the University 
  9.5   of Minnesota is requested to ensure 
  9.6   that any reallocation of state 
  9.7   appropriations and expenditures 
  9.8   implemented for fiscal years 2002 and 
  9.9   2003 is shared by university 
  9.10  administration in at least the 
  9.11  proportion as expenditures for 
  9.12  administration are to total 
  9.13  expenditures. 
  9.14  Subd. 4.  Medical Education 
  9.15  Endowment Appropriation 
  9.16  The amounts of the medical education 
  9.17  endowment fund under Minnesota 
  9.18  Statutes, section 62J.694, are 
  9.19  appropriated according to section 
  9.20  62J.694, subdivision 2. 
  9.21  Subd. 5.  Health Care
  9.22  Access Fund                            2,537,000      2,537,000
  9.23  $2,537,000 each year is appropriated 
  9.24  from the health care access fund for 
  9.25  primary care education initiatives. 
  9.26  Subd. 6.  Special
  9.27  Appropriation                         73,394,000     73,524,000
  9.28  The amounts expended for each program 
  9.29  in the four categories of special 
  9.30  appropriations shall be separately 
  9.31  identified in the 2003 biennial budget 
  9.32  document. 
  9.33  (a) Agriculture and Extension Service 
  9.34      58,338,000     58,338,000
  9.35  This appropriation is for the 
  9.36  Agricultural Experiment Station, 
  9.37  Minnesota Extension Service. 
  9.38  Any salary increases granted by the 
  9.39  University to personnel paid from the 
  9.40  Minnesota Extension appropriation must 
  9.41  not result in a reduction of the county 
  9.42  responsibility for the salary payments. 
  9.43  During the biennium, the University 
  9.44  shall maintain an advisory council 
  9.45  system for each experiment station.  
  9.46  The advisory councils must be broadly 
  9.47  representative of the range of size and 
  9.48  income distribution of farms and 
  9.49  agribusinesses and must not 
  9.50  disproportionately represent those from 
  9.51  the upper half of the size and income 
  9.52  distributions. 
  9.53  The university must continue to provide 
  9.54  support for sustainable and organic 
  9.55  agriculture initiatives including, but 
  9.56  not limited to, the alternative swine 
  9.57  systems program. 
 10.1   The board of regents of the University 
 10.2   of Minnesota is requested to review and 
 10.3   analyze the programmatic mission, 
 10.4   scope, and cost-effectiveness of the 
 10.5   Minnesota Extension Service with the 
 10.6   goal of assuring that the Minnesota 
 10.7   Extension Service offers programs and 
 10.8   services effectively and efficiently 
 10.9   and within the scope of its current 
 10.10  defined mission.  The board is 
 10.11  requested to report to the governor and 
 10.12  the chairs of the higher education 
 10.13  finance committees of the legislature 
 10.14  with recommendations for priorities in 
 10.15  the extension service. 
 10.16  (b) Health Sciences 
 10.17       5,881,000      5,911,000
 10.18  This appropriation is for the rural 
 10.19  physicians associates program, the 
 10.20  Veterinary Diagnostic Laboratory, 
 10.21  health sciences research, dental care, 
 10.22  and the Biomedical Engineering Center. 
 10.23  (c) Institute of Technology  
 10.24       1,655,000      1,665,000
 10.25  This appropriation is for the 
 10.26  Geological Survey and the Talented 
 10.27  Youth Mathematics Program. 
 10.28  (d) System Specials 
 10.29       7,520,000      7,610,000
 10.30  This appropriation is for general 
 10.31  research, student loans matching money, 
 10.32  industrial relations education, Natural 
 10.33  Resources Research Institute, Center 
 10.34  for Urban and Regional Affairs, Bell 
 10.35  Museum of Natural History, and the 
 10.36  Humphrey exhibit. 
 10.37  Sec. 5.  MAYO MEDICAL FOUNDATION 
 10.38  Subdivision 1.  Total
 10.39  Appropriation                           1,637,000       1,637,000
 10.40  The amounts that may be spent from this 
 10.41  appropriation for each purpose are 
 10.42  specified in the following subdivisions.
 10.43  Subd. 2.  Medical School
 10.44         605,000        605,000
 10.45  The state of Minnesota must pay a 
 10.46  capitation of $14,405 each year for 
 10.47  each student who is a resident of 
 10.48  Minnesota.  The appropriation may be 
 10.49  transferred between years of the 
 10.50  biennium to accommodate enrollment 
 10.51  fluctuations. 
 10.52  The legislature intends that during the 
 10.53  biennium the Mayo foundation use the 
 10.54  capitation money to increase the number 
 10.55  of doctors practicing in rural areas in 
 11.1   need of doctors.  
 11.2   Subd. 3.  Family Practice and
 11.3   Graduate Residency Program
 11.4          625,000        625,000
 11.5   The state of Minnesota must pay a 
 11.6   capitation of $22,313 for 26 residents 
 11.7   each year and $44,627 for one resident 
 11.8   each year. 
 11.9   Subd. 4.  St. Cloud Hospital-Mayo 
 11.10  Family Practice Residency Program 
 11.11         407,000        407,000
 11.12  This appropriation is to the Mayo 
 11.13  foundation to support 12 resident 
 11.14  physicians in the first year and 12 
 11.15  resident physicians in the second year 
 11.16  in the St. Cloud Hospital-Mayo Family 
 11.17  Practice Residency Program.  The 
 11.18  program shall prepare doctors to 
 11.19  practice primary care medicine in the 
 11.20  rural areas of the state.  It is 
 11.21  intended that this program will improve 
 11.22  health care in rural communities, 
 11.23  provide affordable access to 
 11.24  appropriate medical care, and manage 
 11.25  the treatment of patients in a more 
 11.26  cost-effective manner. 
 11.27   Sec. 6.  POST-SECONDARY SYSTEMS 
 11.28  Subdivision 1.  Post-Secondary Planning Report
 11.29  By February 15 of each year the board 
 11.30  of trustees of the Minnesota state 
 11.31  colleges and universities must and the 
 11.32  board of regents of the University of 
 11.33  Minnesota is requested to report to the 
 11.34  legislature on progress under the 
 11.35  master academic plan for the 
 11.36  metropolitan area.  The report must 
 11.37  include a discussion of coordination 
 11.38  and duplication of program offerings, 
 11.39  developmental and remedial education, 
 11.40  credit transfers within and between the 
 11.41  post-secondary systems, and planning 
 11.42  and delivery of coordinated programs.  
 11.43  In order to better achieve the goal of 
 11.44  a more integrated, effective, and 
 11.45  seamless post-secondary education 
 11.46  system in Minnesota, the report must 
 11.47  also identify statewide efforts at 
 11.48  integration and cooperation between the 
 11.49  post-secondary systems. 
 11.50  Subd. 2.  Accountability 
 11.51  The board of trustees of the Minnesota 
 11.52  state colleges and universities must 
 11.53  and the board of regents of the 
 11.54  University of Minnesota is requested to 
 11.55  report to the chairs of the higher 
 11.56  education finance committees by 
 11.57  December 15, 2002, on progress and 
 11.58  performance of the post-secondary 
 11.59  systems.  For each system the report 
 11.60  must include, but not be limited to, 
 12.1   reports of progress and performance in 
 12.2   the following areas:  (1) academic and 
 12.3   program quality; (2) student experience 
 12.4   and success; (3) cost-effectiveness and 
 12.5   institutional efficiency; (4) 
 12.6   contributions to workforce and economic 
 12.7   development; (5) instructional 
 12.8   efficiency and research productivity; 
 12.9   (6) diversity in enrollment; and (7) 
 12.10  strategic directions and future trends. 
 12.11  The systems must work to develop 
 12.12  reliable measures to compare programs 
 12.13  and institutions.  The report must 
 12.14  describe the measures used and identify 
 12.15  any limitations or complexity in the 
 12.16  comparisons. 
 12.17                             ARTICLE 2 
 12.18                         RELATED PROVISIONS 
 12.19     Section 1.  [16A.532] [MINNESOTA STATE COLLEGES AND 
 12.20  UNIVERSITIES RESERVES ACCOUNT.] 
 12.21     There is created in the state enterprise fund a Minnesota 
 12.22  state colleges and universities reserves account.  The 
 12.23  commissioner must report on activity in this account 
 12.24  semiannually as part of the fund balance statements. 
 12.25     Sec. 2.  Minnesota Statutes 2000, section 62J.694, 
 12.26  subdivision 2, is amended to read: 
 12.27     Subd. 2.  [EXPENDITURES.] (a) Up to five percent of the 
 12.28  fair market value of the fund is appropriated for medical 
 12.29  education activities in the state of Minnesota.  The 
 12.30  appropriations are to be transferred quarterly for the purposes 
 12.31  identified in the following paragraphs.  
 12.32     (b) For fiscal year 2000, 70 percent of the appropriation 
 12.33  in paragraph (a) is for transfer to the board of regents for the 
 12.34  instructional costs of health professional programs at the 
 12.35  academic health center and affiliated teaching institutions, and 
 12.36  30 percent of the appropriation is for transfer to the 
 12.37  commissioner of health to be distributed for medical education 
 12.38  under section 62J.692.  
 12.39     (c) For fiscal year 2001, 49 percent of the appropriation 
 12.40  in paragraph (a) is for transfer to the board of regents for the 
 12.41  instructional costs of health professional programs at the 
 12.42  academic health center and affiliated teaching institutions, and 
 12.43  51 percent is for transfer to the commissioner of health to be 
 13.1   distributed for medical education under section 62J.692. 
 13.2      (d) For fiscal year 2002, and each year thereafter, 42 
 13.3   appropriations in paragraph (a) are distributed as follows:  
 13.4      (1) 55 percent of the appropriation in paragraph (a) may be 
 13.5   appropriated by another law is for transfer to the board of 
 13.6   regents of the University of Minnesota for the instructional 
 13.7   costs of health professional programs at publicly funded the 
 13.8   academic health centers center and affiliated teaching 
 13.9   institutions,; 
 13.10     (2) nine percent is for transfer to the board of regents of 
 13.11  the University of Minnesota for interdisciplinary academic 
 13.12  initiatives within the academic health center and health 
 13.13  professional education; and 58 
 13.14     (3) 36 percent is for transfer to the commissioner of 
 13.15  health to be distributed for medical education under section 
 13.16  62J.692. 
 13.17     (e) For fiscal year 2003, and each year thereafter, 
 13.18  appropriations in paragraph (a) are distributed as follows: 
 13.19     (1) 51 percent is for transfer to the board of regents of 
 13.20  the University of Minnesota for the instructional costs of 
 13.21  health professional programs at the academic health center and 
 13.22  affiliated teaching institutions; 
 13.23     (2) 14 percent is for transfer to the board of regents of 
 13.24  the University of Minnesota for interdisciplinary initiatives 
 13.25  within the academic health center and health professional 
 13.26  education; and 
 13.27     (3) 35 percent is for transfer to the commissioner of 
 13.28  health to be distributed for medical education under section 
 13.29  62J.692. 
 13.30     (f) A maximum of $150,000 of each annual appropriation to 
 13.31  the commissioner of health in paragraph (d) may be used by the 
 13.32  commissioner for administrative expenses associated with 
 13.33  implementing section 62J.692.  
 13.34     [EFFECTIVE DATE.] This section is effective the day 
 13.35  following final enactment.  
 13.36     Sec. 3.  Minnesota Statutes 2000, section 62J.694, is 
 14.1   amended by adding a subdivision to read: 
 14.2      Subd. 2a.  [OUTCOMES.] (a) The academic health center of 
 14.3   the University of Minnesota must work in partnership with the 
 14.4   commissioner of health and other stakeholders to: 
 14.5      (1) develop a plan to meet Minnesota's evolving health 
 14.6   workforce needs through the redesign of training processes; and 
 14.7      (2) establish outcomes, annual benchmarks, and reporting 
 14.8   requirements to implement the plan.  
 14.9      (b) The plan under paragraph (a) must: 
 14.10     (1) recognize the need for significant changes to meet 
 14.11  future health care needs in addition to increasing the capacity 
 14.12  to train health professionals; 
 14.13     (2) include recruitment strategies for all schools to 
 14.14  increase enrollment among racial and ethnic minority populations 
 14.15  to increase the diversity of the state's health professional 
 14.16  workforce; 
 14.17     (3) address improvements in academic and clinical 
 14.18  programming to improve the instruction of students in health 
 14.19  fields in the skills necessary to care for and to promote the 
 14.20  health of individuals from diverse ethnic, cultural, and racial 
 14.21  backgrounds; 
 14.22     (4) include an increase in the number of community health 
 14.23  training and practice sites; and 
 14.24     (5) provide for the joint establishment, by the academic 
 14.25  health center and the commissioner, of an integrated health 
 14.26  status database and a health occupations database to guide 
 14.27  future policy development and resource allocations. 
 14.28     [EFFECTIVE DATE.] This section is effective the day 
 14.29  following final enactment.  
 14.30     Sec. 4.  Minnesota Statutes 2000, section 135A.031, 
 14.31  subdivision 2, is amended to read: 
 14.32     Subd. 2.  [APPROPRIATIONS FOR CERTAIN ENROLLMENTS.] The 
 14.33  state share of the estimated expenditures for instruction shall 
 14.34  vary for some categories of students, as designated in this 
 14.35  subdivision. 
 14.36     (a) The state must provide at least 67 percent of the 
 15.1   estimated expenditures for: 
 15.2      (1) students who resided in the state for at least one 
 15.3   calendar year prior to applying for admission or dependent 
 15.4   students whose parent or legal guardian resides in Minnesota at 
 15.5   the time the student applies; 
 15.6      (2) Minnesota residents who can demonstrate that they were 
 15.7   temporarily absent from the state without establishing residency 
 15.8   elsewhere; 
 15.9      (3) residents of other states or provinces who are 
 15.10  attending a Minnesota institution under a tuition reciprocity 
 15.11  agreement; and 
 15.12     (4) students who have been in Minnesota as migrant 
 15.13  farmworkers, as defined in the Code of Federal Regulations, 
 15.14  title 20, section 633.104, over a period of at least two years 
 15.15  immediately before admission or readmission to a Minnesota 
 15.16  public post-secondary institution, or students who are 
 15.17  dependents of such migrant farmworkers. 
 15.18     (b) The definition of full year equivalent for purposes of 
 15.19  the formula calculations in this chapter is twice the normal 
 15.20  value for the following enrollments: 
 15.21     (1) students who are concurrently enrolled in a public 
 15.22  secondary school and for whom the institution is receiving any 
 15.23  compensation under the Post-Secondary Enrollment Options Act; 
 15.24  and 
 15.25     (2) students enrolled under the student exchange program of 
 15.26  the Midwest Compact. 
 15.27     (c) The state may not provide any of the estimated 
 15.28  expenditures for undergraduate students (1) who do not meet the 
 15.29  residency criteria under paragraph (a), or (2) who have 
 15.30  completed, without receiving a baccalaureate degree, 48 or more 
 15.31  quarter credits or the equivalent, applicable toward the degree, 
 15.32  beyond the number required for a baccalaureate in their major. 
 15.33  Credits for courses in which a student received a grade of "F" 
 15.34  or "W" shall be counted toward this maximum, as if the credits 
 15.35  had been earned. 
 15.36     [EFFECTIVE DATE.] This section is effective the day 
 16.1   following final enactment.  
 16.2      Sec. 5.  Minnesota Statutes 2000, section 136A.08, 
 16.3   subdivision 2, is amended to read: 
 16.4      Subd. 2.  [AUTHORIZATION.] The higher education services 
 16.5   office, in consultation with the commissioner of finance 
 16.6   and with the participation of each affected public 
 16.7   post-secondary board, may enter into agreements, on subjects 
 16.8   that include remission of nonresident tuition for designated 
 16.9   categories of students at public post-secondary institutions, 
 16.10  with appropriate state or provincial agencies and public 
 16.11  post-secondary institutions in other states or provinces.  The 
 16.12  agreements shall must be for the purpose of purposes of (1) 
 16.13  supporting the state's role in developing a strong, productive, 
 16.14  and educated workforce, and (2) the mutual improvement of 
 16.15  educational advantages for residents of this state and other 
 16.16  states or provinces with whom agreements are made. 
 16.17     Sec. 6.  Minnesota Statutes 2000, section 136A.101, 
 16.18  subdivision 5a, is amended to read: 
 16.19     Subd. 5a.  [ASSIGNED FAMILY RESPONSIBILITY.] "Assigned 
 16.20  family responsibility" means the amount of a family contribution 
 16.21  to a student's cost of attendance, as determined by a federal 
 16.22  need analysis, except that, beginning for the 1998-1999 academic 
 16.23  year, up to $25,000 in savings and other assets shall be 
 16.24  subtracted from the federal calculation of net worth before 
 16.25  determining the contribution.  For dependent students, the 
 16.26  assigned family responsibility is the parental contribution.  
 16.27  For independent students with dependents other than a spouse, 
 16.28  the assigned family responsibility is the student contribution. 
 16.29  For independent students without dependents other than a spouse, 
 16.30  the assigned family responsibility is 80 percent of the student 
 16.31  contribution.  Beginning in fiscal year 2002, the assigned 
 16.32  family responsibility for all independent students is reduced an 
 16.33  additional 20 percent.  
 16.34     [EFFECTIVE DATE.] This section is effective the day 
 16.35  following final enactment.  
 16.36     Sec. 7.  Minnesota Statutes 2000, section 136A.101, 
 17.1   subdivision 8, is amended to read: 
 17.2      Subd. 8.  [RESIDENT STUDENT.] "Resident student" means a 
 17.3   student who meets one of the following conditions:  
 17.4      (1) an independent a student who has resided in Minnesota 
 17.5   for purposes other than post-secondary education for at least 12 
 17.6   months without being enrolled at a post-secondary educational 
 17.7   institution for more than five credits in any term; 
 17.8      (2) a dependent student whose parent or legal guardian 
 17.9   resides in Minnesota at the time the student applies; 
 17.10     (3) a student who graduated from a Minnesota high school, 
 17.11  if the student was a resident of Minnesota during the student's 
 17.12  period of attendance at the Minnesota high school; or 
 17.13     (4) a student who, after residing in the state for a 
 17.14  minimum of one year, earned a high school equivalency 
 17.15  certificate in Minnesota. 
 17.16     Sec. 8.  Minnesota Statutes 2000, section 136A.121, 
 17.17  subdivision 6, is amended to read: 
 17.18     Subd. 6.  [COST OF ATTENDANCE.] (a) The recognized cost of 
 17.19  attendance consists of allowances specified in law for room and 
 17.20  board living and miscellaneous expenses, and 
 17.21     (1) for public institutions, the actual tuition and fees 
 17.22  charged by the institution; or 
 17.23     (2) for private institutions, an allowance for tuition and 
 17.24  fees equal to the lesser of the actual tuition and fees charged 
 17.25  by the institution, or the private institution tuition and fee 
 17.26  maximums established in law. 
 17.27     (b) For the purpose of paragraph (a), clause (2), the 
 17.28  private institution tuition and fee maximum for two- and 
 17.29  four-year, private, residential, liberal arts, degree-granting 
 17.30  colleges and universities must be the same. 
 17.31     (c) For a student attending registering for less than full 
 17.32  time, the office shall prorate the recognized cost of attendance 
 17.33  living and miscellaneous expense allowance to the actual number 
 17.34  of credits for which the student is enrolled. 
 17.35     The recognized cost of attendance for a student who is 
 17.36  confined to a Minnesota correctional institution shall consist 
 18.1   of the tuition and fee component in paragraph (a), clause (1) or 
 18.2   (2), with no allowance for living and miscellaneous expenses. 
 18.3      Sec. 9.  Minnesota Statutes 2000, section 136A.121, 
 18.4   subdivision 9, is amended to read: 
 18.5      Subd. 9.  [AWARDS.] An undergraduate student who meets the 
 18.6   office's requirements is eligible to apply for and receive a 
 18.7   grant in any year of undergraduate study unless the student has 
 18.8   obtained a baccalaureate degree or previously has been enrolled 
 18.9   full time or the equivalent for eight ten semesters or 12 
 18.10  quarters the equivalent, excluding courses taken from a 
 18.11  Minnesota school or post-secondary institution which is not 
 18.12  participating in the state grant program and from which a 
 18.13  student transferred no credit. 
 18.14     Sec. 10.  [136A.124] [ADVANCED PLACEMENT AND INTERNATIONAL 
 18.15  BACCALAUREATE GRANT.] 
 18.16     Subdivision 1.  [ESTABLISHMENT.] Appropriations for this 
 18.17  section must be used by the office for grants to encourage 
 18.18  Minnesota students participating in advanced placement and 
 18.19  international baccalaureate programs to attend a college or 
 18.20  university in Minnesota.  For enrollment beginning in the fall 
 18.21  of 2002, the grants must be awarded to students who apply for 
 18.22  the grant, are eligible under subdivision 2, and who enroll in 
 18.23  an eligible institution as defined in subdivision 2 during the 
 18.24  year following high school graduation.  An institution, on 
 18.25  behalf of the student, must request payment of the grant from 
 18.26  the higher education services office.  The grant may be used 
 18.27  only for the costs of the actual tuition, required fees, and 
 18.28  books in nonsectarian courses or programs.  A grant under this 
 18.29  section may be made for a maximum of two years.  
 18.30     Subd. 2.  [ELIGIBILITY.] A grant must be awarded to a 
 18.31  student scoring an average of three or higher on five or more 
 18.32  advanced placement examinations on full-year courses or an 
 18.33  average of four or higher on five or more international 
 18.34  baccalaureate examinations on full-year courses.  The annual 
 18.35  amount of each grant must be based on the student's scores on 
 18.36  the examinations and the funds available under this section. 
 19.1      A grant under this subdivision must not affect a 
 19.2   recipient's eligibility for a state grant under section 136A.121.
 19.3      Subd. 3.  [ALLOCATION OF FUNDS.] The office, in 
 19.4   consultation with representatives of the advanced placement and 
 19.5   international baccalaureate programs selected by the advanced 
 19.6   placement advisory council, IBMN, and the department of 
 19.7   children, families, and learning must allocate the available 
 19.8   funds fairly between the advanced placement and international 
 19.9   baccalaureate programs. 
 19.10     Subd. 4.  [ELIGIBLE INSTITUTION.] An "eligible institution" 
 19.11  under this section is a public or private four-year 
 19.12  degree-granting college or university or a two-year public 
 19.13  college in Minnesota that has a credit and placement policy for 
 19.14  either advanced placement or international baccalaureate 
 19.15  scholarship recipients, or both.  Each eligible institution must 
 19.16  annually certify its policies to the office.  The office must 
 19.17  provide each Minnesota secondary school with a copy of the 
 19.18  post-secondary advanced placement and international 
 19.19  baccalaureate policies of eligible institutions. 
 19.20     Sec. 11.  Minnesota Statutes 2000, section 136A.125, 
 19.21  subdivision 2, is amended to read: 
 19.22     Subd. 2.  [ELIGIBLE STUDENTS.] An applicant is eligible for 
 19.23  a child care grant if the applicant: 
 19.24     (1) is a resident of the state of Minnesota; 
 19.25     (2) has a child 12 years of age or younger, or 14 years of 
 19.26  age or younger who is handicapped as defined in section 125A.02, 
 19.27  and who is receiving or will receive care on a regular basis 
 19.28  from a licensed or legal, nonlicensed caregiver; 
 19.29     (3) is income eligible as determined by the office's 
 19.30  policies and rules, but is not a recipient of assistance from 
 19.31  the Minnesota family investment program; 
 19.32     (4) has not earned a baccalaureate degree and has been 
 19.33  enrolled full time less than eight ten semesters, 12 quarters, 
 19.34  or the equivalent; 
 19.35     (5) is pursuing a nonsectarian program or course of study 
 19.36  that applies to an undergraduate degree, diploma, or 
 20.1   certificate; 
 20.2      (6) is enrolled at least half time in an eligible 
 20.3   institution; and 
 20.4      (7) is in good academic standing and making satisfactory 
 20.5   academic progress. 
 20.6      Sec. 12.  Minnesota Statutes 2000, section 136A.125, 
 20.7   subdivision 4, is amended to read: 
 20.8      Subd. 4.  [AMOUNT AND LENGTH OF GRANTS.] The amount of a 
 20.9   child care grant must be based on: 
 20.10     (1) the income of the applicant and the applicant's spouse, 
 20.11  if any; 
 20.12     (2) the number in the applicant's family, as defined by the 
 20.13  office; and 
 20.14     (3) the number of eligible children in the applicant's 
 20.15  family.  
 20.16     The maximum award to the applicant shall be $2,000 $2,300 
 20.17  for each eligible child per academic year, except that the 
 20.18  campus financial aid officer may apply to the office for 
 20.19  approval to increase grants by up to ten percent to compensate 
 20.20  for higher market charges for infant care in a community.  The 
 20.21  office shall develop policies to determine community market 
 20.22  costs and review institutional requests for compensatory grant 
 20.23  increases to ensure need and equal treatment.  The office shall 
 20.24  prepare a chart to show the amount of a grant that will be 
 20.25  awarded per child based on the factors in this subdivision.  The 
 20.26  chart shall include a range of income and family size. 
 20.27     Sec. 13.  Minnesota Statutes 2000, section 136F.13, 
 20.28  subdivision 1, is amended to read: 
 20.29     Subdivision 1.  [OPERATION.] The state university board 
 20.30  shall operate an educational program for a state university 
 20.31  center as organized in the seven county metropolitan area.  The 
 20.32  center may operate in facilities acquired through the 
 20.33  commissioner of administration by gift or lease.  The faculty 
 20.34  and staff of the state university system shall provide 
 20.35  assistance in developing curricular and educational programs for 
 20.36  the university. 
 21.1      [EFFECTIVE DATE.] This section is effective the day 
 21.2   following final enactment.  
 21.3      Sec. 14.  Minnesota Statutes 2000, section 136F.60, 
 21.4   subdivision 2, is amended to read: 
 21.5      Subd. 2.  [METHODS OF ACQUISITION AND REAL PROPERTY 
 21.6   TRANSACTIONS.] (a) If money has been appropriated to the board 
 21.7   to acquire lands or sites for public buildings or real estate, 
 21.8   the acquisition may be by gift, purchase, or condemnation 
 21.9   proceedings.  Condemnation proceedings must be under chapter 117.
 21.10     (b) The board may accept gifts to improve or acquire 
 21.11  facilities as provided in this paragraph: 
 21.12     (1) for remodeling existing facilities if the remodeling 
 21.13  does not materially increase the square footage of the facility; 
 21.14     (2) for the acquisition, construction, or remodeling costs 
 21.15  of facilities for which state capital appropriations have been 
 21.16  made and whose use will not be substantially changed; or 
 21.17     (3) for capital projects not authorized by the legislature 
 21.18  if the board first certifies that project revenues, other gifts 
 21.19  or grants, or other sources of capital funds are available for 
 21.20  project costs and that no tuition revenues or state or federal 
 21.21  appropriations are used for the capital or operating costs, 
 21.22  including all program costs, salaries, and benefits, of the 
 21.23  facility. 
 21.24     (c) The board may convey or lease real property under the 
 21.25  board's control, with or without monetary consideration, to 
 21.26  provide a facility for the primary benefit of a state college or 
 21.27  university or its students if the board certifies that project 
 21.28  revenues, other gifts or grants, or other sources of funds are 
 21.29  available for project costs and that no tuition revenues or 
 21.30  state or federal appropriations are used for the capital or 
 21.31  operating costs, including all program costs, salaries, and 
 21.32  benefits, of the facility.  Agreements under this paragraph to 
 21.33  convey, or to lease for a term not to exceed 30 years, subject 
 21.34  to section 16A.695, may be made following requests for proposal 
 21.35  or by direct negotiation.  Conveyances by the board under this 
 21.36  paragraph must be by quitclaim deed in a form approved by the 
 22.1   attorney general.  Land conveyed by the board must revert to the 
 22.2   state if it is no longer used for the primary benefit of a state 
 22.3   college or university or its students.  
 22.4      (d) For the purposes of this subdivision, "facility" 
 22.5   includes, but is not limited to, student unions, recreational 
 22.6   centers, and other facilities for student housing, athletics, 
 22.7   parking, academic instruction, and administration. 
 22.8      (e) The board must report in a timely manner to the chairs 
 22.9   of the house and senate committees with jurisdiction over higher 
 22.10  education finance, capital investment, and ways and means any 
 22.11  capital project under paragraphs (b) or (c) with a cost of 
 22.12  $3,000,000 or more.  
 22.13     Sec. 15.  [136F.701] [REFUND OF TUITION.] 
 22.14     (a) Any student who is a resident of the state, has 
 22.15  enrolled in the state colleges and universities and paid tuition 
 22.16  for the course, and who, prior to the termination of the school 
 22.17  year for which the tuition was paid, enlisted or has been 
 22.18  inducted into the military service of the United States, either 
 22.19  voluntarily or pursuant to the present selective service law, is 
 22.20  entitled to the refund of all tuition paid for which credit 
 22.21  cannot properly be given.  
 22.22     (b) The administrative officers of the state colleges and 
 22.23  universities shall refund to the students any tuition so paid.  
 22.24  Any student making application for refund of any paid tuition 
 22.25  shall furnish to the administrative officers of the state 
 22.26  colleges and universities a certificate from the proper officers 
 22.27  reciting the fact of the enlistment or the induction of the 
 22.28  student into the military service of the United States. 
 22.29     [EFFECTIVE DATE.] This section is effective the day 
 22.30  following final enactment.  
 22.31     Sec. 16.  Minnesota Statutes 2000, section 137.10, is 
 22.32  amended to read: 
 22.33     137.10 [REFUND OF TUITION TO STUDENTS IN CERTAIN CASES.] 
 22.34     Any student who, being a resident of the state, has 
 22.35  enrolled to pursue any course in the University of Minnesota or 
 22.36  any state university and paid tuition for the course, and who, 
 23.1   prior to the termination of the school year for which the 
 23.2   tuition was paid, enlisted or has been inducted into the 
 23.3   military services of the United States, either voluntarily or 
 23.4   pursuant to the present selective service law, is entitled to 
 23.5   the refund of all tuition paid for which credit cannot properly 
 23.6   be given.  
 23.7      The administrative officers of the University of Minnesota 
 23.8   and of the universities or institutions shall refund to the 
 23.9   students any tuition so paid.  Any student making application 
 23.10  for refund of any paid tuition shall furnish to the 
 23.11  administrative officers of the University of Minnesota or of the 
 23.12  universities a certificate from the proper officers reciting the 
 23.13  fact of the enlistment or the induction of the student into the 
 23.14  military service of the United States. 
 23.15     [EFFECTIVE DATE.] This section is effective the day 
 23.16  following final enactment.  
 23.17     Sec. 17.  Minnesota Statutes 2000, section 144.395, 
 23.18  subdivision 1, is amended to read: 
 23.19     Subdivision 1.  [CREATION.] The tobacco use prevention and 
 23.20  local public health endowment fund is created in the state 
 23.21  treasury.  The state board of investment shall invest the fund 
 23.22  under section 11A.24.  All earnings of the fund must be credited 
 23.23  to the fund.  The principal of the fund must be maintained 
 23.24  inviolate, except for transfers in law and that the principal 
 23.25  may be used to make expenditures from the fund for the purposes 
 23.26  specified in this section when the market value of the fund 
 23.27  falls below 105 percent of the cumulative total of the tobacco 
 23.28  settlement payments received by the state and credited to the 
 23.29  tobacco settlement fund under section 16A.87, subdivision 2.  
 23.30  For purposes of this section, "principal" means an amount equal 
 23.31  to the cumulative total of the tobacco settlement payments 
 23.32  received by the state and credited to the tobacco settlement 
 23.33  fund under section 16A.87, subdivision 2.  
 23.34     [EFFECTIVE DATE.] This section is effective the day 
 23.35  following final enactment.  
 23.36     Sec. 18.  Minnesota Statutes 2000, section 144.395, 
 24.1   subdivision 2, is amended to read: 
 24.2      Subd. 2.  [EXPENDITURES.] (a) Up to five percent of the 
 24.3   fair market value of the fund on the preceding July 1, must be 
 24.4   spent to reduce the human and economic consequences of tobacco 
 24.5   use among the youth of this state through state and local 
 24.6   tobacco prevention measures and efforts, and for other public 
 24.7   health initiatives. 
 24.8      (b) Notwithstanding paragraph (a), on January 1, 2000, up 
 24.9   to five percent of the fair market value of the fund is 
 24.10  appropriated to the commissioner of health to distribute as 
 24.11  grants under section 144.396, subdivisions 5 and 6, in 
 24.12  accordance with allocations in paragraph (c), clauses (1) and 
 24.13  (2).  Up to $200,000 of this appropriation is available to the 
 24.14  commissioner to conduct the statewide assessments described in 
 24.15  section 144.396, subdivision 3. 
 24.16     (c) Beginning On July 1, 2000, and on July 1 of each year 
 24.17  thereafter, the money in paragraph (a) is appropriated as 
 24.18  follows, except as provided in paragraphs (d) and (e):  
 24.19     (1) 67 percent to the commissioner of health to distribute 
 24.20  as grants under section 144.396, subdivision 5, to fund 
 24.21  statewide tobacco use prevention initiatives aimed at youth; 
 24.22     (2) 16.5 percent to the commissioner of health to 
 24.23  distribute as grants under section 144.396, subdivision 6, to 
 24.24  fund local public health initiatives aimed at tobacco use 
 24.25  prevention in coordination with other local health-related 
 24.26  efforts to achieve measurable improvements in health among 
 24.27  youth; and 
 24.28     (3) 16.5 percent to the commissioner of health to 
 24.29  distribute in accordance with section 144.396, subdivision 7.  
 24.30     (d) A maximum of $150,000 of each annual appropriation to 
 24.31  the commissioner of health in paragraphs (b), and (c), (f), (g), 
 24.32  and (h) may be used by the commissioner for administrative 
 24.33  expenses associated with implementing this section. 
 24.34     (e) Beginning July 1, 2001, $1,100,000 of each annual 
 24.35  appropriation to the commissioner under paragraph clause (1) of 
 24.36  paragraphs (c), clause (1) (f), (g), and (h), may be used to 
 25.1   provide base level funding for the commissioner's tobacco 
 25.2   prevention and control programs and activities.  This 
 25.3   appropriation must occur before any other appropriation under 
 25.4   this subdivision. 
 25.5      (f) Notwithstanding paragraph (a), on July 1, 2001, 
 25.6   $10,461,000 of the fund in subdivision 1 is appropriated as 
 25.7   follows, except as provided in paragraphs (d) and (e): 
 25.8      (1) 34 percent to the commissioner of health to distribute 
 25.9   as grants under section 144.396, subdivision 5, to fund 
 25.10  statewide tobacco use prevention initiatives aimed at youth; 
 25.11     (2) 33 percent to the commissioner of health to distribute 
 25.12  as grants under section 144.396, subdivision 6, to fund local 
 25.13  public health initiatives aimed at tobacco use prevention in 
 25.14  coordination with other local health-related efforts to achieve 
 25.15  measurable improvements in health among youth; and 
 25.16     (3) 33 percent to the commissioner of health to distribute 
 25.17  in accordance with section 144.396, subdivision 7. 
 25.18     (g) Notwithstanding paragraph (a), on July 1, 2002, 
 25.19  $15,561,000 is appropriated as follows, except as provided in 
 25.20  paragraphs (d) and (e): 
 25.21     (1) 40 percent to the commissioner of health to distribute 
 25.22  as grants under section 144.396, subdivision 5, to fund 
 25.23  statewide tobacco use prevention initiatives aimed at youth; 
 25.24     (2) 30 percent to the commissioner of health to distribute 
 25.25  as grants under section 144.396, subdivision 6, to fund local 
 25.26  public health initiatives aimed at tobacco use prevention in 
 25.27  coordination with other local health-related efforts to achieve 
 25.28  measurable improvements in health among youth; and 
 25.29     (3) 30 percent to the commissioner of health to distribute 
 25.30  in accordance with section 144.396, subdivision 7.  
 25.31     (h) On July 1, 2003, and each year thereafter, following 
 25.32  the transfer of any money under subdivision 1, the money in 
 25.33  paragraph (a) is appropriated as follows, except as provided in 
 25.34  paragraphs (d) and (e): 
 25.35     (1) 40 percent to the commissioner of health to distribute 
 25.36  as grants under section 144.396, subdivision 5, to fund 
 26.1   statewide tobacco use prevention initiatives aimed at youth; 
 26.2      (2) 30 percent to the commissioner of health to distribute 
 26.3   as grants under section 144.396, subdivision 6, to fund local 
 26.4   public health initiatives aimed at tobacco use prevention in 
 26.5   coordination with other local health-related efforts to achieve 
 26.6   measurable improvements in health among youth; and 
 26.7      (3) 30 percent to the commissioner of health to distribute 
 26.8   in accordance with section 144.396, subdivision 7.  
 26.9      [EFFECTIVE DATE.] This section is effective the day 
 26.10  following final enactment.  
 26.11     Sec. 19.  Minnesota Statutes 2000, section 169.966, is 
 26.12  amended to read: 
 26.13     169.966 [STATE UNIVERSITY BOARD TO REGULATE TRAFFIC.] 
 26.14     Subdivision 1.  [AUTHORITY.] The state university board of 
 26.15  trustees of the Minnesota state colleges and universities may 
 26.16  from time to time make, adopt, and enforce such rules or 
 26.17  ordinances not inconsistent with this chapter, as it may find 
 26.18  expedient or necessary relating to the regulation of traffic and 
 26.19  parking upon parking facilities and private roads and roadways 
 26.20  situated on property owned, leased, occupied or operated by 
 26.21  state universities. 
 26.22     Subd. 1a.  [PARKING FACILITIES.] The state university board 
 26.23  of trustees may establish rents, charges or fees for the use of 
 26.24  parking facilities owned, leased, occupied, or operated by the 
 26.25  state university board.  The money collected by the board as 
 26.26  rents, charges or fees in accordance with this subdivision shall 
 26.27  be deposited in the university activity fund and is annually 
 26.28  appropriated to the state university board of trustees for state 
 26.29  university purposes and to maintain and operate parking lots and 
 26.30  parking facilities. 
 26.31     Subd. 2.  [PETTY MISDEMEANOR.] Any person violating such 
 26.32  rule or ordinance shall be guilty of a petty misdemeanor and 
 26.33  subject to the provisions of sections 169.891 and 169.90, 
 26.34  subdivision 1. 
 26.35     Subd. 3.  [PROSECUTION.] The prosecution may be before a 
 26.36  district court having jurisdiction over the place where the 
 27.1   violation occurs. 
 27.2      Subd. 4.  [ENFORCEMENT.] Every sheriff, constable, police 
 27.3   officer, or other peace officer shall see that all rules and 
 27.4   ordinances are obeyed and shall arrest and prosecute offenders. 
 27.5      Subd. 5.  [ENFORCEMENT POWERS.] The state university 
 27.6   board of trustees may appoint and employ, and fix the 
 27.7   compensation to be paid out of funds which may be available for 
 27.8   such purposes, persons who shall have and may exercise on 
 27.9   property owned, leased, or occupied by the state universities 
 27.10  the same powers of arrest for violation of rules or ordinances 
 27.11  adopted by the board as possessed by a sheriff, constable, 
 27.12  police officer, or peace officer. 
 27.13     Subd. 6.  [JUDICIAL NOTICE.] All persons shall take notice 
 27.14  of such rules and ordinances without pleading and proof of the 
 27.15  same. 
 27.16     Subd. 7.  [NOTICE, HEARING, FILING, AND EFFECT.] (a) 
 27.17  The state university board of trustees shall fix a date for a 
 27.18  public hearing on the adoption of any such proposed rule or 
 27.19  ordinance.  Notice of such hearing shall be published in a legal 
 27.20  newspaper in the county in which the property affected by the 
 27.21  rule or ordinance is located.  The publication shall be at least 
 27.22  15 days and not more than 45 days before the date of the hearing.
 27.23     (b) If, after the public hearing, the proposed rule or 
 27.24  ordinance shall be adopted by a majority of the members of the 
 27.25  board, the same shall be considered to have been enacted by the 
 27.26  board.  A copy of the same shall be signed by the president and 
 27.27  filed with the county recorder of each county where the rule or 
 27.28  ordinance shall be in effect, together with proof of 
 27.29  publication.  Upon such filing, the rule or ordinance, as the 
 27.30  case may be, shall thenceforth be in full force and effect. 
 27.31     Subd. 8.  [DELEGATION.] The state university board of 
 27.32  trustees may delegate its responsibilities under this section to 
 27.33  a state university president.  Actions of the president shall be 
 27.34  presumed to be those of the board.  The university president 
 27.35  shall file with the board president the results of any public 
 27.36  hearings and the subsequent adoption of any proposed rule or 
 28.1   ordinance enacted pursuant thereto.  
 28.2      Sec. 20.  Minnesota Statutes 2000, section 299A.45, 
 28.3   subdivision 1, is amended to read: 
 28.4      Subdivision 1.  [ELIGIBILITY.] Following certification 
 28.5   under section 299A.44 and compliance with this section and rules 
 28.6   of the commissioner of public safety and the higher education 
 28.7   services office, dependent children less than 23 years of age 
 28.8   and the surviving spouse of a public safety officer killed in 
 28.9   the line of duty on or after January 1, 1973, are eligible to 
 28.10  receive educational benefits under this section.  To qualify for 
 28.11  an award, they must be enrolled in undergraduate degree or 
 28.12  certificate programs after June 30, 1990, at an eligible 
 28.13  Minnesota institution as provided in section 136A.101, 
 28.14  subdivision 4.  Persons who have received a baccalaureate degree 
 28.15  or have been enrolled full time or the equivalent of eight ten 
 28.16  semesters or 12 quarters the equivalent, whichever occurs first, 
 28.17  are no longer eligible. 
 28.18     Sec. 21.  Minnesota Statutes 2000, section 299A.45, 
 28.19  subdivision 4, is amended to read: 
 28.20     Subd. 4.  [RENEWAL.] Each award must be given for one 
 28.21  academic year and is renewable for a maximum of six eight 
 28.22  semesters or nine quarters or their the equivalent.  An award 
 28.23  must not be given to a dependent child who is 23 years of age or 
 28.24  older on the first day of the academic year. 
 28.25     Sec. 22.  Minnesota Statutes 2000, section 354.094, 
 28.26  subdivision 2, is amended to read: 
 28.27     Subd. 2.  [MEMBERSHIP; RETENTION.] Notwithstanding section 
 28.28  354.49, subdivision 4, clause (3), a member on extended leave 
 28.29  whose employee and employer contributions are paid into the fund 
 28.30  pursuant to subdivision 1 shall retain membership in the 
 28.31  association for as long as the contributions are paid, under the 
 28.32  same terms and conditions as if the member had continued to 
 28.33  teach in the district, the community college system, or the 
 28.34  Minnesota state university colleges and universities system. 
 28.35     [EFFECTIVE DATE.] This section is effective the day 
 28.36  following final enactment.  
 29.1      Sec. 23.  Minnesota Statutes 2000, section 354.69, is 
 29.2   amended to read: 
 29.3      354.69 [INFORMATION SUPPLIED BY DISTRICT.] 
 29.4      Each school district covered by the provisions of this 
 29.5   chapter and the community college Minnesota state colleges and 
 29.6   state university systems universities system shall furnish to 
 29.7   the teachers retirement association all information and reports 
 29.8   deemed necessary by the executive director to administer the 
 29.9   provisions of section 354.66. 
 29.10     [EFFECTIVE DATE.] This section is effective the day 
 29.11  following final enactment.  
 29.12     Sec. 24.  Minnesota Statutes 2000, section 356.24, 
 29.13  subdivision 1, is amended to read: 
 29.14     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
 29.15  for a school district or other governmental subdivision or state 
 29.16  agency to levy taxes for, or contribute public funds to a 
 29.17  supplemental pension or deferred compensation plan that is 
 29.18  established, maintained, and operated in addition to a primary 
 29.19  pension program for the benefit of the governmental subdivision 
 29.20  employees other than: 
 29.21     (1) to a supplemental pension plan that was established, 
 29.22  maintained, and operated before May 6, 1971; 
 29.23     (2) to a plan that provides solely for group health, 
 29.24  hospital, disability, or death benefits; 
 29.25     (3) to the individual retirement account plan established 
 29.26  by chapter 354B; 
 29.27     (4) to a plan that provides solely for severance pay under 
 29.28  section 465.72 to a retiring or terminating employee; 
 29.29     (5) for employees other than personnel employed by the 
 29.30  state university board or the community college board and 
 29.31  covered by the board of trustees of the Minnesota state colleges 
 29.32  and universities and covered under the higher education 
 29.33  supplemental retirement plan under chapter 354C, if provided for 
 29.34  in a personnel policy of the public employer or in the 
 29.35  collective bargaining agreement between the public employer and 
 29.36  the exclusive representative of public employees in an 
 30.1   appropriate unit, in an amount matching employee contributions 
 30.2   on a dollar for dollar basis, but not to exceed an employer 
 30.3   contribution of $2,000 a year per employee; 
 30.4      (i) to the state of Minnesota deferred compensation plan 
 30.5   under section 352.96; or 
 30.6      (ii) in payment of the applicable portion of the 
 30.7   contribution made to any investment eligible under section 
 30.8   403(b) of the Internal Revenue Code, if the employing unit has 
 30.9   complied with any applicable pension plan provisions of the 
 30.10  Internal Revenue Code with respect to the tax-sheltered annuity 
 30.11  program during the preceding calendar year; or 
 30.12     (6) for personnel employed by the state university board or 
 30.13  the community college board of trustees of the Minnesota state 
 30.14  colleges and universities and not covered by clause (5), to the 
 30.15  supplemental retirement plan under chapter 354C, if provided for 
 30.16  in a personnel policy or in the collective bargaining agreement 
 30.17  of the public employer with the exclusive representative of the 
 30.18  covered employees in an appropriate unit, in an amount matching 
 30.19  employee contributions on a dollar for dollar basis, but not to 
 30.20  exceed an employer contribution of $2,700 a year for each 
 30.21  employee. 
 30.22     [EFFECTIVE DATE.] This section is effective the day 
 30.23  following final enactment.  
 30.24     Sec. 25.  [LAWRENCE HALL REMODELING.] 
 30.25     The board of trustees of Minnesota state colleges and 
 30.26  universities may use funds from nonstate sources to remodel the 
 30.27  top floor of Lawrence Hall for student housing. 
 30.28     Sec. 26.  [COMMISSION ON UNIVERSITY OF MINNESOTA 
 30.29  EXCELLENCE.] 
 30.30     Subdivision 1.  [ESTABLISHMENT.] The commission on 
 30.31  University of Minnesota excellence is established to: 
 30.32     (1) review the university's current nationally ranked areas 
 30.33  of excellence; 
 30.34     (2) review major investment efforts in interdisciplinary 
 30.35  initiatives identified by the university in 1998, including 
 30.36  digital technology, design, new media, molecular and cellular 
 31.1   biology, medical science, and agriculture; 
 31.2      (3) evaluate and make recommendations on how the university 
 31.3   can develop additional centers of excellence that will achieve a 
 31.4   national ranking in the top ten within the next ten years and 
 31.5   identify centers of excellence which are best positioned and 
 31.6   have the best potential to achieve this goal; 
 31.7      (4) examine the university's mission, scope, and financing 
 31.8   of programs and propose possible ways in which the university 
 31.9   can refocus or refine its mission and offerings; and 
 31.10     (5) examine the regent selection process and make 
 31.11  recommendations on how the selection process can be improved.  
 31.12     Subd. 2.  [MEMBERSHIP; STAFF.] (a) The commission on 
 31.13  University of Minnesota excellence consists of 15 members.  Five 
 31.14  members must be appointed by the governor.  Five members must be 
 31.15  appointed by the speaker of the house of representatives.  No 
 31.16  more than two members of the house of representatives may be 
 31.17  appointed with one of the members designated to serve as a 
 31.18  cochair of the commission.  Five members must be appointed by 
 31.19  the subcommittee on committees of the senate committee on rules 
 31.20  and administration.  No more than two senators may be appointed 
 31.21  with one senator designated to serve as a cochair of the 
 31.22  commission.  Members appointed to the commission must be 
 31.23  selected for their expertise in complex organizational structure 
 31.24  and should include leaders of business, industry, or 
 31.25  post-secondary institutions, except that no members of the 
 31.26  current board of regents of the University of Minnesota may be 
 31.27  appointed to the commission.  The president of the University of 
 31.28  Minnesota or the president's designee is an ex officio, 
 31.29  nonvoting member of the commission. 
 31.30     (b) Members of the commission serve without compensation or 
 31.31  expenses under Minnesota Statutes, section 15.0575, subdivision 
 31.32  3. 
 31.33     (c) The board of regents of the University of Minnesota is 
 31.34  requested to make University of Minnesota staff available to the 
 31.35  commission.  The legislature must provide additional staff 
 31.36  support for the commission. 
 32.1      Subd. 3.  [CENTERS OF EXCELLENCE.] The commission must, at 
 32.2   a minimum, identify five additional centers of excellence at the 
 32.3   University of Minnesota in which to focus resources and policy 
 32.4   initiatives.  The goal for these centers is to have them develop 
 32.5   national stature and achieve a national ranking in the top ten 
 32.6   within ten years.  The additional centers of excellence must be 
 32.7   chosen from a group of potential centers of excellence that 
 32.8   includes the programs and departments in which the university is 
 32.9   currently considered a national or regional leader and from 
 32.10  existing or potential interdisciplinary initiatives at the 
 32.11  university. 
 32.12     Subd. 4.  [REPORT.] The commission must report to the 
 32.13  legislature by January 15, 2002, on recommendations for changes 
 32.14  in the regent selection process.  The commission must report to 
 32.15  the legislature by July 1, 2002, on areas of excellence, 
 32.16  mission, and focus of the University of Minnesota.  In preparing 
 32.17  its report on areas of excellence, the task force is encouraged 
 32.18  to consider operation and capital financing needs, Minnesota 
 32.19  economic needs, federal research priorities, and opportunities 
 32.20  for private financial support.  
 32.21     Subd. 5.  [EXPIRATION.] The commission on University of 
 32.22  Minnesota excellence expires on December 31, 2002. 
 32.23     [EFFECTIVE DATE.] This section is effective the day 
 32.24  following final enactment.  
 32.25     Sec. 27.  [TRANSFER.] 
 32.26     $212,000,000 is transferred on July 1, 2001, and 
 32.27  $38,000,000 is transferred on July 1, 2002, from the tobacco use 
 32.28  prevention and local public health endowment fund under 
 32.29  Minnesota Statutes, section 144.395 to the medical education 
 32.30  endowment fund under Minnesota Statutes, section 62J.694. 
 32.31     [EFFECTIVE DATE.] This section is effective the day 
 32.32  following final enactment.  
 32.33     Sec. 28.  [REPEALER.] 
 32.34     (a) Minnesota Statutes 2000, sections 16A.87; 135A.06, 
 32.35  subdivision 1; and 136F.13, subdivision 2, are repealed.  
 32.36     (b) Laws 1986, chapter 398, article 1, section 18; and Laws 
 33.1   1994, chapter 643, section 66, are repealed. 
 33.2                              ARTICLE 3 
 33.3                           MINNESOTA EDVEST 
 33.4      Section 1.  Minnesota Statutes 2000, section 136A.241, is 
 33.5   amended to read: 
 33.6      136A.241 [MINNESOTA EDVEST PROGRAM ESTABLISHED.] 
 33.7      An A college savings program known as Minnesota Edvest 
 33.8   savings program is established.  In establishing this program, 
 33.9   the legislature seeks to encourage individuals to save for 
 33.10  post-secondary education by: 
 33.11     (1) providing a qualified state tuition program under 
 33.12  federal tax law; 
 33.13     (2) providing matching grants for contributions to the 
 33.14  program by low- and middle-income families; and 
 33.15     (3) by encouraging individuals, foundations, and businesses 
 33.16  to provide additional grants to participating students. 
 33.17     Sec. 2.  Minnesota Statutes 2000, section 136A.242, is 
 33.18  amended to read: 
 33.19     136A.242 [DEFINITIONS.] 
 33.20     Subdivision 1.  [GENERAL.] For purposes of sections 
 33.21  136A.241 to 136A.245 136A.246, the following terms have the 
 33.22  meanings given. 
 33.23     Subd. 1a.  [ACCOUNT.] "Account" means the formal record of 
 33.24  transactions relating to a Minnesota college savings program 
 33.25  beneficiary. 
 33.26     Subd. 1b.  [ACCOUNT OWNER.] "Account owner" means a person 
 33.27  who enters into a participation agreement and is entitled to 
 33.28  select or change the beneficiary of an account or to receive 
 33.29  distributions from the account for other than qualified higher 
 33.30  education expenses. 
 33.31     Subd. 2.  [ADJUSTED GROSS INCOME.] "Adjusted gross income" 
 33.32  means adjusted gross income as defined in section 62 of the 
 33.33  Internal Revenue Code. 
 33.34     Subd. 3.  [BENEFICIARY.] "Beneficiary" means the designated 
 33.35  beneficiary for the account, as defined in section 529(e)(1) of 
 33.36  the Internal Revenue Code. 
 34.1      Subd. 4.  [BOARD.] "Board" means the state board of 
 34.2   investment. 
 34.3      Subd. 4a.  [CONTINGENT ACCOUNT OWNER.] "Contingent account 
 34.4   owner" means the person designated as the account owner, either 
 34.5   in the participation agreement or pursuant to a separate 
 34.6   Minnesota college savings program form, in the event of the 
 34.7   death of the account owner. 
 34.8      Subd. 4b.  [CONTRIBUTION.] "Contribution" means a payment 
 34.9   directly allocated to an account for the benefit of a 
 34.10  beneficiary.  In the case of a rollover distribution, only the 
 34.11  portion of the rollover amount that constitutes investment in 
 34.12  the account is treated as a contribution to the account. 
 34.13     Subd. 5.  [DIRECTOR.] "Director" means the director of the 
 34.14  higher education services office. 
 34.15     Subd. 5a.  [DISTRIBUTION.] "Distribution" means a 
 34.16  disbursement from an account to the account owner, the 
 34.17  beneficiary, or the beneficiary's estate.  Distribution does not 
 34.18  include a change of beneficiary to a member of the family of the 
 34.19  prior beneficiary or a rollover distribution. 
 34.20     Subd. 5b.  [DORMANT ACCOUNT.] "Dormant account" means an 
 34.21  account that has not received contributions for at least three 
 34.22  consecutive years and the account statements mailed to the 
 34.23  account owner have been returned as undeliverable. 
 34.24     Subd. 5c.  [EARNINGS.] "Earnings" means the total account 
 34.25  balance minus the investment in the account as of a particular 
 34.26  date. 
 34.27     Subd. 5d.  [ELIGIBLE EDUCATIONAL INSTITUTION.] "Eligible 
 34.28  educational institution" means an institution as defined in 
 34.29  section 529(e)(5) of the Internal Revenue Code. 
 34.30     Subd. 5e.  [INACTIVE ACCOUNT.] "Inactive account" means an 
 34.31  account with a matching grant in which the beneficiary: 
 34.32     (1) is not the account owner, the beneficiary turns 28 
 34.33  years of age, and the beneficiary has not informed the program 
 34.34  administrator that the beneficiary is enrolled in an eligible 
 34.35  educational institution; 
 34.36     (2) is the account owner, the beneficiary was over the age 
 35.1   of 18 when the account was opened, and the beneficiary has not 
 35.2   informed the program administrator that the beneficiary is 
 35.3   enrolled in an eligible educational institution within ten years 
 35.4   of the date of opening the account; or 
 35.5      (3) is the account owner, the beneficiary was a minor when 
 35.6   the account was opened, the account becomes inactive when the 
 35.7   beneficiary turns 28, and the beneficiary has not informed the 
 35.8   program administrator that the beneficiary is enrolled in an 
 35.9   eligible educational institution. 
 35.10     Subd. 6.  [EXECUTIVE DIRECTOR.] "Executive director" means 
 35.11  the executive director of the state board of investment. 
 35.12     Subd. 7.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
 35.13  means the Internal Revenue Code of 1986, as amended. 
 35.14     Subd. 7a.  [INVESTMENT IN THE ACCOUNT.] "Investment in the 
 35.15  account" means the sum of all contributions made to an account 
 35.16  by a particular date minus the aggregate amount of contributions 
 35.17  included in distributions or rollover distributions, if any, 
 35.18  made from the account as of the date. 
 35.19     Subd. 7b.  [MATCHING GRANT ACCOUNT.] "Matching grant 
 35.20  account" means an account owned by Minnesota that contains 
 35.21  matching grants and earnings. 
 35.22     Subd. 7c.  [MEMBER OF THE FAMILY.] "Member of the family" 
 35.23  means an individual who is related to the beneficiary as defined 
 35.24  in section 529(e)(2) of the Internal Revenue Code. 
 35.25     Subd. 8.  [OFFICE.] "Office" means the higher education 
 35.26  services office. 
 35.27     Subd. 8a.  [PARTICIPATION AGREEMENT.] "Participation 
 35.28  agreement" means an agreement to participate in the Minnesota 
 35.29  college savings program between an account owner and the state 
 35.30  of Minnesota, through its agencies, the office, and the board. 
 35.31     Subd. 8b.  [PERSON.] "Person" means a natural person, a 
 35.32  public or private entity, however organized, or a unit of state 
 35.33  or local government. 
 35.34     Subd. 9.  [PROGRAM.] "Program" or "Edvest" refers to the 
 35.35  program established under sections 136A.241 to 136A.245 136A.246.
 35.36     Subd. 10.  [PROGRAM ADMINISTRATOR.] "Program administrator" 
 36.1   means the person selected by the office and the board to 
 36.2   administer the daily operations of the Minnesota college savings 
 36.3   program and to provide marketing, recordkeeping, investment 
 36.4   management, and other services for the program. 
 36.5      Subd. 11.  [QUALIFIED DISTRIBUTION.] "Qualified 
 36.6   distribution" means a distribution made from an account for 
 36.7   qualified higher education expenses of the beneficiary. 
 36.8      Subd. 12.  [QUALIFIED HIGHER EDUCATION 
 36.9   EXPENSES.] "Qualified higher education expenses" means an 
 36.10  expense as defined in section 529(e)(3) of the Internal Revenue 
 36.11  Code. 
 36.12     Subd. 13.  [ROLLOVER DISTRIBUTION.] "Rollover distribution" 
 36.13  means a transfer of funds made: 
 36.14     (1) from one account to another account within 60 days of a 
 36.15  distribution; 
 36.16     (2) from another qualified state tuition program to an 
 36.17  account within 60 days of the distribution; or 
 36.18     (3) to another qualified state tuition program from an 
 36.19  account within 60 days of a distribution. 
 36.20     In each case, the transfer of funds must be made for the 
 36.21  benefit of a new beneficiary who is a member of the family of 
 36.22  the prior beneficiary. 
 36.23     Subd. 14.  [SCHOLARSHIP.] "Scholarship" means a 
 36.24  scholarship, allowance, or payment as defined in section 
 36.25  529(b)(3)(C) of the Internal Revenue Code. 
 36.26     Sec. 3.  Minnesota Statutes 2000, section 136A.243, 
 36.27  subdivision 1, is amended to read: 
 36.28     Subdivision 1.  [RESPONSIBILITIES.] (a) The director shall 
 36.29  establish the rules, terms, and conditions for the program, 
 36.30  subject to the requirements of sections 136A.241 to 
 36.31  136A.245 136A.246. 
 36.32     (b) The director shall prescribe the application forms, 
 36.33  procedures, and other requirements that apply to the program. 
 36.34     Sec. 4.  Minnesota Statutes 2000, section 136A.243, 
 36.35  subdivision 2, is amended to read: 
 36.36     Subd. 2.  [ACCOUNTS-TYPE PROGRAM.] The office must 
 37.1   establish the program and the program must be operated as an 
 37.2   accounts-type program that permits individuals to save for 
 37.3   qualified higher education costs incurred at any institution, 
 37.4   regardless of whether it is private or public or whether it is 
 37.5   located within or outside of this state.  A separate account 
 37.6   must be maintained for each beneficiary for whom contributions 
 37.7   are made. 
 37.8      Sec. 5.  Minnesota Statutes 2000, section 136A.243, 
 37.9   subdivision 3, is amended to read: 
 37.10     Subd. 3.  [CONSULTATION WITH STATE BOARD OF INVESTMENT.] In 
 37.11  designing and establishing the program's requirements and in 
 37.12  negotiating or entering contracts with third parties under 
 37.13  subdivision 8, the director shall consult with the executive 
 37.14  director.  The director and the executive director shall 
 37.15  establish an annual fee, equal to a percentage of the average 
 37.16  daily net assets of the program, to be imposed on participants 
 37.17  to recover the costs of administration, recordkeeping, and 
 37.18  investment management as provided in subdivision 9 and section 
 37.19  136A.244, subdivision 4. 
 37.20     Sec. 6.  Minnesota Statutes 2000, section 136A.243, 
 37.21  subdivision 4, is amended to read: 
 37.22     Subd. 4.  [PROGRAM TO COMPLY WITH FEDERAL LAW.] The 
 37.23  director shall take steps to ensure that the program meets the 
 37.24  requirements for a qualified state tuition program under section 
 37.25  529 529(b)(1) of the Internal Revenue Code.  The director may 
 37.26  request a private letter ruling or rulings from the Internal 
 37.27  Revenue Service or take any other steps to ensure that the 
 37.28  program qualifies under section 529 of the Internal Revenue Code 
 37.29  or other relevant provisions of federal law. 
 37.30     Sec. 7.  Minnesota Statutes 2000, section 136A.243, 
 37.31  subdivision 9, is amended to read: 
 37.32     Subd. 9.  [AUTHORITY TO IMPOSE FEES.] The office may impose 
 37.33  annual fees, as provided in subdivision 3, on participants in 
 37.34  the program to recover the costs of administration.  The office 
 37.35  must use its best efforts to keep these fees as low as possible, 
 37.36  consistent with efficient administration, so that the returns on 
 38.1   savings invested in the program will be as high as possible. 
 38.2      Sec. 8.  Minnesota Statutes 2000, section 136A.244, 
 38.3   subdivision 1, is amended to read: 
 38.4      Subdivision 1.  [STATE BOARD TO INVEST.] The state board of 
 38.5   investment shall invest the money deposited in accounts in the 
 38.6   program.  Persons making contributions to an account do not 
 38.7   direct the investment of contributions to the program. 
 38.8      Sec. 9.  Minnesota Statutes 2000, section 136A.244, 
 38.9   subdivision 4, is amended to read: 
 38.10     Subd. 4.  [FEES.] The board may impose annual fees, as 
 38.11  provided in section 136A.243, subdivision 3, on participants in 
 38.12  the program to recover the cost of investment management and 
 38.13  related tasks for the program.  The board must use its best 
 38.14  efforts to keep these fees as low as possible, consistent with 
 38.15  high quality investment management, so that the returns on 
 38.16  savings invested in the program will be as high as possible.  
 38.17     Sec. 10.  [136A.2441] [EDVEST ACCOUNTS; GENERALLY.] 
 38.18     Subdivision 1.  [CONTRIBUTIONS TO AN ACCOUNT.] A person may 
 38.19  make contributions to an account on behalf of a beneficiary.  
 38.20  Contributions to an account made by persons other than the 
 38.21  account owner become the property of the account owner.  A 
 38.22  person does not acquire an interest in an account by making 
 38.23  contributions to an account.  Contributions to an account must 
 38.24  be in cash.  
 38.25     Subd. 2.  [AUTHORITY OF ACCOUNT OWNER.] An account owner is 
 38.26  the only person entitled to: 
 38.27     (1) select or change a beneficiary or a contingent account 
 38.28  owner; or 
 38.29     (2) request distributions or rollover distributions from an 
 38.30  account. 
 38.31     Subd. 3.  [SECURITY FOR LOANS.] An interest in an account 
 38.32  or matching grant account must not be used as security for a 
 38.33  loan. 
 38.34     Subd. 4.  [SEPARATE ACCOUNTING.] The program must provide a 
 38.35  separate account for each beneficiary for whom contributions are 
 38.36  made.  Each account must have a single account owner and a 
 39.1   single beneficiary.  An account owner must not open more than 
 39.2   one account for the same beneficiary, but several account owners 
 39.3   may open accounts for the same beneficiary. 
 39.4      Subd. 5.  [NAMING OF BENEFICIARY.] The account owner must 
 39.5   designate the beneficiary of an account when the account is 
 39.6   established, except for accounts established under section 
 39.7   529(e)(1)(C) of the Internal Revenue Code, which do not require 
 39.8   a designated beneficiary until a distribution is made. 
 39.9      Subd. 6.  [CHANGE OF BENEFICIARY.] An account owner may 
 39.10  change the beneficiary of an account to a member of the family 
 39.11  of the current beneficiary, at any time without penalty, if the 
 39.12  change will not cause the contributions held for the new 
 39.13  beneficiary to exceed the maximum contribution limit as provided 
 39.14  in subdivision 8.  A change of beneficiary other than as 
 39.15  permitted in this subdivision is treated as a nonqualified 
 39.16  distribution under section 136A.246, subdivision 3. 
 39.17     Subd. 7.  [CHANGE OF ACCOUNT OWNERSHIP.] An account owner 
 39.18  may transfer ownership of an account to another person eligible 
 39.19  to be an account owner.  All transfers of ownership are final. 
 39.20     Subd. 8.  [MAXIMUM CONTRIBUTION LIMIT.] (a) The total net 
 39.21  contributions in all accounts held for the same beneficiary, 
 39.22  including matching grant accounts, must not be greater than the 
 39.23  amount necessary to pay qualified higher education expenses for 
 39.24  four years at the highest priced eligible educational 
 39.25  institution in Minnesota.  For purposes of this section, "net 
 39.26  contributions" means the total contributions to all accounts for 
 39.27  the beneficiary less the sum of the contribution portion of: 
 39.28     (1) distributions, other than qualified distributions or 
 39.29  distributions resulting from the death or disability of, or 
 39.30  scholarship to, a beneficiary; and 
 39.31     (2) rollover distributions. 
 39.32     (b) The program administrator, in consultation with the 
 39.33  office and the board, shall project qualified higher education 
 39.34  expenses and will reject additional contributions to an account 
 39.35  when the account reaches the maximum contribution limit.  If 
 39.36  necessary, the office shall adjust the maximum contribution 
 40.1   limit on January 1 of each year.  The maximum contribution limit 
 40.2   must not exceed the maximum amount permitted to qualify as a 
 40.3   qualified state tuition program. 
 40.4      (c) If contributions to all accounts held for the same 
 40.5   beneficiary within a particular calendar year reach the maximum 
 40.6   contribution limit prior to the end of the particular calendar 
 40.7   year, the beneficiary may still receive any applicable matching 
 40.8   grant for that particular calendar year. 
 40.9      Subd. 9.  [EXCESS CONTRIBUTIONS AND 
 40.10  BALANCES.] Contributions for a beneficiary must be rejected, or 
 40.11  if accepted in error, returned to the account owner with 
 40.12  earnings, less applicable penalties, if the amount of the 
 40.13  contributions in the account together with the contributions in 
 40.14  other accounts for the benefit of the same beneficiary would 
 40.15  cause the net contributions held for the beneficiary to exceed 
 40.16  the maximum contribution limit established by the office and 
 40.17  board.  Payment of excess balances to the account owner is a 
 40.18  nonqualified distribution under section 136A.246. 
 40.19     Subd. 10.  [DORMANT ACCOUNTS.] (a) The program 
 40.20  administrator shall attempt to locate the account owner or the 
 40.21  beneficiary, or both, to determine the disposition of a dormant 
 40.22  account.  A fee of five percent of the total account balance of 
 40.23  the dormant account, not to exceed $100, plus allowable costs, 
 40.24  may be charged for this service.  Costs will not exceed $100 or 
 40.25  five percent of the total account balance in the dormant 
 40.26  account, whichever is less. 
 40.27     (b) If the account owner, or the account owner's legal 
 40.28  heirs, are not found after three attempts by the program 
 40.29  administrator, the remaining funds in the dormant account must 
 40.30  be turned over to the office.  Such funds shall be treated as 
 40.31  unclaimed property for purposes of sections 345.31 to 345.60, 
 40.32  and the office shall turn all remaining dormant account funds 
 40.33  over to the commissioner of commerce.  If the dormant account 
 40.34  has a matching grant account, all amounts in the beneficiary's 
 40.35  matching grant account, if any, must be returned to the office. 
 40.36     Subd. 11.  [EFFECT OF PROGRAM CHANGES ON PARTICIPATION 
 41.1   AGREEMENT.] Amendments to sections 136A.241 to 136A.246, 
 41.2   automatically amend the participation agreement.  Any amendments 
 41.3   to the operating procedures and policies of the program shall 
 41.4   amend the participation agreement 30 days after adoption by the 
 41.5   office or the board. 
 41.6      Subd. 12.  [SPECIAL ACCOUNT TO HOLD PLAN ASSETS.] All 
 41.7   assets of the program, including contributions to accounts and 
 41.8   matching grant accounts and earnings, will be held in a special 
 41.9   account in the state treasury to be known as the Minnesota 
 41.10  college savings program account.  Program assets shall not be 
 41.11  commingled with the general fund or any other special funds or 
 41.12  accounts of the state.  Program assets are not subject to 
 41.13  appropriation.  Payments from the Minnesota college savings 
 41.14  program account shall be made under sections 136A.241 to 
 41.15  136A.246. 
 41.16     Sec. 11.  Minnesota Statutes 2000, section 136A.245, 
 41.17  subdivision 2, is amended to read: 
 41.18     Subd. 2.  [FAMILY INCOME.] (a) For purposes of this 
 41.19  section, "family income" means: 
 41.20     (1) if the beneficiary is under age 25, the combined 
 41.21  adjusted gross income of the beneficiary's parents as reported 
 41.22  on the federal tax return or returns for the most recently 
 41.23  available tax year.  If the beneficiary's parents are divorced, 
 41.24  the income of the parent claiming the beneficiary as a dependent 
 41.25  on the federal individual income tax return and the income of 
 41.26  that parent's spouse, if any, shall be used to determine family 
 41.27  income; or 
 41.28     (2) if the beneficiary is age 25 or older, the combined 
 41.29  adjusted gross income of the beneficiary and spouse, if any. 
 41.30     (b) For a parent or legal guardian of beneficiaries under 
 41.31  age 25 and for beneficiaries age 25 or older who resided in 
 41.32  Minnesota and filed a federal individual income tax return two 
 41.33  years prior to the year in which the matching grant is awarded, 
 41.34  the matching grant shall be based on family income from Internal 
 41.35  Revenue Service tax data on file with the Minnesota department 
 41.36  of revenue.  
 42.1      (c) Parents or legal guardians of beneficiaries under age 
 42.2   25 and beneficiaries age 25 or older who did not reside in 
 42.3   Minnesota two years prior to the year in which the matching 
 42.4   grant is awarded must provide a signed copy of their federal 
 42.5   individual income tax return to the office, regardless of who 
 42.6   the account owner is, in order to be considered for a matching 
 42.7   grant. 
 42.8      Sec. 12.  Minnesota Statutes 2000, section 136A.245, is 
 42.9   amended by adding a subdivision to read: 
 42.10     Subd. 2a.  [RESIDENCY REQUIREMENT.] (a) If the beneficiary 
 42.11  is under age 25, the beneficiary's parents or legal guardians 
 42.12  must be Minnesota residents to qualify for a matching grant.  If 
 42.13  the beneficiary is age 25 or older, the beneficiary must be a 
 42.14  Minnesota resident to qualify for a matching grant. 
 42.15     (b) To meet the residency requirements, the parent or legal 
 42.16  guardian of beneficiaries under age 25 must have filed a 
 42.17  Minnesota individual income tax return as a Minnesota resident, 
 42.18  claiming the beneficiary as a dependent, two years prior to the 
 42.19  year in which the matching grant is awarded.  For beneficiaries 
 42.20  age 25 or older, the beneficiary, and a spouse, if any, must 
 42.21  have filed a Minnesota individual income tax return as a 
 42.22  Minnesota resident two years prior to the year in which the 
 42.23  matching grant is awarded. 
 42.24     (c) A parent of beneficiaries under age 25 and 
 42.25  beneficiaries age 25 or older who did not reside in Minnesota 
 42.26  two years prior to the year in which the matching grant is 
 42.27  awarded must establish Minnesota residency through the issuance 
 42.28  of a Minnesota driver's license or identification card. 
 42.29     Sec. 13.  Minnesota Statutes 2000, section 136A.245, is 
 42.30  amended by adding a subdivision to read: 
 42.31     Subd. 2b.  [AGE DETERMINATION OF BENEFICIARY.] In 
 42.32  determining the age of the beneficiary for purposes of a 
 42.33  matching grant, the program administrator shall use the age of 
 42.34  the beneficiary on December 31 of the year in which the request 
 42.35  for a matching grant is made. 
 42.36     Sec. 14.  Minnesota Statutes 2000, section 136A.245, is 
 43.1   amended by adding a subdivision to read: 
 43.2      Subd. 7.  [ANNUAL APPLICATION.] An account owner must 
 43.3   submit an application form for a matching grant on an annual 
 43.4   basis.  The application must be received by December 31 of the 
 43.5   year preceding the awarding of the matching grant.  For example, 
 43.6   for a matching grant to be awarded by March 1, 2001, the 
 43.7   application must be received by December 31, 2000. 
 43.8      Sec. 15.  Minnesota Statutes 2000, section 136A.245, is 
 43.9   amended by adding a subdivision to read: 
 43.10     Subd. 8.  [SINGLE BENEFICIARIES WITH MULTIPLE 
 43.11  ACCOUNTS.] (a) A matching grant will first be computed on an 
 43.12  account owned by a parent or legal guardian of the beneficiary, 
 43.13  or an account owner who is also the beneficiary.  If there are 
 43.14  multiple accounts for a single beneficiary, any matching grant, 
 43.15  up to the annual maximum, will be proportionately awarded to the 
 43.16  beneficiary named in accounts owned by the parents or guardians. 
 43.17     (b) If the account owned by a parent or a guardian or an 
 43.18  account owner who is also the beneficiary, do not qualify for 
 43.19  the maximum annual matching grant, the remaining matching grant 
 43.20  eligibility will be proportionately distributed to the 
 43.21  beneficiary named in an account owned by someone other than the 
 43.22  parent or guardian. 
 43.23     (c) If the account for a beneficiary is not owned by a 
 43.24  parent or a legal guardian, or an account owner who is also the 
 43.25  beneficiary, then the matching grant will be proportionately 
 43.26  distributed to the beneficiary in an account owned by others. 
 43.27     Sec. 16.  Minnesota Statutes 2000, section 136A.245, is 
 43.28  amended by adding a subdivision to read: 
 43.29     Subd. 9.  [OWNERSHIP OF MATCHING GRANT FUNDS.] The office 
 43.30  retains ownership of all matching grants and earnings on 
 43.31  matching grants until a qualified distribution is made to a 
 43.32  beneficiary. 
 43.33     Sec. 17.  Minnesota Statutes 2000, section 136A.245, is 
 43.34  amended by adding a subdivision to read: 
 43.35     Subd. 10.  [INACTIVE ACCOUNTS.] (a) The program 
 43.36  administrator will attempt to locate the account owner or the 
 44.1   beneficiary of an inactive account to determine the disposition 
 44.2   of the account.  No fee will be charged for this service.  The 
 44.3   matching grants and matching grant earnings in the account must 
 44.4   be returned to the office, unless the account owner applies for 
 44.5   a deferment or the beneficiary begins attending school within 
 44.6   one year of the date of notification. 
 44.7      (b) The account owner can apply to the program 
 44.8   administrator for a deferment of inactive account time limits.  
 44.9   Upon application, the program administrator shall grant a 
 44.10  one-time deferment of two years.  In addition, the program 
 44.11  administrator shall grant a deferment for the beneficiary's 
 44.12  initial enlistment for active duty in the armed forces of the 
 44.13  United States, or for the period of active military duty 
 44.14  required as part of the beneficiary's obligation as a member in 
 44.15  a reserve military unit of the armed forces of the United States.
 44.16     Sec. 18.  Minnesota Statutes 2000, section 136A.245, is 
 44.17  amended by adding a subdivision to read: 
 44.18     Subd. 11.  [FORFEITURE OF MATCHING GRANTS.] (a) Matching 
 44.19  grants must be forfeited if: 
 44.20     (1) the account owner transfers the total account balance 
 44.21  of an account to another account or to another qualified state 
 44.22  tuition program; 
 44.23     (2) the beneficiary receives a full tuition scholarship or 
 44.24  admission to a United States service academy; 
 44.25     (3) the beneficiary dies or becomes disabled; 
 44.26     (4) the account owner changes the beneficiary of the 
 44.27  account; or 
 44.28     (5) the account owner closes the account with a 
 44.29  nonqualified withdrawal. 
 44.30     (b) Matching grants must be proportionally forfeited if: 
 44.31     (1) the account owner transfers a portion of an account to 
 44.32  another account or to another qualified state tuition program; 
 44.33     (2) the beneficiary receives a scholarship covering a 
 44.34  portion of qualified higher education expenses; or 
 44.35     (3) the account owner makes a partial nonqualified 
 44.36  withdrawal. 
 45.1      (c) If the account owner makes a misrepresentation in a 
 45.2   participation agreement or an application for a matching grant 
 45.3   that results in a matching grant, the matching grant associated 
 45.4   with the misrepresentation shall be forfeited.  The office and 
 45.5   the board must instruct the program administrator as to the 
 45.6   amount to be forfeited from the matching grant account.  The 
 45.7   office and the board must withdraw the matching grant or the 
 45.8   proportion of the matching grant that is related to the 
 45.9   misrepresentation. 
 45.10     Sec. 19.  [136A.246] [ACCOUNT DISTRIBUTIONS.] 
 45.11     Subdivision 1.  [QUALIFIED DISTRIBUTION METHODS.] (a) After 
 45.12  the beneficiary submits a receipt showing that payment for 
 45.13  qualified higher education expenses has been made, qualified 
 45.14  distributions may be made: 
 45.15     (1) directly to participating eligible educational 
 45.16  institutions on behalf of the beneficiary; or 
 45.17     (2) in the form of a check payable to both the beneficiary 
 45.18  and the eligible educational institution. 
 45.19     (b) When administratively feasible, distributions may be 
 45.20  made when the beneficiary certifies prior to the distribution 
 45.21  that the distribution will be expended for qualified higher 
 45.22  education expenses a reasonable time after the distribution.  
 45.23  The program administrator may retain a penalty on the earnings 
 45.24  portion of the distribution until payment of qualified higher 
 45.25  education expenses are substantiated.  A payment receipt showing 
 45.26  payment for qualified higher education expenses must be 
 45.27  submitted to the program administrator within 30 days of 
 45.28  distribution. 
 45.29     (c) Qualified distributions will be withdrawn 
 45.30  proportionally from contributions and earnings as provided in 
 45.31  section 529 of the Internal Revenue Code. 
 45.32     Subd. 2.  [MATCHING GRANT ACCOUNTS.] (a) Qualified 
 45.33  distributions are based on the total account balances in an 
 45.34  account owner's account and matching grant account, if any, on 
 45.35  the date of distribution.  Qualified distributions shall be 
 45.36  withdrawn proportionally from each account based on the relative 
 46.1   total account balance of each account to the total account 
 46.2   balance for both accounts.  Amounts for matching grants and 
 46.3   matching grant earnings must only be distributed for qualified 
 46.4   higher education expenses. 
 46.5      Subd. 3.  [NONQUALIFIED DISTRIBUTION.] (a) "Nonqualified 
 46.6   distribution" means a distribution made from an account other 
 46.7   than: 
 46.8      (1) a distribution for the qualified higher education 
 46.9   expenses of a beneficiary; or 
 46.10     (2) a distribution on account of the death or disability 
 46.11  of, or scholarship to, a beneficiary. 
 46.12     (b) An account owner may request a nonqualified 
 46.13  distribution from an account at any time. Nonqualified 
 46.14  distributions are based on the total account balances in an 
 46.15  account owner's account and shall be withdrawn proportionally 
 46.16  from contributions and earnings as provided in section 529 of 
 46.17  the Internal Revenue Code.  The earnings portion of a 
 46.18  nonqualified distribution is subject to a ten percent penalty.  
 46.19  For purposes of this subdivision, "earnings portion" means the 
 46.20  ratio of the earnings in the account to the total account 
 46.21  balance, immediately prior to the distribution, multiplied by 
 46.22  the distribution.  The penalty must be withheld from the total 
 46.23  amount of any distribution. 
 46.24     Subd. 4.  [NONQUALIFIED DISTRIBUTIONS FROM MATCHING GRANT 
 46.25  ACCOUNTS.] If an account owner requests a nonqualified 
 46.26  distribution from an account that has a matching grant account, 
 46.27  the total account balance of the matching grant account, if any, 
 46.28  must be reduced as follows: 
 46.29     (1) the nonqualified distribution shall be withdrawn from 
 46.30  the account and will be subject to a penalty as provided in 
 46.31  subdivision 3; and 
 46.32     (2) the account owner must forfeit matching grant amounts 
 46.33  in the same proportion as the nonqualified distribution is to 
 46.34  the total account balance of the account. 
 46.35     Subd. 5.  [DISTRIBUTIONS DUE TO DEATH OR DISABILITY OF, OR 
 46.36  SCHOLARSHIP TO, A BENEFICIARY.] An account owner may request a 
 47.1   distribution due to the death or disability of, or scholarship 
 47.2   to, a beneficiary from an account by submitting a completed 
 47.3   request to the program.  Prior to distribution, the account 
 47.4   owner shall certify the reason for the distribution and provide 
 47.5   written confirmation from a third party that the beneficiary has 
 47.6   died, become disabled, or received a scholarship for attendance 
 47.7   at an eligible educational institution.  The program must not 
 47.8   consider a request to make a distribution until a third-party 
 47.9   written confirmation is received by the program.  For purposes 
 47.10  of this subdivision, third-party written confirmation shall 
 47.11  consist of the following: 
 47.12     (1) for death of the beneficiary, a certified copy of the 
 47.13  beneficiary's death certificate; 
 47.14     (2) for disability of the beneficiary, a certification by a 
 47.15  physician who is a doctor of medicine or osteopathy stating that 
 47.16  the doctor is legally authorized to practice in a state of the 
 47.17  United States and that the beneficiary is unable to attend any 
 47.18  eligible educational institution because of an injury or illness 
 47.19  that is expected to continue indefinitely or result in death.  
 47.20  Certification must be on a form approved by the program; or 
 47.21     (3) for a scholarship award to the beneficiary, a letter 
 47.22  from the grantor of the scholarship or from the eligible 
 47.23  educational institution receiving or administering the 
 47.24  scholarship, that identifies the beneficiary by name and social 
 47.25  security number or taxpayer identification number as the 
 47.26  recipient of the scholarship and states the amount of the 
 47.27  scholarship, the period of time or number of credits or units to 
 47.28  which it applies, the date of the scholarship, and, if 
 47.29  applicable, the eligible educational institution to which the 
 47.30  scholarship is to be applied. 
 47.31     Sec. 20.  [REVISOR'S INSTRUCTION.] 
 47.32     (a) The revisor of statutes shall renumber each section of 
 47.33  Minnesota Statutes listed in column A with the section listed in 
 47.34  column B. 
 47.35      Column A          Column B 
 47.36      136A.241          136G.01 
 48.1       136A.242          136G.03 
 48.2       136A.243          136G.05 
 48.3       136A.244          136G.07 
 48.4       136A.2441         136G.09 
 48.5       136A.245          136G.11 
 48.6       136A.246          136G.13 
 48.7      (b) The revisor of statutes shall correct cross-references 
 48.8   in Minnesota Statutes that are recodified by this act, and, if 
 48.9   Minnesota Statutes, sections 136A.241 to 136A.246, are further 
 48.10  amended in the 2001 legislative session, shall codify the 
 48.11  amendments in a manner consistent with this act.