SF 2775

1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to children; proposing an amendment to the 
  1.3             Minnesota Constitution by adding a section to article 
  1.4             XI; establishing the children's endowment fund; 
  1.5             appropriating money; proposing coding for new law as 
  1.6             Minnesota Statutes, chapter 119C. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [CONSTITUTIONAL AMENDMENT.] 
  1.9      An amendment to the Minnesota Constitution is proposed to 
  1.10  the people.  If the amendment is adopted, a section shall be 
  1.11  added to article XI to read: 
  1.12     Sec. 15.  The endowment fund for Minnesota's children is 
  1.13  established in the state treasury.  The principal of the 
  1.14  children's endowment fund must be perpetual and inviolate 
  1.15  forever.  The net earnings from the fund must be appropriated by 
  1.16  law for purposes that will enhance children's physical, 
  1.17  emotional, and intellectual development through the age of six 
  1.18  years so that children in this state begin school ready to learn.
  1.19     Sec. 2.  [SCHEDULE AND QUESTION.] 
  1.20     The amendment shall be submitted to the people at the 1998 
  1.21  general election.  The question submitted shall be: 
  1.22     "Shall the Minnesota Constitution be amended to create a 
  1.23  permanent endowment fund to enhance the development of young 
  1.24  children through the age of six? 
  1.25                                     Yes .......
  1.26                                     No ........"
  2.1                             CHAPTER 119C
  2.2                  ENDOWMENT FOR MINNESOTA'S CHILDREN
  2.3      Sec. 3.  [FINDINGS.] 
  2.4      The legislature finds that the state's highest priority 
  2.5   should be to ensure that all children have the opportunity to 
  2.6   succeed by beginning school ready to learn.  Scientific research 
  2.7   shows that the electrical activity of brain cells actually 
  2.8   changes the physical structure of the brain itself and that 
  2.9   without a stimulating environment, a baby's brain will suffer.  
  2.10  At birth, a baby's brain contains 100,000,000,000 neurons, 
  2.11  roughly as many nerve cells as there are stars in the Milky 
  2.12  Way.  The wiring pattern between these neurons, which creates 
  2.13  the brain's road map for successful learning, develops over 
  2.14  time, with much of this development being completed before the 
  2.15  child reaches the age of six.  Children who play very little or 
  2.16  are rarely touched develop brains that are 20 to 30 percent 
  2.17  smaller than normal for their age. 
  2.18     This scientific evidence also conclusively demonstrates 
  2.19  that enhancing children's physical, social, emotional, and 
  2.20  intellectual development will result in tremendous benefits for 
  2.21  children, families, and the state.  Since more than 50 percent 
  2.22  of the mothers of children under the age of three now work 
  2.23  outside the home, our society must change to provide new 
  2.24  supports so young children receive the attention and care that 
  2.25  they need.  Many Minnesota children live in poverty and, 
  2.26  compared to other industrialized nations, the United States has 
  2.27  a higher infant mortality rate, a higher proportion of low 
  2.28  birth-weight babies, and a smaller proportion of babies 
  2.29  immunized against childhood diseases.  National and local 
  2.30  studies have shown a strong link between increased violence and 
  2.31  crime among youth when there is no early intervention.  This 
  2.32  state will spend millions of dollars in the future on programs 
  2.33  for at-risk or delinquent youth and child welfare programs that 
  2.34  address crisis situations that frequently could be avoided or 
  2.35  made much less severe with good early interventions.  While this 
  2.36  state and many local communities have developed successful early 
  3.1   childhood efforts, a commitment of funds in a children's 
  3.2   endowment fund dedicated to stimulating innovation and 
  3.3   encouraging expansion of demonstrably successful projects that 
  3.4   assist children through the age of six years could expand and 
  3.5   enhance opportunities for young children. 
  3.6      Sec. 4.  [119C.01] [DEFINITIONS.] 
  3.7      Subdivision 1.  [APPLICABILITY.] The definitions in this 
  3.8   section apply to sections 119C.01 to 119C.07. 
  3.9      Subd. 2.  [ENDOWMENT FUND.] "Endowment fund" means the 
  3.10  children's endowment fund established in the Minnesota 
  3.11  Constitution, article XI, section 15. 
  3.12     Subd. 3.  [YOUNG CHILDREN.] "Young children" means children 
  3.13  under the age of seven. 
  3.14     Sec. 5.  [119C.02] [ENDOWMENT FUND NOT TO SUPPLANT EXISTING 
  3.15  FUNDING.] 
  3.16     (a) The endowment fund may not be used as a substitute for 
  3.17  traditional sources of funding activities for young children and 
  3.18  their parents, but the endowment fund must be used to supplement 
  3.19  traditional sources, including sources used to support the 
  3.20  activities in section 119C.04, subdivision 1. 
  3.21     (b) The commission shall determine the amount of the state 
  3.22  budget spent from traditional sources to fund activities for 
  3.23  young children and their parents before and after the endowment 
  3.24  fund is established and include a comparison of the amount in 
  3.25  the report under section 119C.05, subdivision 7. 
  3.26     Sec. 6.  [119C.03] [ENDOWMENT FUND ACCOUNT.] 
  3.27     Subdivision 1.  [ESTABLISHMENT OF ACCOUNT AND INVESTMENT.] 
  3.28  The children's endowment fund, under the Minnesota Constitution, 
  3.29  article XI, section 15, is an account in the state treasury.  
  3.30  The commissioner of finance shall credit to the endowment fund 
  3.31  the amounts authorized under this section and section 119C.06.  
  3.32  The state board of investment shall ensure that endowment fund 
  3.33  money is invested under section 11A.24.  All money earned by the 
  3.34  endowment fund must be credited to the endowment fund.  The 
  3.35  principal of the endowment fund and any unexpended earnings must 
  3.36  be invested and reinvested by the state board of investment.  
  4.1      Subd. 2.  [REVENUE.] Nothing in sections 3 to 10 limits the 
  4.2   source of contributions to the endowment fund. 
  4.3      Subd. 3.  [GIFTS AND DONATIONS.] Gifts and donations may be 
  4.4   made to the endowment fund.  Noncash gifts and donations must be 
  4.5   disposed of for cash as soon as the board prudently can maximize 
  4.6   the value of the gift or donation.  Gifts and donations of 
  4.7   marketable securities may be held or disposed of for cash at the 
  4.8   option of the board.  The cash receipts of gifts and donations 
  4.9   of cash or capital assets and marketable securities disposed of 
  4.10  for cash must be credited immediately to the principal of the 
  4.11  endowment fund.  The value of marketable securities at the time 
  4.12  the gift or donation is made must be credited to the principal 
  4.13  of the endowment fund, and any earnings from the marketable 
  4.14  securities are earnings of the endowment fund. 
  4.15     Subd. 4.  [AUDITS REQUIRED.] The legislative auditor shall 
  4.16  audit endowment fund expenditures to ensure that the money is 
  4.17  spent for the purposes in the commission's budget plan. 
  4.18     Sec. 7.  [119C.04] [ENDOWMENT FUND EXPENDITURES; 
  4.19  EXCEPTIONS; PLANS.] 
  4.20     Subdivision 1.  [EXPENDITURES.] Money in the endowment fund 
  4.21  may be spent for: 
  4.22     (1) research that contributes to increasing the 
  4.23  understanding of the development of young children's brains or 
  4.24  to developing new methods to increase the effectiveness of 
  4.25  stimulation and educational activities that will improve brain 
  4.26  development in young children; 
  4.27     (2) collection and analysis of information that assists in 
  4.28  enhancing the development of young children so they begin school 
  4.29  ready to learn; 
  4.30     (3) enhancement of public education, awareness, and 
  4.31  understanding necessary for the promotion and encouragement of 
  4.32  activities that protect and stimulate young children's 
  4.33  development so that they begin school ready to learn; 
  4.34     (4) supplemental funding to those projects and programs 
  4.35  that have demonstrated successful outcomes in improving and 
  4.36  enhancing the development of young children so they begin school 
  5.1   ready to learn; 
  5.2      (5) activities that link parenting education for parents to 
  5.3   early childhood learning services for young children; 
  5.4      (6) activities that are designed to strengthen the quality 
  5.5   of child care for young children and expand the supply of high 
  5.6   quality child care services for young children; 
  5.7      (7) activities that increase the level of immunization and 
  5.8   preventive health care screening and education for young 
  5.9   children; 
  5.10     (8) activities that assist in the development and improved 
  5.11  efficiency of community-based assistance activities for young 
  5.12  children; 
  5.13     (9) activities that establish methods to evaluate how 
  5.14  services can be more effectively delivered to young children and 
  5.15  parents of young children; 
  5.16     (10) activities that strengthen families, neighborhoods, 
  5.17  and communities by encouraging partnerships and collaborations 
  5.18  on behalf of young children; 
  5.19     (11) activities that provide all three- and four-year-olds 
  5.20  with access to a setting that offers both a high quality 
  5.21  preschool experience and child care during the hours that 
  5.22  parents work; 
  5.23     (12) activities that support every neighborhood in efforts 
  5.24  to provide a family-friendly place from which infants and 
  5.25  toddlers and their families would be provided home visiting, 
  5.26  family support, early education, and other community-based 
  5.27  supports reaching out to the youngest children and their 
  5.28  parents; 
  5.29     (13) activities that ensure that all young children and 
  5.30  pregnant women receive the health care they require; 
  5.31     (14) administrative and investment expenses incurred by the 
  5.32  state board of investment in investing deposits to the endowment 
  5.33  fund; and 
  5.34     (15) administrative expenses subject to the limits in 
  5.35  section 119C.05. 
  5.36     Activities in clauses (5) to (13) may include pilot 
  6.1   projects or demonstration projects. 
  6.2      Subd. 2.  [STRATEGIC PLAN REQUIRED.] (a) The commission 
  6.3   shall adopt a strategic plan for making expenditures from the 
  6.4   endowment fund, including identifying the priority areas for 
  6.5   funding for the next six years.  The strategic plan must be 
  6.6   updated every two years.  The plan is advisory only.  The 
  6.7   commission shall submit the plan, as a recommendation, to the 
  6.8   house of representatives appropriations and senate finance 
  6.9   committees by January 1 of each odd-numbered year. 
  6.10     (b) The commission may accept or modify the draft of the 
  6.11  strategic plan submitted to it by the advisory committee before 
  6.12  voting on the plan's adoption. 
  6.13     Subd. 3.  [BUDGET PLAN.] (a) Funding may be provided only 
  6.14  for projects that fit within the categories in subdivision 1. 
  6.15     (b) Projects submitted to the commission for funding may be 
  6.16  referred to the advisory committee for recommendation. 
  6.17     (c) The commission shall adopt a budget plan to make 
  6.18  expenditures from the endowment fund for the purposes provided 
  6.19  in subdivision 1.  The budget plan must be submitted to the 
  6.20  governor for inclusion in the biennial budget and supplemental 
  6.21  budget submitted to the legislature. 
  6.22     (d) Money in the endowment fund may not be spent except 
  6.23  under an appropriation by law.  
  6.24     Subd. 4.  [PUBLIC MEETINGS.] All advisory committee and 
  6.25  commission meetings must be open to the public.  The commission 
  6.26  shall attempt to meet at least once in each of the state's 
  6.27  congressional districts during each biennium.  
  6.28     Subd. 5.  [PEER REVIEW.] (a) Research proposals must 
  6.29  include a stated purpose, timeline, potential outcomes, and an 
  6.30  explanation of the need for the research.  All research 
  6.31  proposals must be reviewed by a peer review panel before 
  6.32  receiving an appropriation. 
  6.33     (b) In conducting research proposal reviews, the peer 
  6.34  review panel shall: 
  6.35     (1) comment on the method proposed and whether it can be 
  6.36  expected to yield appropriate and useful information and data; 
  7.1      (2) comment on the need for the research and about similar 
  7.2   existing information available, if any; and 
  7.3      (3) report to the commission and advisory committee on 
  7.4   clauses (1) and (2). 
  7.5      (c) The peer review panel also must review completed 
  7.6   research proposals that have received an appropriation and 
  7.7   comment and report upon whether the project reached the intended 
  7.8   goals. 
  7.9      Subd. 6.  [PEER REVIEW PANEL MEMBERSHIP.] (a) The peer 
  7.10  review panel must consist of at least five members who are 
  7.11  knowledgeable in general research methods in the area of child 
  7.12  development.  Not more than two members of the panel may be 
  7.13  employees of state agencies in this state. 
  7.14     (b) The commission shall select a chair every two years who 
  7.15  is responsible for convening meetings of the panel as often as 
  7.16  is necessary to fulfill its duties under this section.  
  7.17  Compensation of panel members is governed by section 15.059, 
  7.18  subdivision 3. 
  7.19     Sec. 8.  [119C.05] [ADMINISTRATION.] 
  7.20     Subdivision 1.  [ADMINISTRATIVE AUTHORITY.] The commission 
  7.21  may appoint legal and other personnel and consultants necessary 
  7.22  to carry out functions and duties of the commission.  Permanent 
  7.23  employees are in the unclassified service.  In addition, the 
  7.24  commission may request staff assistance and data from any other 
  7.25  agency of state government as needed for the execution of the 
  7.26  responsibilities of the commission and advisory committee and an 
  7.27  agency must promptly furnish it. 
  7.28     Subd. 2.  [LIAISON OFFICERS.] The commission shall request, 
  7.29  and the head of each state agency with a direct interest and 
  7.30  responsibility in activities conducted by the commission shall 
  7.31  appoint, a liaison officer for the agency who shall work closely 
  7.32  with the commission and its staff. 
  7.33     Subd. 3.  [APPRAISAL AND EVALUATION.] The commission shall 
  7.34  obtain and appraise information available through private 
  7.35  organizations and groups, using to the fullest extent possible 
  7.36  studies, data, and reports previously prepared or currently in 
  8.1   progress by public agencies, private organizations, groups, and 
  8.2   others, concerning future trends.  Any data compiled by the 
  8.3   commission must be made available to any standing or interim 
  8.4   committee of the legislature upon the request of the committee's 
  8.5   chair. 
  8.6      Subd. 4.  [PERSONNEL.] Persons who are employed by a state 
  8.7   agency to work on a project and are paid by an appropriation 
  8.8   from the endowment fund are in the unclassified civil service, 
  8.9   and their continued employment is contingent upon the 
  8.10  availability of money from the appropriation.  When the 
  8.11  appropriation has been spent, their positions must be canceled 
  8.12  and the approved complement of the agency reduced accordingly.  
  8.13  Part-time employment of persons for a project is authorized.  
  8.14  The use of classified employees is authorized when approved as 
  8.15  part of the work program required by section 119C.05, 
  8.16  subdivision 2, paragraph (b). 
  8.17     Subd. 5.  [ADMINISTRATIVE EXPENSE.] The administrative 
  8.18  expenses of the commission must be paid by the commission in 
  8.19  accordance with paragraphs (a) and (b). 
  8.20     (a) Until July 1, 1999, the administrative expenses of the 
  8.21  commission and the advisory committee must be paid from the 
  8.22  endowment fund.  After that time, the prorated expenses related 
  8.23  to administration of the endowment fund must be paid from the 
  8.24  earnings of the endowment fund. 
  8.25     (b) After June 30, 1999, the prorated expenses related to 
  8.26  administration of the endowment fund may not exceed an amount 
  8.27  equal to four percent of the projected earnings of the endowment 
  8.28  fund for a biennium. 
  8.29     Subd. 6.  [CONFLICT OF INTEREST.] A commission member, 
  8.30  advisory committee member, peer review panelist, or an employee 
  8.31  of the commission may not participate in or vote on a decision 
  8.32  of the commission, advisory committee, or peer review panel 
  8.33  relating to an organization in which the member, panelist, or 
  8.34  employee has either a direct or indirect personal financial 
  8.35  interest.  While serving on the legislative commission, advisory 
  8.36  committee, or peer review panel or as an employee of the 
  9.1   commission, a person shall avoid any potential conflict of 
  9.2   interest. 
  9.3      Subd. 7.  [REPORT REQUIRED.] By January 15 of each 
  9.4   odd-numbered year, the commission shall submit a report to the 
  9.5   governor, the chairs of the house appropriations and senate 
  9.6   finance committees, and the chairs of the house and senate 
  9.7   committees having jurisdiction over health and human services, 
  9.8   education, and crime prevention.  Copies of the report must be 
  9.9   available to the public.  The report must include: 
  9.10     (1) a copy of the current strategic plan; 
  9.11     (2) a description of each project receiving money from the 
  9.12  endowment fund during the preceding biennium; 
  9.13     (3) a summary of any research project completed in the 
  9.14  preceding biennium; 
  9.15     (4) recommendations to implement successful projects and 
  9.16  programs into a state agency's standard operations; 
  9.17     (5) to the extent known by the commission, descriptions of 
  9.18  the projects anticipated to be supported by the endowment fund 
  9.19  during the next biennium; 
  9.20     (6) the source and amount of all revenues collected and 
  9.21  distributed by the commission, including all administrative and 
  9.22  other expenses; 
  9.23     (7) a description of the assets and liabilities of the 
  9.24  endowment fund; 
  9.25     (8) any findings or recommendations that may assist the 
  9.26  legislature in formulating legislation; 
  9.27     (9) a list of all gifts and donations with a value over 
  9.28  $1,000; 
  9.29     (10) a comparison of the amounts spent by the state for 
  9.30  activities through the most recent fiscal year; and 
  9.31     (11) a copy of the most recent compliance audit. 
  9.32     Sec. 9.  [119C.06] [ROYALTIES; COPYRIGHTS; PATENTS.] 
  9.33     This section applies to projects supported by the endowment 
  9.34  fund.  The endowment fund owns and shall take title to the 
  9.35  percentage of a royalty, copyright, or patent resulting from a 
  9.36  project supported by the fund equal to the percentage of the 
 10.1   project's total funding provided by the fund.  Cash receipts 
 10.2   resulting from a royalty, copyright, or patent, or the sale of 
 10.3   the endowment fund's rights to a royalty, copyright, or patent, 
 10.4   must be credited immediately to the principal of the endowment 
 10.5   fund.  Before a project is included in the budget plan, the 
 10.6   commission may vote to relinquish the ownership or rights to a 
 10.7   royalty, copyright, or patent resulting from a project supported 
 10.8   by the endowment fund to the project's proposer when the amount 
 10.9   of the original grant or loan, plus interest, has been repaid to 
 10.10  the endowment fund. 
 10.11     Sec. 10.  [119C.07] [AVAILABILITY OF FUNDS FOR 
 10.12  DISBURSEMENT.] 
 10.13     Subdivision 1.  [AMOUNT.] (a) The amount biennially 
 10.14  available from the endowment fund for the budget plan developed 
 10.15  by the commission consists of the earnings generated from the 
 10.16  endowment fund.  Earnings generated from the endowment fund must 
 10.17  equal the amount of interest on debt securities and dividends on 
 10.18  equity securities.  Gains and losses arising from the sale of 
 10.19  securities must be apportioned in accordance with paragraphs (b) 
 10.20  and (c).  
 10.21     (b) If the sale of securities results in a net gain during 
 10.22  a fiscal year, the gain must be apportioned in equal 
 10.23  installments over the next ten fiscal years to offset net losses 
 10.24  in those years.  If any portion of an installment is not needed 
 10.25  to recover subsequent losses identified in paragraph (b), it 
 10.26  must be added to the principal of the endowment fund.  
 10.27     (c) If the sale of securities results in a net loss during 
 10.28  a fiscal year, the net loss must be recovered from the gains in 
 10.29  paragraph (b) apportioned to that fiscal year.  If the gains are 
 10.30  insufficient, any remaining net loss must be recovered from 
 10.31  interest and dividend income in equal installments over the 
 10.32  following ten fiscal years.  
 10.33     Subd. 2.  [UNENCUMBERED FUNDS.] Any appropriated funds not 
 10.34  encumbered in the biennium in which they are appropriated cancel 
 10.35  and must be credited to the principal of the endowment fund. 
 10.36     Sec. 11.  [APPROPRIATION.] 
 11.1      If the constitutional amendment in section 1 is adopted, 
 11.2   $....... is appropriated from the general fund to the 
 11.3   commissioner of finance for transfer to the children's endowment 
 11.4   fund. 
 11.5      Sec. 12.  [EFFECTIVE DATE.] 
 11.6      Sections 3 to 10 are effective the day after the 
 11.7   constitutional amendment proposed in sections 1 and 2 is adopted.