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HF 1636

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/09/2021 12:23pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/25/2021
1st Engrossment Posted on 03/09/2021

Current Version - 1st Engrossment

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A bill for an act
relating to data practices; modifying certain provisions of the Minnesota college
savings plan; amending Minnesota Statutes 2020, sections 136A.675; 136G.05,
subdivision 10.

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

Section 1.

Minnesota Statutes 2020, section 136A.675, is amended to read:


136A.675 RISK ANALYSIS.

new text begin Subdivision 1. new text end

new text begin Standard development and usage. new text end

new text begin(a) To screen and detect whether an
institution may not be financially or administratively responsible,
new text endthe office shall develop
deleted text begin a set ofdeleted text end financial and deleted text beginprogrammatic evaluation metrics to aid in the detection of the failure
or potential failure of a school to meet the standards established under sections 136A.61 to
136A.71
deleted text endnew text begin nonfinancial indicatorsnew text end. deleted text beginThese metrics shall include indicators of financial stability,
changes in the senior management or the financial aid and senior administrative staff of an
institution, changes in enrollment, changes in program offerings, and changes in faculty
staffing patterns.
deleted text end The development of financial deleted text beginstandardsdeleted text endnew text begin and nonfinancial indicatorsnew text end shall
use industry standards as deleted text beginbenchmarksdeleted text endnew text begin guidancenew text end. deleted text beginThe development of the nonfinancial
standards shall include a measure of trends and dramatic changes in trends or practice.
deleted text end

new text begin (b) Annually, new text endthe deleted text beginagencydeleted text endnew text begin officenew text end must deleted text beginspecify the metrics and standards for each area anddeleted text end
provide a copy new text beginof the financial and nonfinancial indicators new text endto each registered institution and
post deleted text beginthemdeleted text endnew text begin a list of reviewed indicatorsnew text end on the deleted text beginagencydeleted text endnew text begin officenew text end website.

new text begin (c)new text end The deleted text beginagencydeleted text endnew text begin officenew text end shall use regularly reported data submitted to the federal
government or other regulatory or accreditation agencies wherever possible. deleted text beginThe agency
may require more frequent data reporting by an institution to ascertain whether the standards
are being met.
deleted text end

new text begin (d) The office must use the indicators in this subdivision to screen for whether the
institution is at risk of being unable to meet the standards established under sections
136A.646; 136A.64, subdivision 3; 136A.65, subdivisions 1a and 4, paragraph (a), clauses
(1), (2), (3), and (7); and 136A.685 and those violations may prevent the institution from
meeting its financial obligations or completing its academic terms for the next 18 months.
new text end

new text begin Subd. 2. new text end

new text begin Additional reporting. new text end

new text begin (a) In addition to the information required for the
indicators in subdivision 1, an institution must notify the office within ten business days if
any of the events in paragraphs (b) to (e) occur.
new text end

new text begin (b) Notice is required for the following events related to revenue, debt, and cash flow:
new text end

new text begin (1) the institution has defaulted on a debt payment or covenant and has not received a
waiver of the violation from the financial institution within 60 days;
new text end

new text begin (2) for institutions with a federal composite score of less than 1.5, the institution's owner
withdraws equity that directly results in a composite score of less than 1.0, unless the
withdrawal is a transfer between affiliated entities included in a common composite score;
new text end

new text begin (3) the United States Department of Education requires a 25 percent or greater Letter of
Credit, except when the letter of credit is imposed due to a change of ownership;
new text end

new text begin (4) the United States Department of Education requires Heightened Cash Monitoring 2;
new text end

new text begin (5) the institution receives written notification that it violated the United States
Department of Education's revenue requirement under United States Code, title 20, section
1094(a)(24), as amended; or
new text end

new text begin (6) the institution receives written notification by the United States Department of
Education that it has fallen below minimum financial standards and that its continued
participation in Title IV is conditioned upon satisfying either the Zone Alternative, Code
of Federal Regulations, title 34, section 668.175, paragraph (f), or a Letter of Credit
Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (c).
new text end

new text begin (c) Notice is required for the following events related to accreditation and licensing:
new text end

new text begin (1) the institution receives written notification of probation, warning, show-cause, or
loss of institutional accreditation;
new text end

new text begin (2) the institution receives written notification that its institutional accreditor loses federal
recognition; or
new text end

new text begin (3) the institution receives written notification that it has materially violated state
authorization or institution licensing requirements in a different state that may lead to or
has led to the termination of the institution's ability to continue to provide educational
programs or otherwise continue to operate in that state.
new text end

new text begin (d) Notice is required for the following events related to securities:
new text end

new text begin (1) the Securities and Exchange Commission: (i) issues an order suspending or revoking
the registration of the institution's securities or (ii) suspends trading of the institution's
securities on any national securities exchange;
new text end

new text begin (2) the national securities exchange on which the institution's securities are traded notifies
the institution that it is not in compliance with the exchange's listing requirements and the
institution's securities are delisted; or
new text end

new text begin (3) the Securities and Exchange Commission is not in timely receipt of a required report
and did not issue an extension to file the report.
new text end

new text begin (e) Notice is required for the following events related to criminal and civil investigations:
new text end

new text begin (1) the institution receives written notification of a felony criminal indictment or charges
of the institution's owner;
new text end

new text begin (2) the institution receives written notification of criminal indictment or charges of the
institution's officers related to operations of the institution; or
new text end

new text begin (3) there has been a criminal, civil, or administrative adjudication of fraud or
misrepresentation in Minnesota or in another state or jurisdiction against the institution or
its owner, officers, agents, or sponsoring organization.
new text end

new text begin Subd. 3. new text end

new text begin Determination procedures. new text end

new text begin (a) If the office: (1) identifies a potential risk under
subdivision 1, paragraph (d); (2) receives notification from an institution under subdivision
2; or (3) identifies other exigent circumstances impacting or at the institution that may deny
students a reasonable opportunity to complete their education program at the institution or
through an alternate institution with minimal disruption, the office shall conduct a systematic
evaluation under this paragraph to make a preliminary determination of whether action
under paragraph (e) is necessary. The systematic evaluation must, to the extent practicable,
be a collaboration between the office and the institution. The office must request additional
context and information from the institution that demonstrates the administrative and financial
responsibility of the institution. If the institution may not be financially or administratively
responsible, a contingency plan must be implemented either collaboratively or as part of a
final determination under paragraph (e), clause (4).
new text end

new text begin (b) The office shall provide notice in writing to the institution of the preliminary
determination. The notice shall provide the analysis used by the office to make the
determination, a request for the institution to provide additional context and information
that demonstrates the administrative and financial responsibility of the institution not provided
under paragraph (a), any potential action the office may take under paragraph (e), and a
deadline for responding to the notice. The institution shall have not less than ten business
days to respond to the preliminary determination.
new text end

new text begin (c) The response from the institution to provide additional context and information must
be written and may include a collaborative consultation with the office. In its response, the
institution shall provide additional context, financial data, and other information, including
but not limited to evidence of sound business practices, institutional financial health,
compliance with the requirements of sections 136A.61 to 136A.71, or sufficient and timely
plans to cure any noncompliance or to manage financial health and risk.
new text end

new text begin (d) If the institution does not respond to the office's notice and request for additional
context and information within the time required, the office's preliminary determination
shall become final and the office may take any of the actions specified in the notice required
by paragraph (e). If the institution responds to the office's notice, the office must reevaluate
the preliminary determination. The office shall use the additional context and information
provided by the institution to make a final determination and determine which actions under
paragraph (e), if any, are necessary to mitigate risk to students and state financial aid under
this chapter. The office shall provide the institution notice of the final determination and
the actions required under paragraph (e).
new text end

new text begin (e) The office may use a final determination to:
new text end

new text begin (1) revoke, suspend, or refuse to renew registration, approval of an institution's degree,
or use of a regulated term in its name under section 136A.65, subdivision 8;
new text end

new text begin (2) require periodic monitoring and submission of reports on the institution's
administrative and financial responsibility to ascertain whether compliance and financial
risk improves;
new text end

new text begin (3) require periodic collaborative consultations with the institution on noncompliance
of sections 136A.61 to 136A.71, or how the institution is managing financial health and
risk;
new text end

new text begin (4) require the institution to submit contingency plans such as teach-out plans or transfer
pathways for students;
new text end

new text begin (5) prohibit the institution from accepting tuition and fee payments made through cash,
alternative loans, or the equivalent, prior to the add/drop period of the current period of
instruction;
new text end

new text begin (6) prohibit the institution from enrolling new students;
new text end

new text begin (7) initiate alternative processes and communications with students enrolled at the
institution;
new text end

new text begin (8) require a surety bond under section 136A.646; or
new text end

new text begin (9) submit institution closure information under section 136A.645.
new text end

new text begin Subd. 4. new text end

new text begin Data classification. new text end

new text begin Data under this section shall be classified as financial
records under section 136A.64, subdivision 2.
new text end

Sec. 2.

Minnesota Statutes 2020, section 136G.05, subdivision 10, is amended to read:


Subd. 10.

Data.

new text begin(a) new text endAccount owner data, account data, and data on beneficiaries of
accounts are private data on individuals or nonpublic data as defined in section 13.02, deleted text beginexcept
that the names and addresses of the beneficiaries of accounts that receive matching grants
are public
deleted text endnew text begin unless the data qualifies for the exception in paragraph (b)new text end.

new text begin (b) Account owner data may be used by the office in cooperation with the Department
of Revenue for the purposes of research and analysis to evaluate the plan in order to make
ongoing informed decisions regarding the administration of the plan.
new text end