Office of the Revisor of Statutes
Minnesota Session Laws - 2001, 1st Special Session
Key: (1) language to be deleted (2) new language
CHAPTER 1-S.F.No. 11
An act relating to education; appropriating money for
education and related purposes to the higher education
services office, board of trustees of the Minnesota
state colleges and universities, board of regents of
the University of Minnesota, and the Mayo Medical
Foundation, with certain conditions; establishing an
account in the state enterprise fund; authorizing
appropriations from the medical education endowment
fund; modifying state appropriations for certain
enrollments; extending expiration deadline for certain
advisory groups; adjusting assigned family
responsibility; modifying grant provisions;
establishing a grant program; authorizing acquisition
of certain facilities by the board of trustees;
providing for refund of tuition for certain students;
making various clarifying and technical changes;
deleting obsolete references; establishing a
developmental education demonstration project;
establishing a commission on University of Minnesota
excellence; requiring reports; amending Minnesota
Statutes 2000, sections 13.322, subdivision 3; 16A.87;
62J.694, subdivisions 1, 2, by adding a subdivision;
135A.031, subdivision 2; 136A.031, by adding a
subdivision; 136A.101, subdivisions 5a, 8; 136A.121,
subdivisions 6, 9; 136A.125, subdivisions 2, 4;
136A.241; 136A.242; 136A.243, subdivisions 1, 2, 3, 4,
9, by adding a subdivision; 136A.244, subdivisions 1,
4; 136A.245, subdivisions 2, 4, by adding
subdivisions; 136F.13, subdivision 1; 136F.60,
subdivision 2; 137.10; 169.966; 299A.45, subdivisions
1, 4; 354.094, subdivision 2; 354.69; 356.24,
subdivision 1; Laws 1986, chapter 398, article 1,
section 18, as amended; proposing coding for new law
in Minnesota Statutes, chapters 16A; 136A; 136F;
repealing Minnesota Statutes 2000, sections 135A.06,
subdivision 1; 136F.13, subdivision 2; Laws 1994,
chapter 643, section 66.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
APPROPRIATIONS
Section 1. [HIGHER EDUCATION APPROPRIATIONS.]
The sums in the columns marked "APPROPRIATIONS" are
appropriated from the general fund, or other named fund, to the
agencies and for the purposes specified in this article. The
listing of an amount under the figure "2002" or "2003" in this
article indicates that the amount is appropriated to be
available for the fiscal year ending June 30, 2002, or June 30,
2003, respectively. "The first year" is fiscal year 2002. "The
second year" is fiscal year 2003. "The biennium" is fiscal
years 2002 and 2003.
SUMMARY BY FUND
2002 2003 TOTAL
General $1,380,039,000 $1,464,114,000 $2,844,153,000
Health Care
Access 2,537,000 2,537,000 5,074,000
SUMMARY BY AGENCY - ALL FUNDS
2002 2003 TOTAL
Higher Education Services Office
148,699,000 157,650,000 306,349,000
Board of Trustees of the Minnesota
State Colleges and Universities
601,583,000 639,984,000 1,241,567,000
Board of Regents of the University
of Minnesota
630,657,000 667,380,000 1,298,037,000
Mayo Medical Foundation
1,637,000 1,637,000 3,274,000
APPROPRIATIONS
Available for the Year
Ending June 30
2002 2003
Sec. 2. HIGHER EDUCATION
SERVICES OFFICE
Subdivision 1. Total
Appropriation $ 148,699,000 $ 157,650,000
The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.
Notwithstanding Minnesota Statutes,
section 136A.1211, savings in the state
grant program in fiscal years 2002 and
2003 resulting from any increases in
the maximum federal grant from $3,300
up to $3,750 must be used as provided
in this section.
Subd. 2. State Grants 113,668,000 122,598,000
If the appropriation in this
subdivision for either year is
insufficient, the appropriation for the
other year is available for it.
The legislature intends that the higher
education services office make full
grant awards in each year of the
biennium.
For the biennium, the private
institution tuition maximum shall be
$8,764 in the first year and $8,983 in
the second year for four-year
institutions and $6,744 in the first
year and $6,913 in the second year for
two-year institutions.
This appropriation contains money to
set the living and miscellaneous
expense allowance at $5,405 in each
year.
This appropriation contains money to
match scholarship grants made under the
President's Student Service Scholarship
program of the Corporation for National
Service to students attending Minnesota
high schools and who will attend a
Minnesota post-secondary institution.
Not more than one matching grant of
$500 may be made for each high school
per year.
Notwithstanding Minnesota Statutes,
section 136A.1211, savings in the state
grant program in fiscal years 2002 and
2003 resulting from any increase in the
maximum federal grant over $3,750 or
from any other source must be used to
provide additional decreases in the
family responsibility for independent
students up to an additional ten
percent from the decrease in this bill
and to increase funding for work study
programs.
Subd. 3. Interstate Tuition
Reciprocity 5,250,000 5,250,000
If the appropriation in this
subdivision for either year is
insufficient, the appropriation for the
other year is available to meet
reciprocity contract obligations.
The higher education services office
must negotiate the reciprocity
agreements for remission of nonresident
tuition under Minnesota Statutes,
section 136A.08. The agreements must
be negotiated under this subdivision
with the goal of reducing and
minimizing the obligation of
participating states to make general
fund transfers for the tuition
reciprocity program while maintaining
access for Minnesota students.
Negotiations must include consideration
of new methods of collaboration with
education institutions in reciprocity
states to improve student access at
lower costs, including on-line
learning. The chancellor of the
Minnesota state colleges and
universities and the president of the
University of Minnesota or their
designees may participate in any
negotiations on the tuition reciprocity
agreement. The higher education
services office must present progress
on negotiations under this subdivision
to the higher education finance
committees of the 2002 legislature.
Subd. 4. State Work Study
12,444,000 12,444,000
Subd. 5. Minitex and MnLINK
5,868,000 5,868,000
Subd. 6. Learning Network of Minnesota
6,079,000 6,079,000
Subd. 7. Income Contingent Loans
The higher education services office
shall administer an income-contingent
loan repayment program to assist
graduates of Minnesota schools in
medicine, dentistry, pharmacy,
chiropractic medicine, public health,
and veterinary medicine, and Minnesota
residents graduating from optometry and
osteopathy programs. Applicant data
collected by the office for this
program may be disclosed to a consumer
credit reporting agency under the same
conditions as those that apply to the
supplemental loan program under
Minnesota Statutes, section 136A.162.
No new applicants may be accepted after
June 30, 1995.
Subd. 8. Minnesota College Savings Plan
1,520,000 1,520,000
Subd. 9. Agency Administration
3,870,000 3,891,000
This appropriation includes base
funding to foster post-secondary
attendance by providing outreach
services to historically underserved
groups of Minnesota elementary and
secondary students. The office may
retain the entire appropriation or
contract with other agencies or
nonprofit organizations for specific
services in this effort.
This appropriation contains money for
grants to increase campus-community
collaboration and service learning
statewide. For every $1 in state
funding, grant recipients must
contribute $2 in campus or
community-based support. Up to five
percent of the allocation for this
program may be used to develop and
implement a performance-based
accountability system to assess program
outcomes.
This appropriation includes an increase
in the dues for the Midwest Higher
Education Compact.
Any appropriations remaining after
final benefits are paid to youthworks
grantees may be used for college early
intervention programs.
Subd. 10. Balances Forward
A balance in the first year under this
section does not cancel, but is
available for the second year.
Subd. 11. Transfers
The higher education services office
may transfer unencumbered balances from
the appropriations in this section to
the state grant appropriation, the
interstate tuition reciprocity
appropriation, the child care
appropriation, and the state work study
appropriation.
Subd. 12. Reporting
The higher education services office
shall collect data monthly from
institutions disbursing state financial
aid. The data collected shall include,
but is not limited to, expenditures by
type to date and unexpended balances.
The higher education services office
shall evaluate and report on state
financial aid expenditures and
unexpended balances to the chairs of
the higher education finance committees
of the senate and house of
representatives and the commissioner of
finance on February 1, May 1, September
1, and December 1 each year.
Sec. 3. BOARD OF TRUSTEES OF THE
MINNESOTA STATE COLLEGES AND UNIVERSITIES
Subdivision 1. Total
Appropriation 601,583,000 639,984,000
The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.
The legislature intends that state
appropriations be used to strengthen
and support education of students. To
this end, all money appropriated in
this section, except that in direct
support of system office activities,
shall be allocated by the board
directly to the colleges and
universities.
Subd. 2. Estimated Expenditures and Appropriations
The legislature estimates that
instructional expenditures will be
$795,927,000 in the first year and
$847,873,000 in the second year.
The legislature estimates that
noninstructional expenditures will be
$70,964,000 in the first year and
$74,736,000 in the second year.
The Northeast Higher Education District
shall be the fiscal agent for the
Arrowhead University Center.
This appropriation includes money for a
grant to Minnesota state university,
Mankato, for the Talented Youth
Mathematics Program and to expand the
program in the second year to an
additional region.
During the biennium, neither the board
nor campuses shall plan or develop
doctoral level programs or degrees
until after they have received the
recommendation of the house and senate
committees on education, finance, and
ways and means.
By January 1, 2002, the board must
implement the Minnesota transfer
curriculum at all state colleges and
universities.
Once a course has met the criteria
necessary for inclusion in the
Minnesota transfer curriculum in any
area of emphasis, the course must be
accepted for full credit in that area
of emphasis at all Minnesota state
colleges and universities.
By July 1, 2002, the board must publish
an internet-based student manual that
identifies and describes how general
education courses at two-year MnSCU
institutions transfer to state
universities within the Minnesota state
colleges and universities system.
In each year, the board of trustees
shall increase the percentage of the
total general fund expenditures for
direct instruction and academic
support, as reported in the federal
Integrated Postsecondary Education Data
System (IPEDS). By February 15 of each
year, the board of trustees shall
report to the higher education finance
committees of the legislature the
percentage of total general fund
expenditures spent on direct
instruction and on academic support
during the previous fiscal year by
institution and for the system as a
whole.
During the biennium, technical and
consolidated colleges shall make use of
instructional advisory committees
consisting of employers, students, and
instructors. The instructional
advisory committee shall be consulted
when a technical program is proposed to
be created, modified, or eliminated.
If a decision is made to eliminate a
program, a college shall adequately
notify students and make plans to
assist students affected by the closure.
The board may waive tuition for
eligible Southwest Asia veterans, as
provided in Minnesota Statutes, section
136F.28.
Subd. 3. Accountability
(a) By February 1 of each even-numbered
year, the board must submit a report to
the chairs of the appropriate education
committees of the legislature
describing the following:
(1) how it allocated the state
appropriations made to the system in
the omnibus higher education funding
bill in the odd-numbered year;
(2) the tuition rates and fees set by
the board; and
(3) the amount of state money used to
leverage money from other funding
sources and the level of support from
those sources.
(b) By February 15, 2002, and each
odd-numbered year thereafter, the board
of trustees of the Minnesota state
colleges and universities must submit a
report to the commissioner of finance
and the chairs of the higher education
finance committees delineating:
(1) the five undergraduate degree
programs determined to be of highest
priority to the system, and the revenue
necessary to advance each program to be
a center of excellence;
(2) the reallocation of money and
curricular and staffing changes, by
campus and program, made to advance the
system's priorities;
(3) baseline data, and the methodology
used to measure the number of first
generation students admitted
systemwide, together with a plan to
increase both the recruitment and
retention through graduation of these
students;
(4) progress towards increasing the
percentage of students at four-year
institutions graduating within four,
five, and six years and the percentage
of students at two-year institutions
completing a program or transferring to
a four-year institution, as reported in
IPEDS. Data should be provided for
each institution by race, ethnicity,
and gender. Data provided should
include information on successful
retention strategies and the money
allocated to enhance student retention;
and
(5) progress towards increasing the
revenue generated from contracts with
employers for customized training.
Subd. 4. Base Appropriations
For fiscal years 2002 and 2003, there
is a one-time reduction of $13,500,000
in the base appropriation for the
Minnesota state colleges and
universities.
Subd. 5. Reserves
The board must distribute $5,000,000 of
the balance held in central office
reserves at the end of fiscal year 2001
to campuses in fiscal year 2002 through
a leveraged equipment purchase
program. Participating campuses must
match the money distributed through the
leveraged equipment purchase program at
least dollar for dollar with nonstate
funds.
By December 1, 2002, the board of
trustees must adopt policies to clarify
the purposes of the central reserve and
under what general conditions it will
be used.
Subd. 6. Central Office Services
The board of trustees of the Minnesota
state colleges and universities, in
cooperation with the council of
presidents, must develop a plan to
increase autonomy for campuses and
accountability at the system level.
The plan must include the provision of
central office services in ways that
better reflect campus needs. The plan
must consider the following:
(1) core central office services funded
through a nominal fee paid by all
campuses;
(2) an option for campuses to contract
for services from the central office;
(3) the streamlined delivery of
services to eliminate duplication at
the campus and central office;
(4) the impact of alternative service
delivery methods on various types of
campuses; and
(5) making central office services more
market-sensitive.
The board must present a plan to
restructure central office services to
the chairs of the higher education
finance committees of the legislature
by February 15, 2003.
Sec. 4. BOARD OF REGENTS OF THE
UNIVERSITY OF MINNESOTA
Subdivision 1. Total
Appropriation 630,657,000 667,380,000
The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.
Subd. 2. Operations and
Maintenance 554,211,000 590,934,000
Estimated Expenditures
and Appropriations
The legislature estimates that
instructional expenditures will be
$485,793,000 in the first year and
$522,184,000 in the second year.
The legislature estimates that
noninstructional expenditures will be
$230,349,000 in the first year and
$242,812,000 in the second year.
Subd. 3. Health Care Access Fund 2,537,000 2,537,000
This appropriation is from the health
care access fund for primary care
education initiatives.
Subd. 4. Special
Appropriation 73,909,000 73,909,000
The amounts expended for each program
in the four categories of special
appropriations shall be stated in the
2003 biennial budget document.
(a) Agriculture and Extension Service
58,838,000 58,838,000
This appropriation is for the
Agricultural Experiment Station,
Minnesota Extension Service.
The university must continue to provide
support for the rapid agricultural
response fund, and sustainable and
organic agriculture initiatives
including, but not limited to, the
alternative swine systems program.
Any salary increases granted by the
University to personnel paid from the
Minnesota Extension appropriation must
not result in a reduction of the county
responsibility for the salary payments.
During the biennium, the University
shall maintain an advisory council
system for each experiment station.
The advisory councils must be broadly
representative of the range in size and
income distribution of farms and
agribusinesses and must not
disproportionately represent those from
the upper half of the size and income
distributions.
The board of regents of the University
of Minnesota is requested to review and
analyze the programmatic mission,
scope, and cost-effectiveness of the
Minnesota Extension Service with the
goal of assuring that the Minnesota
Extension Service offers programs and
services effectively and efficiently
and within the scope of its current
defined mission. The board is
requested to report, by February 15,
2002, to the governor and the chairs of
the higher education finance committees
of the legislature with recommendations
for priorities in the extension service.
(b) Health Sciences
5,846,000 5,846,000
This appropriation is for the rural
physicians associates program, the
Veterinary Diagnostic Laboratory,
health sciences research, dental care,
and the Biomedical Engineering Center.
(c) Institute of Technology
1,645,000 1,645,000
This appropriation is for the
Geological Survey and the Talented
Youth Mathematics Program.
(d) System Specials
7,580,000 7,580,000
This appropriation is for general
research, student loans matching money,
industrial relations education, Natural
Resources Research Institute, Center
for Urban and Regional Affairs, Bell
Museum of Natural History, and the
Humphrey exhibit.
This appropriation contains money for
an increase in each year for the
Natural Resources Research Institute.
Subd. 5. Accountability
(a) By February 1 of each even-numbered
year, the board must submit a report to
the chairs of the appropriate education
committees of the legislature
describing the following:
(1) how it allocated the state
appropriations made to the system in
the omnibus higher education funding
bill in the odd-numbered year;
(2) the tuition rates and fees set by
the board; and
(3) the amount of state money used to
leverage money from other funding
sources and the level of support from
those sources.
(b) By February 15, 2002, and each
odd-numbered year thereafter, the board
of regents of the University of
Minnesota must submit a report to the
commissioner of finance and the chairs
of the higher education finance
committees delineating:
(1) the five undergraduate degree
programs determined to be of highest
priority to the system, and the revenue
necessary to advance each program to be
a center of excellence;
(2) the reallocation of money and
curricular and staffing changes, by
campus and program, made to advance the
system's priorities;
(3) baseline data, and the methodology
used to measure, the number of first
generation students admitted
systemwide, together with a plan to
increase both the recruitment and
retention through graduation of these
students;
(4) progress towards increasing the
percentage of students graduating
within four, five, and six years as
reported in IPEDS. Data should be
provided for each institution by race,
ethnicity, and gender. Data provided
should include information on
successful retention strategies and the
money allocated to enhance student
retention;
(5) progress towards increasing the
revenue received, from all sources, to
support research activities. Data
provided should include information on
the increase in funding from each
source; and
(6) progress of the academic health
center in meeting the goals and
outcomes in paragraph (c) including how
money appropriated from the medical
endowment fund contributed to meeting
specific workforce training and health
education goals for the academic health
center.
(c) The Academic Health Center, in
cooperation with the department of
health, shall:
(1) develop new strategies for health
care delivery and professional training
in this state that takes into account
the changing racial and ethnic
composition of this state;
(2) develop new strategies to meet the
health care workforce needs in the
state; and
(3) base these strategies on analysis
of the population's health status and
opportunities for its improvement.
Sec. 5. MAYO MEDICAL FOUNDATION
Subdivision 1. Total
Appropriation 1,637,000 1,637,000
The amounts that may be spent from this
appropriation for each purpose are
specified in the following subdivisions.
Subd. 2. Medical School
605,000 605,000
The state of Minnesota must pay a
capitation of $14,405 each year for
each student who is a resident of
Minnesota. The appropriation may be
transferred between years of the
biennium to accommodate enrollment
fluctuations.
The legislature intends that during the
biennium the Mayo foundation use the
capitation money to increase the number
of doctors practicing in rural areas in
need of doctors.
Subd. 3. Family Practice and
Graduate Residency Program
625,000 625,000
The state of Minnesota must pay a
capitation of $22,313 for 26 residents
each year and $44,627 for one resident
each year.
Subd. 4. St. Cloud Hospital-Mayo
Family Practice Residency Program
407,000 407,000
This appropriation is to the Mayo
foundation to support 12 resident
physicians each year in the St. Cloud
Hospital-Mayo Family Practice Residency
program. The program shall prepare
doctors to practice primary care
medicine in the rural areas of the
state. It is intended that this
program will improve health care in
rural communities, provide affordable
access to appropriate medical care, and
manage the treatment of patients in a
more cost-effective manner.
Sec. 6. POST-SECONDARY SYSTEMS
Subdivision 1. Post-Secondary Planning Report
By February 15 of each year the board
of trustees of the Minnesota state
colleges and universities must and the
board of regents of the University of
Minnesota is requested to report to the
legislature on progress under the
master academic plan for the
metropolitan area. The report must
include a discussion of coordination
and duplication of program offerings,
developmental and remedial education,
credit transfers within and between the
post-secondary systems, and planning
and delivery of coordinated programs.
In order to better achieve the goal of
a more integrated, effective, and
seamless post-secondary education
system in Minnesota, the report must
also identify statewide efforts at
integration and cooperation between the
post-secondary systems.
ARTICLE 2
RELATED PROVISIONS
Section 1. [16A.532] [MINNESOTA STATE COLLEGES AND
UNIVERSITIES ENTERPRISE ACCOUNT.]
There is created in the state enterprise fund a Minnesota
state colleges and universities account. The commissioner must
report to committees of the legislature having jurisdiction over
the account on activity in this account at the same time fund
balance statements are issued for the general fund. The amounts
in this account earn investment income as provided in section
136F.71, subdivision 3.
Sec. 2. Minnesota Statutes 2000, section 16A.87, is
amended to read:
16A.87 [TOBACCO SETTLEMENT FUND.]
Subdivision 1. [ESTABLISHMENT; PURPOSE.] The tobacco
settlement fund is established as a clearing account in the
state treasury.
Subd. 2. [DEPOSIT OF MONEY.] The commissioner shall credit
to the tobacco settlement fund the tobacco settlement payments
received by the state on September 5, 1998, January 4, 1999,
January 3, 2000, and January 2, 2001, January 2, 2002, and
January 2, 2003, as a result of the settlement of the lawsuit
styled as State v. Philip Morris Inc., No. C1-94-8565 (Minnesota
District Court, Second Judicial District).
Subd. 3. [APPROPRIATION.] (a) Of the amounts credited to
the fund prior to January 2, 2002, 61 percent is appropriated
for transfer to the tobacco use prevention and local public
health endowment fund created in section 144.395 and 39 percent
is appropriated for transfer to the medical education endowment
fund created in section 62J.694.
(b) The entire amount credited to the fund from the payment
made on January 2, 2002, and January 2, 2003, is appropriated
for transfer to the academic health center account under section
62J.694, subdivision 1, paragraph (b), in the medical education
endowment fund created under section 62J.694, subdivision 1.
Subd. 4. [SUNSET.] The tobacco settlement fund expires
June 30, 2015 2004.
Sec. 3. Minnesota Statutes 2000, section 62J.694,
subdivision 1, is amended to read:
Subdivision 1. [CREATION.] (a) The medical education
endowment fund is created in the state treasury. The state
board of investment shall invest the fund under section 11A.24.
All earnings of the fund must be credited to the fund. The
principal of the fund must be maintained inviolate, except that
the principal may be used to make expenditures from the fund for
the purposes specified in this section when the market value of
the fund falls below 105 percent of the cumulative total of the
tobacco settlement payments received by the state and credited
to the tobacco settlement fund under section 16A.87, subdivision
2. For purposes of this section, "principal" means an amount
equal to the cumulative total of the tobacco settlement payments
received by the state and credited to the tobacco settlement
fund under section 16A.87, subdivision 2.
(b) The academic health center account is created as a
separate account in the medical education endowment fund. The
account is invested under paragraph (a). All earnings of the
account must be credited to the account. The principal of the
account must be maintained inviolate, except that the principal
may be used to make expenditures from the account for the
purposes specified in subdivision 2a when the value of the
account falls below an amount equal to deposits made to the
account under section 16A.87, subdivision 3, paragraph (b).
Sec. 4. Minnesota Statutes 2000, section 62J.694,
subdivision 2, is amended to read:
Subd. 2. [EXPENDITURES.] (a) Up to five percent of the
fair market value of the fund excluding the value of the
academic health center account, is annually appropriated for
medical education activities in the state of Minnesota. The
appropriations are to be transferred quarterly for the purposes
identified in the following paragraphs.
(b) For fiscal year 2000, 70 percent of the appropriation
in paragraph (a) is for transfer to the board of regents for the
instructional costs of health professional programs at the
academic health center and affiliated teaching institutions, and
30 percent of the appropriation is for transfer to the
commissioner of health to be distributed for medical education
under section 62J.692.
(c) For fiscal year 2001, 49 percent of the appropriation
in paragraph (a) is for transfer to the board of regents for the
instructional costs of health professional programs at the
academic health center and affiliated teaching institutions, and
51 percent is for transfer to the commissioner of health to be
distributed for medical education under section 62J.692.
(d) For fiscal year 2002, and each year thereafter, 42
percent of the appropriation in paragraph (a) may be is
appropriated by another law for the instructional costs of
health professional programs at publicly funded the University
of Minnesota academic health centers and affiliated teaching
institutions center, and 58 percent is for transfer to the
commissioner of health to be distributed for medical education
under section 62J.692.
(e) A maximum of $150,000 of each annual appropriation to
the commissioner of health in paragraph (d) may be used by the
commissioner for administrative expenses associated with
implementing section 62J.692.
Sec. 5. Minnesota Statutes 2000, section 62J.694, is
amended by adding a subdivision to read:
Subd. 2a. [EXPENDITURE; ACADEMIC HEALTH CENTER
ACCOUNT.] Beginning in January 2002, up to five percent of the
fair market value of the academic health center account is
annually appropriated to the board of regents for the costs of
the academic health center. Appropriations are to be
transferred quarterly and may only be used for instructional
costs of health professional programs at the academic health
center and for interdisciplinary academic initiatives within the
academic health center.
Sec. 6. Minnesota Statutes 2000, section 135A.031,
subdivision 2, is amended to read:
Subd. 2. [APPROPRIATIONS FOR CERTAIN ENROLLMENTS.] The
state share of the estimated expenditures for instruction shall
vary for some categories of students, as designated in this
subdivision.
(a) The state must provide at least 67 percent of the
estimated expenditures for:
(1) students who resided in the state for at least one
calendar year prior to applying for admission or dependent
students whose parent or legal guardian resides in Minnesota at
the time the student applies;
(2) Minnesota residents who can demonstrate that they were
temporarily absent from the state without establishing residency
elsewhere;
(3) residents of other states or provinces who are
attending a Minnesota institution under a tuition reciprocity
agreement; and
(4) students who have been in Minnesota as migrant
farmworkers, as defined in the Code of Federal Regulations,
title 20, section 633.104, over a period of at least two years
immediately before admission or readmission to a Minnesota
public post-secondary institution, or students who are
dependents of such migrant farmworkers; and
(5) persons who: (i) were employed full time and were
relocated to the state by the person's current employer, or (ii)
moved to the state for employment purposes and, before moving
and before applying for admission to a public post-secondary
institution, accepted a job in the state, or students who are
spouses or dependents of such persons.
(b) The definition of full year equivalent for purposes of
the formula calculations in this chapter is twice the normal
value for the following enrollments:
(1) students who are concurrently enrolled in a public
secondary school and for whom the institution is receiving any
compensation under the Post-Secondary Enrollment Options Act;
and
(2) students enrolled under the student exchange program of
the Midwest Compact.
(c) The state may not provide any of the estimated
expenditures for undergraduate students (1) who do not meet the
residency criteria under paragraph (a), or (2) who have
completed, without receiving a baccalaureate degree, 48 or more
quarter credits or the equivalent, applicable toward the degree,
beyond the number required for a baccalaureate in their major.
Credits for courses in which a student received a grade of "F"
or "W" shall be counted toward this maximum, as if the credits
had been earned.
Sec. 7. Minnesota Statutes 2000, section 136A.031, is
amended by adding a subdivision to read:
Subd. 5. [EXPIRATION.] Notwithstanding section 15.059,
subdivision 5a, the advisory groups established in this section
expire on June 30, 2003.
Sec. 8. Minnesota Statutes 2000, section 136A.101,
subdivision 5a, is amended to read:
Subd. 5a. [ASSIGNED FAMILY RESPONSIBILITY.] "Assigned
family responsibility" means the amount of a family contribution
to a student's cost of attendance, as determined by a federal
need analysis, except that, beginning for the 1998-1999 academic
year, up to $25,000 in savings and other assets shall be
subtracted from the federal calculation of net worth before
determining the contribution. For dependent students, the
assigned family responsibility is the parental contribution.
For independent students with dependents other than a spouse,
the assigned family responsibility is the student contribution.
For independent students without dependents other than a spouse,
the assigned family responsibility is 80 percent of the student
contribution. Beginning in fiscal year 2002, the assigned
family responsibility for all independent students is reduced an
additional ten percent.
Sec. 9. Minnesota Statutes 2000, section 136A.101,
subdivision 8, is amended to read:
Subd. 8. [RESIDENT STUDENT.] "Resident student" means a
student who meets one of the following conditions:
(1) an independent a student who has resided in Minnesota
for purposes other than post-secondary education for at least 12
months without being enrolled at a post-secondary educational
institution for more than five credits in any term;
(2) a dependent student whose parent or legal guardian
resides in Minnesota at the time the student applies;
(3) a student who graduated from a Minnesota high school,
if the student was a resident of Minnesota during the student's
period of attendance at the Minnesota high school; or
(4) a student who, after residing in the state for a
minimum of one year, earned a high school equivalency
certificate in Minnesota.
Sec. 10. Minnesota Statutes 2000, section 136A.121,
subdivision 6, is amended to read:
Subd. 6. [COST OF ATTENDANCE.] (a) The recognized cost of
attendance consists of allowances specified in law for room and
board living and miscellaneous expenses, and
(1) for public institutions, the actual tuition and fees
charged by the institution; or
(2) for private institutions, an allowance for tuition and
fees equal to the lesser of the actual tuition and fees charged
by the institution, or the private institution tuition and fee
maximums established in law.
(b) For the purpose of paragraph (a), clause (2), the
private institution tuition and fee maximum for two- and
four-year, private, residential, liberal arts, degree-granting
colleges and universities must be the same.
(c) For a student attending registering for less than full
time, the office shall prorate the recognized cost of attendance
living and miscellaneous expense allowance to the actual number
of credits for which the student is enrolled.
The recognized cost of attendance for a student who is
confined to a Minnesota correctional institution shall consist
of the tuition and fee component in paragraph (a), clause (1) or
(2), with no allowance for living and miscellaneous expenses.
Sec. 11. Minnesota Statutes 2000, section 136A.121,
subdivision 9, is amended to read:
Subd. 9. [AWARDS.] An undergraduate student who meets the
office's requirements is eligible to apply for and receive a
grant in any year of undergraduate study unless the student has
obtained a baccalaureate degree or previously has been enrolled
full time or the equivalent for eight ten semesters or 12
quarters the equivalent, excluding courses taken from a
Minnesota school or post-secondary institution which is not
participating in the state grant program and from which a
student transferred no credit.
Sec. 12. [136A.124] [ADVANCED PLACEMENT AND INTERNATIONAL
BACCALAUREATE GRANT.]
Subdivision 1. [ESTABLISHMENT.] Appropriations for this
section must be used by the office for grants to encourage
Minnesota students participating in advanced placement and
international baccalaureate programs to attend a college or
university in Minnesota. For enrollment beginning in the fall
of 2002, the grants must be awarded to students who apply for
the grant, are eligible under subdivision 2, and who enroll in
an eligible institution as defined in subdivision 2 during the
year following high school graduation. An institution, on
behalf of the student, must request payment of the grant from
the higher education services office. The grant may be used
only for the costs of the actual tuition, required fees, and
books in nonsectarian courses or programs. A grant under this
section may be made for a maximum of two years.
Subd. 2. [ELIGIBILITY.] A grant must be awarded to a
student scoring an average of three or higher on five or more
advanced placement examinations on full-year courses or an
average of four or higher on five or more international
baccalaureate examinations on full-year courses. The annual
amount of each grant must be based on the student's scores on
the examinations and the funds available under this section.
A grant under this subdivision must not affect a
recipient's eligibility for a state grant under section 136A.121.
Subd. 3. [ALLOCATION OF FUNDS.] The office, in
consultation with representatives of the advanced placement and
international baccalaureate programs selected by the advanced
placement advisory council, international baccalaureate of
Minnesota (IBMN), and the department of children, families, and
learning must allocate the available funds fairly between the
advanced placement and international baccalaureate programs.
Subd. 4. [ELIGIBLE INSTITUTION.] An "eligible institution"
under this section is a public or private four-year
degree-granting college or university or a two-year public
college in Minnesota that has a credit and placement policy for
either advanced placement or international baccalaureate
scholarship recipients, or both. Each eligible institution must
annually certify its policies to the office. The office must
provide each Minnesota secondary school with a copy of the
post-secondary advanced placement and international
baccalaureate policies of eligible institutions.
Sec. 13. Minnesota Statutes 2000, section 136A.125,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBLE STUDENTS.] An applicant is eligible for
a child care grant if the applicant:
(1) is a resident of the state of Minnesota;
(2) has a child 12 years of age or younger, or 14 years of
age or younger who is handicapped as defined in section 125A.02,
and who is receiving or will receive care on a regular basis
from a licensed or legal, nonlicensed caregiver;
(3) is income eligible as determined by the office's
policies and rules, but is not a recipient of assistance from
the Minnesota family investment program;
(4) has not earned a baccalaureate degree and has been
enrolled full time less than eight ten semesters, 12 quarters,
or the equivalent;
(5) is pursuing a nonsectarian program or course of study
that applies to an undergraduate degree, diploma, or
certificate;
(6) is enrolled at least half time in an eligible
institution; and
(7) is in good academic standing and making satisfactory
academic progress.
Sec. 14. Minnesota Statutes 2000, section 136A.125,
subdivision 4, is amended to read:
Subd. 4. [AMOUNT AND LENGTH OF GRANTS.] The amount of a
child care grant must be based on:
(1) the income of the applicant and the applicant's spouse,
if any;
(2) the number in the applicant's family, as defined by the
office; and
(3) the number of eligible children in the applicant's
family.
The maximum award to the applicant shall be $2,000 $2,600
for each eligible child per academic year, except that the
campus financial aid officer may apply to the office for
approval to increase grants by up to ten percent to compensate
for higher market charges for infant care in a community. The
office shall develop policies to determine community market
costs and review institutional requests for compensatory grant
increases to ensure need and equal treatment. The office shall
prepare a chart to show the amount of a grant that will be
awarded per child based on the factors in this subdivision. The
chart shall include a range of income and family size.
Sec. 15. Minnesota Statutes 2000, section 136F.13,
subdivision 1, is amended to read:
Subdivision 1. [OPERATION.] The state university board
shall operate an educational program for a state university
center as organized in the seven county metropolitan area. The
center may operate in facilities acquired through the
commissioner of administration by gift or lease. The faculty
and staff of the state university system shall provide
assistance in developing curricular and educational programs for
the university.
Sec. 16. Minnesota Statutes 2000, section 136F.60,
subdivision 2, is amended to read:
Subd. 2. [METHODS OF ACQUISITION AND REAL PROPERTY
TRANSACTIONS.] (a) If money has been appropriated to the board
to acquire lands or sites for public buildings or real estate,
the acquisition may be by gift, purchase, or condemnation
proceedings. Condemnation proceedings must be under chapter 117.
(b) The board may accept gifts to improve or acquire
facilities as provided in this paragraph:
(1) for remodeling existing facilities if the remodeling
does not materially increase the square footage of the facility;
(2) for the acquisition, construction, or remodeling costs
of facilities for which state capital appropriations have been
made and whose use will not be substantially changed; or
(3) for capital projects not authorized by the legislature
if the board first certifies that project revenues, other gifts
or grants, or other sources of capital funds are available for
project costs and that no tuition revenues or state or federal
appropriations are used for the capital or operating costs,
including all program costs, salaries, and benefits, of the
facility.
(c) The board may convey or lease real property under the
board's control, with or without monetary consideration, to
provide a facility for the primary benefit of a state college or
university or its students if the board certifies that project
revenues, other gifts or grants, or other sources of funds are
available for project costs and that no tuition revenues or
state or federal appropriations are used for the capital cost of
the facility. Agreements under this paragraph must demonstrate
to the board's satisfaction the financial viability of the
proposed project, including all proposed financial and
contractual obligations, and operating costs, including all
program costs, salaries and benefits, and other costs reasonably
expected to be incurred or binding upon the college or
university. Siting and design of the facility must be
consistent with the campus master plan and Minnesota state
colleges and universities building standards. Agreements under
this paragraph to convey, or to lease for a term not to exceed
30 years, subject to section 16A.695, may be made following
requests for proposal or by direct negotiation. Conveyances by
the board under this paragraph must be by quitclaim deed in a
form approved by the attorney general. Land conveyed by the
board must revert to the state if it is no longer used for the
primary benefit of a state college or university or its students.
(d) For purposes of this subdivision, "facility" includes
student unions, recreational centers and athletic centers, or
facilities for which state capital appropriations have been made
and the use of which will not be substantially changed.
"Facility" also includes self-supporting student housing.
(e) The board must report in a timely manner to the chairs
of the house and senate committees with jurisdiction over higher
education finance, capital investment, and ways and means any
capital project under paragraphs (b) or (c) with a cost of
$3,000,000 or more.
Sec. 17. [136F.701] [REFUND OF TUITION.]
(a) Any student who is a resident of the state, has
enrolled in the state colleges and universities and paid tuition
for the course, and who, prior to the termination of the school
year for which the tuition was paid, enlisted or has been
inducted into the military service of the United States, either
voluntarily or pursuant to the present selective service law, is
entitled to the refund of all tuition paid for which credit
cannot properly be given.
(b) The administrative officers of the state colleges and
universities shall refund to the students any tuition so paid.
Any student making application for refund of any paid tuition
must furnish to the administrative officers of the state
colleges and universities a certificate from the proper officers
reciting the fact of the enlistment or the induction of the
student into the military service of the United States.
Sec. 18. Minnesota Statutes 2000, section 137.10, is
amended to read:
137.10 [REFUND OF TUITION TO STUDENTS IN CERTAIN CASES.]
Any student who, being a resident of the state, has
enrolled to pursue any course in the University of Minnesota or
any state university and paid tuition for the course, and who,
prior to the termination of the school year for which the
tuition was paid, enlisted or has been inducted into the
military services of the United States, either voluntarily or
pursuant to the present selective service law, is entitled to
the refund of all tuition paid for which credit cannot properly
be given.
The administrative officers of the University of Minnesota
and of the universities or institutions shall refund to the
students any tuition so paid. Any student making application
for refund of any paid tuition shall furnish to the
administrative officers of the University of Minnesota or of the
universities a certificate from the proper officers reciting the
fact of the enlistment or the induction of the student into the
military service of the United States.
Sec. 19. Minnesota Statutes 2000, section 169.966, is
amended to read:
169.966 [STATE UNIVERSITY BOARD TO REGULATE TRAFFIC.]
Subdivision 1. [AUTHORITY.] The state university board of
trustees of the Minnesota state colleges and universities may
from time to time make, adopt, and enforce such rules or
ordinances not inconsistent with this chapter, as it may find
expedient or necessary relating to the regulation of traffic and
parking upon parking facilities and private roads and roadways
situated on property owned, leased, occupied or operated by
state universities.
Subd. 1a. [PARKING FACILITIES.] The state university board
of trustees may establish rents, charges or fees for the use of
parking facilities owned, leased, occupied, or operated by the
state university board. The money collected by the board as
rents, charges or fees in accordance with this subdivision shall
be deposited in the university activity fund and is annually
appropriated to the state university board of trustees for state
university purposes and to maintain and operate parking lots and
parking facilities.
Subd. 2. [PETTY MISDEMEANOR.] Any person violating such
rule or ordinance shall be guilty of a petty misdemeanor and
subject to the provisions of sections 169.891 and 169.90,
subdivision 1.
Subd. 3. [PROSECUTION.] The prosecution may be before a
district court having jurisdiction over the place where the
violation occurs.
Subd. 4. [ENFORCEMENT.] Every sheriff, constable, police
officer, or other peace officer shall see that all rules and
ordinances are obeyed and shall arrest and prosecute offenders.
Subd. 5. [ENFORCEMENT POWERS.] The state university
board of trustees may appoint and employ, and fix the
compensation to be paid out of funds which may be available for
such purposes, persons who shall have and may exercise on
property owned, leased, or occupied by the state universities
the same powers of arrest for violation of rules or ordinances
adopted by the board as possessed by a sheriff, constable,
police officer, or peace officer.
Subd. 6. [JUDICIAL NOTICE.] All persons shall take notice
of such rules and ordinances without pleading and proof of the
same.
Subd. 7. [NOTICE, HEARING, FILING, AND EFFECT.] (a)
The state university board of trustees shall fix a date for a
public hearing on the adoption of any such proposed rule or
ordinance. Notice of such hearing shall be published in a legal
newspaper in the county in which the property affected by the
rule or ordinance is located. The publication shall be at least
15 days and not more than 45 days before the date of the hearing.
(b) If, after the public hearing, the proposed rule or
ordinance shall be adopted by a majority of the members of the
board, the same shall be considered to have been enacted by the
board. A copy of the same shall be signed by the president and
filed with the county recorder of each county where the rule or
ordinance shall be in effect, together with proof of
publication. Upon such filing, the rule or ordinance, as the
case may be, shall thenceforth be in full force and effect.
Subd. 8. [DELEGATION.] The state university board of
trustees may delegate its responsibilities under this section to
a state university president. Actions of the president shall be
presumed to be those of the board. The university president
shall file with the board president the results of any public
hearings and the subsequent adoption of any proposed rule or
ordinance enacted pursuant thereto.
Sec. 20. Minnesota Statutes 2000, section 299A.45,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY.] Following certification
under section 299A.44 and compliance with this section and rules
of the commissioner of public safety and the higher education
services office, dependent children less than 23 years of age
and the surviving spouse of a public safety officer killed in
the line of duty on or after January 1, 1973, are eligible to
receive educational benefits under this section. To qualify for
an award, they must be enrolled in undergraduate degree or
certificate programs after June 30, 1990, at an eligible
Minnesota institution as provided in section 136A.101,
subdivision 4. Persons who have received a baccalaureate degree
or have been enrolled full time or the equivalent of eight ten
semesters or 12 quarters the equivalent, whichever occurs first,
are no longer eligible.
Sec. 21. Minnesota Statutes 2000, section 299A.45,
subdivision 4, is amended to read:
Subd. 4. [RENEWAL.] Each award must be given for one
academic year and is renewable for a maximum of six eight
semesters or nine quarters or their the equivalent. An award
must not be given to a dependent child who is 23 years of age or
older on the first day of the academic year.
Sec. 22. Minnesota Statutes 2000, section 354.094,
subdivision 2, is amended to read:
Subd. 2. [MEMBERSHIP; RETENTION.] Notwithstanding section
354.49, subdivision 4, clause (3), a member on extended leave
whose employee and employer contributions are paid into the fund
pursuant to subdivision 1 shall retain membership in the
association for as long as the contributions are paid, under the
same terms and conditions as if the member had continued to
teach in the district, the community college system, or the
Minnesota state university colleges and universities system.
Sec. 23. Minnesota Statutes 2000, section 354.69, is
amended to read:
354.69 [INFORMATION SUPPLIED BY DISTRICT.]
Each school district covered by the provisions of this
chapter and the community college Minnesota state colleges and
state university systems universities system shall furnish to
the teachers retirement association all information and reports
deemed necessary by the executive director to administer the
provisions of section 354.66.
Sec. 24. Minnesota Statutes 2000, section 356.24,
subdivision 1, is amended to read:
Subdivision 1. [RESTRICTION; EXCEPTIONS.] It is unlawful
for a school district or other governmental subdivision or state
agency to levy taxes for, or contribute public funds to a
supplemental pension or deferred compensation plan that is
established, maintained, and operated in addition to a primary
pension program for the benefit of the governmental subdivision
employees other than:
(1) to a supplemental pension plan that was established,
maintained, and operated before May 6, 1971;
(2) to a plan that provides solely for group health,
hospital, disability, or death benefits;
(3) to the individual retirement account plan established
by chapter 354B;
(4) to a plan that provides solely for severance pay under
section 465.72 to a retiring or terminating employee;
(5) for employees other than personnel employed by the
state university board or the community college board and
covered by the board of trustees of the Minnesota state colleges
and universities and covered under the higher education
supplemental retirement plan under chapter 354C, if provided for
in a personnel policy of the public employer or in the
collective bargaining agreement between the public employer and
the exclusive representative of public employees in an
appropriate unit, in an amount matching employee contributions
on a dollar for dollar basis, but not to exceed an employer
contribution of $2,000 a year per employee;
(i) to the state of Minnesota deferred compensation plan
under section 352.96; or
(ii) in payment of the applicable portion of the
contribution made to any investment eligible under section
403(b) of the Internal Revenue Code, if the employing unit has
complied with any applicable pension plan provisions of the
Internal Revenue Code with respect to the tax-sheltered annuity
program during the preceding calendar year; or
(6) for personnel employed by the state university board or
the community college board of trustees of the Minnesota state
colleges and universities and not covered by clause (5), to the
supplemental retirement plan under chapter 354C, if provided for
in a personnel policy or in the collective bargaining agreement
of the public employer with the exclusive representative of the
covered employees in an appropriate unit, in an amount matching
employee contributions on a dollar for dollar basis, but not to
exceed an employer contribution of $2,700 a year for each
employee.
Sec. 25. Laws 1986, chapter 398, article 1, section 18, as
amended by Laws 1987, chapter 292, section 37; Laws 1989,
chapter 350, article 16, section 8; Laws 1990, chapter 525,
section 1; Laws 1991, chapter 208, section 2; Laws 1993, First
Special Session chapter 2, article 6, section 2; Laws 1995,
chapter 212, article 2, section 11; Laws 1997, chapter 183,
article 3, section 29; Laws 1998, chapter 395, section 7; Laws
1998, chapter 402, section 6; and Laws 1999, chapter 214,
article 2, section 19, is amended to read:
Sec. 18. [REPEALER.]
Sections 1 to 17 and Minnesota Statutes, section 336.9-501,
subsections (6) and (7), and sections 583.284, 583.285, 583.286,
and 583.305, are repealed on July 1 June 30, 2001 2005.
Sec. 26. [DEVELOPMENTAL EDUCATION DEMONSTRATION PROJECT.]
Subdivision 1. [COLLEGE AND UNIVERSITY READINESS.] Prior
to July 1, 2001, the chancellor, in consultation with the
commissioner of children, families, and learning and selected
school boards, must designate at least one state college or
university and a minimum of four school districts to implement a
comprehensive demonstration project designed to increase the
number of high school graduates who are academically prepared to
enroll in college level courses.
Subd. 2. [IMPLEMENTATION.] Beginning in the 2001-2002
academic year, the designated institution must administer
college readiness assessment tests in math, reading, and writing
to all students in the designated school districts, in the first
quarter of the student's junior year of high school. The school
district must inform each student of any academic areas in which
the student needs additional preparation during high school to
ensure college readiness.
Subd. 3. [STUDENT FOLLOW-UP.] The designated college or
university must monitor and report on the college enrollment and
college placement of all graduating students participating in
the demonstration project. The report must identify any changes
in college readiness between initial and final assessment of
students involved in the demonstration project.
Subd. 4. [REPORT AND RECOMMENDATIONS.] By December 15,
2003, the designated college or university must report to the
board of trustees, the commissioner of children, families, and
learning and the committees of the legislature having
jurisdiction over higher education on the effectiveness of the
college readiness demonstration project, including the estimated
cost of the demonstration project and recommendations for future
remediation efforts.
Sec. 27. [LAWRENCE HALL REMODELING.]
The board of trustees of Minnesota state colleges and
universities may use funds from nonstate sources to remodel the
top floor of Lawrence Hall for student housing.
Sec. 28. [COMMISSION ON UNIVERSITY OF MINNESOTA
EXCELLENCE.]
Subdivision 1. [ESTABLISHMENT.] The commission on
University of Minnesota excellence is established to:
(1) review the university's current nationally ranked areas
of excellence;
(2) review major investment efforts in interdisciplinary
initiatives identified by the university in 1998, including
digital technology, design, new media, molecular and cellular
biology, medical science, and agriculture;
(3) evaluate and make recommendations on how the university
can develop additional centers of excellence that will achieve a
national ranking in the top ten within the next ten years and
identify centers of excellence which are best positioned and
have the best potential to achieve this goal;
(4) examine the university's mission, scope, and financing
of programs and propose possible ways in which the university
can refocus or refine its mission and offerings; and
(5) identify undergraduate degree programs in which quality
and productivity improvements could be achieved through
increased collaboration with public and private post-secondary
institutions in and outside of Minnesota.
Subd. 2. [MEMBERSHIP; STAFF.] (a) The commission on
University of Minnesota excellence consists of 15 members. Four
members must be appointed by the governor, including the chair
of the commission. Four members must be appointed by the
speaker of the house of representatives. Up to two members of
the house of representatives may be appointed. Four members
must be appointed by the subcommittee on committees of the
senate committee on rules and administration. Up to two
senators may be appointed. Three members must be appointed by
the chair of the University of Minnesota board of regents and
may include current members of the board. Appointments must be
made by September 1, 2001. Members appointed to the commission
must be selected for their expertise in complex organizational
structure and should include leaders of business, industry, or
post-secondary institutions. The president of the University of
Minnesota or the president's designee is an ex officio,
nonvoting member of the commission.
(b) Members of the commission serve without compensation or
expenses under Minnesota Statutes, section 15.0575, subdivision
3.
(c) The board of regents of the University of Minnesota is
requested to make University of Minnesota staff available to the
commission.
Subd. 3. [CENTERS OF EXCELLENCE.] The commission must, at
a minimum, identify five additional centers of excellence at the
University of Minnesota in which to focus resources and policy
initiatives. The goal for these centers is to have them develop
national stature and achieve a national ranking in the top ten
within ten years. The additional centers of excellence must be
chosen from a group of potential centers of excellence that
includes the programs and departments in which the university is
currently considered a national or regional leader and from
existing or potential interdisciplinary initiatives at the
university.
Subd. 4. [REPORT.] The commission must report to the
legislature by July 1, 2002, on areas of excellence, mission,
and focus of the University of Minnesota. In preparing its
report on areas of excellence, the task force is encouraged to
consider operation and capital financing needs, Minnesota
economic needs, federal research priorities, and opportunities
for private financial support.
Subd. 5. [EXPIRATION.] The commission on University of
Minnesota excellence expires on December 31, 2002.
Sec. 29. [REPEALER.]
(a) Minnesota Statutes 2000, sections 135A.06, subdivision
1; and 136F.13, subdivision 2, are repealed.
(b) Laws 1994, chapter 643, section 66, is repealed.
Sec. 30. [EFFECTIVE DATES.]
(a) Section 10 is effective July 1, 2002.
(b) Section 25 is effective the day following final
enactment.
ARTICLE 3
MINNESOTA COLLEGE SAVINGS PLAN
Section 1. Minnesota Statutes 2000, section 13.322,
subdivision 3, is amended to read:
Subd. 3. [HIGHER EDUCATION SERVICES OFFICE.] (a)
[GENERAL.] Data sharing involving the higher education services
office and other institutions is governed by section 136A.05.
(b) [STUDENT FINANCIAL AID.] Data collected and used by the
higher education services office on applicants for financial
assistance are classified under section 136A.162.
(c) [MINNESOTA COLLEGE SAVINGS PLAN DATA.] Account owner
data, account data, and data on beneficiaries of accounts under
the Minnesota college savings plan are classified under section
136A.243, subdivision 10.
(d) [SCHOOL FINANCIAL RECORDS.] Financial records submitted
by schools registering with the higher education services office
are classified under section 136A.64.
Sec. 2. Minnesota Statutes 2000, section 136A.241, is
amended to read:
136A.241 [EDVEST PROGRAM MINNESOTA COLLEGE SAVINGS PLAN
ESTABLISHED.]
An Edvest savings program A college savings plan known as
the Minnesota college savings plan is established. In
establishing this program plan, the legislature seeks to
encourage individuals to save for post-secondary education by:
(1) providing a qualified state tuition program plan under
federal tax law;
(2) providing matching grants for contributions to the
program by low- and middle-income families; and
(3) by encouraging individuals, foundations, and businesses
to provide additional grants to participating students.
Sec. 3. Minnesota Statutes 2000, section 136A.242, is
amended to read:
136A.242 [DEFINITIONS.]
Subdivision 1. [GENERAL.] For purposes of sections
136A.241 to 136A.245 136A.246, the following terms have the
meanings given.
Subd. 1a. [ACCOUNT.] "Account" means the formal record of
transactions relating to a Minnesota college savings plan
beneficiary.
Subd. 1b. [ACCOUNT OWNER.] "Account owner" means a person
who enters into a participation agreement and is entitled to
select or change the beneficiary of an account or to receive
distributions from the account for other than payment of
qualified higher education expenses.
Subd. 2. [ADJUSTED GROSS INCOME.] "Adjusted gross income"
means adjusted gross income as defined in section 62 of the
Internal Revenue Code.
Subd. 3. [BENEFICIARY.] "Beneficiary" means the designated
beneficiary for the account, as defined in section 529(e)(1) of
the Internal Revenue Code.
Subd. 4. [BOARD.] "Board" means the state board of
investment.
Subd. 4a. [CONTINGENT ACCOUNT OWNER.] "Contingent account
owner" means the individual designated as the account owner,
either in the participation agreement or pursuant to a separate
Minnesota college savings plan form, in the event of the death
of the account owner.
Subd. 4b. [CONTRIBUTION.] "Contribution" means a payment
directly allocated to an account for the benefit of a
beneficiary. For a rollover distribution, only the portion of
the rollover amount that constitutes investment in the account
is treated as a contribution to the account.
Subd. 5. [DIRECTOR.] "Director" means the director of the
higher education services office.
Subd. 5a. [DISTRIBUTION.] "Distribution" means a
disbursement from an account to the account owner, the
beneficiary, or the beneficiary's estate or to an eligible
educational institution. Distribution does not include a change
of beneficiary to a member of the family of the prior
beneficiary or a rollover distribution.
Subd. 5b. [DORMANT ACCOUNT.] "Dormant account" means an
account that has not received contributions for at least three
consecutive years and the account statements mailed to the
account owner have been returned as undeliverable.
Subd. 5c. [EARNINGS.] "Earnings" means the total account
balance minus the investment in the account.
Subd. 5d. [ELIGIBLE EDUCATIONAL INSTITUTION.] "Eligible
educational institution" means an institution as defined in
section 529(e)(5) of the Internal Revenue Code.
Subd. 5e. [INACTIVE ACCOUNT WITH A MATCHING GRANT
ACCOUNT.] "Inactive account with a matching grant account" means
an account in which the beneficiary:
(1) is not the account owner, the beneficiary has reached
28 years of age, and the beneficiary has not informed the plan
administrator that the beneficiary is enrolled in an eligible
educational institution;
(2) is the account owner, the beneficiary was over the age
of 18 when the account was opened, and the beneficiary has not
informed the program administrator that the beneficiary is
enrolled in an eligible educational institution within ten years
of the date of opening the account; or
(3) is the account owner, the beneficiary was a minor when
the account was opened, the account becomes inactive when the
beneficiary turns 28 years of age, and the beneficiary has not
informed the program administrator that the beneficiary is
enrolled in an eligible educational institution.
Subd. 6. [EXECUTIVE DIRECTOR.] "Executive director" means
the executive director of the state board of investment.
Subd. 7. [INTERNAL REVENUE CODE.] "Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended.
Subd. 7a. [INVESTMENT IN THE ACCOUNT.] "Investment in the
account" means the sum of all contributions made to an account
by a particular date minus the aggregate amount of contributions
included in distributions or rollover distributions, if any,
made from the account as of that date.
Subd. 7b. [MATCHING GRANT.] "Matching grant" means an
amount added to a matching grant account under section 136A.245.
Subd. 7c. [MATCHING GRANT ACCOUNT.] "Matching grant
account" means an account owned by the state that contains
matching grants and earnings.
Subd. 7d. [MAXIMUM ACCOUNT BALANCE LIMIT.] "Maximum
account balance limit" means the amount established by the
office under section 136.2441, subdivision 8, paragraph (d).
Subd. 7e. [MEMBER OF THE FAMILY.] "Member of the family"
means an individual who is related to the beneficiary as defined
in section 529(e)(2) of the Internal Revenue Code.
Subd. 7f. [NONQUALIFIED DISTRIBUTION.] "Nonqualified
distribution" means a distribution made from an account other
than (1) a qualified distribution; or (2) a distribution due to
the death or disability of, or scholarship to, a beneficiary.
Subd. 8. [OFFICE.] "Office" means the higher education
services office.
Subd. 8a. [PARTICIPATION AGREEMENT.] "Participation
agreement" means an agreement to participate in the Minnesota
college savings plan between an account owner and the state,
through its agencies, the office, and the board.
Subd. 8b. [PENALTY.] "Penalty" means the amount
established by the office that is applied against the earnings
portion of a nonqualified distribution. The amount established
by the office must be the minimum required to be de minimis
under section 529 of the Internal Revenue Code. The office must
impose, collect, and apply penalties consistent with section 529
of the Internal Revenue Code.
Subd. 8c. [PERSON.] "Person" means an individual, trust,
estate, partnership, association, company, corporation, or the
state.
Subd. 9. [PROGRAM PLAN.] "Program" or "Edvest Plan"
refers to the program plan established under sections 136A.241
to 136A.245 136A.246.
Subd. 10. [PLAN ADMINISTRATOR.] "Plan administrator" means
the person selected by the office and the board to administer
the daily operations of the Minnesota college savings plan and
to provide marketing, recordkeeping, investment management, and
other services for the program.
Subd. 11. [QUALIFIED DISTRIBUTION.] "Qualified
distribution" means a distribution made from an account for
qualified higher education expenses of the beneficiary.
Subd. 12. [QUALIFIED HIGHER EDUCATION
EXPENSES.] "Qualified higher education expenses" means expenses
as defined in section 529(e)(3) of the Internal Revenue Code.
Subd. 13. [ROLLOVER DISTRIBUTION.] "Rollover distribution"
means a transfer of funds made:
(1) from one account to another account within 60 days of a
distribution;
(2) from another qualified state tuition program to an
account within 60 days of the distribution; or
(3) to another qualified state tuition program from an
account within 60 days of a distribution.
Each transfer of funds must be made for the benefit of a
new beneficiary who is a member of the family of the prior
beneficiary.
Subd. 14. [SCHOLARSHIP.] "Scholarship" means a
scholarship, allowance, or payment under section 529(b)(3)(C) of
the Internal Revenue Code.
Subd. 15. [STATE.] "State" means the state of Minnesota
and any Minnesota agency or political subdivision of Minnesota.
Subd. 16. [TOTAL ACCOUNT BALANCE.] "Total account balance"
means the amount in an account on a particular date or the fair
market value of an account on a particular date.
Sec. 4. Minnesota Statutes 2000, section 136A.243,
subdivision 1, is amended to read:
Subdivision 1. [RESPONSIBILITIES.] (a) The director shall
establish the rules, terms, and conditions for the program plan,
subject to the requirements of sections 136A.241 to
136A.245 136A.246.
(b) The director shall prescribe the application forms,
procedures, and other requirements that apply to the program
plan.
Sec. 5. Minnesota Statutes 2000, section 136A.243,
subdivision 2, is amended to read:
Subd. 2. [ACCOUNTS-TYPE PROGRAM PLAN.] The office must
establish the program plan and the program plan must be operated
as an accounts-type program plan that permits individuals
persons to save for qualified higher education costs expenses
incurred at any eligible educational institution, regardless of
whether it is private or public or whether it is located within
or outside of this the state. A separate account must be
maintained for each beneficiary for whom contributions are made.
Sec. 6. Minnesota Statutes 2000, section 136A.243,
subdivision 3, is amended to read:
Subd. 3. [CONSULTATION WITH STATE BOARD OF INVESTMENT.] In
designing and establishing the program's plan's requirements and
in negotiating or entering into contracts with third parties
under subdivision 8, the director shall consult with the
executive director. The director and the executive director
shall establish an annual fee, equal to a percentage of the
average daily net assets of the plan, to be imposed on
participants to recover the costs of administration,
recordkeeping, and investment management as provided in
subdivision 9 and section 136A.244, subdivision 4.
Sec. 7. Minnesota Statutes 2000, section 136A.243,
subdivision 4, is amended to read:
Subd. 4. [PROGRAM PLAN TO COMPLY WITH FEDERAL LAW.] The
director shall take steps to ensure that the program plan meets
the requirements for a qualified state tuition program under
section 529(b)(1)(A)(ii) of the Internal Revenue Code. The
director may request a private letter ruling or rulings from the
Internal Revenue Service or take any other steps to ensure that
the program plan qualifies under section 529 of the Internal
Revenue Code or other relevant provisions of federal law.
Sec. 8. Minnesota Statutes 2000, section 136A.243,
subdivision 9, is amended to read:
Subd. 9. [AUTHORITY TO IMPOSE FEES.] The office may impose
annual fees, as provided in subdivision 3, on participants in
the program plan to recover the costs of administration. The
office must use its best efforts to keep these fees as low as
possible, consistent with efficient administration, so that the
returns on savings invested in the program plan will be as high
as possible.
Sec. 9. Minnesota Statutes 2000, section 136A.243, is
amended by adding a subdivision to read:
Subd. 10. [DATA.] Account owner data, account data, and
data on beneficiaries of accounts are private data on
individuals as defined in section 13.02, except that the names
and addresses of the beneficiaries of accounts that receive
matching grants are public.
Sec. 10. Minnesota Statutes 2000, section 136A.244,
subdivision 1, is amended to read:
Subdivision 1. [STATE BOARD TO INVEST.] The state board of
investment shall invest the money deposited in accounts in the
program plan and all investments are directed by the board.
Neither persons making contributions to an account nor
beneficiaries may direct the investment of contributions to the
plan or plan earnings.
Sec. 11. Minnesota Statutes 2000, section 136A.244,
subdivision 4, is amended to read:
Subd. 4. [FEES.] The board may impose annual fees, as
provided in section 136A.243, subdivision 3, on participants in
the program plan to recover the cost of investment management
and related tasks for the program plan. The board must use its
best efforts to keep these fees as low as possible, consistent
with high quality investment management, so that the returns on
savings invested in the program plan will be as high as possible.
Sec. 12. [136A.2441] [MINNESOTA COLLEGE SAVINGS PLAN
ACCOUNTS; GENERALLY.]
Subdivision 1. [CONTRIBUTIONS TO AN ACCOUNT.] A person may
make contributions to an account on behalf of a beneficiary.
Contributions to an account made by persons other than the
account owner become the property of the account owner. A
person does not acquire an interest in an account by making
contributions to an account. Contributions to an account must
be made by check, money order, or other commercially acceptable
means as permitted by the United States Internal Revenue Service
and authorized by the plan administrator in cooperation with the
office and the board.
Subd. 2. [AUTHORITY OF ACCOUNT OWNER.] An account owner is
the only person entitled to:
(1) select or change a beneficiary or a contingent account
owner; or
(2) request distributions or rollover distributions from an
account.
Subd. 3. [SECURITY FOR LOANS.] An interest in an account
or matching grant account must not be used as security for a
loan.
Subd. 4. [SEPARATE ACCOUNTING.] The plan must provide a
separate account for each beneficiary for whom contributions are
made. Each account must have a single account owner and a
single beneficiary. An account owner must not open more than
one account for the same beneficiary, but several account owners
may open accounts for the same beneficiary.
Subd. 5. [NAMING OF BENEFICIARY.] The account owner must
designate the beneficiary of an account when the account is
established, except for accounts established under section
529(e)(1)(C) of the Internal Revenue Code, which do not require
a designated beneficiary until a distribution is made.
Subd. 6. [CHANGE OF BENEFICIARY.] An account owner may
change the beneficiary of an account to a member of the family
of the current beneficiary, at any time without penalty, if the
change will not cause the total account balance of all accounts
held for the new beneficiary to exceed the maximum account
balance limit as provided in subdivision 8. A change of
beneficiary other than as permitted in this subdivision is
treated as a nonqualified distribution under section 136A.246,
subdivision 3.
Subd. 7. [CHANGE OF ACCOUNT OWNERSHIP.] An account owner
may transfer ownership of an account to another person eligible
to be an account owner. All transfers of ownership are absolute
and irrevocable.
Subd. 8. [MAXIMUM ACCOUNT BALANCE LIMIT.] (a) When a
contribution is made, the total account balance of all accounts
held for the same beneficiary, including matching grant
accounts, must not exceed the maximum account balance limit as
determined under this subdivision.
(b) The maximum account balance limit is reduced for
withdrawals from any account for the same beneficiary that are
qualified distributions, distributions due to the death or
disability of the beneficiary, or distributions due to the
beneficiary receiving a scholarship. Subsequent contributions
must not be made to replenish an account if the contribution
results in the total account balance of all accounts held for
the beneficiary to exceed the reduced maximum account balance
limit. Any subsequent contributions must be rejected. A
subsequent contribution accepted in error must be returned to
the account owner plus any earnings on the contribution less any
applicable penalties.
(c) The maximum account balance limit is not reduced for a
nonqualified distribution or a rollover distribution. When such
distributions are taken, subsequent contributions may be made to
replenish an account up to the maximum account balance limit.
(d) The office must establish a maximum account balance
limit. The maximum account balance limit is four times the cost
of one year of qualified higher education expenses at the most
expensive eligible educational institution in Minnesota. The
office must adjust the maximum account balance limit, as
necessary, or on January 1 of each year. Qualified higher
education expenses for the academic year prior to January 1 of
each year must be used in calculating the maximum account
balance limit. The maximum account balance limit must not
exceed the amount permitted for the plan to qualify as a
qualified state tuition program under section 529 of the
Internal Revenue Code.
(e) If the total account balance of all accounts held for a
single beneficiary reaches the maximum account balance limit
prior to the end of that calendar year, the beneficiary may
receive an applicable matching grant for that calendar year.
Subd. 9. [EXCESS CONTRIBUTIONS AND BALANCES.] A
contribution to any account for a beneficiary must be rejected
if the contribution would cause the total account balance of all
accounts held for the same beneficiary, including the matching
grant account, to exceed the maximum account balance limit under
section 529 of the Internal Revenue Code as established by the
office. If a contribution under this subdivision is accepted in
error, the contribution must be returned to the account owner
plus any earnings thereon, less applicable penalties. A payment
of an excess contribution to the account owner may be a
nonqualified distribution subject to a penalty.
Subd. 10. [DORMANT ACCOUNTS.] (a) The plan administrator
shall attempt to locate the account owner or the beneficiary, or
both, to determine the disposition of a dormant account. A fee
of five percent of the total account balance of the dormant
account, not to exceed $100, plus allowable costs, may be
charged for this service. Costs will not exceed $100 or five
percent of the total account balance in the dormant account,
whichever is less.
(b) If the account owner, or the account owner's legal
heirs, are not found after three attempts by the plan
administrator, the remaining funds in the dormant account must
be turned over to the office. The funds are treated as
unclaimed property for purposes of sections 345.31 to 345.60,
and the office shall turn all remaining dormant account funds
over to the commissioner of commerce. If the dormant account
has a matching grant account, all amounts in the beneficiary's
matching grant account, if any, must be returned to the office.
Subd. 11. [EFFECT OF PLAN CHANGES ON PARTICIPATION
AGREEMENT.] Amendments to sections 136A.241 to 136A.246
automatically amend the participation agreement. Any amendments
to the operating procedures and policies of the plan shall amend
the participation agreement 30 days after adoption by the office
or the board.
Subd. 12. [SPECIAL ACCOUNT TO HOLD PLAN ASSETS IN
TRUST.] All assets of the plan, including contributions to
accounts and matching grant accounts and earnings, are held in
trust for the exclusive benefit of account owners and
beneficiaries. Assets must be held in a separate account in the
state treasury to be known as the Minnesota college savings plan
account. Plan assets are not subject to claims by creditors of
the state, are not part of the general fund, and are not subject
to appropriation by the state. Payments from the Minnesota
college savings plan account shall be made under sections
136A.241 to 136A.246.
Sec. 13. Minnesota Statutes 2000, section 136A.245,
subdivision 2, is amended to read:
Subd. 2. [FAMILY INCOME.] (a) For purposes of this
section, "family income" means:
(1) if the beneficiary is under age 25, the combined
adjusted gross income of the beneficiary's parents or legal
guardians as reported on the federal tax return or returns for
the most recently available tax year. If the beneficiary's
parents are divorced, the income of the parent claiming the
beneficiary as a dependent on the federal individual income tax
return and the income of that parent's spouse, if any, is used
to determine family income; or
(2) if the beneficiary is age 25 or older, the combined
adjusted gross income of the beneficiary and spouse, if any.
(b) For a parent or legal guardian of beneficiaries under
age 25 and for beneficiaries age 25 or older who resided in
Minnesota and filed a federal individual income tax return two
years prior to the year in which the matching grant is awarded,
the matching grant must be based on family income from Internal
Revenue Service tax data on file with the Minnesota department
of revenue.
(c) Parents or legal guardians of beneficiaries under age
25 and beneficiaries age 25 or older who did not reside in
Minnesota two years prior to the year in which the matching
grant is awarded must provide a signed copy of their federal
individual income tax return to the office, regardless of who
the account owner is, in order to be considered for a matching
grant.
Sec. 14. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 2a. [RESIDENCY REQUIREMENT.] (a) If the beneficiary
is under age 25, the beneficiary's parents or legal guardians
must be Minnesota residents to qualify for a matching grant. If
the beneficiary is age 25 or older, the beneficiary must be a
Minnesota resident to qualify for a matching grant.
(b) To meet the residency requirements, the parent or legal
guardian of beneficiaries under age 25 must have filed a
Minnesota individual income tax return as a Minnesota resident,
claiming the beneficiary as a dependent, two years prior to the
year in which the matching grant is awarded. For beneficiaries
age 25 or older, the beneficiary, and a spouse, if any, must
have filed a Minnesota individual income tax return as a
Minnesota resident two years prior to the year in which the
matching grant is awarded.
(c) A parent of beneficiaries under age 25 and
beneficiaries age 25 or older who did not reside in Minnesota
two years prior to the year in which the matching grant is
awarded must establish Minnesota residency through the issuance
of a Minnesota driver's license or identification card.
Sec. 15. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 2b. [AGE AND DATE OF BIRTH DETERMINATION OF
BENEFICIARY.] In determining the age of the beneficiary for
purposes of a matching grant, the plan administrator shall use
the age of the beneficiary as reported on the participation
agreement on December 31 of the year in which the request for a
matching grant is made.
Sec. 16. Minnesota Statutes 2000, section 136A.245,
subdivision 4, is amended to read:
Subd. 4. [BUDGET LIMIT.] If the total amount of matching
grants determined under subdivision 3 exceeds the amount of the
appropriation for the fiscal year, the director shall
proportionately reduce each grant so that the total equals the
available appropriation. The director must reduce matching
grants so that the amount of the matching grant assigned to a
beneficiary's account equals:
(1) the ratio of state appropriations for the matching
grant divided by the total dollar amount of matching grants for
all beneficiaries; multiplied by
(2) the dollar amount of the matching grant for each
eligible beneficiary.
Sec. 17. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 7. [ANNUAL APPLICATION.] An account owner must
submit an application form for a matching grant on an annual
basis. The application must be postmarked by December 31 of the
year preceding the awarding of the matching grant.
Sec. 18. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 8. [SINGLE BENEFICIARIES WITH MULTIPLE
ACCOUNTS.] (a) A matching grant will first be computed on an
account owned by a parent or legal guardian of the beneficiary,
or an account owner who is also the beneficiary. If there are
multiple accounts for a single beneficiary, any matching grant,
up to the annual maximum, will be proportionately awarded to the
beneficiary named in accounts owned by the parents or guardians.
(b) If the account owned by a parent or a guardian or an
account owner who is also the beneficiary does not qualify for
the maximum annual matching grant, any remaining matching grant
funds are proportionately distributed to the beneficiary to an
account or accounts owned by someone other than the parent or
guardian.
(c) If the account for a beneficiary is not owned by a
parent or a legal guardian, or an account owner who is also the
beneficiary, then the matching grant will be proportionately
distributed to the beneficiary to accounts owned by others.
Sec. 19. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 9. [OWNERSHIP OF MATCHING GRANT FUNDS.] The state
retains ownership of all matching grants and earnings on
matching grants until a qualified distribution is made to a
beneficiary or an eligible educational institution.
Sec. 20. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 10. [INACTIVE ACCOUNTS WITH MATCHING GRANTS.] (a)
The plan administrator will attempt to locate the account owner
or the beneficiary of an inactive account with a matching grant
to determine the disposition of the account. No fee will be
charged for this service. The matching grants and matching
grant earnings in the account must be returned to the office,
unless the account owner applies for a deferment or the
beneficiary begins attending an eligible educational institution
within one year of the date of notification.
(b) The account owner may apply to the plan administrator
for a deferment of inactive account time limits. Upon
application, the plan administrator shall grant a one-time
deferment of two years. In addition, the plan administrator
shall grant a deferment for the beneficiary's initial enlistment
for active duty in the armed forces of the United States, or for
the period of active military duty required as part of the
beneficiary's obligation as a member in a reserve military unit
of the armed forces of the United States.
Sec. 21. Minnesota Statutes 2000, section 136A.245, is
amended by adding a subdivision to read:
Subd. 11. [FORFEITURE OF MATCHING GRANTS.] (a) Matching
grants are forfeited if:
(1) the account owner transfers the total account balance
of an account to another account or to another qualified state
tuition program;
(2) the beneficiary receives a full tuition scholarship or
admission to a United States service academy;
(3) the beneficiary dies or becomes disabled;
(4) the account owner changes the beneficiary of the
account; or
(5) the account owner closes the account with a
nonqualified withdrawal.
(b) Matching grants must be proportionally forfeited if:
(1) the account owner transfers a portion of an account to
another account or to another qualified state tuition program;
(2) the beneficiary receives a scholarship covering a
portion of qualified higher education expenses; or
(3) the account owner makes a partial nonqualified
withdrawal.
(c) If the account owner makes a misrepresentation in a
participation agreement or an application for a matching grant
that results in a matching grant, the matching grant associated
with the misrepresentation is forfeited. The office and the
board must instruct the plan administrator as to the amount to
be forfeited from the matching grant account. The office and
the board must withdraw the matching grant or the proportion of
the matching grant that is related to the misrepresentation.
Sec. 22. [136A.246] [ACCOUNT DISTRIBUTIONS.]
Subdivision 1. [QUALIFIED DISTRIBUTION METHODS.] (a)
Qualified distributions may be made:
(1) directly to participating eligible educational
institutions on behalf of the beneficiary;
(2) in the form of a check payable to both the beneficiary
and the eligible educational institution; or
(3) to an account owner with a receipt verifying the
payment of qualified higher education expenses.
(b) When administratively feasible, distributions may be
made when the account owner and beneficiary certify prior to the
distribution that the distribution will be expended for
qualified higher education expenses a reasonable time after the
distribution. The plan administrator may retain a penalty on
the earnings portion of the nonqualified distribution until
payment of qualified higher education expenses are
substantiated. A payment receipt showing payment for qualified
higher education expenses must be submitted to the program
administrator within 30 days of distribution.
(c) Qualified distributions must be withdrawn
proportionally from contributions and earnings in an account
owner's account on the date of distribution as provided in
section 529 of the Internal Revenue Code.
Subd. 2. [MATCHING GRANT ACCOUNTS.] Qualified
distributions are based on the total account balances in an
account owner's account and matching grant account, if any, on
the date of distribution. Qualified distributions must be
withdrawn proportionally from each account based on the relative
total account balance of each account to the total account
balance for both accounts. Amounts for matching grants and
matching grant earnings must only be distributed for qualified
higher education expenses.
Subd. 3. [NONQUALIFIED DISTRIBUTION.] An account owner may
request a nonqualified distribution from an account at any
time. Nonqualified distributions are based on the total account
balances in an account owner's account and must be withdrawn
proportionally from contributions and earnings as provided in
section 529 of the Internal Revenue Code. The earnings portion
of a nonqualified distribution is subject to a penalty. For
purposes of this subdivision, "earnings portion" means the ratio
of the earnings in the account to the total account balance,
immediately prior to the distribution, multiplied by the
distribution. The penalty must be withheld from the total
amount of any distribution.
Subd. 4. [NONQUALIFIED DISTRIBUTIONS FROM MATCHING GRANT
ACCOUNTS.] (a) If an account owner requests a nonqualified
distribution from an account that has a matching grant account,
the total account balance of the matching grant account, if any,
is reduced.
(b) After the nonqualified distribution is withdrawn from
the account including any penalty as provided in subdivision 3,
the account owner forfeits matching grant amounts in the same
proportion as the nonqualified distribution is to the total
account balance of the account.
Subd. 5. [DISTRIBUTIONS DUE TO DEATH OR DISABILITY OF, OR
SCHOLARSHIP TO, A BENEFICIARY.] An account owner may request a
distribution due to the death or disability of, or scholarship
to, a beneficiary from an account by submitting a completed
request to the plan. Prior to distribution, the account owner
shall certify the reason for the distribution and provide
written confirmation from a third party that the beneficiary has
died, become disabled, or received a scholarship for attendance
at an eligible educational institution. The plan must not
consider a request to make a distribution until a third-party
written confirmation is received by the plan. For purposes of
this subdivision, a third-party written confirmation consists of
the following:
(1) for death of the beneficiary, a certified copy of the
beneficiary's death certificate;
(2) for disability of the beneficiary, a certification by a
physician who is a doctor of medicine or osteopathy stating that
the doctor is legally authorized to practice in a state of the
United States and that the beneficiary is unable to attend any
eligible educational institution because of an injury or illness
that is expected to continue indefinitely or result in death.
Certification must be on a form approved by the plan; or
(3) for a scholarship award to the beneficiary, a letter
from the grantor of the scholarship or from the eligible
educational institution receiving or administering the
scholarship, that identifies the beneficiary by name and social
security number or taxpayer identification number as the
recipient of the scholarship and states the amount of the
scholarship, the period of time or number of credits or units to
which it applies, the date of the scholarship, and, if
applicable, the eligible educational institution to which the
scholarship is to be applied.
Sec. 23. [REVISOR'S INSTRUCTION.]
(a) The revisor of statutes shall renumber each section of
Minnesota Statutes listed in column A with the section listed in
column B.
Column A Column B
136A.241 136G.01
136A.242 136G.03
136A.243 136G.05
136A.244 136G.07
136A.2441 136G.09
136A.245 136G.11
136A.246 136G.13
(b) The revisor of statutes shall correct cross-references
in Minnesota Statutes that are recodified by this act, and, if
Minnesota Statutes, sections 136A.241 to 136A.246, are further
amended in the 2001 legislative session, shall codify the
amendments in a manner consistent with this act.
(c) The revisor of statutes shall change "Edvest" to
"Minnesota college savings plan" wherever it appears in
Minnesota Statutes.
Sec. 24. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
Presented to the governor June 27, 2001
Signed by the governor June 30, 2001, 8:46 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes