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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 107-H.F.No. 1385 
                  An act relating to higher education; allocating money 
                  for educational and related purposes with certain 
                  conditions; modifying various loan, grant, and 
                  financial aid provisions; requiring institutions to 
                  provide certain data; permitting disclosure of certain 
                  data to determine eligibility; amending various 
                  reciprocity provisions; providing definitions; 
                  amending provisions related to advisory and student 
                  groups; directing the Board of Trustees to designate 
                  centers of excellence; amending the Minnesota college 
                  savings plan; amending provisions related to private 
                  career schools; establishing fees; establishing the 
                  Rochester University Development Committee; 
                  appropriating money; amending Minnesota Statutes 2004, 
                  135A.031, subdivisions 3, 4; 135A.052, subdivision 1; 
                  135A.30, subdivisions 3, 4, 5; 135A.52, subdivisions 
                  1, 2; 136A.01, subdivision 2; 136A.031, subdivisions 
                  2, 3, 4, 5; 136A.08, by adding subdivisions; 136A.121, 
                  subdivisions 2, 6, 9, 13, by adding subdivisions; 
                  136A.125, subdivisions 2, 4; 136A.1701, by adding 
                  subdivisions; 136F.04, subdivision 4; 136F.32, 
                  subdivision 2; 136G.03, subdivisions 3, 21a, 22, 32; 
                  136G.05, subdivision 8; 136G.09, subdivisions 11, 12; 
                  136G.11, subdivisions 1, 2, 3, 13; 136G.13, 
                  subdivisions 1, 5; 136G.14; 137.0245, subdivisions 1, 
                  3, 4; 141.21, by adding a subdivision; 141.25, 
                  subdivisions 3, 5, 8, 9, 12; 141.251; 141.26, 
                  subdivision 5; 141.271, subdivisions 4, 7, 10, by 
                  adding subdivisions; 141.28, subdivision 1, by adding 
                  a subdivision; 141.29, subdivision 3; 141.30; 141.35; 
                  192.502, subdivision 1; 299A.45, subdivisions 1, 4; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 135A; 136A; 136F; 137; 141; 144; 583; 
                  repealing Minnesota Statutes 2004, sections 136A.011; 
                  136A.031, subdivision 1; Minnesota Rules, parts 
                  4815.0100; 4815.0110; 4815.0120; 4815.0130; 4815.0140; 
                  4815.0150; 4815.0160; 4830.8100; 4830.8110; 4830.8120; 
                  4830.8130; 4830.8140; 4830.8150. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                                 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 "2006" or "2007" in this article 
        indicates that the amount is appropriated to be available for 
        the fiscal year ending June 30, 2006, or June 30, 2007, 
        respectively.  "The first year" is fiscal year 2006.  "The 
        second year" is fiscal year 2007.  "The biennium" is fiscal 
        years 2006 and 2007. 
                                SUMMARY BY FUND
                                  2006          2007           TOTAL
        General            $1,365,500,000 $1,395,500,000 $2,761,000,000
        Health Care 
        Access                  2,157,000      2,157,000      4,314,000
                         SUMMARY BY AGENCY - ALL FUNDS
                                  2006          2007           TOTAL
        Higher Education
        Services Office       172,129,000    177,181,000    349,310,000
        Board of Trustees
        of the Minnesota State
        Colleges and
        Universities          600,694,000    602,194,000  1,202,888,000
        Board of Regents
        of the University
        of Minnesota          593,348,000    616,736,000  1,210,084,000
        Mayo Medical
        Foundation              1,391,000      1,391,000      2,782,000
        Minnesota 
        Department of Health       95,000        155,000        250,000
                                                   APPROPRIATIONS 
                                               Available for the Year 
                                                   Ending June 30 
                                                  2006         2007 
        Sec. 2.  HIGHER EDUCATION     
        SERVICES OFFICE 
        Subdivision 1.  Total
        Appropriation                     $  172,129,000 $  177,181,000
        The amounts that may be spent from this 
        appropriation for each purpose are 
        specified in the following subdivisions.
        Subd. 2.  State Grants               136,394,000    144,756,000 
        If the appropriation in this 
        subdivision for either year is 
        insufficient, the appropriation for the 
        other year is available for it.  For 
        the biennium, the tuition and fee 
        maximum shall be $9,208 the first year 
        and $9,438 the second year for students 
        enrolled in four-year programs and 
        $6,567 the first year and $6,436 the 
        second year for students enrolled in 
        two-year programs. 
        The Higher Education Services Office 
        must study the for-profit postsecondary 
        education sector licensed or registered 
        in Minnesota.  The study must examine 
        tuition levels and program offerings, 
        student debt load, financial 
        assistance, and the impact of the 
        tuition and fee maximums set in law on 
        this postsecondary sector and its 
        students.  The study must also analyze 
        the relationship of the tuition and fee 
        maximums and tuition levels.  The 
        office must report on the findings to 
        the legislative committees responsible 
        for higher education finance by 
        November 15, 2006.  This study may be 
        done in conjunction with the licensing 
        study in article 3. 
        This appropriation sets the living and 
        miscellaneous expense allowance at 
        $5,350 each year. 
        This appropriation contains money to 
        provide educational benefits to 
        dependent children under age 23 and the 
        spouses of public safety officers 
        killed in the line of duty under 
        Minnesota Statutes 2004, section 
        299A.45. 
        Subd. 3.  Interstate Tuition
        Reciprocity                            1,000,000      1,000,000 
        If the appropriation in this 
        subdivision for either year is 
        insufficient, the appropriation for the 
        other year is available to meet 
        reciprocity contract obligations. 
        Subd. 4.  State Work Study            12,444,000     12,444,000 
        Subd. 5.  Child Care Grants            4,934,000      4,934,000 
        Subd. 6.  Minitex                      4,381,000      4,381,000 
        Subd. 7.  MnLINK Gateway                 400,000        400,000 
        Subd. 8.  Learning Network  
        of Minnesota                           4,225,000      4,225,000 
        Subd. 9.  Minnesota College 
        Savings Plan                           1,020,000      1,020,000 
        Subd. 10.  Midwest Higher 
        Education Compact                         90,000         90,000
        Subd. 11.  Other Small      
        Programs                                 920,000        920,000 
        This appropriation includes funding for 
        postsecondary service learning, student 
        and parent information, get ready 
        outreach, and intervention for college 
        attendance program. 
        No more than $50,000 of this 
        appropriation each year may be used for 
        administrative expenses for the 
        intervention for college attendance 
        program under new Minnesota Statutes, 
        section 136A.861.  This appropriation 
        is added to the agency's permanent 
        budget base.  
        Of this appropriation, $115,000 each 
        year is for grants to increase 
        campus-community collaboration and 
        service learning statewide.  For each 
        $1 in state funding, grant recipients 
        must contribute $2 in campus or 
        community-based support. 
        Subd. 12.  Agency           
        Administration                         2,761,000      2,651,000 
        $100,000 the first year and $300,000 
        the second year is for the Higher 
        Education Services Office to develop 
        and implement a process to measure and 
        report on the effectiveness of 
        postsecondary institutions in the state 
        and make a report to the legislature 
        regarding the implementation of the 
        process.  The report must be made by 
        January 15, 2006, to the legislative 
        committees with jurisdiction over 
        higher education policy and finance.  
        The funding base for this initiative in 
        fiscal years 2008 and 2009 is $300,000 
        per year. 
        $310,000 the first year is for the 
        Higher Education Services Office to 
        upgrade computer program application 
        software related to state grant 
        awards.  This appropriation does not 
        cancel but is available until 
        expended.  This is a onetime 
        appropriation and is not added to the 
        agency's base. 
        Subd. 13.  Balances Forward 
        A balance in the first year under this 
        section does not cancel, but is 
        available for the second year. 
        Subd. 14.  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.  Transfers from the 
        child care or state work study 
        appropriations may only be made to the 
        extent there is a projected surplus in 
        the appropriation.  A transfer may be 
        made only with the prior written 
        approval of the commissioner of finance 
        and prior written notice to the chairs 
        of the senate Higher Education Budget 
        Division and house Higher Education 
        Finance Committee. 
        Subd. 15.  Reporting 
        The Higher Education Services Office 
        shall collect data monthly from 
        institutions disbursing state financial 
        aid.  The data collected must include, 
        but is not limited to, expenditures by 
        type to date and unexpended balances.  
        The Higher Education Services Office 
        must evaluate and report quarterly 
        state financial aid expenditures and 
        unexpended balances to the chairs of 
        the Higher Education Finances 
        Committees of the senate and house of 
        representatives and the commissioner of 
        finance.  By November 1 and February 
        15, the Higher Education Services 
        Office must provide updated state grant 
        spending projections taking into 
        account the most current and projected 
        enrollment and tuition and fee 
        information, economic conditions, and 
        other relevant factors.  Before 
        submitting state grant spending 
        projections, the Higher Education 
        Services Office must meet and consult 
        with representatives of public and 
        private postsecondary education, the 
        Department of Finance, Governor's 
        Office, legislative staff, and 
        financial aid administrators. 
        Subd. 16.  Rochester University        3,200,000       -0- 
        (a) $200,000 is for the Rochester 
        Higher Education Development Committee 
        to carry out its planning activities.  
        This is a onetime appropriation.  
        (b) $3,000,000 is for a onetime 
        appropriation that must be deposited 
        into the Rochester higher education 
        development account under article 4.  
        With the approval of the Higher 
        Education Services Office, money in 
        this account may be used to:  (1) 
        provide additional planning and 
        development funds, if needed; (2) 
        provide initial funding for academic 
        program development; and (3) provide 
        funding related to academic facilities, 
        if needed.  The appropriation under 
        this paragraph is available until June 
        30, 2009. 
        Subd. 17.  United Family
        Practice Residency Program               360,000        360,000
        For a grant to the United Family 
        Medicine residency program.  This 
        appropriation shall be used to support 
        18 resident physicians each year in 
        family practice at United Family 
        Medicine residency programs and shall 
        prepare doctors to practice family care 
        medicine in underserved rural and urban 
        areas of the state.  It is intended 
        that this program will improve health 
        care in underserved communities, 
        provide affordable access to 
        appropriate medical care, and manage 
        the treatment of patients in a more 
        cost-effective manner. 
        Sec. 3.  BOARD OF TRUSTEES OF THE MINNESOTA 
        STATE COLLEGES AND UNIVERSITIES
        Subdivision 1.  Total             
        Appropriation                        600,694,000    602,194,000 
        The amounts that may be spent from this 
        appropriation for each purpose are 
        specified in the following subdivisions.
        The legislature estimates that 
        instructional expenditures will be 
        $812,735,000 the first year and 
        $814,764,000 the second year.  The 
        legislature estimates that 
        noninstructional expenditures will be 
        $58,868,000 the first year and 
        $59,015,000 the second year. 
        Subd. 2.  General Appropriation      595,694,000    597,194,000 
        This appropriation includes $12,000,000 
        to pay competitive compensation to 
        faculty or staff for initiatives that 
        promote excellence in student 
        learning.  This appropriation also 
        includes funding for the recurring 
        enrollment adjustment and money to 
        strengthen and expand the Minnesota 
        online program, increase the capacity 
        for training nurses and teachers, 
        provide for the management education 
        needs of farm and small business 
        owners, and provide services and 
        outreach to underserved populations. 
        Subd. 3.  Centers of Excellence        5,000,000      5,000,000 
        This appropriation is for centers of 
        excellence under new Minnesota 
        Statutes, section 136F.31. 
        The board must develop a process to 
        designate centers of excellence under 
        new Minnesota Statutes, section 136F.31.
        Sec. 4.  BOARD OF REGENTS OF THE 
        UNIVERSITY OF MINNESOTA
        Subdivision 1.  Total      
        Appropriation                        593,348,000    616,736,000 
        The amounts that may be spent from this 
        appropriation for each purpose are 
        specified in the following subdivisions.
        Subd. 2.  Operations and    
        Maintenance                          527,824,000    551,212,000 
        The legislature estimates that 
        instructional expenditures will be 
        $451,372,000 the first year and 
        $469,229,000 the second year.  The 
        legislature estimates that 
        noninstructional expenditures will be 
        $290,275,000 the first year and 
        $301,758,000 the second year. 
        This appropriation includes $13,000,000 
        for competitive compensation to enable 
        the university to attract and retain 
        quality faculty members. 
        This appropriation includes funding for 
        the recurring enrollment adjustment and 
        the following initiatives:  Biosciences 
        for a Healthy Society to advance the 
        university's expertise and to increase 
        the university's competitiveness in 
        leveraging new funding from federal and 
        private sources; Preparing Students for 
        the 21st Century to enhance the ability 
        of the university to attract and retain 
        exceptional students; research support 
        to provide resources for the university 
        to maintain a competitive advantage in 
        emerging and ongoing research 
        initiatives; 21st Century Technology to 
        support enhancement to major university 
        systems; and outreach services to 
        historically underserved students.  
        Subd. 3.  Health Care Access Fund      2,157,000      2,157,000 
        This appropriation is from the health 
        care access fund and is for primary 
        care education initiatives. 
        Subd. 4.  Special          
        Appropriation                         63,367,000     63,367,000 
        (a) Agriculture and Extension Service
            50,625,000     50,625,000
        For the Agricultural Experiment 
        Station, Minnesota Extension Service. 
        (b) Health Sciences
             4,929,000      4,929,000 
        For the rural physicians associates 
        program, the Veterinary Diagnostic 
        Laboratory, health sciences research, 
        dental care, and the Biomedical 
        Engineering Center. 
        (c) Institute of Technology  
             1,387,000      1,387,000 
        For the Geological Survey and the 
        Talented Youth Mathematics Program. 
        (d) System Specials          
             6,426,000      6,426,000 
        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. 
        Subd. 5.  Academic Health Center
        The appropriation to the Academic 
        Health Center under Minnesota Statutes, 
        section 297F.10, is anticipated to be 
        $20,890,000 in the first year and 
        $20,474,000 in the second year. 
        Sec. 5.  MAYO MEDICAL FOUNDATION                                
        Subdivision 1.  Total             
        Appropriation                          1,391,000      1,391,000 
        The amounts that may be spent from this 
        appropriation for each purpose are 
        specified in the following subdivisions.
        Subd. 2.  Medical School                 514,000        514,000 
        The state of Minnesota must pay a 
        capitation 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. 
        It is intended 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               531,000        531,000 
        The state of Minnesota must pay a 
        capitation of up to 27 residents each 
        year. 
        Subd. 4.  St. Cloud Hospital-Mayo Family
        Practice Residency Program  
               346,000        346,000 
        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 must 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.  COMMISSIONER OF HEALTH           95,000        155,000
        To the commissioner of health to 
        implement new Minnesota Statutes, 
        section 144.1498. 

                                   ARTICLE 2 
                               RELATED PROVISIONS 
           Section 1.  Minnesota Statutes 2004, section 135A.031, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DETERMINATION OF INSTRUCTIONAL SERVICES BASE.] 
        The instructional services base for each public postsecondary 
        system is the sum of:  (1) the state share; and (2) the 
        legislatively estimated tuition for the second year of the most 
        recent biennium; and (3) adjustments for inflation, enrollment 
        changes as calculated in subdivision 4, and performance as 
        calculated in subdivision 5.  
           [EFFECTIVE DATE.] This section is effective June 30, 2007. 
           Sec. 2.  Minnesota Statutes 2004, section 135A.031, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ADJUSTMENT FOR ENROLLMENTS FOR BUDGETING.] (a) 
        Each public postsecondary system's instructional services base 
        shall be adjusted for estimated changes in enrollments.  For 
        each two percent change in estimated full-year equivalent 
        enrollment, an adjustment shall be made to 65 percent of the 
        instructional services base.  The remaining 35 percent of the 
        instructional services base is not subject to the adjustment in 
        this subdivision. 
           (b) For all purposes where student enrollment is used for 
        budgeting purposes, student enrollment shall be measured in 
        full-year equivalents and shall include only enrollments in 
        courses that award credit or otherwise satisfy any of the 
        requirements of an academic or vocational program. 
           (c) The enrollment adjustment shall be made for each year 
        of the subsequent biennium.  The base enrollment year is the 
        1995 fiscal year enrollment.  The base enrollment shall be 
        updated for each two percent change in estimated full-year 
        equivalent enrollment.  If the actual enrollment differs from 
        the estimated enrollment, an adjustment shall be made in the 
        next biennium. 
           [EFFECTIVE DATE.] This section is effective June 30, 2007. 
           Sec. 3.  Minnesota Statutes 2004, section 135A.052, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATEMENT OF MISSIONS.] The legislature 
        recognizes each type of public postsecondary institution to have 
        a distinctive mission within the overall provision of public 
        higher education in the state and a responsibility to cooperate 
        with each other.  These missions are as follows: 
           (1) the technical colleges shall offer vocational training 
        and education to prepare students for skilled occupations that 
        do not require a baccalaureate degree; 
           (2) the community colleges shall offer lower division 
        instruction in academic programs, occupational programs in which 
        all credits earned will be accepted for transfer to a 
        baccalaureate degree in the same field of study, and remedial 
        studies, for students transferring to baccalaureate institutions 
        and for those seeking associate degrees; 
           (3) consolidated community technical colleges shall offer 
        the same types of instruction, programs, certificates, diplomas, 
        and degrees as the technical colleges and community colleges 
        offer; 
           (4) the state universities shall offer undergraduate and 
        graduate instruction through the master's degree, including 
        specialist certificates, in the liberal arts and sciences and 
        professional education, and may offer applied doctoral degrees 
        in education, business, psychology, physical therapy, audiology, 
        and nursing; and 
           (5) the University of Minnesota shall offer undergraduate, 
        graduate, and professional instruction through the doctoral 
        degree, and shall be the primary state supported academic agency 
        for research and extension services. 
           It is part of the mission of each system that within the 
        system's resources the system's governing board and chancellor 
        or president shall endeavor to: 
           (a) prevent the waste or unnecessary spending of public 
        money; 
           (b) use innovative fiscal and human resource practices to 
        manage the state's resources and operate the system as 
        efficiently as possible; 
           (c) coordinate the system's activities wherever appropriate 
        with the activities of the other system and governmental 
        agencies; 
           (d) use technology where appropriate to increase system 
        productivity, improve customer service, increase public access 
        to information about the system, and increase public 
        participation in the business of the system; 
           (e) utilize constructive and cooperative labor-management 
        practices to the extent otherwise required by chapters 43A and 
        179A; and 
           (f) recommend to the legislature appropriate changes in law 
        necessary to carry out the mission of the system. 
           Sec. 4.  [135A.165] [DEAF STUDENTS; TUITION ASSISTANCE.] 
           (a) For the purpose of this section, a "deaf person" means 
        an individual with a hearing loss of such severity that the 
        individual must depend primarily on visual communication, such 
        as writing, lip reading, manual communication, and gestures. 
           (b) A deaf person, who is a resident student as defined in 
        section 136A.101, subdivision 8, is entitled to tuition 
        assistance for the tuition and fees remaining after deducting 
        any federal or state grants or other public or private grants 
        made to the person for the purpose of paying the tuition and 
        fees at a Minnesota state college or university or the 
        University of Minnesota.  A deaf person must receive either a 
        federal Pell grant or a state grant under section 136A.121 for a 
        term to receive tuition assistance for that term.  
           Sec. 5.  Minnesota Statutes 2004, section 135A.30, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SELECTION OF RECIPIENTS.] The governing board of 
        an eligible institution shall determine, in consultation with 
        its campuses, application dates and procedures, criteria to be 
        considered, and methods of selecting students to receive 
        scholarships.  A campus, with the approval of its governing 
        board, may award a scholarship in any of the specified 
        fields field of study (1) in which the campus offers a program 
        that is of the quality and rigor to meet the needs of the 
        talented student, and (2) that is pertinent to the mission of 
        the campus.  
           Sec. 6.  Minnesota Statutes 2004, section 135A.30, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AMOUNT OF SCHOLARSHIP.] The amount of the 
        scholarship must may be (1) at public institutions, up to the 
        cost of tuition and fees for full-time attendance for one 
        academic year, or (2) at private institutions, an amount equal 
        up to the lesser of the actual tuition and fees charged by the 
        institution or the tuition and fees in comparable public 
        institutions.  Scholarships awarded under this section must not 
        be considered in determining a student's financial need as 
        provided in section 136A.101, subdivision 5. 
           Sec. 7.  Minnesota Statutes 2004, section 135A.30, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RENEWALS.] The scholarship shall may be renewed 
        yearly, for up to three additional academic years, if the 
        student: 
           (1) maintains full-time enrollment with a grade point 
        average of at least 3.0 on a four point scale; 
           (2) pursues studies and continues to demonstrate 
        outstanding ability, achievement, and potential in the field for 
        which the award was made; and 
           (3) is achieving satisfactory progress toward a degree.  
           Sec. 8.  Minnesota Statutes 2004, section 135A.52, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEES AND TUITION.] Except for an 
        administration fee established by the governing board at a level 
        to recover costs, to be collected only when a course is taken 
        for credit, a senior citizen who is a legal resident of 
        Minnesota is entitled without payment of tuition or activity 
        fees to attend courses offered for credit, audit any courses 
        offered for credit, or enroll in any noncredit adult vocational 
        education courses in any state supported institution of higher 
        education in Minnesota when space is available after all 
        tuition-paying students have been accommodated.  A senior 
        citizen enrolled under this section must pay any materials, 
        personal property, or service charges for the course.  In 
        addition, a senior citizen who is enrolled in a course for 
        credit must pay an administrative fee in an amount established 
        by the governing board of the institution to recover the course 
        costs.  There shall be no administrative fee charges to a senior 
        citizen auditing a course.  For the purposes of this section and 
        section 135A.51, the term "noncredit adult vocational education 
        courses" shall not include those adult vocational education 
        courses designed and offered specifically and exclusively for 
        senior citizens.  
           The provisions of this section and section 135A.51 do not 
        apply to noncredit courses designed and offered by the 
        University of Minnesota, and the Minnesota State Colleges and 
        Universities specifically and exclusively for senior citizens.  
        Senior citizens enrolled under the provisions of this section 
        and section 135A.51 shall not be included by such institutions 
        in their computation of full-time equivalent students when 
        requesting staff or appropriations.  The enrollee shall pay 
        laboratory or material fees. 
           Sec. 9.  Minnesota Statutes 2004, section 135A.52, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TERM; INCOME OF SENIOR CITIZENS.] (a) Except 
        under paragraph (b), there shall be no limit to the number of 
        terms, quarters or semesters a senior citizen may attend 
        courses, nor income limitation imposed in determining 
        eligibility.  
           (b) A senior citizen enrolled in a closed enrollment 
        contract training or professional continuing education program 
        is not eligible for benefits under subdivision 1. 
           Sec. 10.  Minnesota Statutes 2004, section 136A.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RESPONSIBILITIES.] The Higher Education Services 
        Office is responsible for: 
           (1) necessary state level administration of financial aid 
        programs, including accounting, auditing, and disbursing state 
        and federal financial aid funds, and reporting on financial aid 
        programs to the governor and the legislature; 
           (2) approval, registration, licensing, and financial aid 
        eligibility of private collegiate and career schools, under 
        sections 136A.61 to 136A.71 and chapter 141; 
           (3) administering the Telecommunications Council under Laws 
        1993, First Special Session chapter 2, article 5, section 2, the 
        Learning Network of Minnesota, and the Statewide Library Task 
        Force; 
           (4) negotiating and administering reciprocity agreements; 
           (5) publishing and distributing financial aid information 
        and materials, and other information and materials under section 
        136A.87, to students and parents; 
           (6) collecting and maintaining student enrollment and 
        financial aid data and reporting data on students and 
        postsecondary institutions to develop and implement a process to 
        measure and report on the effectiveness of postsecondary 
        institutions; 
           (7) administering the federal programs that affect students 
        and institutions on a statewide basis; and 
           (8) prescribing policies, procedures, and rules under 
        chapter 14 necessary to administer the programs under its 
        supervision. 
           Sec. 11.  Minnesota Statutes 2004, section 136A.031, 
        subdivision 2, is amended to read: 
           Subd. 2.  [HIGHER EDUCATION ADVISORY COUNCIL.] A Higher 
        Education Advisory Council (HEAC) is established.  The HEAC is 
        composed of the president of the University of Minnesota or 
        designee; the chancellor of the Minnesota State Colleges and 
        Universities or designee; the commissioner of education; the 
        president of the Private College Council; a representative from 
        the Minnesota Association of Private Postsecondary Schools 
        Career College Association; and a member appointed by the 
        governor.  The HEAC shall (1) bring to the attention of the 
        Higher Education Services Council Office any matters that the 
        HEAC deems necessary, and (2) review and comment upon matters 
        before the council.  The council shall refer all proposals to 
        the HEAC before submitting recommendations to the governor and 
        the legislature.  The council shall provide time for a report 
        from the HEAC at each meeting of the council. 
           Sec. 12.  Minnesota Statutes 2004, section 136A.031, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STUDENT ADVISORY COUNCIL.] A Student Advisory 
        Council (SAC) to the Higher Education Services Council Office is 
        established.  The members of SAC shall include:  the chair of 
        the University of Minnesota student senate; the state chair of 
        the Minnesota State University Student Association; the 
        president of the Minnesota State College Student Association and 
        an officer of the Minnesota State College Student Association, 
        one in a community college course of study and one in a 
        technical college course of study; the president of the 
        Minnesota Association of Private College Students; and a student 
        who is enrolled in a private vocational school, to be appointed 
        by the Minnesota Association of Private Postsecondary Schools 
        Career College Association.  A member may be represented by a 
        student designee who attends an institution from the same system 
        that the absent member represents.  The SAC shall select one of 
        its members to serve as chair. 
           The Higher Education Services Council Office shall inform 
        the SAC of all matters related to student issues under 
        consideration and shall refer all proposals to the SAC before 
        taking action or sending the proposals to the governor or 
        legislature.  The SAC shall report to the Higher Education 
        Services Council Office quarterly and at other times that the 
        SAC considers desirable.  The SAC shall determine its meeting 
        times, but it shall also meet with the council office within 30 
        days after the director's request for a meeting. 
           The SAC shall: 
           (1) bring to the attention of the Higher Education Services 
        Council Office any matter that the SAC believes needs the 
        attention of the council office; 
           (2) make recommendations to the Higher Education Services 
        Council Office as it finds appropriate; and 
           (3) appoint approve student members to appointments by the 
        Higher Education Services Council Office for each advisory 
        groups group as provided in subdivision 4; and 
           (4) provide any reasonable assistance to the council. 
           Sec. 13.  Minnesota Statutes 2004, section 136A.031, 
        subdivision 4, is amended to read: 
           Subd. 4.  [STUDENT REPRESENTATION.] If requested by the 
        SAC, The director must place at least one student from an 
        affected educational system on any task force created under 
        subdivision 1.  The student member or members shall be appointed 
        by the SAC by the office.  The director must submit to the SAC 
        the name of any student appointed to an advisory group or task 
        force.  The student appointment is not approved if four SAC 
        members vote to disapprove of the appointment.  If an 
        appointment is disapproved, the director must submit another 
        student appointment to the SAC in a timely manner.  
           Sec. 14.  Minnesota Statutes 2004, section 136A.031, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXPIRATION.] Notwithstanding section 15.059, 
        subdivision 5, the advisory groups established in this section 
        expire on June 30, 2005 2007. 
           Sec. 15.  Minnesota Statutes 2004, section 136A.08, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [REPORTING.] The Higher Education Services Office 
        must annually, before the last day in January, submit a report 
        to the committees in the house of representatives and the senate 
        with responsibility for higher education finance on: 
           (1) participation in the tuition reciprocity program by 
        Minnesota students and students from other states attending 
        Minnesota postsecondary institutions under a reciprocity 
        agreement; 
           (2) reciprocity and resident tuition rates at each 
        institution; and 
           (3) interstate payments and obligations for each state 
        participating in the tuition reciprocity program in the prior 
        year. 
           Sec. 16.  Minnesota Statutes 2004, section 136A.08, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [DATA SHARING.] (a) The Higher Education Services 
        Office must consider developing data collection procedures and 
        agreements to monitor the extent to which students who attend 
        Minnesota postsecondary institutions under reciprocity 
        agreements are employed in Minnesota after graduation.  These 
        procedures must include matching Social Security numbers of 
        reciprocity students for purposes of tracking the migration and 
        employment of students who receive associate, baccalaureate, or 
        graduate degrees through a tuition reciprocity program.  State 
        agencies must share wage and earnings data under section 268.19 
        for the purpose of evaluating the tuition reciprocity program.  
           (b) The reciprocity application must request the use of 
        student Social Security numbers for the purposes of this 
        subdivision.  Reciprocity students must be informed that Social 
        Security numbers will be used only for monitoring described in 
        paragraph (a), by sharing information with Minnesota agencies 
        and departments responsible for the administration of covered 
        wage data and revenue collections.  Social Security numbers must 
        not be used for any other purpose or reported to any other 
        government entity. 
           (c) The office must include summary data on the migration 
        and earnings of reciprocity graduates in the reciprocity report 
        to the legislature.  This report must include summary statistics 
        on number of graduates by institution, degree granted and year 
        of graduation, total number of reciprocity students employed in 
        the state, and total earnings of graduates.  
           Sec. 17.  Minnesota Statutes 2004, section 136A.121, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBILITY FOR GRANTS.] An applicant is 
        eligible to be considered for a grant, regardless of the 
        applicant's sex, creed, race, color, national origin, or 
        ancestry, under sections 136A.095 to 136A.131 if the office 
        finds that the applicant: 
           (1) is a resident of the state of Minnesota; 
           (2) is a graduate of a secondary school or its equivalent, 
        or is 17 years of age or over, and has met all requirements for 
        admission as a student to an eligible college or technical 
        college of choice as defined in sections 136A.095 to 136A.131; 
           (3) has met the financial need criteria established in 
        Minnesota Rules; 
           (4) is not in default, as defined by the office, of any 
        federal or state student educational loan; and 
           (5) is not more than 30 days in arrears for any in 
        court-ordered child support payments owed to a that is collected 
        or enforced by the public agency authority responsible for child 
        support enforcement or, if the applicant is more than 30 days in 
        arrears in court-ordered child support that is collected or 
        enforced by the public authority responsible for child support 
        enforcement, but is complying with a written payment 
        agreement under section 518.553 or order for arrearages.  An 
        agreement must provide for a repayment of arrearages at no less 
        than 20 percent per month of the amount of the monthly child 
        support obligation or no less than $30 per month if there is no 
        current monthly child support obligation.  Compliance means that 
        payments are made by the payment date. 
           The director and the commissioner of human services shall 
        develop procedures to implement clause (5).  
           Sec. 18.  Minnesota Statutes 2004, section 136A.121, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COST OF ATTENDANCE.] (a) The recognized cost of 
        attendance consists of allowances specified in law for living 
        and miscellaneous expenses, and an allowance for tuition and 
        fees equal to the lesser of the average tuition and fees charged 
        by the institution, or the tuition and fee maximums established 
        in law. 
           (b) For a student registering for less than full time, the 
        office shall prorate the cost of attendance to the actual number 
        of credits for which the student is enrolled. 
           The recognized cost of attendance for a student who is 
        confined to a Minnesota correctional institution shall consist 
        of the tuition and fee component in paragraph (a), with no 
        allowance for living and miscellaneous expenses. 
           For the purpose of this subdivision, "fees" include only 
        those fees that are mandatory and charged to full-time resident 
        students attending the institution.  Fees do not include charges 
        for tools, equipment, computers, or other similar materials 
        where the student retains ownership.  Fees include charges for 
        these materials if the institution retains ownership.  Fees do 
        not include optional or punitive fees. 
           Sec. 19.  Minnesota Statutes 2004, section 136A.121, is 
        amended by adding a subdivision to read: 
           Subd. 7a.  [SURPLUS APPROPRIATION.] If the amount 
        appropriated is determined by the office to be more than 
        sufficient to fund projected grant demand in the second year of 
        the biennium, the office may increase the living and 
        miscellaneous expense allowance in the second year of the 
        biennium by up to an amount that retains sufficient 
        appropriations to fund the projected grant demand.  The 
        adjustment may be made one or more times.  In making the 
        determination that there is more than sufficient funds, the 
        office shall balance the need for sufficient resources to meet 
        the projected demand for grants with the goal of fully 
        allocating the appropriation for state grants.  An increase in 
        the living and miscellaneous expense allowance under this 
        subdivision does not carry forward into a subsequent biennium.  
        This subdivision expires June 30, 2007. 
           Sec. 20.  Minnesota Statutes 2004, section 136A.121, 
        subdivision 9, is amended to read: 
           Subd. 9.  [AWARDS.] An undergraduate student who meets the 
        office's requirements is eligible to apply for and receive a 
        grant in any year of undergraduate study unless the student has 
        obtained a baccalaureate degree or previously has been enrolled 
        full time or the equivalent for eight semesters or the 
        equivalent, excluding courses taken from a Minnesota school or 
        postsecondary institution which is not participating in the 
        state grant program and from which a student transferred no 
        credit.  A student who withdraws from enrollment for active 
        military service is entitled to an additional semester or the 
        equivalent of grant eligibility.  A student enrolled in a 
        two-year program at a four-year institution is only eligible for 
        the tuition and fee maximums established by law for two-year 
        institutions. 
           Sec. 21.  Minnesota Statutes 2004, section 136A.121, 
        subdivision 13, is amended to read: 
           Subd. 13.  [DEADLINE.] The deadline for the office to 
        accept applications for state grants for a term is 14 30 days 
        after the start of that term. 
           Sec. 22.  Minnesota Statutes 2004, section 136A.121, is 
        amended by adding a subdivision to read: 
           Subd. 18.  [DATA.] (a) An eligible institution must provide 
        to the office data on student enrollment and federal and state 
        financial aid. 
           (b) An institution or its agent must provide to the office 
        aggregate and distributional financial or other data as 
        determined by the director that is directly related to the 
        responsibilities of the office under this chapter and chapter 
        141.  The director may only request aggregate and distributional 
        data after establishing and consulting with a data advisory task 
        force to determine the need, content, and detail of the 
        information.  Data provided by nonpublic institutions under this 
        paragraph is considered nonpublic data under chapter 13. 
           Sec. 23.  Minnesota Statutes 2004, section 136A.125, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELIGIBLE STUDENTS.] (a) An applicant is eligible 
        for a child care grant if the applicant: 
           (1) is a resident of the state of Minnesota; 
           (2) has a child 12 years of age or younger, or 14 years of 
        age or younger who is handicapped as defined in section 125A.02, 
        and who is receiving or will receive care on a regular basis 
        from a licensed or legal, nonlicensed caregiver; 
           (3) is income eligible as determined by the office's 
        policies and rules, but is not a recipient of assistance from 
        the Minnesota family investment program; 
           (4) has not earned a baccalaureate degree and has been 
        enrolled full time less than eight semesters or the equivalent; 
           (5) is pursuing a nonsectarian program or course of study 
        that applies to an undergraduate degree, diploma, or 
        certificate; 
           (6) is enrolled at least half time in an eligible 
        institution; and 
           (7) is in good academic standing and making satisfactory 
        academic progress. 
           (b) A student who withdraws from enrollment for active 
        military service is entitled to an additional semester or the 
        equivalent of grant eligibility.  
           Sec. 24.  Minnesota Statutes 2004, 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; 
           (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 $2,200 $2,300 
        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. 25.  Minnesota Statutes 2004, section 136A.1701, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [DATA.] (a) An eligible institution must provide 
        to the office data on student enrollment and federal and state 
        financial aid. 
           (b) An institution or its agent must provide to the office 
        aggregate and distributional financial or other data as 
        determined by the director that is directly related to the 
        responsibilities of the office under this chapter and chapter 
        141.  The director may only request aggregate and distributional 
        data after establishing and consulting with a data advisory task 
        force to determine the need, content, and detail of the 
        information.  Data provided by nonpublic institutions under this 
        paragraph is considered nonpublic data under chapter 13. 
           Sec. 26.  Minnesota Statutes 2004, section 136A.1701, is 
        amended by adding a subdivision to read: 
           Subd. 12.  [ELIGIBLE STUDENT.] "Eligible student" means a 
        student who is a Minnesota resident who is enrolled or accepted 
        for enrollment at an eligible institution in Minnesota or in 
        another state or province.  Non-Minnesota residents are eligible 
        students if they are enrolled or accepted for enrollment in a 
        minimum of one course of at least 30 days in length during the 
        academic year that requires physical attendance at an eligible 
        institution located in Minnesota.  Non-Minnesota resident 
        students enrolled exclusively during the academic year in 
        correspondence courses or courses offered over the Internet are 
        not eligible students.  Non-Minnesota resident students not 
        physically attending classes in Minnesota due to enrollment in a 
        study abroad program for 12 months or less are eligible students.
        Non-Minnesota residents enrolled in study abroad programs 
        exceeding 12 months are not eligible students.  For purposes of 
        this section, an "eligible student" must also meet the 
        eligibility requirements of section 136A.15, subdivision 8.  
           Sec. 27.  [136A.1703] [INCOME-CONTINGENT LOANS.] 
           The office shall administer an income-contingent loan 
        repayment program to assist graduates of Minnesota schools in 
        medicine, dentistry, pharmacy, chiropractic medicine, public 
        health, and veterinary medicine, and Minnesota residents 
        graduating from optometry and osteopathy programs.  Applicant 
        data collected by the office for this program may be disclosed 
        to a consumer credit reporting agency under the same conditions 
        as those that apply to the supplemental loan program under 
        section 136A.162.  No new applicants may be accepted after June 
        30, 1995. 
           Sec. 28.  [136A.1785] [LOAN CAPITAL FUND.] 
           The office may deposit and hold assets derived from the 
        operation of its student loan programs authorized by this 
        chapter in a fund known as the loan capital fund.  Assets in the 
        loan capital fund are available to the office solely for 
        carrying out the purposes and terms of sections 136A.15 to 
        136A.1703, including, but not limited to, making student loans 
        authorized by this chapter, paying administrative expenses 
        associated with the operation of its student loan programs, 
        repurchasing defaulted student loans, and paying expenses in 
        connection with the issuance of revenue bonds authorized under 
        this chapter.  Assets in the loan capital fund may be invested 
        as provided in sections 11A.24 and 136A.16, subdivision 8.  All 
        interest and earnings from the investment of the loan capital 
        fund inure to the benefit of the fund and are deposited into the 
        fund. 
           Sec. 29.  [136A.861] [INTERVENTION FOR COLLEGE ATTENDANCE 
        PROGRAM GRANTS.] 
           Subdivision 1.  [GRANTS.] The director of the Higher 
        Education Services Office shall award grants to foster 
        postsecondary attendance by providing outreach services to 
        historically underserved students in grades six through 12.  
        Grants must be awarded to programs that provide precollege 
        services, including, but not limited to: 
           (1) academic counseling; 
           (2) mentoring; 
           (3) fostering and improving parental involvement in 
        planning for and facilitating a college education; 
           (4) services for students with English as a second 
        language; 
           (5) academic enrichment activities; 
           (6) tutoring; 
           (7) career awareness and exploration; 
           (8) orientation to college life; 
           (9) assistance with high school course selection and 
        information about college admission requirements; and 
           (10) financial aid counseling. 
           Grants shall be awarded to postsecondary institutions, 
        professional organizations, community-based organizations, or 
        others deemed appropriate by the director.  
           Grants shall be awarded for one year and may be renewed for 
        a second year with documentation to the Higher Education 
        Services Office of successful program outcomes. 
           Subd. 2.  [ELIGIBLE STUDENTS.] Eligible students include 
        students in grades six through 12 who meet one or more of the 
        following criteria: 
           (1) are counted under section 1124(c) of the Elementary and 
        Secondary Education Act of 1965 (Title I); 
           (2) are eligible for free or reduced-price lunch under the 
        National School Lunch Act; 
           (3) receive assistance under the Temporary Assistance for 
        Needy Families Law (Title I of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996); or 
           (4) are a member of a group traditionally underrepresented 
        in higher education. 
           Subd. 3.  [APPLICATION PROCESS.] The director of the Higher 
        Education Services Office shall develop a grant application 
        process.  The director shall attempt to support projects in a 
        manner that ensures that eligible students throughout the state 
        have access to precollege services. 
           The grant application must include, at a minimum, the 
        following information: 
           (1) a description of the characteristics of the students to 
        be served reflective of the need for services listed in 
        subdivision 1; 
           (2) a description of the services to be provided and a 
        timeline for implementation of the activities; 
           (3) a description of how the services provided will foster 
        postsecondary attendance; 
           (4) a description of how the services will be evaluated to 
        determine whether the program goals were met; and 
           (5) other information as identified by the director. 
        Grant recipients must specify both program and student outcome 
        goals, and performance measures for each goal.  
           Subd. 4.  [MATCH REQUIRED.] Applicants are required to 
        match the grant amount dollar-for-dollar.  The match may be in 
        cash or an in-kind contribution.  
           Subd. 5.  [REVIEW COMMITTEE.] The director must establish 
        and convene a grant selection committee to review applications 
        and award grants.  The members of the committee may include 
        representatives of postsecondary institutions, school districts, 
        organizations providing precollege outreach services, and others 
        deemed appropriate by the director. 
           Subd. 6.  [PROGRAM EVALUATION.] Each grant recipient must 
        annually submit a report to the Higher Education Services Office 
        delineating its program and student outcome goals, and 
        activities implemented to achieve the stated outcomes.  The 
        goals must be clearly stated and measurable.  Grant recipients 
        are required to collect, analyze, and report on participation 
        and outcome data that enable the office to verify that the 
        program goals were met.  The office shall maintain: 
           (1) information about successful precollege program 
        activities for dissemination to individuals throughout the state 
        interested in adopting or replicating successful program 
        practices; and 
           (2) data on the success of the funded projects in 
        increasing the high school graduation and college participation 
        rates of students served by the grant recipients.  The office 
        may convene meetings of the grant recipients, as needed, to 
        discuss issues pertaining to the implementation of precollege 
        services.  
           Subd. 7.  [REPORT.] By January 15 of each odd-numbered 
        year, the office shall submit a report to the committees in the 
        legislature with jurisdiction over higher education finance 
        regarding the grant recipients and their activities.  The report 
        shall include information about the students served, the 
        organizations providing services, program activities, program 
        goals and outcomes, and program revenue sources and funding 
        levels. 
           Sec. 30.  Minnesota Statutes 2004, section 136F.04, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOMMENDATIONS.] Each student association shall 
        recommend at least two and not more than four candidates for its 
        student member.  By January 2 April 15 of the year in which its 
        members' term expires, each student association shall submit its 
        recommendations to the governor.  The governor is not bound by 
        these recommendations. 
           Sec. 31.  [136F.31] [CENTERS OF EXCELLENCE.] 
           Subdivision 1.  [BOARD DESIGNATION.] The board must 
        designate at least three and up to eight different program 
        centers of excellence.  The board must determine the form and 
        required information contained in applications from member 
        institutions. 
           Subd. 2.  [CENTER SELECTION CRITERIA.] The board must 
        select programs based on institutional proposals demonstrating: 
           (1) the capacity to build multistate regional or national 
        recognition of the program within five years; 
           (2) a commitment to expanding the influence of the center 
        to improve results in related programs in participating 
        institutions; 
           (3) the capacity to improve employment placement and income 
        expectations of graduates from the program; 
           (4) a strong partnership between a four-year and at least 
        one two-year institution that maximizes the leverage of academic 
        and training capacities in each institution; 
           (5) a comprehensive academic plan that includes a seamless 
        continuum of academic offerings in the program area that 
        supports career development at multiple levels in related 
        employment fields; 
           (6) a specific development plan that includes a description 
        of how the institution will pursue continuous improvement and 
        accountability; 
           (7) identified commitments from employers that include 
        measurable financial and programmatic commitment to the center 
        of excellence on the part of employers who will benefit from the 
        development of the center.  A center for teacher education must 
        demonstrate support from local school districts; 
           (8) a commitment from the institution that the new 
        designated funding will not supplant current budgets from 
        related programs; 
           (9) a strong existing program upon which the proposed 
        center will build; and 
           (10) a separate fund for donations dedicated for the 
        program within current institutional foundations. 
           The board may adopt additional criteria that promote 
        general goals of the centers.  The board shall give priority to 
        programs that integrate the academic and training outcomes of 
        the center with business clusters that have a significant 
        multiplier effect on the state's economy based on projections of 
        job, income, or general economic growth.  The board shall 
        consult with the Department of Employment and Economic 
        Development to identify these clusters and the potential 
        economic impact of developing a center for excellence. 
           Subd. 3.  [ADVISORY COMMITTEE AND REPORTS REQUIRED.] A 
        center of excellence must create an advisory committee 
        representing local, statewide, and national leaders in the 
        field.  By January 15 of each odd-numbered year, each designated 
        center must provide a report to the governor and the chairs of 
        committees of the legislature with jurisdiction over higher 
        education finance, that includes annual and integrated data on 
        program enrollment, student demographics, student admission 
        data, endowment growth, graduation rates, graduation outcomes, 
        employer involvement, indicators of student or graduate 
        employment success, and other outcomes as determined by the 
        board.  After a center has been in existence for three years, 
        the report must include measures of the program's impact on the 
        local economy. 
           Sec. 32.  Minnesota Statutes 2004, section 136F.32, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TECHNICAL AND CONSOLIDATED TECHNICAL COLLEGES.] 
        (a) A technical college or consolidated technical community 
        college shall offer students the option of pursuing diplomas and 
        or certificates in each technical education program, unless the 
        board determines that a degree is the only acceptable credential 
        for career entry in a specific field.  All vocational and 
        technical credits earned for a diploma or certificate shall be 
        applicable toward any available degree in the same program.  
           (b) Certificates and diplomas are credentials that 
        demonstrate competence in a vocational or technical area and, 
        therefore, may include a general education component only as 
        part of an articulation agreement or to meet occupational 
        requirements as established by the trade or profession, or by 
        the program advisory committee.  Students shall be provided with 
        applied training in general studies as necessary for competence 
        in the program area.  Students who have earned a certificate or 
        diploma may earn a degree in the same field if they complete the 
        general education and other degree requirements. 
           Sec. 33.  Minnesota Statutes 2004, section 136G.03, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ACCOUNT OWNER.] "Account owner" means a person 
        who enters into a participation agreement and is entitled 
        to select or change conduct transactions on the account, 
        including selecting and changing the beneficiary of an account 
        or to receive and receiving distributions from the account for 
        other than payment of qualified higher education expenses. 
           Sec. 34.  Minnesota Statutes 2004, section 136G.03, 
        subdivision 21a, is amended to read: 
           Subd. 21a.  [MINOR TRUST ACCOUNT.] "Minor trust account" 
        means a Uniform Gift to Minors Act account, or a Uniform 
        Transfers to Minors Act account, or a trust instrument naming a 
        minor person as beneficiary, created and operating under the 
        laws of Minnesota or another state. 
           Sec. 35.  Minnesota Statutes 2004, section 136G.03, 
        subdivision 22, is amended to read: 
           Subd. 22.  [NONQUALIFIED DISTRIBUTION.] "Nonqualified 
        distribution" means a distribution made from an account other 
        than (1) a qualified distribution; or (2) a distribution due to 
        the death or disability of, or scholarship to, or attendance at 
        a United States military academy by, a beneficiary. 
           Sec. 36.  Minnesota Statutes 2004, section 136G.03, 
        subdivision 32, is amended to read: 
           Subd. 32.  [SCHOLARSHIP.] "Scholarship" means a 
        scholarship, or educational assistance allowance, or payment 
        under section 529(b)(3)(C) of the Internal Revenue Code. 
           Sec. 37.  Minnesota Statutes 2004, section 136G.05, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ADMINISTRATION.] The director shall administer 
        the program, including accepting and processing applications, 
        maintaining account records, making payments, making matching 
        grants under section 136G.11, and undertaking any other 
        necessary tasks to administer the program.  The office may 
        contract with one or more third parties to carry out some or all 
        of these administrative duties, including promotion providing 
        incentives and marketing of the program.  The office and the 
        board may jointly contract with third-party providers, if the 
        office and board determine that it is desirable to contract with 
        the same entity or entities for administration and investment 
        management. 
           Sec. 38.  Minnesota Statutes 2004, section 136G.09, 
        subdivision 11, is amended to read: 
           Subd. 11.  [EFFECT OF PLAN CHANGES ON PARTICIPATION 
        AGREEMENT.] Amendments to sections 136G.01 to 136G.13 
        automatically amend the participation agreement.  Any amendments 
        to the operating procedures and policies of the plan shall 
        automatically amend the participation agreement 30 days after 
        adoption by the office or the board. 
           Sec. 39.  Minnesota Statutes 2004, section 136G.09, 
        subdivision 12, is amended to read: 
           Subd. 12.  [SPECIAL ACCOUNT TO HOLD PLAN ASSETS IN TRUST.] 
        All assets of the plan, including contributions to accounts and 
        matching grant accounts and earnings, are held in trust for the 
        exclusive benefit of account owners and beneficiaries.  Assets 
        must be held in a separate account in the state treasury to be 
        known as the Minnesota college savings plan account or in 
        accounts with the third party provider selected pursuant to 
        section 136G.05, subdivision 8.  Plan assets are not subject to 
        claims by creditors of the state, are not part of the general 
        fund, and are not subject to appropriation by the state.  
        Payments from the Minnesota college savings plan account shall 
        be made under sections 136G.01 to 136G.13. 
           Sec. 40.  Minnesota Statutes 2004, section 136G.11, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MATCHING GRANT QUALIFICATION.] By June 30 
        of each year, a state matching grant must be added to each 
        account established under the program if the following 
        conditions are met: 
           (1) the contributor applies, in writing in a form 
        prescribed by the director, for a matching grant; 
           (2) a minimum contribution of $200 was made during the 
        preceding calendar year; and 
           (3) the beneficiary's family meets Minnesota college 
        savings plan residency requirements; and 
           (4) the family income of the beneficiary did not exceed 
        $80,000. 
           Sec. 41.  Minnesota Statutes 2004, section 136G.11, 
        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 calendar year in which contributions were made.  If the 
        beneficiary's parents or legal guardians are divorced, the 
        income of the parent claiming the beneficiary as a dependent on 
        the federal individual income tax return and the income of that 
        parent's spouse, if any, is used to determine family income; or 
           (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, the 
        matching grant must be based on family income from the calendar 
        year in which contributions were made. 
           Sec. 42.  Minnesota Statutes 2004, section 136G.11, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESIDENCY REQUIREMENT.] (a) If the beneficiary 
        is under age 25, the beneficiary's parents or legal guardians 
        must be Minnesota residents to qualify for a matching grant.  If 
        the beneficiary is age 25 or older, the beneficiary must be a 
        Minnesota resident to qualify for a matching grant. 
           (b) To meet the residency requirements, the parent or legal 
        guardian of beneficiaries under age 25 must have filed a 
        Minnesota individual income tax return as a Minnesota resident 
        and claimed the beneficiary as a dependent on the parent or 
        legal guardian's federal tax return for the calendar year in 
        which contributions were made.  If the beneficiary's parents are 
        divorced, the parent or legal guardian claiming the beneficiary 
        as a dependent on the federal individual income tax return must 
        be a Minnesota resident.  For beneficiaries age 25 or older, the 
        beneficiary, and a spouse, if any, must have filed a Minnesota 
        and a federal individual income tax return as a Minnesota 
        resident for the calendar year in which contributions were made. 
           (c) A parent of beneficiaries under age 25 and 
        beneficiaries age 25 or older who did not reside in Minnesota in 
        the calendar year in which contributions were made are not 
        eligible for a matching grant. 
           Sec. 43.  Minnesota Statutes 2004, section 136G.11, 
        subdivision 13, is amended to read: 
           Subd. 13.  [FORFEITURE OF MATCHING GRANTS.] (a) Matching 
        grants are forfeited if: 
           (1) the account owner transfers the total account balance 
        of an account to another account or to another qualified tuition 
        program; 
           (2) the beneficiary receives a full tuition scholarship or 
        admission to is attending a United States service academy; 
           (3) the beneficiary dies or becomes disabled; 
           (4) the account owner changes the beneficiary of the 
        account; or 
           (5) the account owner closes the account with a 
        nonqualified withdrawal. 
           (b) Matching grants must be proportionally forfeited if: 
           (1) the account owner transfers a portion of an account to 
        another account or to another qualified tuition program; 
           (2) the beneficiary receives a scholarship covering a 
        portion of qualified higher education expenses; or 
           (3) the account owner makes a partial nonqualified 
        withdrawal. 
           (c) If the account owner makes a misrepresentation in a 
        participation agreement or an application for a matching grant 
        that results in a matching grant, the matching grant associated 
        with the misrepresentation is forfeited.  The office and the 
        board must instruct the plan administrator as to the amount to 
        be forfeited from the matching grant account.  The office and 
        the board must withdraw the matching grant or the proportion of 
        the matching grant that is related to the misrepresentation. 
           Sec. 44.  Minnesota Statutes 2004, section 136G.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [QUALIFIED DISTRIBUTION METHODS.] (a) 
        Qualified distributions may be made: 
           (1) directly to participating eligible educational 
        institutions on behalf of the beneficiary; or 
           (2) in the form of a check payable to both the beneficiary 
        and the eligible educational institution; or 
           (3) directly to the account owner or beneficiary if the 
        account owner or beneficiary has already paid qualified higher 
        education expenses. 
           (b) Qualified distributions must be withdrawn 
        proportionally from contributions and earnings in an account 
        owner's account on the date of distribution as provided in 
        section 529 of the Internal Revenue Code. 
           Sec. 45.  Minnesota Statutes 2004, section 136G.13, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISTRIBUTIONS DUE TO DEATH OR DISABILITY OF, OR 
        SCHOLARSHIP TO, OR ATTENDANCE AT A UNITED STATES MILITARY 
        ACADEMY BY, A BENEFICIARY.] An account owner may request a 
        distribution due to the death or disability of, or scholarship 
        to, or attendance at a United States military academy by, 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, or is attending a United 
        States military academy.  The plan must not consider a request 
        to make a distribution until a third-party written confirmation 
        is received by the plan.  For purposes of this subdivision, a 
        third-party written confirmation consists of the following: 
           (1) for death of the beneficiary, a certified copy of the 
        beneficiary's death record; 
           (2) for disability of the beneficiary, a certification by a 
        physician who is a doctor of medicine or osteopathy stating that 
        the doctor is legally authorized to practice in a state of the 
        United States and that the beneficiary is unable to attend any 
        eligible educational institution because of an injury or illness 
        that is expected to continue indefinitely or result in death.  
        Certification must be on a form approved by the plan; 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; or 
           (4) for attendance by the beneficiary at a United States 
        military academy, a letter from the military academy indicating 
        the beneficiary's enrollment and attendance. 
           Sec. 46.  Minnesota Statutes 2004, section 136G.14, is 
        amended to read: 
           136G.14 [MINOR TRUST ACCOUNTS.] 
           (a) This section applies to a plan account in which funds 
        of a minor trust account are invested. 
           (b) The account owner may not be changed to any person 
        other than a successor custodian or the beneficiary unless a 
        court order directing the change of ownership is provided to the 
        plan administrator.  The custodian must sign all forms and 
        requests submitted to the plan administrator in the custodian's 
        representative capacity.  The custodian must notify the plan 
        administrator in writing when the beneficiary becomes legally 
        entitled to be the account owner.  An account owner under this 
        section may not select a contingent account owner. 
           (c) The beneficiary of an account under this section may 
        not be changed.  If the beneficiary dies, assets in a plan 
        account become the property of the beneficiary's estate.  Funds 
        in an account must not be transferred or rolled over to another 
        account owner or to an account for another beneficiary.  A 
        nonqualified distribution from an account, or a distribution due 
        to the disability or scholarship award to the beneficiary, or 
        made on account of the beneficiary's attendance at a United 
        States military academy, must be used for the benefit of the 
        beneficiary. 
           Sec. 47.  Minnesota Statutes 2004, section 137.0245, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ESTABLISHMENT.] A Regent Candidate 
        Advisory Council is established to assist the legislature in 
        determining criteria for, and identifying and recruiting 
        qualified candidates for membership on the Board of Regents and 
        making recommendations to the governor. 
           Sec. 48.  Minnesota Statutes 2004, section 137.0245, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DUTIES.] (a) The advisory council shall: 
           (1) develop, in consultation with current and former 
        regents and the administration of the University of Minnesota, a 
        statement of the selection criteria to be applied and a 
        description of the responsibilities and duties of a regent, and 
        shall distribute this to potential candidates; and 
           (2) for each position on the board, identify and recruit 
        qualified candidates for the Board of Regents, based on the 
        background and experience of the candidates, and their potential 
        for discharging the responsibilities of a member of the Board of 
        Regents, and the needs of the board.  The selection criteria 
        must not include a limitation on the number of terms an 
        individual may serve on the Board of Regents. 
           (b) The selection criteria developed under paragraph (a), 
        clause (1), must include a criterion that regents represent 
        diversity in geography; gender; race; occupation, including 
        business and labor; and experience.  
           (c) The selection criterion must include an identification 
        of the membership needs of the board for individual skills 
        relevant to the governance of the University of Minnesota and 
        the needs for certain individual characteristics.  Individual 
        characteristics relate to qualities such as gender, race, and 
        geographic location of residence. 
           Sec. 49.  Minnesota Statutes 2004, section 137.0245, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RECOMMENDATIONS.] (a) The advisory council shall 
        recommend at least two and not more than four candidates.  By 
        March 15 January 15 of each odd-numbered year, the advisory 
        council shall submit its recommendations to the president of the 
        senate and the speaker of the house of representatives.  The 
        legislature shall not be bound by these recommendations governor.
           (b) The advisory council must submit a report to the 
        governor on the needs criterion identified under subdivision 3, 
        paragraph (c), at the same time it submits its recommendations. 
           Sec. 50.  [137.0246] [REGENT NOMINATION AND ELECTION.] 
           Subdivision 1.  [GOVERNOR NOMINATION.] By February 15 
        following the receipt of recommendations from the advisory 
        council, the governor must submit to the joint committee 
        established under subdivision 2 a slate of regent nominations 
        that complies with sections 137.023 and 137.024.  The slate must 
        name one nominee for each vacancy.  In selecting nominees, the 
        governor must consider the needs of the Board of Regents and the 
        balance of the board membership with respect to gender, racial, 
        and ethnic composition.  The governor must inform the joint 
        committee how each candidate and the slate meets the needs 
        identified in the report under section 137.0245, subdivision 4, 
        paragraph (b). 
           Subd. 2.  [JOINT COMMITTEE.] (a) The joint legislative 
        committee consists of 20 legislator members.  Ten members shall 
        be appointed by the speaker of the house.  Ten members shall be 
        appointed by the Subcommittee on Committees of the Committee on 
        Rules and Administration from the senate.  An equal number of 
        members from the majority and minority party shall be appointed 
        from each house.  The members appointed from the minority party 
        must be appointed from among those recommended by the minority 
        leader.  The chairs of the education policy committees and of 
        the higher education budget divisions and the ranking minority 
        member of those committees and divisions must be appointed.  A 
        majority of the members from each house is a quorum of the joint 
        committee.  
           (b) By February 28 of each odd-numbered year, or at a date 
        agreed to by concurrent resolution, the joint legislative 
        committee shall meet to consider the governor's nominees for 
        regent of the University of Minnesota for possible presentation 
        to a joint convention of the legislature. 
           (c) The joint committee may only recommend to the joint 
        convention nominees recommended by the governor.  If the joint 
        committee does not recommend a governor's nominee, the governor 
        must submit a different nominee for the same vacancy. 
           Sec. 51.  [144.1498] [NURSING LOW-INCOME LOAN REPAYMENT.] 
           Subdivision 1.  [DEFINITION.] For purposes of this section, 
        "qualifying educational loans" means government, commercial, and 
        foundation loans for actual costs paid for tuition, reasonable 
        education expenses, and reasonable living expenses related to 
        the graduate or undergraduate education of a licensed practical 
        nurse or registered nurse. 
           Subd. 2.  [CREATION OF ACCOUNT; LOAN REPAYMENT PROGRAM.] A 
        low-income nursing education account is created in the general 
        fund.  The commissioner of health shall use money from the 
        account to establish a loan repayment program for licensed 
        practical or registered nurses who agree to practice in a 
        Minnesota nursing home or work in a position in Minnesota as a 
        nurse educator.  Appropriations made to the account do not 
        cancel and are available until expended.  
           Subd. 3.  [ELIGIBILITY.] (a) To be eligible to apply to 
        participate in the loan repayment program, an individual must: 
           (1) be a resident of Minnesota; 
           (2) currently be attending a program leading to a degree in 
        practical or registered nursing or a graduate nursing degree in 
        a public or private postsecondary education institution located 
        in Minnesota; and 
           (3) submit an application to the commissioner of health.  
           (b) An applicant selected to participate must sign a 
        contract to agree to serve a minimum three-year, full-time 
        service obligation in a position or place of employment 
        described in subdivision 2.  The service must begin no later 
        than March 31 following completion of required training.  If 
        fewer applications are submitted by nursing students than there 
        are participant slots available, the commissioner may consider 
        applications submitted by nursing program graduates who are 
        licensed or registered nurses or nurses who are nurse 
        educators.  Nurses selected for loan repayment assistance must 
        comply with this section.  
           Subd. 4.  [LOAN REPAYMENT.] The commissioner of health may 
        accept applicants each year for participation in the loan 
        repayment program, within the limits of available funding.  
        Applicants are responsible for securing their own loans.  The 
        commissioner shall select participants in a priority based upon 
        lowest family income, followed in order of ascending family 
        income.  Family income may be determined in the same manner as 
        for state grants under section 136A.121 or in another manner the 
        commissioner determines fairly represents family income.  The 
        commissioner shall give preference to applicants closest to 
        completing their training.  For each year that a participant 
        meets the service obligation required under subdivision 3, up to 
        a maximum of four years, the commissioner shall make annual 
        disbursements directly to the participant equivalent to 15 
        percent of the average educational debt for indebted nursing 
        school graduates in the year closest to the applicant's 
        selection for which information is available or the balance of 
        the qualifying educational loans, whichever is less.  Before 
        receiving loan repayment disbursements and as requested, the 
        participant must complete and return to the commissioner an 
        affidavit of practice form provided by the commissioner 
        verifying that the participant is practicing as required under 
        subdivision 3.  The participant must provide the commissioner 
        with verification that the full amount of loan repayment 
        disbursement received by the participant has been applied toward 
        the designated loans.  After each disbursement, verification 
        must be received by the commissioner and approved before the 
        next loan repayment disbursement is made.  Participants remain 
        eligible for loan repayment as long as they practice as required 
        under subdivision 3.  
           Subd. 5.  [PENALTY FOR NONFULFILLMENT.] If a participant 
        does not fulfill the service commitment under subdivision 3, the 
        commissioner of health shall collect from the participant 100 
        percent of any payments made for qualified educational loans and 
        interest at a rate established according to section 270.75.  The 
        commissioner shall deposit the money collected in the low-income 
        nursing education account established under subdivision 2.  
           Subd. 6.  [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or 
        service obligations cancel in the event of a participant's 
        death.  The commissioner of health may waive or suspend payment 
        or service obligations in cases of total and permanent 
        disability or long-term temporary disability lasting for more 
        than two years.  The commissioner shall evaluate all other 
        requests for suspension or waivers on a case-by-case basis and 
        may grant a waiver of all or part of the money owed as a result 
        of a nonfulfillment penalty if emergency circumstances prevented 
        fulfillment of the required service commitment. 
           Sec. 52.  Minnesota Statutes 2004, section 192.502, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [POSTSECONDARY STUDENTS.] (a) A member of 
        the Minnesota National Guard or any other military reserve 
        component who is a As used in this subdivision, the terms 
        "qualified person" and "qualified student" have the same meaning 
        and include: 
           (1) any student at a postsecondary education educational 
        institution and who is called or ordered to state into active 
        military service in the Minnesota National Guard, as defined in 
        section 190.05, subdivision 5, or who is called or ordered to 
        federal active military service; and 
           (2) a veteran, as defined in section 197.447, who has a 
        service-connected disability as certified by the United States 
        Department of Veterans Affairs, who is a student at a 
        postsecondary educational institution, and whose service 
        connected medical condition or medical treatment requirements 
        reasonably prevent the person's attendance at or progress in 
        part or all of the person's higher educational training or 
        studies at any given time.  The terms "medical condition" and 
        "medical treatment requirements" must be broadly construed and 
        without regard for whether or not they relate directly to the 
        person's service-connected disability. 
           (b) A qualified person or qualified student has the 
        following rights: 
           (1) with regard to courses in which the person is enrolled, 
        the person may: 
           (i) withdraw from one or more courses for which tuition and 
        fees have been paid that are attributable to the courses.  The 
        tuition and fees must be credited to the person's account at the 
        postsecondary institution.  Any refunds are subject to the 
        requirements of the state or federal financial aid programs of 
        origination.  In such a case, the student must not receive 
        credit for the courses and must not receive a failing grade, an 
        incomplete, or other negative annotation on the student's 
        record, and the student's grade point average must not be 
        altered or affected in any manner because of action under this 
        item; 
           (ii) be given a grade of incomplete and be allowed to 
        complete the course upon release from active duty service, upon 
        completion of medical treatment, or upon sufficient medical 
        recovery under the postsecondary institution's standard practice 
        for completion of incompletes; or 
           (iii) continue and complete the course for full credit.  
        Class sessions the student misses due to performance of state or 
        federal active military service or due to the person's medical 
        treatment or medical condition must be counted as excused 
        absences and must not be used in any way to adversely impact the 
        student's grade or standing in the class.  Any student who 
        selects this option is not, however, automatically excused from 
        completing assignments due during the period the student is 
        performing state or federal active military service or receiving 
        medical treatment or recovering from a medical condition.  A 
        letter grade or a grade of pass must only be awarded only if, in 
        the opinion of the faculty member teaching the course, the 
        student has completed sufficient work and has demonstrated 
        sufficient progress toward meeting course requirements to 
        justify the grade; 
           (2) to receive a refund of amounts paid for room, board, 
        and fees attributable to the time period during which the 
        student was serving in state or federal active military service 
        or receiving medical treatment or dealing with the person's 
        medical condition and did not use the facilities or services for 
        which the amounts were paid.  Any refund of room, board, and 
        fees is subject to the requirements of the state or federal 
        financial aid programs of origination; and 
           (3) if the student chooses to withdraw, the student has the 
        right to be readmitted and reenrolled as a student at the 
        postsecondary education institution, without penalty or 
        redetermination of admission eligibility, within one year two 
        years following release from the state or federal active 
        military service or following completion of medical treatment or 
        sufficient recovery from the person's medical condition. 
           (b) (c) The protections in this section may be invoked as 
        follows: 
           (1) the qualified person or qualified student, or an 
        appropriate officer from the military organization in which the 
        person will be serving, or an appropriate medical authority or 
        the person's authorized caregiver or family member, must give 
        advance verbal or written notice that the person is being called 
        or ordered to qualifying active military service or will be 
        undertaking medical treatment or a period of recovery for a 
        medical condition; 
           (2) advance notice is not required if the giving of notice 
        is precluded by military or medical necessity or, under all the 
        relevant circumstances, the giving of notice is impossible or 
        unreasonable; and 
           (3) upon written request from the postsecondary 
        institution, the person must provide written verification of the 
        order to active service or of the existence of the medical 
        condition or medical treatment. 
           (c) (d) This section provides minimum protections for 
        qualified students.  Nothing in this section prevents 
        postsecondary institutions from providing additional options or 
        protections to students who are called or ordered to state or 
        federal active military service or are undertaking medical 
        treatment or a period of recovery from a medical condition. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 53.  Minnesota Statutes 2004, section 299A.45, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY.] Following certification 
        under section 299A.44 and compliance with this section and rules 
        of the commissioner of public safety and the higher education 
        services office, dependent children less than 23 years of age 
        and the surviving spouse of a public safety officer killed in 
        the line of duty on or after January 1, 1973, are eligible to 
        receive educational benefits under this section.  To qualify for 
        an award, they must be enrolled in undergraduate degree or 
        certificate programs after June 30, 1990, at an eligible 
        Minnesota institution as provided in section 136A.101, 
        subdivision 4.  A student who withdraws from enrollment for 
        active military service is entitled to an additional semester or 
        the equivalent of grant eligibility.  Persons who have received 
        a baccalaureate degree or have been enrolled full time or the 
        equivalent of ten semesters or the equivalent, whichever occurs 
        first, are no longer eligible. 
           Sec. 54.  Minnesota Statutes 2004, section 299A.45, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RENEWAL.] Each award must be given for one 
        academic year and is renewable for a maximum of eight semesters 
        or the equivalent.  A student who withdraws from enrollment for 
        active military service is entitled to an additional semester or 
        the equivalent of grant eligibility.  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. 55.  [583.215] [EXPIRATION.] 
           (a) Sections 336.9-601, subsections (h) and (i); 550.365; 
        559.209; 582.039; and 583.20 to 583.32, expire June 30, 2009. 
           (b) Laws 1986, chapter 398, article 1, section 18, as 
        amended, is repealed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 56.  [RECIPROCITY NEGOTIATIONS.] 
           Subdivision 1.  [SOUTH DAKOTA.] The Higher Education 
        Services Office must examine reinstating interstate payments in 
        the Minnesota-South Dakota reciprocity program while maintaining 
        the tuition reciprocity agreement.  The office must examine the 
        advantages and disadvantages of computing interstate payments 
        under the reciprocity agreement and the impact of interstate 
        payments on participating students, institutions, and the 
        general funds of the two states.  The office must report on the 
        impacts of reinstating reciprocity payments to the committees of 
        the legislature with responsibility for higher education by 
        January 15, 2006.  
           Subd. 2.  [WISCONSIN.] The Higher Education Services Office 
        must, as soon as possible, commence negotiations with the state 
        of Wisconsin on the tuition reciprocity agreement.  The 
        negotiations must include the issue of the disparity between the 
        tuition paid by Wisconsin residents and Minnesota residents at 
        campuses of the University of Minnesota with a goal of reducing 
        or eliminating the disparity. 
           This section does not mandate the inclusion of any 
        particular term in a tuition reciprocity agreement.  
           Sec. 57.  [ADVISORY TASK FORCE ON PUBLIC POSTSECONDARY 
        FUNDING.] 
           The Higher Education Services Office shall convene an 
        advisory task force to study the current postsecondary funding 
        policy under Minnesota Statutes, sections 135A.01 to 135A.034.  
        The task force must include the chief financial officers of the 
        University of Minnesota and the Minnesota State Colleges and 
        Universities, and the commissioner of finance, or their 
        designees.  The task force may include other members as selected 
        by the Higher Education Services Office.  The task force must 
        study and make specific recommendations on alternatives to the 
        methods currently used by the postsecondary systems to implement 
        the provisions of Minnesota Statutes, section 135A.031, 
        subdivision 4.  The task force must submit its recommendations 
        to the legislature and the governor by January 15, 2006.  The 
        task force expires on June 30, 2007. 
           Sec. 58.  [ALTERNATIVE FORMAT INSTRUCTIONAL MATERIAL 
        NETWORK.] 
           The Higher Education Services Office must convene a group 
        with representatives from publishers of postsecondary 
        instructional materials, the Association of American Publishers 
        (AAP), the Minnesota State Colleges and Universities, the 
        University of Minnesota, all sectors of private postsecondary 
        education, and Minnesota State Services for the Blind to develop 
        a network to make available postsecondary instructional material 
        in an electronic format or to identify other solutions, such as 
        a national system, to address the specialized format needs of 
        postsecondary students with disabilities.  The material 
        available through the network must be made available to 
        Minnesota postsecondary institutions and to postsecondary 
        students with disabilities that require a reading 
        accommodation.  The group must establish standards for the 
        instructional material that is available through the network.  
        Instructional material must be in a format that is compatible 
        with assistive technology used by students who require a reading 
        accommodation.  Instructional material includes, but is not 
        limited to, commercially printed materials published or produced 
        primarily for use by students in postsecondary educational 
        courses.  Instructional materials also include materials 
        produced by postsecondary institutions, as defined by the group, 
        for use in conjunction with a course of study.  The Higher 
        Education Services Office must report to the committees in the 
        house of representatives and senate with responsibility for 
        higher education finance by January 15, 2006, on progress in 
        developing the network and with recommendations on methods to 
        meet the needs of students for instructional materials in 
        alternative formats. 
           Sec. 59.  [APPLICATION OF ELIGIBILITY.] 
           The additional semester or the equivalent of grant 
        eligibility under sections 20, 23, 53, and 54 applies to any 
        student who withdrew from enrollment in a postsecondary 
        institution after December 31, 2002, because the student was 
        ordered to active military service as defined in Minnesota 
        Statutes, section 190.05, subdivision 5b or 5c. 
           Sec. 60.  [REVISOR'S INSTRUCTION.] 
           The revisor of statutes shall change the terms "HESO" and 
        "Higher Education Services Office" to "Minnesota Office of 
        Higher Education" wherever in Minnesota Statutes and Minnesota 
        Rules the terms appear. 
           Sec. 61.  [REPEALER.] 
           (a) Minnesota Statutes 2004, sections 136A.011, and 
        136A.031, subdivision 1, are repealed. 
           (b) Minnesota Rules, parts 4815.0100; 4815.0110; 4815.0120; 
        4815.0130; 4815.0140; 4815.0150; 4815.0160; 4830.8100; 
        4830.8110; 4830.8120; 4830.8130; 4830.8140; and 4830.8150, are 
        repealed. 

                                   ARTICLE 3 
                             PRIVATE CAREER SCHOOLS 
           Section 1.  Minnesota Statutes 2004, section 141.21, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [MULTIPLE LOCATION.] "Multiple location" means 
        any site where classes or administrative services are provided 
        to students and which has a street address that is different 
        than the street address found on the school's private career 
        school license. 
           Sec. 2.  Minnesota Statutes 2004, section 141.25, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATION.] Application for a license shall be 
        on forms prepared and furnished by the office, and shall include 
        the following and other information as the office may require: 
           (1) the title or name of the school, ownership and 
        controlling officers, members, managing employees, and director; 
           (2) the specific programs which will be offered and the 
        specific purposes of the instruction; 
           (3) the place or places where the instruction will be 
        given; 
           (4) a listing of the equipment available for instruction in 
        each program; 
           (5) the maximum enrollment to be accommodated with 
        equipment available in each specified program; 
           (6) the qualifications of instructors and supervisors in 
        each specified program; 
           (7) a current balance sheet, income statement, and adequate 
        supporting documentation, prepared and certified by an 
        independent public accountant or CPA; 
           (8) copies of all media advertising and promotional 
        literature and brochures or electronic display currently used or 
        reasonably expected to be used by the school; 
           (9) copies of all Minnesota enrollment agreement forms and 
        contract forms and all enrollment agreement forms and contract 
        forms used in Minnesota; and 
           (10) gross income earned in the preceding year from student 
        tuition, fees, and other required institutional charges, unless 
        the school files with the office a surety bond equal to at least 
        $50,000 $250,000 as described in subdivision 5.  
           Sec. 3.  Minnesota Statutes 2004, section 141.25, 
        subdivision 5, is amended to read: 
           Subd. 5.  [BOND.] (a) No license shall be issued to any 
        school which maintains, conducts, solicits for, or advertises 
        within the state of Minnesota any program, unless the applicant 
        files with the office a continuous corporate surety bond written 
        by a company authorized to do business in Minnesota conditioned 
        upon the faithful performance of all contracts and agreements 
        with students made by the applicant.  
           (b) The amount of the surety bond shall be ten percent of 
        the preceding year's gross income from student tuition, fees, 
        and other required institutional charges, but in no event less 
        than $10,000 nor greater than $50,000 $250,000, except that a 
        school may deposit a greater amount at its own discretion.  A 
        school in each annual application for licensure must compute the 
        amount of the surety bond and verify that the amount of the 
        surety bond complies with this subdivision, unless the school 
        maintains a surety bond equal to at least $50,000 $250,000.  A 
        school that operates at two or more locations may combine gross 
        income from student tuition, fees, and other required 
        institutional charges for all locations for the purpose of 
        determining the annual surety bond requirement.  The gross 
        tuition and fees used to determine the amount of the surety bond 
        required for a school having a license for the sole purpose of 
        recruiting students in Minnesota shall be only that paid to the 
        school by the students recruited from Minnesota. 
           (c) The bond shall run to the state of Minnesota and to any 
        person who may have a cause of action against the applicant 
        arising at any time after the bond is filed and before it is 
        canceled for breach of any contract or agreement made by the 
        applicant with any student.  The aggregate liability of the 
        surety for all breaches of the conditions of the bond shall not 
        exceed the principal sum deposited by the school under paragraph 
        (b).  The surety of any bond may cancel it upon giving 60 days' 
        notice in writing to the office and shall be relieved of 
        liability for any breach of condition occurring after the 
        effective date of cancellation. 
           (d) In lieu of bond, the applicant may deposit with the 
        commissioner of finance a sum equal to the amount of the 
        required surety bond in cash, or securities as may be legally 
        purchased by savings banks or for trust funds in an aggregate 
        market value equal to the amount of the required surety bond.  
           (e) Failure of a school to post and maintain the required 
        surety bond or deposit under paragraph (d) may result in denial, 
        suspension, or revocation of the school's license.  
           Sec. 4.  Minnesota Statutes 2004, section 141.25, 
        subdivision 8, is amended to read: 
           Subd. 8.  [FEES AND TERMS OF LICENSE.] An application for 
        an initial license under sections 141.21 to 141.35 shall be 
        accompanied by a nonrefundable application fee established by 
        the office as provided in section 141.255 that is sufficient to 
        recover, but not exceed, its the administrative costs of the 
        office. 
           All licenses shall expire one year from the date issued by 
        the office, except as provided in section 141.251.  
           Sec. 5.  Minnesota Statutes 2004, section 141.25, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CATALOG, BROCHURE, OR ELECTRONIC DISPLAY.] 
        Before a license is issued to a school, the school shall furnish 
        to the office a catalog, brochure, or electronic display 
        including: 
           (1) identifying data, such as volume number and date of 
        publication; 
           (2) name and address of the school and its governing body 
        and officials; 
           (3) a calendar of the school showing legal holidays, 
        beginning and ending dates of each course quarter, term, or 
        semester, and other important dates; 
           (4) the school policy and regulations on enrollment 
        including dates and specific entrance requirements for each 
        program; 
           (5) the school policy and regulations about leave, 
        absences, class cuts, make-up work, tardiness, and interruptions 
        for unsatisfactory attendance; 
           (6) the school policy and regulations about standards of 
        progress for the student including the grading system of the 
        school, the minimum grades considered satisfactory, conditions 
        for interruption for unsatisfactory grades or progress, a 
        description of any probationary period allowed by the school, 
        and conditions of reentrance for those dismissed for 
        unsatisfactory progress; 
           (7) the school policy and regulations about student conduct 
        and conditions for dismissal for unsatisfactory conduct; 
           (8) a detailed schedule of fees, charges for tuition, 
        books, supplies, tools, student activities, laboratory fees, 
        service charges, rentals, deposits, and all other charges; 
           (9) the school policy and regulations, including an 
        explanation of section 141.271, about refunding tuition, fees, 
        and other charges if the student does not enter the program, 
        withdraws from the program, or the program is discontinued; 
           (10) a description of the available facilities and 
        equipment; 
           (11) a course outline syllabus for each course offered 
        showing course objectives, subjects or units in the course, type 
        of work or skill to be learned, and approximate time, hours, or 
        credits to be spent on each subject or unit; 
           (12) the school policy and regulations about granting 
        credit for previous education and preparation; 
           (13) a procedure for investigating and resolving student 
        complaints; and 
           (14) the name and address of the Minnesota Higher Education 
        Services Office. 
           A school that is exclusively a distance education school is 
        exempt from clauses (3) and (5). 
           Sec. 6.  Minnesota Statutes 2004, section 141.25, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PERMANENT RECORDS.] A school licensed under 
        this chapter and located in Minnesota shall maintain a permanent 
        record for each student for 50 years from the last date of the 
        student's attendance.  A school licensed under this chapter and 
        offering distance instruction to a student located in Minnesota 
        shall maintain a permanent record for each Minnesota student for 
        50 years from the last date of the student's attendance.  
        Records include school transcripts, documents, and files 
        containing student data about academic credits earned, courses 
        completed, grades awarded, degrees awarded, and periods of 
        attendance.  To preserve permanent records, a school shall 
        submit a plan that meets the following requirements: 
           (1) at least one copy of the records must be held in a 
        secure, fireproof depository; 
           (2) an appropriate official must be designated to provide a 
        student with copies of records or a transcript upon request; 
           (3) an alternative method, approved by the office, of 
        complying with clauses (1) and (2) must be established if the 
        school ceases to exist; and 
           (4) a continuous surety bond must be filed with the office 
        in an amount not to exceed $20,000 if the school has no binding 
        agreement for preserving student records or a trust must be 
        arranged if the school ceases to exist. 
           Sec. 7.  Minnesota Statutes 2004, section 141.251, is 
        amended to read: 
           141.251 [LICENSE RENEWAL.] 
           Subdivision 1.  [APPLICATION.] Application for renewal of a 
        license must be made at least 30 60 days before expiration of 
        the current license on a form provided by the office.  A renewal 
        application shall be accompanied by a nonrefundable fee 
        established by the office as provided in section 141.255 that is 
        sufficient to recover, but does not exceed, its the 
        administrative costs of the office. 
           Subd. 2.  [CONDITIONS.] The office shall adopt rules 
        establishing the conditions for renewal of a license.  The 
        conditions shall permit two levels of renewal based on the 
        record of the school.  A school that has demonstrated the 
        quality of its program and operation through longevity and 
        performance in the state may renew its license based on a 
        relaxed standard of scrutiny.  A school that has been in 
        operation in Minnesota for a limited period of time or that has 
        not performed adequately on performance indicators shall renew 
        its license based on a strict standard of scrutiny.  The office 
        shall specify minimum longevity standards and performance 
        indicators that must be met before a school may be permitted to 
        operate under the relaxed standard of scrutiny.  The performance 
        indicators used in this determination shall include, but not be 
        limited to:  degree granting status, regional or national 
        accreditation, loan default rates, placement rate of graduates, 
        student withdrawal rates, audit results, student complaints, and 
        school status with the United States Department of Education.  
        Schools that meet the requirements established in rule shall be 
        required to submit a full relicensure report once every four 
        years, and in the interim years will be exempt from the 
        requirements of section 141.25, subdivision 3, clauses (4), (5), 
        and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and 
        4880.2100, subpart 4. 
           Sec. 8.  [141.255] [FEES.] 
           Subdivision 1.  [INITIAL LICENSURE FEE.] The office 
        processing fee for an initial licensure application is: 
           (1) $1,500 for a school that will offer no more than one 
        program during its first year of operation; 
           (2) $2,000 for a school that will offer two or more 
        nondegree level programs during its first year of operation; and 
           (3) $2,500 for a school that will offer two or more degree 
        level programs during its first year of operation. 
           Subd. 2.  [RENEWAL LICENSURE FEE; LATE FEE.] (a) The office 
        processing fee for a renewal licensure application is: 
           (1) for a category A school, as determined by the office, 
        the fee is $865 if the school offers one program or $1,150 if 
        the school offers two or more programs; and 
           (2) for a category B or C school, as determined by the 
        office, the fee is $430 if the school offers one program or $575 
        if the school offers two or more programs. 
           (b) If a license renewal application is not received by the 
        office by the close of business at least 60 days before the 
        expiration of the current license, a late fee of $100 per 
        business day shall be assessed. 
           Subd. 3.  [DEGREE LEVEL ADDITION FEE.] The office 
        processing fee for adding a degree level to an existing program 
        is $2,000 per program. 
           Subd. 4.  [PROGRAM ADDITION FEE.] The office processing fee 
        for adding a program that represents a significant departure in 
        the objectives, content, or method of delivery of programs that 
        are currently offered by the school is $500 per program. 
           Subd. 5.  [VISIT OR CONSULTING FEE.] If the office 
        determines that a fact-finding visit or outside consultant is 
        necessary to review or evaluate any new or revised program, the 
        office shall be reimbursed for the expenses incurred related to 
        the review as follows: 
           (1) $300 for the team base fee or for a paper review 
        conducted by a consultant if the office determines that a 
        fact-finding visit is not required; 
           (2) $300 for each day or part thereof on site per team 
        member; and 
           (3) the actual cost of customary meals, lodging, and 
        related travel expenses incurred by team members. 
           Subd. 6.  [MODIFICATION FEE.] The fee for modification of 
        any existing program is $100 and is due if there is: 
           (1) an increase or decrease of 25 percent or more, from the 
        original date of program approval, in clock hours, credit hours, 
        or calendar length of an existing program; 
           (2) a change in academic measurement from clock hours to 
        credit hours or vice versa; or 
           (3) an addition or alteration of courses that represent a 
        25 percent change or more in the objectives, content, or methods 
        of delivery. 
           Subd. 7.  [SOLICITOR PERMIT FEE.] The solicitor permit fee 
        is $350 and must be paid annually. 
           Subd. 8.  [MULTIPLE LOCATION FEE.] Schools wishing to 
        operate at multiple locations must pay: 
           (1) $250 per location, for two to five locations; and 
           (2) an additional $50 for each location over five.  
           Subd. 9.  [STUDENT TRANSCRIPT FEE.] The fee for a student 
        transcript requested from a closed school whose records are held 
        by the office is $10, with a maximum of five transcripts per 
        request. 
           Subd. 10.  [PUBLIC OFFICE DOCUMENTS; COPIES.] The office 
        shall establish rates for copies of any public office document. 
           Sec. 9.  Minnesota Statutes 2004, section 141.26, 
        subdivision 5, is amended to read: 
           Subd. 5.  [FEE.] The initial and renewal application for 
        each permit shall be accompanied by a nonrefundable fee as 
        established by the office under section 141.255. 
           Sec. 10.  Minnesota Statutes 2004, section 141.271, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [SHORT-TERM PROGRAMS.] Licensed schools 
        conducting programs not exceeding 40 hours in length shall not 
        be required to make a full refund once a program has commenced 
        and shall be allowed to prorate any refund based on the actual 
        length of the program as stated in the school catalog or 
        advertisements and the number of hours attended by the student. 
           Sec. 11.  Minnesota Statutes 2004, section 141.271, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RESIDENT SCHOOLS.] When a student has been 
        accepted by a school offering a resident program and gives 
        written notice of cancellation, or the school has actual notice 
        of a student's nonattendance after the start of the period of 
        instruction for which the student has been charged, but before 
        completion of 75 percent of the period of instruction, the 
        amount charged for tuition, fees, and all other charges shall be 
        prorated based on number of days in the term as a portion of the 
        total charges for tuition, fees, and all other charges.  An 
        additional 25 percent of the total cost of the period of 
        instruction may be added, but shall not exceed $100.  After 
        completion of 75 percent of the period of instruction for which 
        the student has been charged, no refunds are required.  
           Sec. 12.  Minnesota Statutes 2004, section 141.271, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EQUIPMENT AND SUPPLIES.] The fair market retail 
        price, if separately stated in the catalog and contract or 
        enrollment agreement, of equipment or supplies furnished to the 
        student, which the student fails to return in condition suitable 
        for resale, and which may reasonably be resold, within ten 
        business days following cancellation may be retained by the 
        school and may be deducted from the total cost for tuition, fees 
        and all other charges when computing refunds.  
           An overstatement of the fair market retail price of any 
        equipment or supplies furnished the student shall be considered 
        inconsistent with this provision.  
           Sec. 13.  Minnesota Statutes 2004, section 141.271, 
        subdivision 10, is amended to read: 
           Subd. 10.  [CANCELLATION OCCURRENCE.] Written notice of 
        cancellation shall take place on the date the letter of 
        cancellation is postmarked or, in the cases where the notice is 
        hand carried, it shall occur on the date the notice is delivered 
        to the school.  If a student has not attended classes for a 
        period of 21 consecutive days, the student is considered to have 
        withdrawn from school for all purposes as of the student's last 
        documented date of attendance. 
           Sec. 14.  Minnesota Statutes 2004, section 141.271, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [CLOSED SCHOOL.] In the event a school closes 
        for any reason during a term and interrupts and terminates 
        classes during that term, all tuition for the term shall be 
        refunded to the students or the appropriate state or federal 
        agency or private lender that provided any funding for the term 
        and any outstanding obligation of the student for the term is 
        canceled. 
           Sec. 15.  Minnesota Statutes 2004, section 141.28, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOT TO ADVERTISE STATE APPROVAL.] Schools, 
        agents of schools, and solicitors may not advertise or represent 
        in writing or orally that such school is approved or accredited 
        by the state of Minnesota, except that any school, agent, or 
        solicitor may advertise that the school and solicitor have been 
        duly licensed by the state. using the following language: 
        "(Name of school) is licensed as a private career school with 
        the Minnesota Higher Education Services Office.  Licensure is 
        not an endorsement of the institution.  Credits earned at the 
        institution may not transfer to all other institutions.  The 
        educational programs may not meet the needs of every student or 
        employer."  
           Sec. 16.  Minnesota Statutes 2004, section 141.28, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [FINANCIAL AID PAYMENTS.] (a) All schools must 
        collect, assess, and distribute funds received from loans or 
        other financial aid as provided in this subdivision.  
           (b) Student loans or other financial aid funds received 
        from federal, state, or local governments or administered in 
        accordance with federal student financial assistance programs 
        under title IV of the Higher Education Act of 1965, as amended, 
        United States Code, title 20, chapter 28, must be collected and 
        applied as provided by applicable federal, state, or local law 
        or regulation. 
           (c) Student loans or other financial aid assistance 
        received from a bank, finance or credit card company, or other 
        private lender must be collected or disbursed as provided in 
        paragraphs (d) and (e). 
           (d) Loans or other financial aid payments for amounts 
        greater than $3,000 must be disbursed: 
           (1) in two equal disbursements, if the term length is more 
        than four months.  The loan or payment amounts may be disbursed 
        no earlier than the first day the student attends class with the 
        remainder to be disbursed halfway through the term; or 
           (2) in three equal disbursements, if the term length is 
        more than six months.  The loan or payment amounts may be 
        disbursed no earlier than the first day the student attends 
        class, one-third of the way through the term, and two-thirds of 
        the way through the term.  
           (e) Loans or other financial aid payments for amounts less 
        than $3,000 may be disbursed as a single disbursement on the 
        first day a student attends class, regardless of term length. 
           (f) No school may enter into a contract or agreement with, 
        or receive any money from, a bank, finance or credit card 
        company, or other private lender, unless the private lender 
        follows the requirements for disbursements provided in 
        paragraphs (d) and (e). 
           Sec. 17.  Minnesota Statutes 2004, section 141.29, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POWERS AND DUTIES.] The office shall have (in 
        addition to the powers and duties now vested therein by law) the 
        following powers and duties: 
           (a) To negotiate and enter into interstate reciprocity 
        agreements with similar agencies in other states, if in the 
        judgment of the office such agreements are or will be helpful in 
        effectuating the purposes of Laws 1973, Chapter 714; 
           (b) To grant conditional school license for periods of less 
        than one year if in the judgment of the office correctable 
        deficiencies exist at the time of application and when refusal 
        to issue school license would adversely affect currently 
        enrolled students; 
           (c) The office may upon its own motion, and shall upon the 
        verified complaint in writing of any person setting forth fact 
        which, if proved, would constitute grounds for refusal or 
        revocation under Laws 1973, Chapter 714, investigate the actions 
        of any applicant or any person or persons holding or claiming to 
        hold a license or permit.  However, before proceeding to a 
        hearing on the question of whether a license or permit shall be 
        refused, revoked or suspended for any cause enumerated in 
        subdivision 1, the office may shall grant a reasonable time to 
        the holder of or applicant for a license or permit to correct 
        the situation.  If within such time the situation is corrected 
        and the school is in compliance with the provisions of this 
        chapter, no further action leading to refusal, revocation, or 
        suspension shall be taken.  
           Sec. 18.  Minnesota Statutes 2004, section 141.30, is 
        amended to read: 
           141.30 [INSPECTION.] 
           (a) The office or a delegate may inspect the instructional 
        books and records, classrooms, dormitories, tools, equipment and 
        classes of any school or applicant for license at any reasonable 
        time.  The office may require the submission of a certified 
        public audit, or if there is no such audit available the office 
        or a delegate may inspect the financial books and records of the 
        school.  In no event shall such financial information be used by 
        the office to regulate or set the tuition or fees charged by the 
        school.  
           (b) Data obtained from an inspection of the financial 
        records of a school or submitted to the office as part of a 
        license application or renewal are nonpublic data as defined in 
        section 13.02, subdivision 9.  Data obtained from inspections 
        may be disclosed to other members of the office, to law 
        enforcement officials, or in connection with a legal or 
        administrative proceeding commenced to enforce a requirement of 
        law. 
           Sec. 19.  Minnesota Statutes 2004, section 141.35, is 
        amended to read: 
           141.35 [EXEMPTIONS.] 
           Sections 141.21 to 141.35 shall not apply to the following: 
           (1) public postsecondary institutions; 
           (2) private postsecondary institutions registered under 
        sections 136A.61 to 136A.71 that are nonprofit, or that are for 
        profit and registered under sections 136A.61 to 136A.71 as of 
        December 31, 1998, or are approved to offer exclusively 
        baccalaureate or postbaccalaureate programs; 
           (3) schools of nursing accredited by the state Board of 
        Nursing or an equivalent public board of another state or 
        foreign country; 
           (4) private schools complying with the requirements of 
        section 120A.22, subdivision 4; 
           (5) courses taught to students in a valid apprenticeship 
        program taught by or required by a trade union; 
           (6) schools exclusively engaged in training physically or 
        mentally handicapped persons for the state of Minnesota; 
           (7) schools licensed by boards authorized under Minnesota 
        law to issue licenses; 
           (8) schools and educational programs, or training programs, 
        contracted for by persons, firms, corporations, government 
        agencies, or associations, for the training of their own 
        employees, for which no fee is charged the employee; 
           (9) schools engaged exclusively in the teaching of purely 
        avocational, recreational, or remedial subjects as determined by 
        the office; 
           (10) driver training schools and instructors as defined in 
        section 171.33, subdivisions 1 and 2; 
           (11) classes, courses, or programs conducted by a bona fide 
        trade, professional, or fraternal organization, solely for that 
        organization's membership; 
           (12) programs in the fine arts provided by organizations 
        exempt from taxation under section 290.05 and registered with 
        the attorney general under chapter 309.  For the purposes of 
        this clause, "fine arts" means activities resulting in artistic 
        creation or artistic performance of works of the imagination 
        which are engaged in for the primary purpose of creative 
        expression rather than commercial sale or employment.  In making 
        this determination the office may seek the advice and 
        recommendation of the Minnesota Board of the Arts; 
           (13) classes, courses, or programs intended to fulfill the 
        continuing education requirements for licensure or certification 
        in a profession, that have been approved by a legislatively or 
        judicially established board or agency responsible for 
        regulating the practice of the profession, and that are offered 
        primarily exclusively to an individual practicing the 
        profession; 
           (14) classes, courses, or programs intended to prepare 
        students to sit for undergraduate, graduate, postgraduate, or 
        occupational licensing and occupational entrance examinations; 
           (15) classes, courses, or programs providing 16 or fewer 
        clock hours of instruction that are not part of the curriculum 
        for an occupation or entry level employment; 
           (16) classes, courses, or programs providing instruction in 
        personal development, modeling, or acting; 
           (17) training or instructional programs, in which one 
        instructor teaches an individual student, that are not part of 
        the curriculum for an occupation or are not intended to prepare 
        a person for entry level employment; and 
           (18) schools with no physical presence in Minnesota, as 
        determined by the office, engaged exclusively in offering 
        distance instruction that are located in and regulated by other 
        states or jurisdictions. 
           Sec. 20.  [REGULATION OF PRIVATE AND OUT-OF-STATE 
        POSTSECONDARY INSTITUTIONS.] 
           The Higher Education Services Office must convene a working 
        group to develop recommendations to revise the regulation under 
        Minnesota Statutes, sections 136A.61 to 136A.71, and chapter 
        141, of private and out-of-state postsecondary institutions that 
        offer instruction in Minnesota or to Minnesota residents who are 
        not required to leave the state.  Members of the working group 
        are appointed by the director of the Higher Education Services 
        Office and must include one or more representatives of the 
        Minnesota Private College Council, the Minnesota Career College 
        Association, and other interested institutions that are 
        registered or licensed under state law.  
           In developing recommendations, the working group must 
        consider the office's mission to protect both consumers of 
        postsecondary education and the state's interests.  The 
        recommendations must address the provision of degrees, 
        certificates, diplomas, and training offered by for-profit and 
        nonprofit institutions in Minnesota and outside of Minnesota, in 
        classrooms or online, and regulatory issues under federal law.  
        The recommendations may include other relevant issues as 
        determined by the working group. 
           The office must provide preliminary recommendations to the 
        committees of the legislature with jurisdiction over higher 
        education policy and higher education finance by November 15, 
        2005, and must provide final recommendations by January 15, 2006.

                                   ARTICLE 4
                                   ROCHESTER
           Section 1.  [ROCHESTER HIGHER EDUCATION DEVELOPMENT 
        COMMITTEE.] 
           Subdivision 1.  [ESTABLISHMENT.] The Rochester Higher 
        Education Development Committee is established to research and 
        make recommendations to the governor and legislature on the 
        creation of mission-driven postsecondary educational programs or 
        institutions in the Rochester area that meet the educational 
        needs of the region and the state and that capitalize on the 
        unique opportunities for educational partnerships presented in 
        the Rochester area. 
           Subd. 2.  [MEMBERSHIP.] The committee is composed of 11 
        members, to be appointed by the governor, as follows: 
           (1) a trustee of the Minnesota State Colleges and 
        Universities, or the trustee's designee; 
           (2) a regent of the University of Minnesota, or the 
        regent's designee; 
           (3) six persons from the Rochester area representing 
        business, health and medical sciences, and technology; 
           (4) the commissioner of finance, as a nonvoting member, or 
        the commissioner's designee; 
           (5) one person who by training or experience has special 
        expertise in postsecondary finance and planning; and 
           (6) one person who by training or experience has special 
        expertise in postsecondary academic planning and programming. 
           Before the first meeting of the committee, the governor 
        shall select one person from the committee who shall serve as 
        chair. 
           Subd. 3.  [COMPENSATION AND REMOVAL.] Appointments to the 
        committee are not subject to Minnesota Statutes, section 15.0597.
        Members of the committee are not entitled to reimbursement under 
        Minnesota Statutes, section 15.059, subdivision 6.  Members may 
        be removed and vacancies filled pursuant to Minnesota Statutes, 
        section 15.059, subdivision 4.  The director of the Higher 
        Education Services Office may provide administrative support to 
        the committee.  
           Subd. 4.  [DUTIES.] (a) The committee shall develop a 
        proposal for establishment and implementation of expanded higher 
        education programs or institutions in Rochester.  The 
        committee's report must include recommendations on:  
           (1) the mission and focus of the programs or institutions; 
           (2) the nature of undergraduate and graduate programs to be 
        offered; 
           (3) site and facility needs; 
           (4) funding sources and opportunities; 
           (5) operational needs; 
           (6) alliances or other types of cooperative arrangements 
        with public and private institutions; 
           (7) governance structures; and 
           (8) mechanisms to ensure that the expanded programs are 
        aligned with the unique needs and opportunities of the Rochester 
        area and that programs take advantage of opportunities presented 
        by regional business and industry.  
           (b) If the committee recommends any programmatic changes 
        that result in institutional realignments, the committee must 
        consult with the representatives of affected employees and 
        address the continuation of collective bargaining and 
        contractual rights and benefits, including accumulated sick 
        leave, vacation time, seniority, time to tenure, separation or 
        retirement benefits, and pension plan coverage.  
           (c) The committee must consider specifically whether 
        expansion of the University of Minnesota in Rochester is the 
        most appropriate method of meeting the region's needs. 
           (d) The committee may also research and provide 
        recommendations on sites for the facilities and programs.  The 
        committee shall recommend any changes to Minnesota law required 
        to implement recommendations of the committee. 
           Subd. 5.  [REPORT.] The committee must issue a report with 
        recommendations to the governor and the legislature by January 
        15, 2006. 
           Subd. 6.  [SUNSET.] The committee expires on December 31, 
        2007. 
           Sec. 2.  [ROCHESTER HIGHER EDUCATION DEVELOPMENT ACCOUNT.] 
           A Rochester higher education development account is created 
        in the state treasury in the special revenue fund.  Money in 
        this account is appropriated to the Higher Education Services 
        Office for allocation to the committee established in section 1, 
        subdivision 1, and the implementation activities outlined in 
        article 1, section 2, subdivision 16, paragraph (b).  The office 
        shall serve as fiscal agent for the committee established in 
        section 1. 
           Sec. 3.  [EFFECTIVE DATE.] 
           This article is effective the day following final enactment.
           Presented to the governor May 24, 2005 
           Signed by the governor May 26, 2005, 9:45 a.m.