1.1                          A bill for an act
  1.2             relating to higher education; providing reserve 
  1.3             funding for the state grant program; amending 
  1.4             Minnesota Statutes 2002, section 16A.152, subdivision 
  1.5             3; Minnesota Statutes 2003 Supplement, section 
  1.6             136A.121, subdivision 7. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 16A.152, 
  1.9   subdivision 3, is amended to read: 
  1.10     Subd. 3.  [USE.] (a) The use of the budget reserve should 
  1.11  be governed by principles based on the full economic cycle 
  1.12  rather than the budget cycle.  The budget reserve may be used 
  1.13  when a negative budgetary balance is projected and when 
  1.14  objective measures, such as reduced growth in total wages, 
  1.15  retail sales, or employment, reflect downturns in the state's 
  1.16  economy.  
  1.17     (b) Up to $....... of the balance in the budget reserve 
  1.18  account may be used for the purposes of sections 136A.101 to 
  1.19  136A.121 upon certification by the director of the Higher 
  1.20  Education Services Office to the director of finance that the 
  1.21  amount appropriated for state grants is insufficient to make 
  1.22  grant awards through the end of the fiscal year.  The amount 
  1.23  certified, up to the limits of this paragraph, is appropriated 
  1.24  to the Higher Education Services Office for the state grant 
  1.25  program. 
  1.26     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  2.1   136A.121, subdivision 7, is amended to read: 
  2.2      Subd. 7.  [INSUFFICIENT APPROPRIATION.] If the amount 
  2.3   appropriated is determined by the office to be insufficient to 
  2.4   make full awards to applicants under subdivision 5, the director 
  2.5   must certify the amount of the shortfall to the commissioner of 
  2.6   finance under section 16A.152, subdivision 3, paragraph (b).  If 
  2.7   the amount appropriated is still insufficient to make full 
  2.8   awards, awards must be reduced by: 
  2.9      (1) adding a surcharge to the applicant's assigned family 
  2.10  responsibility, as defined in section 136A.101, subdivision 5a; 
  2.11  and 
  2.12     (2) a percentage increase in the applicant's assigned 
  2.13  student responsibility, as defined in subdivision 5. 
  2.14  The reduction under clauses (1) and (2) must be equal dollar 
  2.15  amounts.