1.1 	A bill for an act
1.2 	relating to financing the National Guard tuition
1.3 	reimbursement program; imposing an income tax
1.4 	surcharge; extending the time for providing tuition
1.5 	reimbursement to members who have served in active
1.6 	military service; appropriating money; amending
1.7 	Minnesota Statutes 2004, section 192.501, subdivision
1.8 	2, by adding a subdivision.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. INCOME TAX SURCHARGE.
 1.11 	In addition to the tax computed under section 290.06,
1.12 	subdivision 2c, and section 290.091, there is a surcharge
1.13 	imposed on individuals, estates, and trusts.  For taxable years
1.14 	beginning after December 31, 2004, but before January 1, 2006,
1.15 	the surcharge is computed by applying the rate of 0.1 percent to
1.16 	the tax computed under section 290.06, subdivision 2c, and under
1.17 	section 290.091, after the credit allowed under section 290.0675.

1.18 	EFFECTIVE DATE. This section is effective for taxable
1.19 	years beginning after December 31, 2004, but before January 1,
1.20 	2006.

1.21 	Sec. 2. Minnesota Statutes 2004, section 192.501,
1.22 	subdivision 2, is amended to read:
1.23 		Subd. 2.Tuition and textbook reimbursement grant
1.24 	program.  (a) The adjutant general shall establish a program to
1.25 	provide tuition and textbook reimbursement grants to eligible
1.26 	members of the Minnesota National Guard within the limitations
1.27 	of this subdivision.
2.1 	(b) Eligibility is limited to a member of the National
2.2 	Guard who:
2.3 	(1) is serving satisfactorily as defined by the adjutant
2.4 	general;
2.5 	(2) is attending a postsecondary educational institution,
2.6 	as defined by section 136A.15, subdivision 6, including a
2.7 	vocational or technical school operated or regulated by this
2.8 	state or another state or province; and
2.9 	(3) provides proof of satisfactory completion of
2.10 	coursework, as defined by the adjutant general.
2.11 	Notwithstanding clause (1), for a person who has
2.12 	satisfactorily completed the person's service contract in the
2.13 	Minnesota National Guard or the portion of it requiring active
2.14 	drill status, for which any part of that service was spent
2.15 	serving honorably in federal active service or federally funded
2.16 	state active service, as defined in section 190.05, subdivisions
2.17 	5b and 5c, the person's eligibility is extended for a period of
2.18 	three years, plus an amount of time equal to the duration of
2.19 	that person's active service, subject to the credit hours limit
2.20 	in paragraph (c).  However, if a person who has provided
2.21 	honorable active service is separated or discharged from the
2.22 	National Guard due to a service connected injury, disease, or
2.23 	disability, the eligibility period is extended for eight years
2.24 	beyond the date of separation.
2.25 	In addition, if a member of the Minnesota National Guard is
2.26 	killed in the line of state active service or federally funded
2.27 	state active service, as defined in section 190.05, subdivisions
2.28 	5a and 5b, the member's surviving spouse, and any surviving
2.29 	dependent who has not yet reached 24 years of age, is eligible
2.30 	for a tuition and textbook reimbursement grant.
2.31 	The adjutant general may, within the limitations of this
2.32 	paragraph and other applicable laws, determine additional
2.33 	eligibility criteria for the grant, and must specify the
2.34 	criteria in department regulations and publish changes as
2.35 	necessary.
2.36 	(c) The amount of a tuition and textbook reimbursement
3.1 	grant must be specified on a schedule as determined and
3.2 	published in department regulations by the adjutant general, but
3.3 	is limited to a maximum of an amount equal to the greater of:
3.4 	(1) up to 100 percent of the cost of tuition for lower
3.5 	division programs in the College of Liberal Arts at the Twin
3.6 	Cities campus of the University of Minnesota in the most recent
3.7 	academic year; or
3.8 	(2) up to 100 percent of the cost of tuition for the
3.9 	program in which the person is enrolled at that Minnesota public
3.10 	institution, or if that public institution is outside the state
3.11 	of Minnesota, for the cost of a comparable program at the
3.12 	University of Minnesota, except that in the case of a survivor
3.13 	as defined in paragraph (b), the amount of the tuition and
3.14 	textbook reimbursement grant for coursework satisfactorily
3.15 	completed by the person is limited to 100 percent of the cost of
3.16 	tuition for postsecondary courses at a Minnesota public
3.17 	educational institution.
3.18 	Paragraph (b) notwithstanding, a person is no longer
3.19 	eligible for a grant under this subdivision once the person has
3.20 	received grants under this subdivision for the equivalent of 208
3.21 	quarter credits or 144 semester credits of coursework.
3.22 	(d) Tuition and textbook reimbursement grants received
3.23 	under this subdivision may not be considered by the Minnesota
3.24 	Higher Education Services Office or by any other state board,
3.25 	commission, or entity in determining a person's eligibility for
3.26 	a scholarship or grant-in-aid under sections 136A.095 to
3.27 	136A.1311.
3.28 	(e) If a member fails to complete a term of enlistment
3.29 	during which a tuition and textbook reimbursement grant was
3.30 	paid, the adjutant general may seek to recoup a prorated amount
3.31 	as determined by the adjutant general. However, this authority
3.32 	does not apply to a person whose separation from the National
3.33 	Guard is due to a medical condition or financial hardship.
3.34 	
EFFECTIVE DATE. This section is effective the day
3.35 	following final enactment.

3.36 	Sec. 3. Minnesota Statutes 2004, section 192.501, is
4.1 	amended by adding a subdivision to read:
4.2 		Subd. 2a.Extended eligibility appropriation. Revenue
4.3 	collected under section 1 is appropriated from the general fund
4.4 	to the adjutant general to pay tuition and textbook
4.5 	reimbursement grants under section 192.501, subdivision 2, to
4.6 	members and former members of the Minnesota National Guard whose
4.7 	period of eligibility for the grants has been extended as a
4.8 	result of having served in active military service.  This
4.9 	appropriation is available until expended.  No part of this
4.10 	appropriation may be expended on grants to persons who are
4.11 	serving in active drill status in the National Guard.  The
4.12 	adjutant general must account for this appropriation separately
4.13 	from other appropriations for the purpose of making grants under
4.14 	subdivision 2 to National Guard members whose eligibility period
4.15 	has not been extended as the result of active service.
4.16 	
EFFECTIVE DATE. This section is effective July 1, 2005.