1997 Minnesota Statutes

     136A.243 Higher education services office. 

    Subdivision 1.    Responsibilities.  (a) The director 
 shall establish the rules, terms, and conditions for the 
 program, subject to the requirements of sections 136A.241 to 
 136A.245. 

    (b) The director shall prescribe the application forms, 
 procedures, and other requirements that apply to the program. 

    Subd. 2.    Accounts-type program.  The office must 
 establish the program and the program must be operated as an 
 accounts-type program that permits individuals to save for 
 qualified higher education costs incurred at any institution, 
 regardless of whether it is private or public or whether it is 
 located within or outside of this state.  A separate account 
 must be maintained for each beneficiary for whom contributions 
 are made. 

    Subd. 3.    Consultation with state board of investment. 
  In designing and establishing the program's requirements and 
 in negotiating or entering contracts with third parties under 
 subdivision 8, the director shall consult with the executive 
 director. 

    Subd. 4.    Program to comply with federal law.  The 
 director shall take steps to ensure that the program meets the 
 requirements for a qualified state tuition program under section 
 529 of the Internal Revenue Code.  The director may request a 
 private letter ruling or rulings from the Internal Revenue 
 Service or take any other steps to ensure that the program 
 qualifies under section 529 of the Internal Revenue Code or 
 other relevant provisions of federal law. 

    Subd. 5.    Minimum penalty.  In establishing the terms 
 of the program, the office must provide that refunds of amounts 
 in an account are subject to a minimum penalty, as required by 
 section 529(b)(3) of the Internal Revenue Code.  If the refunds 
 or payments are not used for qualified higher education expenses 
 of the designated beneficiary, this penalty must equal, at 
 least, the proportionate amount of any matching grants deposited 
 in the account under section 136A.245 and the investment return 
 on the grants, plus an additional penalty that meets the 
 requirement of federal law. 

    Subd. 6.    Three-year period for withdrawal of grants.  
 A matching grant deposited in the account under section 136A.245 
 may not be withdrawn within three years of the establishment of 
 the account of the beneficiary.  In calculating the three-year 
 period, the period held in another account is included, if the 
 account includes a rollover from another account under section 
 529(c)(3)(C) of the Internal Revenue Code. 

    Subd. 7.    Marketing.  The director shall make parents 
 and other interested individuals aware of the availability and 
 advantages of the program as a way to save for higher education 
 costs.  The cost of these promotional efforts must be paid 
 entirely from state general fund appropriations and may not be 
 funded with fees imposed on participants. 

    Subd. 8.    Administration.  The director shall 
 administer the program, including accepting and processing 
 applications, maintaining account records, making payments, 
 making matching grants under section 136A.245, 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 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. 

    Subd. 9.    Authority to impose fees.  The office may 
 impose fees on participants in the program to recover the costs 
 of administration.  The office must use its best efforts to keep 
 these fees as low as possible, consistent with efficient 
 administration, so that the returns on savings invested in the 
 program will be as high as possible. 

    HIST: 1997 c 183 art 2 s 14