1.1                          A bill for an act
  1.2             relating to education; establishing a trust fund at 
  1.3             the University of Minnesota for grants to health 
  1.4             sciences students; appropriating cigarette tax 
  1.5             revenue; amending Minnesota Statutes 1998, section 
  1.6             297F.10, subdivision 1; proposing coding for new law 
  1.7             in Minnesota Statutes, chapter 137. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [137.375] [HEALTH-RELATED TUITION OFFSET TRUST 
  1.10  FUND.] 
  1.11     Subdivision 1.  [ESTABLISHMENT; PURPOSE; 
  1.12  ADMINISTRATION.] The board of regents shall establish the 
  1.13  health-related tuition offset trust fund solely to support 
  1.14  students in health-related education programs at the University 
  1.15  academic health center.  The board of regents shall administer 
  1.16  the fund.  All earnings including income and appreciation of the 
  1.17  trust fund must be credited to the fund.  
  1.18     Subd. 2.  [USE OF PROCEEDS.] The board of regents shall 
  1.19  annually appropriate proceeds from the trust which must be used 
  1.20  to offset the cost of graduate tuition for students in 
  1.21  health-related fields and to pay any costs of managing the 
  1.22  trust.  The initial appropriations shall be used for students in 
  1.23  the medical school.  As increases in the trust income permit, 
  1.24  the regents shall expand the tuition offset to other 
  1.25  health-related fields, giving priority to high-cost programs in 
  1.26  which significant numbers of students are graduating with high 
  2.1   levels of debt.  The regents shall biennially report to the 
  2.2   governor and the legislature on the use of the tuition offset. 
  2.3      Subd. 3.  [INVESTMENT MANAGEMENT.] (a) The board of regents 
  2.4   shall transfer the trust fund money to the Minnesota medical 
  2.5   foundation, which shall be responsible for managing the 
  2.6   investment of the trust fund according to this section. 
  2.7      (b) The Minnesota medical foundation shall manage the 
  2.8   investment of the trust fund as follows: 
  2.9      (1) all trust fund assets including income and appreciation 
  2.10  shall be placed in a separate account; 
  2.11     (2) the trust fund shall be audited annually by an 
  2.12  independent auditor; 
  2.13     (3) the trust fund shall be invested and managed according 
  2.14  to rules applicable to trust investments as provided in the 
  2.15  Minnesota Prudent Investor Act, sections 501B.151 and 501B.152; 
  2.16     (4) reasonable and necessary administrative and investment 
  2.17  expenses directly associated with the management and investment 
  2.18  of the trust fund may be recovered from the trust fund 
  2.19  appropriation as provided in subdivision 2; and 
  2.20     (5) the Minnesota medical foundation shall transfer assets 
  2.21  from the trust fund for purposes consistent with this section as 
  2.22  directed by the board of regents, including the return of the 
  2.23  entire balance in the trust fund on July 1, 2009, to the board 
  2.24  of regents. 
  2.25     (c) The board of regents shall in its discretion establish 
  2.26  an annual appropriation from the trust fund, not to exceed five 
  2.27  percent of the fair market value of all assets held in the trust 
  2.28  fund as of the first day of the calendar year. 
  2.29     (d) The amount of the annual appropriation determined in 
  2.30  paragraph (c) shall be distributed as directed by the board of 
  2.31  regents for the purposes of the trust fund according to 
  2.32  subdivision 2. 
  2.33     Subd. 4.  [ADVISORY BOARD.] (a) The board of regents shall 
  2.34  appoint an advisory board to consult with the senior 
  2.35  vice-president for health sciences in making budget 
  2.36  recommendations regarding the annual appropriation from the 
  3.1   trust fund. 
  3.2      (b) The advisory board shall consist of seven members, one 
  3.3   of whom shall be the commissioner of health.  The other members 
  3.4   shall be Minnesota residents, selected in equal number to 
  3.5   represent the interests of health care consumers and providers. 
  3.6      Sec. 2.  Minnesota Statutes 1998, section 297F.10, 
  3.7   subdivision 1, is amended to read: 
  3.8      Subdivision 1.  [TAX AND USE TAX ON CIGARETTES.] Revenue 
  3.9   received from cigarette taxes, as well as related penalties, 
  3.10  interest, license fees, and miscellaneous sources of revenue 
  3.11  shall be deposited by the commissioner in the state treasury and 
  3.12  credited as follows: 
  3.13     (a) first to the general obligation special tax bond debt 
  3.14  service account in each fiscal year the amount required to 
  3.15  increase the balance on hand in the account on each December 1 
  3.16  to an amount equal to the full amount of principal and interest 
  3.17  to come due on all outstanding bonds whose debt service is 
  3.18  payable primarily from the proceeds of the tax to and including 
  3.19  the second following July 1; and 
  3.20     (b) after the requirements of paragraph (a) have been met: 
  3.21     (1), the revenue produced by one mill of the tax on 
  3.22  cigarettes weighing not more than three pounds a thousand and 
  3.23  two mills of the tax on cigarettes weighing more than three 
  3.24  pounds a thousand must be credited to the Minnesota future 
  3.25  resources fund; 
  3.26     (c) after the requirements of paragraphs (a) and (b) have 
  3.27  been met, a percentage of the balance is credited to the 
  3.28  health-related tuition offset trust fund established in section 
  3.29  137.375; and 
  3.30     (2) (d) after the requirements of paragraphs (a), (b), and 
  3.31  (c) have been met, the balance of the revenues derived from 
  3.32  taxes, penalties, and interest (under this chapter) and from 
  3.33  license fees and miscellaneous sources of revenue shall be 
  3.34  credited to the general fund. 
  3.35     The percentage of the balance credited to the 
  3.36  health-related tuition offset trust fund in paragraph (c) is in 
  4.1   accordance with the following schedule: 
  4.2      Fiscal Year       Percentage 
  4.3         2000           10 percent 
  4.4         2001           20 percent 
  4.5         2002           30 percent 
  4.6         2003           40 percent 
  4.7         2004           50 percent 
  4.8         2005           60 percent 
  4.9         2006           70 percent 
  4.10        2007           80 percent 
  4.11        2008           90 percent 
  4.12        2009          100 percent 
  4.13   following years      0 percent